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☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30,
2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number:
001-39304
ADEIA INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
84-4734590
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
3025 Orchard Parkway
,
San Jose
,
California
95134
(Address of Principal Executive Offices)
(Zip Code)
(
408
)
473-2500
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock (par value $0.001 per share)
ADEA
Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
The number of shares outstanding of the registrant’s common stock as of October 23, 2025
was
109,510,191
Treasury stock at cost (2025:
18,108
shares; 2024:
15,880
shares)
(
286,243
)
(
255,301
)
Accumulated other comprehensive income (loss)
22
(
1
)
Retained earnings
23,870
2,834
Total stockholders’ equity
413,722
396,571
Total liabilities and equity
$
1,068,668
$
1,097,961
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
ADEIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September 30, 2025
September 30, 2024
Cash flows from operating activities:
Net income
$
37,364
$
28,595
Adjustments to reconcile net income to net cash from operating activities:
Depreciation
1,476
1,536
Amortization of intangible assets
42,427
56,787
Stock-based compensation expense
25,627
19,156
Deferred income taxes
2,256
(
1,818
)
Loss on debt extinguishment
—
453
Amortization of debt issuance costs
2,495
2,429
Other
(
334
)
(
1,421
)
Changes in operating assets and liabilities:
Accounts receivable
4,015
(
3,547
)
Unbilled contracts receivable
3,347
(
15,711
)
Other assets
(
12,900
)
(
481
)
Accounts payable
(
4,285
)
(
170
)
Accrued and other liabilities
(
1,615
)
(
1,053
)
Deferred revenue
(
1,785
)
20,246
Net cash provided by operating activities
98,088
105,001
Cash flows from investing activities:
Purchases of property and equipment
(
1,216
)
(
1,274
)
Purchases of intangible assets
(
6,100
)
(
8,476
)
Purchases of short-term investments
(
46,256
)
(
25,094
)
Proceeds from sales of investments
996
—
Proceeds from maturities of investments
18,200
26,450
Net cash used in investing activities
(
34,376
)
(
8,394
)
Cash flows from financing activities:
Payment of dividends
(
16,328
)
(
16,303
)
Principal payments on debt agreements
(
39,267
)
(
64,153
)
Proceeds from employee stock purchase program and exercise of stock options
1,405
1,547
Repurchases of common stock for tax withholdings on equity awards
(
20,931
)
(
11,560
)
Repurchases of common stock
(
11,326
)
—
Net cash used in financing activities
(
86,447
)
(
90,469
)
Net increase in cash and cash equivalents
(
22,735
)
6,138
Cash and cash equivalents at beginning of period
78,825
54,560
Cash and cash equivalents at end of period
$
56,090
$
60,698
Supplemental disclosure of cash flow information:
Interest paid
$
25,735
$
36,221
Income taxes paid, net of refunds
$
14,383
$
7,694
Unpaid purchases of property and equipment at the end of the period
$
92
$
235
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
ADEIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except per share amount)
(unaudited)
Total Company Stockholders' Equity
Common Stock
Treasury Stock
Three Months Ended September 30, 2025
Shares
Amount
Additional
Paid-In Capital
Shares
Amount
Accumulated
Other Comprehensive Income
Retained Earnings
Total
Stockholders' Equity
Balance at July 1, 2025
109,325
$
127
$
667,250
18,017
$
(
285,018
)
$
44
$
20,513
$
402,916
Net income
—
—
—
—
—
—
8,828
8,828
Other comprehensive loss
—
—
—
—
—
(
22
)
—
(
22
)
Cash dividends paid on common stock ($
0.05
per share)
—
—
—
—
—
—
(
5,471
)
(
5,471
)
Issuance of common stock in connection with exercise of stock options
1
—
13
—
—
—
—
13
Issuance of restricted stock, net of shares canceled
233
—
—
—
—
—
—
—
Withholding taxes related to net share settlement of restricted awards
(
91
)
—
—
91
(
1,225
)
—
—
(
1,225
)
Stock-based compensation expense
—
—
8,683
—
—
—
—
8,683
Balance at September 30, 2025
109,468
$
127
$
675,946
18,108
$
(
286,243
)
$
22
$
23,870
$
413,722
Total Company Stockholders' Equity
Common Stock
Treasury Stock
Nine Months Ended September 30,
2025
Shares
Amount
Additional
Paid-In Capital
Shares
Amount
Accumulated
Other Comprehensive Income (Loss)
Retained Earnings
Total
Stockholders' Equity
Balance at January 1, 2025
108,072
$
125
$
648,914
15,880
$
(
255,301
)
$
(
1
)
$
2,834
$
396,571
Net income
—
—
—
—
—
—
37,364
37,364
Other comprehensive income
—
—
—
—
—
23
—
23
Cash dividends paid on common stock ($
0.10
per share)
—
—
—
—
—
—
(
16,328
)
(
16,328
)
Issuance of common stock in connection with exercise of stock options
16
—
199
—
—
—
—
199
Issuance of common stock in connection with employee stock purchase plan
144
—
1,206
—
—
—
—
1,206
Issuance of restricted stock, net of shares canceled
3,464
2
—
—
—
—
—
2
Withholding taxes related to net share settlement of restricted awards
(
1,468
)
—
—
1,468
(
20,931
)
—
—
(
20,931
)
Repurchases of common stock
(
760
)
—
—
760
(
10,011
)
—
—
(
10,011
)
Stock-based compensation expense
—
—
25,627
—
—
—
—
25,627
Balance at September 30, 2025
109,468
$
127
$
675,946
18,108
$
(
286,243
)
$
22
$
23,870
$
413,722
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
ADEIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except per share amount)
(unaudited)
Total Company Stockholders' Equity
Common Stock
Treasury Stock
Three Months Ended September 30, 2024
Shares
Amount
Additional
Paid-In Capital
Shares
Amount
Accumulated
Other
Comprehensive Loss
Accumulated
Deficit
Total
Stockholders' Equity
Balance at June 1, 2024
108,854
$
123
$
637,752
14,138
$
(
231,599
)
$
(
96
)
$
(
47,044
)
$
359,136
Net income
—
—
—
—
—
—
19,314
19,314
Other comprehensive income
—
—
—
—
—
247
—
247
Cash dividends paid on common stock ($
0.05
per share)
—
—
(
5,450
)
—
—
—
—
(
5,450
)
Issuance of common stock in connection with exercise of stock options
1
—
6
—
—
—
—
6
Issuance of restricted stock, net of shares canceled
545
1
—
—
—
—
—
1
Withholding taxes related to net share settlement of restricted awards
(
207
)
—
—
207
(
2,458
)
—
—
(
2,458
)
Stock-based compensation expense
—
—
7,419
—
—
—
—
7,419
Balance at September 30, 2024
109,193
$
124
$
639,727
14,345
$
(
234,057
)
$
151
$
(
27,730
)
$
378,215
Total Company Stockholders' Equity
Common Stock
Treasury Stock
Nine Months Ended September 30, 2024
Shares
Amount
Additional
Paid-In Capital
Shares
Amount
Accumulated
Other
Comprehensive Loss
Accumulated
Deficit
Total
Stockholders' Equity
Balance at January 1, 2024
107,384
$
121
$
635,331
13,346
$
(
222,497
)
$
(
8
)
$
(
56,325
)
$
356,622
Net income
—
—
—
—
—
—
28,595
28,595
Other comprehensive income
—
—
—
—
—
159
—
159
Cash dividends paid on common stock ($
0.10
per share)
—
—
(
16,303
)
—
—
—
—
(
16,303
)
Issuance of common stock in connection with exercise of stock options
54
—
568
—
—
—
—
568
Issuance of common stock in connection with employee stock purchase plan
120
—
975
—
—
—
—
975
Issuance of restricted stock, net of shares canceled
2,634
4
—
—
—
—
—
4
Withholding taxes related to net share settlement of restricted awards
(
999
)
(
1
)
—
999
(
11,560
)
—
—
(
11,561
)
Stock-based compensation expense
—
—
19,156
—
—
—
—
19,156
Balance at September 30, 2024
109,193
$
124
$
639,727
14,345
$
(
234,057
)
$
151
$
(
27,730
)
$
378,215
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
ADEIA INC.
NOTES TO
C
ONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION
Adeia Inc. (the “Company”), a Delaware corporation, is one of the industry’s largest intellectual property (“IP”) licensing platforms, with a diverse portfolio of media and semiconductor IP consisting of more than
13,000
patents and patent applications worldwide.
The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The amounts as of December 31, 2024 have been derived from the Company’s annual audited Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 19, 2025 (the “Form 10-K”). These Condensed Consolidated Financial Statements should be read in conjunction with the annual audited Consolidated Financial Statements and notes thereto included in the Form 10-K as of and for the year ended December 31, 2024.
The Company’s consolidated financial statements include the accounts of Adeia Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025 or any future period and the Company makes no representations related thereto.
The Company’s fiscal year ends on December 31 and employs a calendar month-end reporting period for its quarterly reporting. The Company operates under
one
reportable segment, IP Licensing.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
There have been no significant changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2025, as compared to the significant accounting policies described in the Form 10-K.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging, and subjective judgment include identifying the performance obligations in the contract, estimating variable consideration, estimating quarterly royalties prior to receiving the royalty reports from the licensee, determining standalone selling price, and allocating consideration in a contract with multiple performance obligations, the assessment of the recoverability of goodwill, the assessment of useful lives and recoverability of other intangible assets and long-lived assets, recognition and measurement of current and deferred income tax assets and liabilities, the assessment of unrecognized tax benefits and purchase accounting resulting from business combinations, among others. Actual results experienced by the Company may differ from management’s estimates. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. In the
fourth quarter of 2024
, the Company
adopted
ASU 2023-07 on a retrospective basis, and the adoption did
no
t have a material impact to the Company’s Condensed Consolidated Financial Statements. See “Note 15 –
Segment Information
” for further detail.
9
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregated information about certain income statement expense line items on an annual and interim basis. ASU 2024-03 will be effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The new standard permits early adoption and can be applied prospectively or retrospectively. The Company is currently evaluating the impact of adopting ASU 2024-03.
NOTE 3 – REVENUE
Revenue Recognition
General
Revenue is recognized when control of the IP rights is transferred to a customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for the licensing of the Company’s IP, which may include various combinations of IP rights and services which are generally capable of being distinct and accounted for as separate performance obligations. In situations where foreign withholding taxes are withheld by the Company’s licensee, revenue is recognized gross of withholding taxes that are remitted directly by the licensee to a local tax authority.
Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the individual performance obligations are separately accounted for if they are distinct. In a contract with multiple performance obligations, the transaction price is allocated among the separate performance obligations on a relative standalone selling price basis. The determination of standalone selling price considers market conditions, the size and scope of the contract, customer and geographic information, and other factors. When observable prices are not available, standalone selling price for separate performance obligations is based on the adjusted market assessment approach to estimate the price that a customer in the relevant market would be willing to pay for licensing the Company’s IP rights. The allocation of transaction price among performance obligations in a contract may impact the amount and timing of revenue recognized in the Consolidated Statements of Income during a given period.
