InterDigital (NASDAQ: IDCC) reported Q2 EPS of $0.30, $0.11 better than the analyst estimate of $0.19. Revenue for the quarter came in at $67.5 million versus the consensus estimate of $64.4 million.

Second Quarter 2018 Financial Highlights

• Second quarter 2018 recurring revenue was $67.5 million, a 5% sequential increase compared to first quarter 2018. Under ASC 605, recurring revenue for second quarter 2018 would have been $88.6 million, compared to $87.9 million in second quarter 2017, primarily driven by new fixed-fee agreements signed during 2018.
• Second quarter 2018 operating expenses decreased by $1.0 million to $53.9 million, compared to $54.8 million in second quarter 2017. Operating expenses were not affected by the adoption of ASC 606.
• The second quarter 2018 effective tax rate was 9.8%, based on the statutory federal tax rate net of discrete federal and state taxes. The effective tax rate for second quarter 2018 was favorably impacted by provisions contained within the Tax Cuts and Jobs Act of 2017 (the "Tax Reform Act"). This is compared to an effective tax rate of 34.4% based on the statutory federal tax rate net of discrete federal and state taxes during second quarter 2017.
• Second quarter 2018 net income1 was $10.7 million, or $0.30 per diluted share. Under ASC 605, net income for second quarter 2018 would have been $33.2 million, or $0.93 per diluted share, compared to $52.5 million, or $1.46 per diluted share, in second quarter 2017.
• In second quarter 2018, the company recorded $6.8 million of cash provided by operating activities, compared to $19.4 million in second quarter 2017. The company used $0.8 million of free cash flow2 in second quarter 2018, compared to generating $10.1 million in second quarter 2017. These changes were primarily due to the timing of cash receipts under fixed-fee agreements. Ending cash and short-term investments totaled $1.1 billion.

“Our continued licensing efforts, including new agreements in the second quarter, saw growth in recurring revenue coupled with careful expense discipline and another excellent quarter,” said William J. Merritt, President and CEO. “With the expansion of our patent portfolio, our continued strong participation in 5G, and the expansion of wireless into new markets, we see new opportunities and a platform for continued growth.”

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