InterDigital (IDCC) Misses Q4 EPS by 1c, Revenues Beat

InterDigital (NASDAQ: IDCC) reported Q4 EPS of ($0.04), $0.01 worse than the analyst estimate of ($0.03). Revenue for the quarter came in at $89.1 million versus the consensus estimate of $88.11 million.

Fourth Quarter 2020 Financial Highlights

• Recurring revenue was $89.1 million, compared to $77.5 million in fourth quarter 2019, a 15% year-over-year increase, which was driven by six new patent license agreements signed during 2020. Total revenue was $90.8 million, compared to $102.2 million in fourth quarter 2019, which is attributable to past sales from deals signed in fourth quarter 2019.
• Operating expenses were $87.7 million, compared to $76.9 million in fourth quarter 2019, due to one-time charges of approximately $10.0 million, primarily related to a non-cash charge for on-going patent portfolio management.
• Operating income was $3.1 million, compared to $25.3 million in fourth quarter 2019.
• Net loss1 was $1.4 million, or $(0.04) per diluted share compared to net income1 of $13.8 million, or $0.44 per diluted share, in fourth quarter 2019.
• The company recorded $19.3 million of cash provided by operating activities, compared to $17.5 million in the same quarter last year.
• The company generated $10.4 million of free cash flow in fourth quarter 2020, compared to free cash flow2 of $8.7 million generated in fourth quarter 2019. The increase was primarily driven by timing of collections under fixed-fee agreements. Ending cash and short-term investments totaled $926.6 million.

“Despite uncertain macroeconomic conditions, we successfully executed on our strategy and signed numerous license agreements, which delivered very strong year-over-year growth for revenue and earnings, noted William J. Merritt, President and CEO of InterDigital. “We enter 2021 with strong licensing momentum and remain confident in our long-term opportunities as we diligently pursue agreements with remaining unlicensed companies in the handset and consumer electronics business.”

“Our performance continues to show the incredible operating leverage in our model, which saw a 13% increase year-over-year in total revenue drive a 46% increase in year-over-year operating income, and a 118% year-over-year increase in earnings per share,” said Richard Brezski, CFO of InterDigital.

For earnings history and earnings-related data on InterDigital (IDCC) click here.

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