When a contract with a customer includes variable consideration, an estimate of the consideration which the Company expects to be entitled to for transferring the promised IP rights or services is made at contract inception and in each subsequent reporting period until the uncertainty associated with the variable consideration is resolved. The amount of variable consideration is estimated by considering all available information (historical, current, and forecast) and is updated as additional information becomes available.
The estimate of variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. When the uncertainty associated with variable consideration relates to potential price adjustments as a result of a legal contract dispute, the Company estimates variable consideration using the expected value method or the most likely amount method, whichever is more appropriate in the circumstances, and considers all available information, including historical data and experience. Estimating variable consideration related to potential future price adjustments requires significant judgment in evaluating the possible outcomes. Subsequent changes in the transaction price resulting from changes in the estimate of variable consideration are allocated to the performance obligations in the contract on the same basis as at contract inception.
When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of IP, revenue is recognized at the later of when the subsequent sale or usage occurs or the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied or partially satisfied.
10
Description of Revenue-Generating Activities
IP License Arrangements
The Company licenses (i) its media patent portfolio (“Media IP licensing”) to multichannel video programming distributors, over-the-top (“OTT”) video service providers, consumer electronics manufacturers, social media, and other new media companies and (ii) its semiconductor technologies and associated patent portfolio (“Semiconductor IP licensing”) to memory, logic, sensors, radio frequency component, and foundry companies. The Company generally licenses its IP portfolios under
three
models: (i) per-unit or per-subscriber Media IP or Semiconductor IP royalty licensing, (ii) fixed-fee Media IP licensing, and (iii) fixed-fee or minimum guarantee Semiconductor IP licensing.
Per-unit or per-subscriber Media IP or Semiconductor IP royalty licensing
The Company recognizes revenue from per-unit or per-subscriber IP royalty licenses in the period in which the licensee’s sales or production are estimated to have occurred, which results in an adjustment to revenue when actual sales or production are subsequently reported by the licensee, which is generally in the month or quarter following usage or shipment. Estimating customers’ monthly or quarterly royalties prior to receiving the royalty reports requires the Company to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate quantities shipped or manufactured by customers, which could have a material impact on the amount of revenue it reports on a quarterly basis.
Fixed-fee Media IP licensing
The Company’s long-term fixed-fee Media IP licensing contracts provide its customers with rights to future patented technologies over the term of the contract that are highly interdependent or highly interrelated to the patented technologies provided at the inception of the contract. The Company treats these rights as a single performance obligation with revenue recognized on a straight-line basis over the term of the fixed-fee license contract. The transaction price is adjusted for the effect of any significant financing components calculated using borrower-specific, risk-adjusted interest rates, with the related interest income or expense being recognized over time on an effective rate basis.
Fixed-fee or minimum guarantee Semiconductor IP licensing
The Company enters into Semiconductor IP licenses that have a fixed fee or a minimum guarantee, whereby licensees pay a fixed fee for the right to incorporate the Company’s IP technologies in the licensee’s products over the license term. In contracts with a minimum guarantee, the fixed fee component corresponds to a minimum number of units or dollars that the customer must produce or pay, with additional per-unit fees for any units or dollars exceeding the minimum. The Company generally recognizes the full fixed fee as revenue at the beginning of the license term when the customer has the right to use the IP and begins to benefit from the license, adjusted for the effect of any significant financing components calculated using borrower-specific, risk-adjusted interest rates, with the related interest income or expense being recognized over time on an effective rate basis. For minimum guarantee contracts where the customer exceeds the minimum, the Company recognizes revenue relating to any additional per-unit fees in the periods it believes the customer has exceeded the minimum and adjusts the revenue based on actual usage once that is reported by the customer.
IP license contracts with multiple performance obligations
At times, the Company enters into long-term license contracts with more than one performance obligation, which may include releases from past patent infringement claims or one or more prospective licenses. In these arrangements, the Company allocates the transaction price between releases for past patent infringement claims and prospective licenses based on their relative standalone selling prices, which requires significant management judgment.
In determining the standalone selling price of each performance obligation, the Company considers such factors as the customer’s revenues, the number of past and projected future subscribers, units shipped, and units manufactured, as well as the per-subscriber or per-unit licensing rates the Company generally receives from licensees of comparable sizes in comparable markets and geographies.
As a release from past patent infringement claims is generally satisfied at execution of the contract, the transaction price allocated to the release from past patent infringement claims is generally recognized in the period the contract is executed. Transaction price allocated to prospective Media IP licenses is recognized ratably over the license term, and transaction price allocated to prospective Semiconductor IP licenses is recognized upon execution of the contract.
11
Practical Expedients and Exemptions
The Company applies a practical expedient to not perform an evaluation of whether a contract includes a significant financing component when the timing of revenue recognition differs from the timing of cash collection by
one year
or less.
The Company applies a practical expedient to expense costs to obtain a contract with a customer as incurred as a component of selling, general and administrative expenses when the amortization period would have been
one year
or less.
The Company applies a practical expedient when disclosing revenue expected to be recognized from unsatisfied performance obligations to exclude contracts with customers with an original duration of less than
one year
; amounts attributable to variable consideration arising from (i) a sales-based or usage-based royalty of an intellectual property license or (ii) when variable consideration is allocated entirely to a wholly unsatisfied performance obligation; or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation.
Revenue Details
Revenue Disaggregation
The following information depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors by disaggregating revenue by category, market vertical and geographic location (presented in “Note 15 –
Segment Information
”). This information includes revenue recognized from contracts with customers and revenue from other sources, including sales-based or usage-based royalty revenues and fees associated with releases for past infringement.
Recurring and non-recurring revenue
Recurring revenue includes the following: (i) for fixed-fee Media IP license agreements, revenue associated with rights to existing and future patented technologies during reporting periods beginning with the reporting period in which the agreement is executed through the end of the term of the agreement, which are recognized on a straight-line basis; and (ii) for per-unit or per-subscriber Media IP or Semiconductor IP royalty license agreements, revenue associated with sales-based or usage-based royalties in exchange for a license of IP, which are recognized in the period such subsequent sales or usage occurs.
Non-recurring revenue includes the following: (i) for fixed-fee or minimum guarantee Semiconductor IP license agreements, revenue in the amount of such fixed fee or minimum guarantee associated with the right to use the IP, which is recognized upon execution of the agreement; and (ii) for all license agreements, revenue in the amount of the fees associated with releases for past patent infringement or licenses, in each case with respect to reporting periods prior to the execution of the agreement, which is recognized upon execution of the agreement.
Revenue disaggregated by recurring and non-recurring nature was as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Recurring revenue
$
86,311
$
82,704
$
255,817
$
249,844
Non-recurring revenue
1,028
3,397
4,927
7,012
Total revenue
$
87,339
$
86,101
$
260,744
$
256,856
Revenue by market vertical
Revenue disaggregated by market vertical was as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Media
$
79,722
$
82,177
$
244,749
$
246,240
Semiconductor
7,617
3,924
15,995
10,616
Total revenue
$
87,339
$
86,101
$
260,744
$
256,856
12
Contract Balances
Contracts Assets
Contract assets primarily consist of unbilled contracts receivable that are expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed. The amount of unbilled contracts receivable may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. Contract assets also include the incremental costs of obtaining a contract with a customer, principally sales commissions when the renewal commission is not commensurate with the initial commission.
Contract assets were recorded in the Condensed Consolidated Balance Sheets as follows (in thousands):
September 30, 2025
December 31, 2024
Unbilled contracts receivable
$
118,936
$
104,047
Other current assets
530
711
Long-term unbilled contracts receivable
44,531
62,767
Other long-term assets
1,012
919
Total contract assets
$
165,009
$
168,444
Contract Liabilities
Contract liabilities are comprised of deferred revenue related to multi-period licensing arrangements for which the Company is paid in advance, while the underlying performance obligation is satisfied at a future date or over time.
Allowance for Credit Losses
The allowance for credit losses represents the Company’s best estimate of lifetime expected credit losses inherent in accounts receivable and unbilled contracts receivable. The Company’s long-term unbilled contracts receivable is derived from fixed-fee or minimum-guarantee Semiconductor IP licensing and is primarily comprised of contracts with large, well-capitalized companies. It is generally considered to be of high credit quality due to past collection history and the nature of the customers.
The allowance for credit losses at September 30, 2025 and December 31, 202
4 was $
0.7
mi
llion and is presented as part of accounts receivable, net in the Condensed Consolidated Balance Sheets.
Additional Disclosures
The following table presents additional revenue and contract disclosures (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Revenue recognized in the period from:
Amounts included in deferred revenue at the beginning of the period
$
4,842
$
1,540
$
15,495
$
5,248
Performance obligations satisfied in previous periods
(1)
$
1,232
$
3,137
$
4,132
$
6,127
(1)
Performance obligations satisfied in previous periods consist mainly of fees associated with releases for past patent infringement, settlements of litigation during the period, and revenue from past royalties owed pursuant to expired or terminated IP license agreements. For long-term and multi-year revenue contracts, the Company recorded revenue from the releases for past infringement during the three and nine months ended September 30, 2025 and 2024 and expects to record revenue from the prospective license in future periods.
13
Remaining revenue under contracts with performance obligations represents the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) under certain of the Company’s fixed fee arrangements (in thousands).
As of
September 30, 2025
Revenue from contracts with performance obligations expected to be satisfied in:
2025
(remaining 3 months)
47,199
2026
92,612
2027
78,272
2028
68,339
2029
60,965
Thereafter
23,118
Total
$
370,505
NOTE 4 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS
Other current assets consisted of the following (in thousands):
September 30, 2025
December 31, 2024
Prepaid income taxes
$
9,497
$
2,934
Prepaid expenses
2,622
2,287
Prepaid insurance
1,020
1,124
Other
3,274
3,447
Total other current assets
$
16,413
$
9,792
Property and equipment, net, consisted of the following (in thousands):
September 30, 2025
December 31, 2024
Equipment, furniture and other
$
18,427
$
17,376
Leasehold improvements
6,293
6,293
Total property and equipment
24,720
23,669
Less: Accumulated depreciation
(
18,625
)
(
17,391
)
Total property and equipment, net
$
6,095
$
6,278
Other long-term assets consisted of the following (in thousands):
September 30, 2025
December 31, 2024
Long-term deferred tax assets
$
28,771
$
31,027
Other assets
1,776
2,913
Total other long-term assets
$
30,547
$
33,940
Accrued liabilities consisted of the following (in thousands):
September 30, 2025
December 31, 2024
Employee compensation and benefits
$
9,104
$
11,461
Accrued legal
$
4,040
$
1,790
Current portion of guarantee
(1)
3,850
3,850
Accrued expenses
1,536
2,936
Current portion of operating lease liabilities
537
481
Accrued income taxes
—
325
Other
2,420
3,674
Total accrued liabilities
$
21,487
$
24,517
14
(1)
Refer to “Note 14
–
Commitments and Contingencies”
for further detail on the nature of the guarantee.
