InterDigital (IDI) AI Stock Analysis

InterDigital

(BX Swiss:IDI)

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Positive Factors

Recurring contracted revenueRecord recurring revenue and a full-year outlook supported by existing contracts indicate meaningful visibility into near-term earnings. This licensing model can provide durable revenue as covered products continue using standardized wireless and multimedia technologies.

Negative Factors

Volatile cash conversionAlthough cumulative earnings quality appears solid, the sharp decline in trailing free cash flow shows that cash conversion can vary materially between periods. Persistent volatility could reduce the predictability of internally funded investment, debt repayment, and shareholder returns.

InterDigital Business Overview & Revenue Model

Company Description

InterDigital, Inc., through its affiliated companies, specializes in the design and advancement of technologies that facilitate and improve wireless communications across major global regions, including the United States, China, South Korea, Japan, T...

InterDigital Earnings Call Summary

Earnings Call Date:Oct 28, 2026(Q3-2026)|Next Earnings Date:Feb 17, 2027

Earnings Call SentimentPositive

The call was strongly positive, with record recurring revenue, revenue and profitability well above guidance, expanded licensing coverage, favorable enforcement outcomes, strong cash generation, increased shareholder returns, and continued technology leadership. The main challenges were ongoing litigation investment, unresolved arbitration outcomes, remaining unlicensed markets, the multiyear VVC adoption process, and an unquantified cloud opportunity.

Positive Updates

Strong Third-Quarter Financial Performance

Third-quarter revenue was $193.4 million, up 17% year-over-year and above the $154 million-$158 million guidance range. Adjusted EBITDA was $131.3 million, up 25% year-over-year and above the $86 million-$92 million guidance range. GAAP diluted EPS was $2.34, above the $1.25-$1.42 guidance range, while non-GAAP EPS was $3.11, up 22% year-over-year and above the $1.94-$2.13 guidance range.

Negative Updates

Higher Operating Expenses

Operating expenses were $94.1 million, an increase of $5.2 million year-over-year, primarily related to increased intellectual-property enforcement costs and share-based compensation driven by business success.

Company Guidance

For Q4, based only on existing contracts, InterDigital expects revenue from existing contracts in the range of $154 million-$160 million, Adjusted EBITDA of $80 million-$88 million or an Adjusted EBITDA margin of about 54% at the midpoint, GAAP diluted EPS of $1.04-$1.27, and non-GAAP EPS of $1.72-$1.98; before adding any potential contributions from new agreements or enforcement outcomes over the balance of the year, it expects to exceed the $810 million midpoint of the increased full-year revenue guidance issued last quarter. For full-year 2026, it expects Adjusted EBITDA of $507 million-$515 million, GAAP diluted EPS of $8.93-$9.16, and non-GAAP EPS of $11.99-$12.25, with the midpoint for each of these ranges on existing contracts alone also above the midpoint of prior full-year guidance; both the fourth quarter and full-year outlooks are now based only on existing licenses, and neither includes contributions from any agreements or enforcement action results InterDigital may sign or receive over the balance of the fourth quarter, with any such contributions additive.

InterDigital Risk Analysis

InterDigital disclosed 36 risk factors in its most recent earnings report. InterDigital reported the most risks in the "Tech & Innovation" category.

Tech & Innovation - Risks related to the company’s reliance on technology and ability to make innovative products

Latest Risks Added

0 New Risks

InterDigital Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

CH:IDI against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADEA	76Outperform	$2.36B	18.96	26.70%	0.93%	24.35%	45.56%
DLB	76Outperform	$5.81B	26.05	8.68%	2.32%	0.55%	-13.85%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
XPER	59Neutral	$259.95M	-7.60	-7.84%	―	-3.87%	-946.99%
RBBN	58Neutral	$277.72M	14.09	4.51%	―	-7.78%	―
IMMR	56Neutral	$239.08M	21.18	3.45%	4.17%	4.12%	-68.41%

* Technology Sector Average

Performance Comparison

CH:IDI and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DLB	Dolby Laboratories	61.99	-2.88	-4.44%
IMMR	Immersion	7.20	0.84	13.28%
RBBN	Ribbon Communications	1.55	-1.81	-53.87%
ADEA	Adeia Inc.	21.44	7.29	51.47%
XPER	Xperi Inc	5.33	-1.27	-19.24%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

InterDigital AI Stock Analysis