Other long-term liabilities consisted of the following (in thousands):
September 30, 2025
December 31, 2024
Long-term portion of guarantee
(1)
$
12,473
$
13,233
Other
2,081
1,996
Total other long-term liabilities
$
14,554
$
15,229
(1)
Refer to “Note 14
–
Commitments and Contingencies”
for further detail on the nature of the guarantee.
NOTE 5 – FINANCIAL INSTRUMENTS
The Company has investments in debt securities, which include corporate bonds and notes, treasury and agency notes and bills, commercial paper, and in equity securities consisting of money market funds. The Company classifies its debt securities as available-for-sale (“AFS”), which are accounted for at fair value with credit related losses recognized as a provision for credit losses in its Condensed Consolidated Statements of Income and all non-credit related unrealized gains and losses recognized in accumulated other comprehensive income or loss on the Condensed Consolidated Balance Sheets. Under ASU 2016-01 (Topic 321), equity securities are measured at fair value with unrealized gains and losses recognized in other income and expense, net, in the Condensed Consolidated Statements of Income.
The following is a summary of marketable securities at September 30, 2025 and December 31, 2024 (in thousands):
September 30, 2025
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Values
Marketable securities
Commercial paper
$
11,648
$
—
$
(
6
)
$
11,642
Corporate bonds and notes
46,270
116
(
51
)
46,335
Treasury and agency notes and bills
4,492
2
—
4,494
Total debt securities
62,410
118
(
57
)
62,471
Money market funds
677
—
—
677
Total equity securities
677
—
—
677
Total marketable securities
$
63,087
$
118
$
(
57
)
$
63,148
Reported in:
Cash and cash equivalents
$
4,164
Marketable securities
58,984
Total marketable securities
$
63,148
December 31, 2024
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Values
Marketable securities
Commercial paper
$
2,688
$
1
$
—
$
2,689
Corporate bonds and notes
25,726
76
(
40
)
25,762
Treasury and agency notes and bills
3,615
1
—
3,616
Total debt securities
32,029
78
(
40
)
32,067
Money market funds
4,322
—
—
4,322
Total equity securities
4,322
—
—
4,322
Total marketable securities
$
36,351
$
78
$
(
40
)
$
36,389
Reported in:
Cash and cash equivalents
$
4,822
Marketable securities
31,567
Total marketable securities
$
36,389
15
At September 30, 2025 and December 31, 2024, the Company h
ad $
115.1
mill
ion and $
110.4
million, respectively, in cash and cash equivalents and marketable securities. A portion of these amounts was held in marketable securities, as shown above. The remaining balances of
$
51.9
million and $
74.0
million at September 30, 2025 and December 31, 2024, respectively, consisted of cash held in operating accounts not included in the tables above.
Debt Securities
The gross realized gains and losses on sales of marketable debt securities were immaterial during the three and nine months ended September 30, 2025 and 2024. Unrealized losses on AFS debt securities were immaterial as of September 30, 2025 and December 31, 2024. The Company evaluated whether the decline in fair value has resulted from credit losses or other factors and concluded these amounts were related to temporary fluctuations in value of AFS securities and were due primarily to changes in interest rates and market conditions of the underlying securities. The Compan
y did
no
t rec
ognize a provision for credit losses related to its AFS debt securities during the three and nine months ended September 30, 2025 and 2024, respectively.
The estimated fair value of marketable debt securities by contractual maturity at September 30, 2025 is shown below (in thousands). Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.
Amortized
Cost
Estimated
Fair Value
Due in one year or less
$
22,733
$
22,759
Due in one to two years
19,458
19,492
Due in two to three years
16,731
16,733
Total
$
58,922
$
58,984
NOTE 6 – FAIR VALUE
The Company follows the authoritative guidance for fair value measurement and the fair value option for financial assets and financial liabilities. The Company carries its financial instruments at fair value with the exception of its long-term debt. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:
Level 1
Quoted prices in active markets for identical assets.
Level 2
Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
When applying fair value principles in the valuation of assets, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculates the fair value of its Level 1 and Level 2 instruments based on the exchange traded price of similar or identical instruments, where available, or based on other observable inputs. There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2024 and September 30, 2025.
16
The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of September 30, 2025 (in thousands):
Fair Value
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Marketable securities
Money market funds - equity securities
(1)
$
677
$
677
$
—
$
—
Corporate bonds and notes - debt securities
(2)
46,335
—
46,335
—
Commercial paper - debt securities
(3)
11,642
—
11,642
—
Treasury and agency notes and bills - debt securities
(3)
4,494
—
4,494
—
Total Assets
$
63,148
$
677
$
62,471
$
—
(1)
Reported as cash and cash equivalents in the Condensed Consolidated Balance Sheet.
(2)
Reported as marketable securities in the Condensed Consolidated Balance Sheet.
(3)
Reported as marketable securities in the Condensed Consolidated Balance Sheet as these were purchased with original maturities of more than three months at date of purchase; otherwise reported as cash and cash equivalents.
The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of December 31, 2024 (in thousands):
Fair Value
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Marketable securities
Money market funds - equity securities
(1)
$
4,322
$
4,322
$
—
$
—
Corporate bonds and notes - debt securities
(2)
25,762
—
25,762
—
Commercial paper - debt securities
(3)
2,689
—
2,689
—
Treasury and agency notes and bills - debt securities
(3)
3,616
—
3,616
—
Total Assets
$
36,389
$
4,322
$
32,067
$
—
(1)
Reported as cash and cash equivalents in the Condensed Consolidated Balance Sheet.
(2)
Reported as marketable securities in the Condensed Consolidated Balance Sheet.
(3)
Reported as marketable securities in the Condensed Consolidated Balance Sheet as these were purchased with original maturities of more than three months at date of purchase; otherwise reported as cash and cash equivalents.
Financial Instruments Not Recorded at Fair Value
The Company’s long-term debt is carried at amortized cost and is measured at fair value on a quarterly basis for disclosure purposes. The fair value of the Company’s long-term debt approximates its carrying value as of each of the periods described below.
The carrying amounts and estimated fair values are as follows (in thousands):
September 30, 2025
December 31, 2024
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Long-term debt, net
(1)
$
438,685
$
440,330
$
475,456
$
475,456
(1)
Carrying amounts of long-term debt are net of unamortized debt discount and issuance costs
of $
9.1
million and $
11.6
million as of
September 30, 2025 and December 31, 2024, respectively. See “Note 8 –
Debt
” fo
r additional information.
If reported at fair value in the Condensed Consolidated Balance Sheets, the Company’s debt would be classified within Level 2 of the fair value hierarchy. The fair value of the debt was estimated based on the quoted market prices for the same or similar issues.
17
NOTE 7 – GOODWILL AND IDENTIFIED INTANGIBLE ASSETS
Goodwill
The carrying value of goodwill at September 30, 2025 and December 31, 2024 wa
s $
313.7
million. There were
no
changes t
o the carrying value of goodwill from January 1, through September 30, 2025. Goodwill at each reporting unit is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The process of evaluating goodwill for potential impairment is subjective and requires significant estimates, assumptions and judgments particularly related to the identification of reporting units, the assignment of assets and liabilities to reporting units and estimating the fair value of each reporting unit.
No
impairment charges were recognized during the three and nine months ended September 30, 2025 and 2024.
Identified Intangible Assets
Identified intangible assets consisted of the following (in thousands):
Average
September 30, 2025
December 31, 2024
Life
(Years)
Gross
Assets
Accumulated
Amortization
Net
Gross
Assets
Accumulated
Amortization
Net
Finite-lived intangible assets:
Acquired patents / core technology
3
-
10
$
684,436
$
(
420,335
)
$
264,101
$
679,085
$
(
377,908
)
$
301,177
Customer contracts and related relationships
3
-
9
155,900
(
155,900
)
—
155,900
(
155,900
)
—
Existing technology / content database
5
-
10
38,681
(
38,681
)
—
38,681
(
38,681
)
—
Trademarks/trade name
4
-
10
1,300
(
1,300
)
—
1,300
(
1,300
)
—
Total intangible assets
$
880,317
$
(
616,216
)
$
264,101
$
874,966
$
(
573,789
)
$
301,177
As of September 30
, 2025, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands):
Amounts
2025 (remaining 3 months)
14,184
2026
56,619
2027
56,268
2028
51,224
2029
48,976
Thereafter
36,830
Total
$
264,101
NOTE 8 – DEBT
The outstanding amounts of debt were as follows (in thousands):
September 30, 2025
December 31, 2024
Long-term debt
$
447,817
$
487,083
Unamortized debt discount and issuance costs
(
9,132
)
(
11,627
)
438,685
475,456
Less: current portion, net of debt discount and issuance costs
(
20,994
)
(
21,021
)
Total long-term debt, net of current portion
$
417,691
$
454,435
Term Loan B
The 2020 Credit Agreement dated June 1, 2020 (the “2020 Credit Agreement”), provides for a senior secured term loan B facility (the “Term Loan B”) with maturity on
June 8, 2028
.
On May 20, 2024, the Company entered into Amendment No. 3
18
(“Amendment
No. 3”) to the 2020 Credit Agreement, and executed a repricing of the outstanding amount of $
561.1
million. Amendment No. 3 reduced the interest margins from SOFR plus a margin of
3.50
% per annum to SOFR plus a margin of
3.00
% per annum or base rate plus a margin of
2.00
% per annum. In addition, Amendment No. 3 lowered the excess cash flow mandatory payment thresholds.
On January 30, 2025, the Company entered into Amendment No. 4 (“Amendment No. 4”) to the 2020 Credit Agreement, and executed a repricing of the outstanding principal amount of $
487.1
million. Amendment No. 4 further reduced the interest margins to SOFR plus a margin of
2.50
% per annum or base rate plus a margin of
1.50
% per annum.
The obligations under the 2020 Credit Agreement, as amended, continue to be guaranteed by the Company’s wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all assets of the Company and the Guarantors.
The 2020 Credit Agreement, as amended, contains customary events of default, representations, warranties, and affirmative and negative covenants. It also requires the Company to maintain a total net leverage ratio of no greater than 3.00x to access a basket for restricted payments (including dividends and share repurchases). As of September 30, 2025, the Company was in compliance with all requirements under the 2020 Credit Agreement, as amended.
The 2020 Credit Agreement, as amended, also requires the Company to continue to make cash payments on an annual basis based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year. The cash payments are applied to the remaining principal balance due at final maturity.
Interest Expense and Expected Principal Payments
At September 30, 2025, the Company had $
447.8
million in total debt outstanding. Additionally, the Company had $
9.1
million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt. The interest rate on the Term Loan B as of September 30, 2025, including the amortization of debt discount and issuance costs, was
7.8
% and interest is payable monthly.
As of September 30, 2025, future minimum principal payments for long-term debt, excluding any additional principal payment required by the excess cash flow provision, are summarized as follows (in thousands):
Amounts
2025 (remaining 3 months)
$
6,089
2026
24,354
2027
24,354
2028
393,020
Total
$
447,817
19
NOTE 9 – NET INCOME PER SHARE
The following table sets forth the computation of net income per share (in thousands, except per share amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Numerator:
Net income
$
8,828
$
19,314
$
37,364
$
28,595
Denominator:
Weighted average shares of common stock outstanding
109,421
109,035
108,735
108,491
Add: Effect of dilutive securities associated with options
1
—
2
2
Add: Effect of dilutive securities associated with restricted stock awards and units
3,396
4,086
3,931
4,383
Add: Effect of dilutive securities associated with employee stock purchase program
Basic net income per share is computed using the weighted average number of shares of common stock outstanding during the period, excluding any unvested restricted stock units that are subject to repurchase. Diluted net income per share is computed using the treasury stock method to calculate the weighted average number of shares of common stock and, if dilutive, potential common shares outstanding during the period. Potentially dilutive common shares include unvested restricted stock units and incremental common shares issuable upon the exercise of stock options, less shares repurchased from assumed proceeds. The assumed proceeds calculation includes actual proceeds to be received from the employee upon exercise and the average unrecognized stock compensation cost during the period.
NOTE 10 – STOCKHOLDERS’ EQUITY
Equity Incentive Plans
The 2020 EIP
On June 1, 2020, the Company adopted the 2020 Equity Incentive Plan (the “2020 EIP”). Under the 2020 EIP, the Company may grant equity-based awards to employees, non-employee directors, and consultants for services rendered to the Company (or any parent or subsidiary) in the form of stock options, stock awards, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and performance awards (or any combination thereof).
At the Company’s 2024 Annual Stockholders Meeting on May 9, 2024, the Company’s stockholders approved an amendment and restatement of the 2020 EIP, which provided for (i) an increase of the number of shares reserved for issuance by
8,900,000
(from an initial share reserve of
16,800,000
under the prior 2020 EIP to
25,700,000
under the amended and restated 2020 EIP) and (ii) the removal of the “fungible share ratio” for future awards, such that all equity awards granted on or after May 9, 2024 will count on a one-to-one basis against the number of shares authorized for issuance under the 2020 EIP (whereas each share granted pursuant to “full value” awards (i.e. stock awards, restricted stock awards, restricted stock units, performance awards and dividend equivalents) prior to May 9, 2024 are counted against shares available for issuance on a
1.5
to 1 ratio). As of September 30, 2025, there wer
e approximately
5.1
million shares reserved for future grants under the 2020 EIP.
The 2020 EIP provides for option grants designed as either incentive stock options or non-statutory options. Options generally are granted with an exercise price not less than the value of the common stock on the grant date and have a term of
ten years
from the date of grant and vest over a
four-year
period.
20
The vesting criteria for restricted stock awards and restricted stock units is generally the passage of time or meeting certain performance-based objectives, and continued employment through the vesting period, which is generally
four years
for time-based awards.
Assumed Plans
On June 1, 2020, the Company assumed all then-outstanding stock options, awards, and shares available and reserved for issuance under all legacy Equity Incentive Plans of TiVo (collectively, the “Assumed Plans”). Stock options assumed from the Assumed Plans generally have vesting periods of
four years
and a contractual term of
seven years
. Awards of restricted stock and restricted stock units assumed from the Assumed Plans are generally subject to a
four year
vesting period. The Company has not issued any awards under these plans since the 2020 EIP was amended in 2022. The number of shares subject to stock options and restricted stock units outstanding under these plans are included in the tables below.
A summary of the stock option activity is presented below (in thousands, except per share amounts):
Options Outstanding
Number of
Shares
Subject
to Options
Weighted
Average
Exercise
Price Per
Share
Balance at December 31, 2024
66
$
18.97
Options granted
—
$
—
Options exercised
(
15
)
$
12.74
Options canceled / forfeited / expired
(
51
)
$
21.29
Balance at September 30, 2025
—
$
—
Vested and exercisable at September 30, 2025
—
$
—
Restricted Stock Awards
Information with respect to outstanding restricted stock units (including both time-based vesting and performance-based vesting) as of September 30, 2025 is as follows (in thousands, except per share amounts):
Restricted Stock Awards
Number of
Shares
Subject to
Time-
based Vesting
Number of
Shares
Subject to
Performance-
based Vesting
Total
Number of
Shares
Weighted
Average
Grant Date
Fair Value
Per Share
Balance at December 31, 2024
6,380
2,247
8,627
$
10.98
Awards granted
2,715
291
3,006
$
14.97
Awards vested / earned
(
2,507
)
(
957
)
(
3,464
)
$
10.93
Awards canceled / forfeited
(
239
)
—
(
239
)
$
10.80
Balance at September 30, 2025
6,349
1,581
7,930
$
12.52
Performance Awards
Performance awards may be granted to employees or consultants based upon, among other things, the contributions, responsibilities and other compensation of the particular employee or consultant. The value and the vesting of such performance awards are generally linked to one or more performance goals or certain market conditions determined by the Company, in each case on a specified date or dates or over any period or periods determined by the Company, and may range from
zero
to
200
percent of the grant. For performance awards subject to a market vesting condition (“market-based PSUs”), the fair value per award is fixed at the grant date and the amount of compensation expense is not adjusted during the performance period regardless of changes in the level of achievement of the market condition. For performance-based awards incorporating a market condition, where the ultimate number of shares to be earned depends on the achievement of both performance and market conditions, the fair value is estimated on the date of grant using a Monte Carlo simulation model and the amount of compensation expense is adjusted if and when it is probable that the performance condition will be achieved.
21
Employee Stock Purchase Plans
On June 1, 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the “2020 ESPP”). The 2020 ESPP is implemented through consecutive overlapping 24-month offering periods, each of which is comprised of four six-month purchase periods. The first offering period commenced on September 1, 2020 and ended on August 31, 2022. The next offering period under the 2020 ESPP plan commenced on December 1, 2022. Each subsequent offering period under the 2020 ESPP will be
twenty-four months
long and will commence on each December 1 with four six-month purchase periods. Participants may contribute up to
100
% of their base earnings and commissions through payroll deductions, and the accumulated deductions will be applied to the purchase of shares on each semi-annual purchase date. The purchase price per share will equal
85
% of the fair market value per share on the start date of the offering period or, if lower,
85
% of the fair market value per share on the semi-annual purchase date.
An eligible employee’s right to buy the Company’s common stock under the 2020 ESPP may not accrue at a rate in excess of $
25,000
of the fair market value of such shares per calendar year for each calendar year of an offering period. If the fair market value per share of the Company’s common stock on any purchase date during an offering period is less than the fair market value per share on the start date of the
24-month
offering period, then that offering period will automatically terminate and a new
24-month
offering period will begin on the next business day. All participants in the terminated offering will be transferred to the new offering period.
At the 2022 Annual Stockholders Meeting on April 29, 2022, the Company’s stockholders approved an amendment to the 2020 ESPP and increased by
6.0
million the number of shares reserved for issuance. As of September 30, 2025, the
re were approximatel
y
4.9
million shares reserved for grant under the Company’s 2020 ESPP.
Dividends
Stockholders of the Company’s common stock are entitled to receive dividends when declared by the Company’s Board of Directors (the “Board”).
In 2025 and 2024, the Company paid quarterly dividends of $
0.05
per share in each of the March, June, September and December quarterly periods, respectively.
During the periods ended September 30, 2025 and 2024, quarterly dividends declared were $
0.05
per common share, respectively.
The capacity to pay dividends in the future depends on many factors, including the Company’s financial condition, results of operations, capital requirements, capital structure, industry practice and other business conditions that the Board considers relevant.
Stock Repurchase Programs
In October 2024, the Company’s Board approved an increase of the existing share repurchase authorization up to a total of $
200.0
million. During the nine months ended September 30
, 2025, the Company repurchased a total of approximately
0.8
million shares of common stock, at an average price of $
13.18
per share for a total cost of $
10.0
million. These purchases occurred during the three months ended March 31, 2025. No repurchases were made from April 1 through September 30, 2025. The Company did
no
t repurchase any shares during the nine months ended September 30, 2024. As of September 30, 2025, the total remaining amount available for repurchase under this plan was
$
170.0
million. The shares repurchased are recorded as treasury stock and are accounted for under the cost method. No expiration date has been specified for this plan. The Company may execute authorized repurchases from time to time under the plan.
The Company accounts for stock repurchases using the cost method and records retirement of treasury stock as a reduction of the cumulative treasury stock paid-in capital balance. Once the cumulative balance is reduced to zero, any remaining difference resulting from the retirement of treasury stock is recorded as a reduction of retained earnings.
The Company issues restricted stock awards as part of the equity incentive plans described above. For the majority of restricted awards, shares are withheld to satisfy required withholding taxes at the vesting date. Shares withheld to satisfy required withholding taxes in connection with the vesting of restricted awards are treated as common stock repurchases in the Condensed Consolidated Financial Statements because they reduce the number of shares that would have been issued on vesting. However, these withheld shares are not included in common stock repurchases under the Company’s authorized share repurchase plan.
22
NOTE 11 – STOCK-BASED COMPENSATION EXPENSE
The effect of recording stock-based compensation (“SBC”) expense for the three and nine months ended September 30, 2025 and 2024 is as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Research and development
$
1,488
$
1,126
4,144
3,028
Selling, general and administrative
7,195
6,293
21,483
16,128
Total stock-based compensation expense
$
8,683
$
7,419
$
25,627
$
19,156
The Company uses a Monte Carlo simulation to determine the grant date fair value of performance stock awards subject to market conditions, or market-based PSUs.
The following assumptions were used to value the restricted stock units subject to market conditions granted during the nine months ended September 30, 2025 and 2024:
2025
2024
Expected life (years)
3.0
3.0
Risk-free interest rate
3.9
%
4.5
%
Dividend yield
1.5
%
1.8
%
Expected volatility
46.4
%
57.0
%
Grants under the 2020 ESPP occur in June and December, as discussed in
“Note 10 –
Stockholders’ Equity
”. The following assumptions were used to value the shares for these grants.
2025
2024
Expected life (years)
2.0
2.0
Risk-free interest rate
3.9
%
4.8
%
Dividend yield
1.4
%
1.7
%
Expected volatility
46.0
%
57.0
%
NOTE 12 – INCOME TAXES
The Company’s income tax provision and effective tax rate for interim periods are based on its estimated annual effective tax rate adjusted for discrete items during the period. For the three and nine months ended September 30, 2025, the Company recorded income tax expense of $
9.6
million and $
2.6
million, respectively. For the three and nine months ended September 30, 2024, the Company recorded income tax benefit of $(
2.5
) million and expense of $
6.1
million, respectively. The effective tax rate varies from the
21
% U.S. federal tax rate primarily due to unrealized foreign exchange gain or loss associated with South Korea withholding tax refund claims. The increase in income tax expense for the three months ended September 30, 2025, as compared to the same period in the prior year was primarily due to unrealized foreign exchange loss associated with South Korea withholding tax refund claims. The decrease in income tax expense for the nine months ended September 30, 2025, as compared to the same period in the prior year was primarily due to unrealized foreign exchange gain associated with South Korea withholding tax refund claims.
NOTE 13 – LEASES
The Company leases office and research facilities and office equipment under operating leases which expire through
2032
.
The Company’s leases have remaining lease terms of less than
three years
to
eight years
,
some of which may include
options to extend
the leases for
five years
or longer, and some of which may include
options to terminate
the leases within the next
five years
or less. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets;
expense for these leases is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred and are not included within the lease liability and right-of-use assets calculation. As a practical expedient, the Company elected, for all office and facility leases, not to separate non-lease components (e.g., common-area maintenance costs) from lease components (e.g., fixed payments including rent) and instead to account for each separate lease component and its associated non-lease components as a single lease component.
23
As most of the leases do not provide an implicit rate, the Company generally, for purposes of discounting lease payments, uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date.
The components of operating lease costs were as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Fixed lease cost
$
523
$
561
$
1,569
1,671
Variable lease cost
190
171
447
468
Total operating lease cost
$
713
$
732
$
2,016
$
2,139
Other information related to leases was as follows (in thousands, except lease term and discount rate):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
231
$
502
$
1,214
$
1,603
September 30, 2025
December 31, 2024
Weighted-average remaining lease term (years):
Operating leases
6.58
7.24
Weighted-average discount rate:
Operating leases
8.6
%
8.5
%
Future minimum lease payments and related lease liabilities as of September 30, 2025 were as follows (in thousands):
Operating Lease Payments
(1)
2025 (remaining 3 months)
(2)
$
12
2026
(2)
1,107
2027
2,455
2028
1,888
2029
1,944
Thereafter
5,827
Total lease payments
13,233
Less: imputed interest
(
3,777
)
Present value of lease liabilities:
$
9,456
Less: current obligations under leases (accrued liabilities)
537
Noncurrent operating lease liabilities
$
8,919
(1)
Future minimum lease payments exclude short-term leases as well as payments to landlords for variable common area maintenance, insurance and real estate taxes.
(2)
Includes tenant improvements allowance
of $
0.6
million in 2025 and $
1.3
million in 2
026.
NOTE 14 – COMMITMENTS AND CONTINGENCIES
Purchase and Other Contractual Obligations
24
In the ordinary course of business, the Company enters into contractual agreements with third parties that include non-cancelable payment obligations, for which it is liable in future periods. These arrangements primarily include unconditional purchase obligations to service providers. As of September 30, 2025, the Company’s total future unconditional purchase obligations
were approximately $
4.8
million, including $
1.2
million due in the remainder of 2025, $
1.8
million due in 2026 and $
1.8
million due thereafter.
Guarantee
Prior to the Separation, Adeia Media LLC, a subsidiary of the Company (“Adeia Media”), and a subsidiary of Xperi Inc. (“Xperi Sub”) entered into an agreement (the “Specified Agreement”) with a third party pursuant to which Adeia Media guarantees the performance of Xperi Sub under the Specified Agreement, including its payment obligations to such third party. In connection with the Separation, Adeia Media and Xperi Sub entered into a separate cross business agreement (the “Cross Business Agreement”) effective as of October 1, 2022, under which Adeia Media agreed to make guarantee payments to Xperi Sub in amounts based on certain of its operating expenses under the Specified Agreement through 2031. Consequently, on October 1, 2022, the Company recognized a guarantee liability pursuant to ASC 460 “Guarantees” of $
19.7
million, which represents the fair value of Adeia Media’s projected payments of such operating expenses during the term of the Cross Business Agreement. Subsequent changes to the carrying value of the guarantee are recognized as part of the Company’s results of operations. As of September 30
, 2025 and December 31, 2024, the balance of the guarantee liability wa
s $
16.3
million and $
17.1
m
illion, respectively. Operating expense reimbursements are capped at a maximum of $
7.5
million per annum. To date, such reimbursements have not been material.
Indemnifications
In the normal course of business, the Company provides indemnifications of varying scopes and amounts to certain of its licensees, customers, and business partners against claims made by third parties arising from the use of the Company’s intellectual property, services or technologies. The Company cannot reasonably estimate the possible range of losses that may be incurred pursuant to its indemnification obligations, if any. Variables affecting any such assessment include, but are not limited to: the nature of the claim asserted; the relative merits of the claim; the financial ability of the party suing the indemnified party to engage in protracted litigation; the number of parties seeking indemnification; the nature and amount of damages claimed by the party suing the indemnified party; and the willingness of such party to engage in settlement negotiations. To date, no such claims have been filed against the Company and no liability has been recorded in the Company’s financial statements.
As permitted under Delaware law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company believes, given the absence of any such payments in the Company’s history, and the estimated low probability of such payments in the future, that the estimated fair value of these indemnification agreements is immaterial. In addition, the Company has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable the Company to recover any payments under the indemnification agreements, should they occur.
Contingencies
At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of losses is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies.
Litigation related
The Company and its subsidiaries are involved in litigation matters and claims in the normal course of business. In the past, the Company and its subsidiaries have litigated to enforce their respective patents and other intellectual property rights, to enforce the terms of license agreements, to protect trade secrets, and to defend the Company’s patents against claims of invalidity. The Company expects it or its subsidiaries will be involved in similar legal proceedings in the future, including proceedings regarding infringement of its patents, and proceedings to ensure proper and full payment of royalties by licensees under the terms of its license agreements.
NOTE 15 –
SEGMENT INFORMATION
25
The Company has
one
reportable segment: IP Licensing. The IP Licensing segment derives revenues from license agreements to (i) its media patent portfolio and (ii) its semiconductor technologies patent portfolio, see further discussion on revenue generating activities in Note 3 –
Revenue
. The Company derives revenue primarily in North America and manages the business activities on a consolidated basis.
The accounting policies of the IP Licensing segment are the same as those described in Note 2 –
Summary of Significant Accounting Policies
. The Company’s
Chief Executive Officer
is also the chief operating decision maker (“CODM”) as defined by the authoritative guidance on segment reporting.
The CODM assesses financial performance for the IP Licensing segment and decides how to allocate resources based on net income that also is reported on the statements of income as consolidated net income. Net income is also used by the CODM to monitor budget versus actual results of the IP Licensing segment.
The measure of segment assets is reported on the balance sheet as total consolidated assets.
The CODM uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the IP Licensing segment or into other parts of the entity, such as for acquisitions or to return value to stockholders.
The following table presents information with respect to the Company’s IP Licensing segment revenue, significant expenses and income (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Revenue
$
87,339
$
86,101
$
260,744
$
256,856
Less:
Personnel related expense
23,165
21,269
70,806
59,372
Patent portfolio expense
8,853
8,161
26,627
24,064
Patent related technical sales support expense
1,802
1,680
5,135
4,706
Amortization expense
14,175
13,600
42,427
56,787
Outside services expense
2,929
4,318
10,726
11,666
Litigation expense
5,195
2,652
18,223
9,843
Interest expense
10,054
12,758
30,919
40,229
Other segment items
(1)
2,735
4,869
15,929
15,485
Provision for income taxes
9,603
(
2,520
)
2,588
6,109
Segment net income
$
8,828
$
19,314
$
37,364
$
28,595
(1)
Other segment items include facilities and other related expenses, marketing and advertising expenses, depreciation expense, travel and entertainment expenses, other income and expense, and other overhead expenses.
Revenue by Geography and Customer Concentration
While the Company’s revenue is primarily derived in North America, a portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., and it is expected that this revenue will continue to account for a portion of total revenue in future periods. Revenue is attributed to geographic locations based on the billing address of each customer. The table below lists the revenue by geography for the periods indicated (in thousands, except for percentages):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
U.S.
$
66,212
76
%
$
68,304
79
%
$
205,635
79
%
$
208,351
81
%
Asia
15,148
17
12,314
14
38,427
15
32,154
12
Canada
3,082
4
3,206
4
9,305
4
9,779
4
Europe and Middle East
2,418
3
1,809
2
5,969
2
5,198
2
Other
479
—
468
1
1,408
—
1,374
1
$
87,339
100
%
$
86,101
100
%
$
260,744
100
%
$
256,856
100
%
26
For the three and nine months ended September 30, 2025 and 2024, there
were
two
custo
mers that each accounted for 10% or more of total revenue.
The following table sets forth revenue generated from customers which comprise 10% or more of total revenue for the periods indicated:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Customer A
19.7
%
20.0
%
19.8
%
20.1
%
Customer B
10.0
%
11.2
%
10.3
%
11.6
%
At September 30, 2025, the Company had two
customers representing
60
% and
13
% of
aggr
egate accounts receivable, respectively. At December 31, 2024, the Company had two customers representing
52
% and
11
% of aggregate accounts receivable, respectively.
Other Geography Information
At September 30, 2025 and December 31, 2024, property and equipment, net, was all located in the U.S.
NOTE 16 – SUBSEQUENT EVENTS
Declaration of Cash Dividends
On
October 21, 2025
, the Board declared a cash dividend of $
0.05
per share of common stock, payable on
December 15, 2025
to the stockholders of record at the close of business on
November 24, 2025
.
27
Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion is intended to promote understanding of the results of operations and financial condition and should be read in conjunction with our condensed consolidated financial statements and notes thereto, and with our audited financial statements and notes thereto for the year ended December 31, 2024 found in the Form 10-K filed by us on February 19, 2025 (the “Form 10-K”). This section of this Form 10-Q generally discusses quarter over quarter comparisons of 2025 against 2024.
This quarterly report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on information available to the Company as of the date hereof, as well as the Company’s current expectations, assumptions, estimates and projections that involve risks and uncertainties. In this context, forward-looking statements often address expected future business, financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “target,” similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond the Company’s control, and are not guarantees of future results. Forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: the Company’s ability to implement its business strategy; the Company’s ability to enter into new and renewal license agreements with customers on favorable terms; the Company’s ability to retain and hire key personnel; uncertainty as to the long-term value of the Company’s common stock; legislative, regulatory and economic developments affecting the Company’s business; general economic and market developments and conditions; the Company’s ability to grow and expand its patent portfolios; changes in technology and development of new technology in the industries in which the Company operates; the evolving legal, regulatory and tax regimes under which the Company operates; unforeseen liabilities and expenses; risks associated with the Company’s indebtedness; unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, natural disasters and global health pandemics, each of which may have an adverse impact on the Company’s business, results of operations, and financial condition.
Although forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks, uncertainties, and changes in condition, significance, value and effect, including those discussed under the heading “Risk Factors” hereof and other documents we file from time to time with the Securities and Exchange Commission (the “SEC”), such as our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. Such risks, uncertainties and changes in condition, significance, value and effect could cause our actual results to differ materially from those expressed herein and in ways not readily foreseeable. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report and are based on information currently and reasonably known to us. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report, other than as required by law. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Business Overview
Adeia Inc. (“Adeia”, “we”) is a leading IP licensing platform in the consumer and entertainment space, with a diverse portfolio of media and semiconductor intellectual property and more than 13,000 patents and patent applications worldwide. In order to serve an increasingly connected world, we invent, develop, and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment. Our inventions are key enabling technologies that drive how consumers interact with entertainment and devices at home and on the go around the world. Our foundational technologies help elevate content and improve how audiences connect with it in a way that is more intelligent, immersive and personal. Our innovative solutions help power smart devices, entertainment experiences and more, and have created a unified ecosystem that reaches highly-engaged consumers and uncovered new business opportunities.
Headquartered in Silicon Valley with more than 35 years of operating experience, we have approximately 150 employees, with substantially all of our employees located in the U.S.
28
Macroeconomic Conditions
Macroeconomic conditions due to inflation, geopolitical instability and global health events had in the past, and may in the future have, an adverse impact on our business. For example, such conditions may cause volatility in the markets we serve, particularly the broad consumer electronics market. Impacts from adverse macroeconomic conditions may negatively impact our financial condition and results of operations, which could result in an impairment of our long-lived assets, including goodwill, and increased credit losses.
Although a significant portion of our revenue is derived from fixed-fee and minimum-guarantee arrangements from large, well-capitalized customers, our per-unit and variable-fee based revenue will continue to be susceptible to direct or indirect effects from macroeconomic events, such as armed conflict, geopolitical factors, tariffs, market volatility, labor shortages, supply chain disruptions, microchip shortages, changes in demand for semiconductors, market and industry downturns, global health concerns, outbreaks and pandemics. In addition, to the extent that our customers experience significant, adverse impacts from such macroeconomic events, such events may affect their financial health and our ability to continue receiving revenues from these customers.
Reportable Segments
We operate and report in one segment: IP Licensing. We believe that this structure reflects our current operational and financial management and provides the best structure for us to focus on growth opportunities. Our Chief Executive Officer has been determined to be the Chief Operating Decision Maker (“CODM”) in consideration with the authoritative guidance on segment reporting.
We primarily license our innovations to leading companies in the broader media entertainment and semiconductor industries, and those companies developing new technologies that will help drive these industries forward. Licensing arrangements include access to one or more of our foundational patent portfolios and may also include access to some portions of our industry-leading technologies and know-how.
Key Metrics
In evaluating our financial condition and operating performance, we primarily focus on revenue and cash flows from operations. For the three and nine months ended September 30, 2025, as compared to the same period in 2024:
Three months ended September 30, 2025:
•
Revenue increased by $1.2 million, or 1.4%, from $86.1 million in 2024 to $87.3 million in 2025.
•
Recurring revenues increased by $3.6 million, or 4.4% from $82.7 million in 2024 to $86.3 million in 2025.
•
Non-recurring revenues decreased by $2.4 million, or 70.6% from $3.4 million in 2024 to $1.0 million in 2025.
•
Cash provided by operating activities increased by $3.5 million, or 24.5% from $14.3 million in 2024 to $17.8 million in 2025.
•
We made $11.1 million in principal payments towards our term loan, bringing the outstanding balance to $447.8 million as of September 30, 2025.
Nine months ended September 30, 2025:
•
Revenue increased by $3.8 million, or 1.5%, from $256.9 million in 2024 to $260.7 million in 2025.
•
Recurring revenues increased by $6.0 million, or 2.4% from $249.8 million in 2024 to $255.8 million in 2025.
•
Non-recurring revenues decreased by $2.1 million, or 29.7% from $7.0 million in 2024 to $4.9 million in 2025.
•
Cash provided by operating activities decreased by $6.9 million, or 6.6% from $105.0 million in 2024 to $98.1 million in 2025.
•
We completed another repricing of our term loan in January 2025, further reducing our interest rate by 50 basis points.
•
We made $39.3 million in principal payments towards our term loan, bringing the outstanding balance to $447.8 million as of September 30, 2025.
•
We repurchased $10.0 million of our common stock in the first quarter of 2025.
29
Results of Operations
Revenue
We derive the majority of our revenue from the licensing of our IP rights to our customers. For our revenue recognition policy, including descriptions of revenue-generating activities, refer to “Note 3 –
Revenue
” of the Notes to Condensed Consolidated Financial Statements.
The following table presents our operating results for the periods indicated as a percentage of revenue:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Revenue
100
%
100
%
100
%
100
%
Operating expenses:
Research and development
18
17
19
17
Selling, general and administrative
29
31
33
29
Amortization expense
16
16
16
22
Litigation expense
6
3
7
4
Total operating expenses
69
67
75
72
Operating income
31
33
25
28
Interest expense
(12
)
(15
)
(12
)
(16
)
Other income and expense, net
2
2
2
2
Income before income taxes
21
20
15
14
Provision for (benefit from) income taxes
11
(3
)
1
2
Net income
10
%
23
%
14
%
12
%
The following table sets forth our revenue for the three and nine months ended September 30, 2025 and 2024 (in thousands, except for percentages):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
Increase
% Change
2025
2024
Increase
% Change
Revenue
$
87,339
$
86,101
$
1,238
1
%
$
260,744
$
256,856
$
3,888
2
%
The increase in revenue during the three months ended September 30, 2025, as compared to the same period in 2024, was primarily attributable the execution of license agreements with new customers and increased royalty revenue from certain semiconductor customers, partially offset by declines in royalty revenue from certain Pay-TV customers.
Recurring revenue for the three months ended September 30, 2025 and 2024 were $86.3 million and $82.7 million, respectively. The increase of $3.6 million was driven primarily by the execution of license agreements with new customers in 2024 and 2025, and increased royalty revenue from certain semiconductor customers, partially offset by declines in royalty revenue from certain Pay-TV customers.
Non-recurring revenues for the three months ended September 30, 2025 and 2024 were $1.0 million and $3.4 million, respectively. The decrease of $2.4 million was primarily attributable to the execution of license agreements with certain customers in the third quarter of 2024, which resulted in an increase in non-recurring revenue in that quarter than as compared to the third quarter of 2025.
The increase in revenue during the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily attributable to the execution of license agreements with new customers, partially offset by declines in royalty revenue from certain Pay-TV customers.
Recurring revenue for the nine months ended September 30, 2025 and 2024 were $255.8 million and $249.8 million, respectively. The increase of $6.0 million was primarily driven by the execution of license agreements with new customers, partially offset by declines in royalty revenue from certain Pay-TV customers.
30
Non-recurring revenues for the nine months ended September 30, 2025 and 2024 were $4.9 million and $7.0 million, respectively. The decrease of $2.1 million was primarily attributable to the execution of license agreements with customers in the second and third quarters of 2024, partially offset by the execution of license agreements with new customers in 2025.
Research and Development (in thousands, except for percentages):
Research and development expense (“R&D expense”) consists primarily of personnel costs, stock-based compensation, outside engineering consulting expenses associated with new IP development, as well as costs related to patent applications and examinations, reverse engineering, materials, supplies and an allocation of facilities costs. All R&D expense is expensed as incurred. We intend to make a continued investment in our R&D efforts because we believe they are essential to grow our patent portfolios to secure new customers and renew agreements with existing customers.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
Increase
% Change
2025
2024
Increase
% Change
Research and development
$
16,040
$
14,825
$
1,215
8
%
$
48,364
$
43,549
$
4,815
11
%
The increase in R&D expense during the three and nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in patent portfolio expenses, patent technical support expenses, and an increase in personnel related costs as a result of increased headcount.
Selling, General and Administrative (in thousands, except for percentages):
Selling, general and administrative (“SG&A”) expenses consist primarily of personnel costs, sales commission, advertising, branding activities, stock-based compensation, professional services, facilities costs, and expenses related to our executive, finance, human resource, legal, and information technology organizations.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
Decrease
% Change
2025
2024
Increase
% Change
Selling, general and administrative
$
24,920
$
26,903
$
(1,983
)
(7
)%
$
85,481
$
75,549
$
9,932
13
%
The decrease in SG&A expense during the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to decreases in advertising expense and outside services, partially offset by increases in personnel related costs as a result of increased headcount.
The increase in SG&A expense during the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to increases in personnel related costs as a result of increased headcount and advertising expense, partially offset by decreases in outside services.
Amortization Expense (in thousands, except for percentages):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
Increase
% Change
2025
2024
Decrease
% Change
Amortization expense
$
14,175
$
13,600
$
575
4
%
$
42,427
$
56,787
$
(14,360
)
(25
)%
The increase in amortization expense during the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to purchases of patent portfolios and the resulting amortization of those assets.
The decrease in amortization expense during the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to certain intangible assets becoming fully amortized during 2024. The decrease was partially offset by an increase in amortization expense as a result of patents acquired in the second half of 2024 and first half of 2025.
31
Litigation Expense (in thousands, except for percentages):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
Increase
% Change
2025
2024
Increase
% Change
Litigation expense
$
5,195
$
2,652
$
2,543
96
%
$
18,223
$
9,844
$
8,379
85
%
The increase in litigation expense during the three and nine months ended September 30, 2025, as compared to the same periods in 2024, was primarily due to increased activity in current litigation matters. See Part II, Item 1 –
Legal Proceedings
for additional information regarding these matters.
We expect that litigation expense will continue to be a significant portion of our operating expenses, as it is used to enforce and protect our IP and contract rights. Litigation expense may fluctuate between periods because of planned or ongoing litigation, as described in Part II, Item 1 –
Legal Proceedings
.
Interest Expense (in thousands, except for percentages):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
Decrease
% Change
2025
2024
Decrease
% Change
Interest expense
$
10,054
$
12,758
$
(2,704
)
(21
)%
$
30,919
$
40,229
$
(9,310
)
(23
)%
The decrease in interest expense during the three and nine months ended September 30, 2025, as compared to the same periods in 2024, was primarily due to lower debt balances, the reduction of the interest rate margin resulting from the repricing of our Term Loan B during the second quarter of 2024 and the first quarter of 2025, and the Federal Reserve interest rate cut during 2024.
Other Income and Expense, Net (in thousands, except for percentages):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
Increase
% Change
2025
2024
Increase
% Change
Other income and expense, net
$
1,476
$
1,431
$
45
3
%
$
4,622
$
4,259
$
363
9
%
The increase in other income and expense, net during the three and nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in interest income from significant financing components from certain revenue contracts.
Loss on Debt Extinguishment
During the nine months ended September 30, 2024, we recognized $0.5 million associated with the repricing of our Term Loan B. There were no such costs in 2025. Refer to discussion below for further detail on the repricing of our Term Loan B.
Provision for Income Taxes (in thousands, except for percentages):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
Increase
% Change
2025
2024
Decrease
% Change
Provision for (benefit from) income taxes
$
9,603
$
(2,520
)
$
12,123
(481
)%
$
2,588
$
6,109
$
(3,521
)
(58
)%
32
Our income tax provision for interim periods is based on the estimated annual effective tax rate adjusted for discrete items during the period. For the three months ended September 30, 2025, we recorded an income tax expense of $9.6 million on pretax income of $18.4 million, and for the nine months ended September 30, 2025, we recorded an income tax expense of $2.6 million on pretax income of $40.0 million, which resulted in effective tax rates of 52.1% and 6.5%, respectively, for the three and nine months ended September 30, 2025. The effective tax rate varies from the 21% U.S. federal tax rate primarily due to unrealized foreign exchange gain or loss associated with South Korea withholding tax refund claims.
For the three months ended September 30, 2024, we recorded income tax benefit of $(2.5) million on pretax income of $16.8 million, and for the nine months ended September 30, 2024, we recorded an income tax expense of $6.1 million on pretax income of $34.7 million, which resulted in effective tax rates of (14.9)% and 17.6%, respectively, for the three and nine months ended September 30, 2024.
The increase in income tax expense for the three months ended September 30, 2025, as compared to the same period in the prior year was primarily due to unrealized foreign exchange loss associated with South Korea withholding tax refund claims. The decrease in income tax expense for the nine months ended September 30, 2025, as compared to the same period in the prior year was primarily due to unrealized foreign exchange gain associated with South Korea withholding tax refund claims.
We periodically evaluate the realizability of our net deferred tax assets based on all available evidence, both positive and negative. After considering the evidence to assess the recoverability of our net deferred tax assets, we concluded that it was more-likely-than-not that we would realize our federal and certain state deferred tax assets.
Liquidity and Capital Resources
The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents for the nine months ended September 30, 2025 and 2024.
As of
(in thousands)
September 30, 2025
December 31, 2024
Cash and cash equivalents
$
56,090
$
78,825
Marketable securities
58,984
31,567
Total cash, cash equivalents and marketable securities
$
115,074
$
110,392
Nine Months Ended September 30,
2025
2024
Net cash provided by operating activities
$
98,088
$
105,001
Net cash used in investing activities
$
(34,376
)
$
(8,394
)
Net cash used in financing activities
$
(86,447
)
$
(90,469
)
Our primary sources of liquidity and capital resources are our operating cash flows and our short-term investments in marketable securities. Cash, cash equivalents and marketable securities were $115.1 million at September 30, 2025, an increase of $4.7 million from $110.4 million at December 31, 2024. This increase primarily resulted from $98.1 million of cash generated from operations, partially offset by $39.3 million in repayment of our long-term debt, $20.9 million in repurchases of common stock associated with tax withholdings on equity awards, $11.3 million in repurchases of common stock, $16.3 million in dividends paid, and $6.1 million in purchases of intangible assets.
The primary objectives of our investment activities are to preserve principal and to maintain liquidity, while at the same time capturing a market rate of return. To achieve these objectives, we maintain a diversified portfolio of securities including money market funds and debt securities such as corporate bonds and notes, municipal bonds and notes, commercial paper, treasury and agency notes and bills and certificates of deposit. Our marketable debt securities are classified as available-for-sale (“AFS”) with credit losses recognized as a credit loss expense and non-credit related unrealized gains and losses, net of tax, recorded in accumulated other comprehensive income or loss.
For information about our material cash requirements, see “Liquidity and Capital Resources” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Other than the principal payments of $39.3 million made by us under the existing Term Loan B during the nine months ended September 30, 2025, our cash requirements have not materially changed since December 31, 2024. We expect to continue to make additional payments on our existing debt from cash generated from operations.
33
In addition to the cash requirements outlined above, we have returned cash to stockholders through both quarterly dividend payments and repurchases of our common stock under our stock repurchase plan.
We believe that based on current levels of operations and anticipated growth, our cash from operations, together with cash and cash equivalents currently available, will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and thereafter for the foreseeable future. Poor financial results, unanticipated expenses, unanticipated acquisitions of technologies or businesses, or unanticipated strategic investments could give rise to additional financing requirements sooner than we expect. There can be no assurance that equity or debt financing will be available when needed or, if available, that such financing will be on terms satisfactory to us. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness could result in increased debt service obligations and may include covenants that would restrict our operations.
Quarterly Dividends
In 2025 and 2024, we paid quarterly dividends of $0.05 per share in each of the March, June, September and December quarterly periods, respectively. In October 2025, our Board authorized payment of a quarterly cash dividend of $0.05 per share, to be paid in December 2025.
Stock Repurchase Plan
In October 2024, our Board approved an increase of the existing share repurchase authorization up to a total of $200.0 million. The stock repurchases may be made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions, or pursuant to a Rule 10b5-1 plan. During the nine months ended September 30, 2025, we repurchased a total of approximately 0.8 million shares of common stock, at an average price of $13.18 per share for a total cost of $10.0 million. These purchases occurred during the three months ended March 31, 2025. No repurchases were made from April 1 through September 30, 2025. We did not repurchase any shares during the nine months ended September 30, 2024. As of September 30, 2025, the total remaining amount available for repurchase under this plan was $170.0 million.
We may continue to execute authorized repurchases from time to time under the Plan. The amount and timing of any repurchases under the Plan depend on a number of factors, including, but not limited to, the trading price, volume and availability of our common shares. There is no guarantee that such repurchases under the Plan will enhance the value of our common stock.
Cash Flows from Operating Activities
Cash flows provided by operations were $98.1 million for the nine months ended September 30, 2025, primarily due to our net income of $37.4 million being adjusted for non-cash items of amortization of intangible assets of $42.4 million, stock-based compensation expense of $25.6 million, and $(13.2) million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2024.
Cash flows provided by operations were $105.0 million for the nine months ended September 30, 2024, primarily due to our net income of $28.6 million being adjusted for non-cash items of amortization of intangible assets of $56.8 million, stock-based compensation expense of $19.2 million and $(0.7) million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2023.
Cash Flows from Investing Activities
Net cash used in investing activities was $34.4 million for the nine months ended September 30, 2025, primarily due to purchases of short-term investments in marketable securities of $46.3 million, purchases of intangible assets of $6.1 million, partially offset by proceeds from maturities of marketable securities of $18.2 million.
Net cash used in investing activities was $8.4 million for the nine months ended September 30, 2024, primarily due to purchases of short-term investments of $25.1 million, purchases of intangible assets of $8.5 million, partially offset by proceeds from maturities of investments of $26.5 million.
Capital Expenditures
34
Our capital expenditures for property and equipment consist primarily of leasehold improvements, purchases of computer hardware and software, information systems, and semiconductor production and test equipment. During the nine months ended September 30, 2025 and 2024, we spent $1.2 million and $1.3 million on capital expenditures, respectively. Our capital expenditures for intangible assets consists of acquired patents. During the nine months ended September 30, 2025 and 2024, we spent $6.1 million and $8.5 million on purchases of intangible assets, respectively. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs.
Cash Flows from Financing Activities
Net cash used in financing activities was $86.4 million for the nine months ended September 30, 2025, primarily due to $39.3 million in repayment of indebtedness, $16.3 million in dividends paid, $20.9 million in repurchases of common stock for tax withholdings on equity awards, and $11.3 million in repurchases of common stock.
Net cash used in financing activities was $90.5 million for the nine months ended September 30, 2024, primarily due to $64.2 million in repayment of indebtedness, $16.3 million in dividends paid, $11.6 million in repurchases of common stock for tax withholdings on equity awards.
Long-term Debt
The 2020 Credit Agreement dated June 1, 2020 (the “2020 Credit Agreement”), provides for a senior secured term loan B facility (the “Term Loan B”) with maturity on June 8, 2028. On May 20 2024, we entered into Amendment No. 3 (“Amendment No. 3”) to the 2020 Credit Agreement, and executed a repricing of the outstanding amount of $561.1 million. Amendment No. 3 reduced interest margins from SOFR plus a margin of 3.50% to SOFR plus a margin of 3.00% per annum or base rate plus a margin of 2.00% per annum. In addition, Amendment No. 3 lowered the excess cash flow mandatory payment thresholds.
On January 30, 2025, we entered into Amendment No. 4 (“Amendment No. 4”) to the 2020 Credit Agreement, and executed a repricing of the outstanding principal amount of $487.1 million. Amendment No. 4 further reduced the interest margins to SOFR plus a margin of 2.50% per annum or base rate plus a margin of 1.50% per annum.
The obligations under the 2020 Credit Agreement, as amended, continue to be guaranteed by our wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all our assets and those of the Guarantors.
As of September 30, 2025, $447.8 million was outstanding under the term loan B facility. Additionally, we had $9.1 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt. The interest rate on the Term Loan B, including the amortization of debt discount and issuance costs, was 7.8% and interest is payable monthly.
Under the existing loan agreement, we have future minimum principal payments for our debt of $6.1 million in the remainder of 2025, $24.4 million each year from 2026 through 2027, with the remaining principal balance of $393.0 million due in 2028. The 2020 Credit Agreement, as amended, also requires that we continue to make cash payments on an annual basis based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year. The cash payments are applied to the remaining principal balance due at final maturity. Based on certain leverage ratios and the voluntary prepayments we made during the year ended December 31, 2024, no excess cash flow payment is required in 2025. The term loan B facility contains customary covenants, and as of September 30, 2025, we were in full compliance with such covenants.
Critical Accounting Policies and Estimates
During the nine months ended September 30, 2025, there were no significant changes in our critical accounting policies and estimates. See “Note 2 –
Summary of Significant Accounting Policies
” of Notes to Condensed Consolidated Financial Statements for additional detail. For a discussion of our critical accounting policies and estimates, see Part II, Item 7 –
Management’s Discussion and Analysis of Financial Condition and Results of Operations
in our Annual Report on Form 10-K.
Recent Accounting Pronouncements
See “Note 2 –
Summary of Significant Accounting Policies
” of the Notes to Condensed Consolidated Financial Statements for a full description of recent accounting pronouncements including the respective expected dates of adoption.
35
Item 3. Quantitative and Qualitati
ve Disclosures About Market Risk
For a discussion of our market risk, see Part II, Item 7A –
Quantitative and Qualitative Disclosures About Market Risk
in our Annual Report on Form 10-K.
Item 4. Controls
and Procedures
Attached as exhibits to this Form 10-Q are certifications of Adeia Inc.’s Chief Executive Officer and Chief Financial Officer, which are required in accordance with Rule 13a-14 of the Exchange Act. This “Controls and Procedures” section includes information concerning the controls and controls evaluation referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.
Evaluation of Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the evaluation date). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the evaluation date that our disclosure controls and procedures were effective to provide reasonable assurance that the information relating to Adeia Inc., including our consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to Adeia Inc.’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, during the last fiscal quarter covered by this Quarterly Report on Form 10-Q that materially affected or are reasonably likely to materially affect our internal control over financial reporting.
36
PART II - OTH
ER INFORMATION
Item 1. Legal
Proceedings
In the normal course of our business, we are involved in legal proceedings. In the past, we have litigated to enforce our patents, to enforce the terms of license agreements, and to defend our patents against claims of invalidity. We expect to continue to be involved in similar legal proceedings in the future, including proceedings regarding infringement of our patents and proceedings to ensure proper and full payment of royalties by licensees under the terms of our license agreements.
We cannot predict the outcome of any of the proceedings described below, other than to the extent such proceedings have concluded. An adverse decision in any of these proceedings could significantly harm our business and our consolidated financial position, results of operations, and cash flows.
Patent Infringement Litigation
In the ordinary course of our business, we engage in litigation to protect our IP from infringement. While litigation is never our preference, and we prefer to reach mutually agreeable commercial licensing arrangements with third parties, it is sometimes a necessary step to effectively protect our investment in our IP. As a result of these lawsuits, defendants have often filed Inter Partes Review (“IPR”) petitions with the U.S. Patent Office’s Patent Trial and Appeal Board (and other similar post-grant proceedings outside of the U.S.) seeking to invalidate one or more of our patents. We are currently engaged in multiple lawsuits with several third parties.
Videotron Patent Infringement Litigation
On May 21, 2021, Adeia Guides Inc. (formerly known as Rovi Guides, Inc.) (“Adeia Guides”) filed a patent infringement complaint against Videotron Ltd. (“Videotron”) in Toronto, Canada, alleging infringement of four patents (the “Videotron Litigation”). On July 21, 2021, the Federal Court of Canada held a case management conference in the Videotron Litigation, shortly before which Videotron filed a motion to strike various portions of the statement of claim. On March 22, 2022, the Court issued an order on Videotron’s motion to strike, dismissing the motion in its entirety. On April 1, 2022, Videotron filed an appeal of the Court’s order dismissing Videotron’s motion to strike. On June 30, 2022, the Court of Appeal issued its decision in Videotron’s appeal in which it ruled in favor of Adeia Guides and dismissed Videotron’s appeal. The trial commenced on February 3, 2025. Closing arguments were held April 15-17, 2025. On October 24, 2025, the Court issued a decision in the case and awarded Adeia a permanent injunction, finding that Videotron’s Helix, illico+ and illico video platforms infringe an Adeia media patent. The Court also ruled that Videotron’s Helix video platform infringes an additional Adeia media patent and awarded Adeia damages for both patents. Two other patents asserted in the case were found invalid. The parties have 30 days to file a notice of appeal.
Bell Patent Infringement Litigation
On July 27, 2021, Adeia Guides and Adeia Media Holdings LLC (formerly known as TiVo LLC) (together, “Adeia Media”) filed a patent infringement complaint against Bell Canada and four of its affiliates, Telefonaktiebolaget L M Ericsson, Ericsson Canada Inc., and MK Systems USA Inc. and MK Mediatech Canada Inc. (collectively, “Defendants”) in Toronto, Canada, alleging infringement of four patents (the “Bell Litigation”). The Defendants filed a motion to strike various portions of the statement of claim in the Bell Litigation. On March 22, 2022, the Court issued an order on Defendants’ motion to strike, dismissing-in-part and granting-in-part. On April 1, 2022, the Defendants filed a Notice of Motion to Appeal the Court’s order on Defendants’ motion to strike. On June 30, 2022, the Court of Appeal issued its decision in Defendants' appeal in which it ruled in Adeia Media’s favor and dismissed Defendants’ appeal. On September 30, 2022, Defendants filed a motion for bifurcation, asking the Federal Court of Canada to bifurcate the case into two phases: a first phase related to liability and injunction and second phase addressing damages if liability is found. The Court held a hearing on the motion for bifurcation on December 12, 2022. On February 15, 2023, the Court issued an order granting the motion for bifurcation in which the Court bifurcated the liability and injunction phase from the damages quantification phase of the case. The trial commenced on April 28, 2025. Closing arguments were held June 2-4, 2025. There is no set deadline for the Federal Court of Canada to issue a decision.
37
Shaw Breach of Contract Litigation
On October 2, 2023, Adeia Guides Inc., Adeia Media Solutions Inc., and Adeia Media Holdings LLC (collectively, “Adeia Media Companies”) filed a complaint against Shaw Cablesystems G.P. and Shaw Satellite G.P. (together, “Shaw”) in the United States District Court for the Southern District of New York, alleging breach of contract by Shaw for failure to pay royalties owed to Adeia Media Companies under the license agreement between the parties. On October 8, 2024, Shaw filed a motion to dismiss the complaint. On September 29, 2025, the Court denied Shaw’s motion to dismiss Adeia Media Companies’ breach of contract claim and granted Shaw’s motion to dismiss the declaratory relief claim as duplicative. On October 14, 2025, Shaw filed its answer to the complaint. The trial date has not been set.
Disney Patent Infringement Litigation
U.S Litigation
On November 7, 2024, Adeia Technologies Inc., (“Adeia Technologies”) and Adeia Media filed a complaint against The Walt Disney Company, Disney Media and Entertainment Distribution LLC, Disney DTC LLC, Disney Streaming Services LLC, Disney Entertainment & Sports LLC, Disney Platform Distribution, Inc., BAMTech, LLC, Hulu, LLC, and ESPN, Inc. (collectively, “Disney U.S. Defendants”) in the United States District Court for the District of Delaware, alleging infringement of six patents (“U.S. Asserted Patents”). On January 16, 2025, Disney U.S. Defendants filed a motion to dismiss two of the six asserted patents as invalid under 35 U.S.C. §101. Adeia Technologies and Adeia Media’s opposition to the motion to dismiss was filed on February 13, 2025. Disney U.S. Defendants’ reply was filed February 27, 2025. On September 12, 2025, the Court denied Disney’s motion to dismiss. On September 26, 2025, Disney U.S. Defendants served its answer to the complaint. Trial has been set for June 7-11, 2027.
On October 31, 2025, Disney U.S. Defendants filed three petitions for IPR before the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office – one petition against each of three of the U.S. Asserted Patents. On November 5, 2025, Disney U.S. Defendants filed two petitions for IPR – one petition against each of two additional U.S. Asserted Patents. No dates have been set yet by the PTAB.
European Litigation
On November 7, 2024, Adeia Solutions LLC (“Adeia Solutions”) filed a complaint against The Walt Disney Company Benelux (BV), Disney Interactive Studios, Inc., and The Walt Disney Company Limited (collectively, “Disney Europe Defendants”) in the Regional Court of Munich, Germany, alleging infringement of one patent. Disney Europe Defendants filed their response to the complaint on June 30, 2025. Adeia Solutions filed its reply to Disney Europe Defendants’ response to the complaint on October 14, 2025. The oral hearing on the merits is set for February 25, 2026.
On November 7, 2024, Adeia Guides filed a complaint against the Disney Europe Defendants in the Unified Patent Court (“UPC”) Munich Local Division, Germany, alleging infringement of one patent. Disney Europe Defendants filed their Statement of Defence and Counterclaim for Revocation on March 10, 2025. Adeia Guides filed its reply to Disney Europe Defendants’ Statement of Defence and Counterclaim for Revocation on May 12, 2025. Oral hearing on the merits is set for January 15, 2026.
On November 7, 2024, Adeia Guides filed a complaint against Disney Europe Defendants in the UPC The Hague Local Division, The Netherlands, alleging infringement of one patent. Disney Europe Defendants filed their Statement of Defence and Counterclaim for Revocation on March 5, 2025. Adeia Guides filed its reply to the Disney Europe Defendants’ Statement of Defence and Counterclaim for Revocation on May 21, 2025. Oral hearing on the merits is set for January 29, 2026.
Brazil Litigation
On November 11, 2024, Adeia Inc. and Adeia Guides Inc. (collectively, “Adeia Brazil Plaintiffs”) filed a complaint against The Walt Disney Company (Brasil) LTDA (“Disney Brazil”) in Rio de Janeiro State Court, Brazil, (“Trial Court”) alleging infringement of four patents (the “Brazil Asserted Patents”) and seeking a preliminary injunction against Disney Brazil for infringement of one of the four Brazil Asserted Patents. On November 14, 2024, the Trial Court granted the preliminary injunction (“PI Decision”). On December 11, 2024, Disney Brazil filed an interlocutory appeal and temporary restraining order against the PI Decision in the Court of Appeals of the State of Rio de Janeiro (“Court of Appeals”), which was provisionally granted on December 19, 2024. On July 24, 2025, the Court of Appeals dismissed Disney Brazil’s appeal of the PI Decision and reinstated the preliminary injunction. Trial date has not been set.
38
On January 27, 2025, Disney Brazil filed a patent invalidity lawsuit against Adeia Inc. and Adeia Guides Inc. (collectively.
“Adeia Brazil Invalidity Defendants”) at the Brazilian Patent and Trademark Office in Rio de Janeiro Federal Court, Brazil, alleging the Brazil Asserted Patents are invalid. Adeia Brazil Invalidity Defendants filed their response to Disney Brazil’s invalidity complaint on September 5, 2025. Trial date has not been set.
Altice Declaratory Judgment of Noninfringement Litigation
On June 27, 2025, Altice USA, Inc., Cequel Communications, LLC and CSC Holdings, LLC (collectively, “Altice”) filed a complaint against Adeia Inc, Adeia Guides Inc., Adeia Media Holdings LLC, Adeia Technologies Inc. and Adeia Media Solutions Inc. (collectively, “Adeia Group”) in the United States District Court for the Southern District of New York seeking a declaratory judgment of noninfringement of ten of our patents. On September 29, 2025, Altice filed a notice of voluntary dismissal with prejudice pursuant to a settlement and patent license agreement between the parties. The case was dismissed with prejudice on October 1, 2025.
AMD Patent Infringement Litigation
On November 3, 2025, Adeia Semiconductor Bonding Technologies Inc., Adeia Semiconductor Inc., and Adeia Semiconductor Solutions LLC filed a patent infringement complaint against Advanced Micro Devices, Inc. in the United States District Court for the Western District of Texas (“WDTX 1 Litigation”), alleging infringement of six patents. No dates have been set by the Court.
On November 3, 2025, Adeia Semiconductor Bonding Technologies Inc. filed a separate patent infringement complaint against Advanced Micro Devices, Inc. in the United States District Court for the Western District of Texas (“WDTX 2 Litigation”), alleging infringement of four patents. No dates have been set by the Court.
39
Item 1A. Ri
sk Factors
There were no material changes to the risk factors previously disclosed in Part 1, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2024, which is incorporated by reference herein.
Item 2.
Unregistered Sales of Equity Securities, Use of Proceeds
, and Issuer Purchases of Equity Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three and nine months ended September 30, 2025
, there were
no
Rule 10b5-1 plans or
no
n-Rule 10b5-1 trading arrangements adopted, modified or terminated by any director or officer of the Company.
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
41
SIGNAT
URES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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