Q2 2020 InterDigital Wireless Inc Earnings Call

[music].

Good day and welcome to the Interdigital Inc. second quarter 2020 earnings call. Today's conference is being recorded at this time turn call over to Patrick Vanda will go ahead Sir.

Thanks, very much good morning, everyone and welcome to hear digital second quarter 2020 earnings Conference call.

This morning are the merger President and CEO in which gets PRC Uh huh.

Interesting with last year's told walk through some highlights about.

And then open the call two questions.

But you know remark free to remind you into this cold easily.

These statements regarding your current beliefs plans and expectations, which are not guarantees of future performance.

Two which some uncertainties that could cause actual results events to differ materially.

Yes, that's contemplated by such forward looking statements.

These risks uncertainties and keep supporting <unk> earnings release.

Actually report on form 10-K for the year as of December 31st we 90 meters and trying to go to filings with the Securities Exchange Commission.

These forward looking statements are made.

Sure.

Except as required by law, we undertake no obligation to update or revise any of them whether as a result, you information future returns for otherwise.

In addition, today's presentation may contain references to non-GAAP financial measures.

So your issues of these non-GAAP financial measures to the most directly comparable financial measures.

Your second quarter, 2020 financial metrics tracker, which can be accessed huge www dot.

Oh my.

Could you normally come love to somebody who believes it's a major metrics truck good for Q2 to me.

Well I was told us on TV participants on this call only different locations some of which are experiencing significant weather boots.

There's a weather related tricky to issue during the call I'll just ask everyone to be patient why are we exercise a fallback option.

Would that take incurable turn the call neighborhood.

Hi.

Good morning, everyone and thank you for joining us on the call. This morning I. Appreciate the world continues to be going through a crazy period I hope all of you are well and finding some time to relaxing summer.

I would that money I was going to keep my remarks fairly brief today touching on the status of our licensing business.

A quick update on litigation and exposing the southern works around the company's operations in light of the continued tailwinds.

Actually the business, we've proven once you get how resilient our business model is growing revenues by 15% during what is arguably one of the more difficult global periods in recent memory well that revenue increase was driven in part by our renewed agreement with Molly is also signed over a half dozen new agreements in the last three quarters all of what you're going to contribute to revenue.

We also signed a small new CE agreement early this quarter that will contribute to third quarter revenue licensing is all about momentum and we certainly have a good amount of that now.

In addition to that licensing success. We also continued to move to boil down to deal with other potential licensees on both the mobile and see side.

Oh that speaks to how well our now larger and more diverse licensing businesses operating.

It gives us confidence that we can deliver on the revenue goals, we articulated for the different licensing programs.

Of course, we occasionally do have the customer that simply refuses to negotiate in good faith.

That is the case Michel nine straight years of effort by Interdigital Chalmette has failed to take the licensing issue seriously. This type of behavior never ceases to Amaze me.

How many successes and cellular handset market was never happen, but for cellular standards.

Needed to make no upfront investments in developing the wireless technology. It was all provided to them as far the worldwide cellular standards process and incredible process. It eliminates barriers to entry and enhances competition benefiting product manufacturers and consumers like.

Actually billions of dollars of research are made available to brand new working interest, allowing them to quickly scale up production and become a market force now.

Now did exactly what Shami did any of profit is enormously the only thing asked the vendors if they paid fair twice that of billions of dollars a technology to which had been provided actually access Charlie has failed to do so.

As we made the decision to bring a patent infringement lawsuit against Charmaine, India, which we filed last week.

We actually filed two patent actions in India. The first is based on sellers are inventions created by interdigital.

The second lawsuit is based on the video coating technologies developed by our or and I team, which we acquired as part of the technical a transaction.

The suit demonstrates the broader reach of the comfort companies innovations and the value that we believe we are due for the use of more inventions.

Among other things the loss it seeks injunctions against Jami sales in handsets in India, which is a significant market for that.

Of course, we continued to be willing to enter into a license agreement with shell with Charlie on fair reasonable nondiscriminatory churn.

We also be willing to arbitrary could turn into a license, which is something you offered to all prospective licensees.

We're not willing to do have shami use our technology without appropriate compensation.

And as we said before litigation tends to be less option for us, which we pursue only when other options are exhausted that said litigation can be affected as our recent agreements with even while we solved the filing was really litigation.

He every company that we had ever litigated together and ultimately signed a license with US we expect shopping and well know well do the same.

Next let me touch quickly on the overall operations as a company in this period.

As it up as is evident from the financial results. We continue to operate well the company remains in a remote workload and will remain so at least until the fall depending upon the status of the pandemic at that point, we will reopen the opposite consistent with all of the safety best practices for doing so.

Maintained the remote work option for all of our employees for the foreseeable future.

Our employees have been highly productive working from home and we also been very effective at recruiting new talent and leading them into the employee populations.

I don't see the need to brush capacity office that said you get a set of employees that are conferred office environment. So we're looking for the best way to balance these different interests.

So as I said I thought I keep it short we've had a great first half a year or we're looking to repeat that success in the second part of the year with that let me turn the call, but rich our CFO for a discussion of the financial results.

Actual.

We delivered strong topline growth in Q2, we are seeing at the top end of Orange is the big total in the current 11.

This growth was driven by new agreements, including our recent patent license agreement with Wally.

As noted in our 10-Q as those in the financial metrics I always try website. This morning.

While we made up approximately 30% of our total revenue in Q2.

Many contributions to based recurring and non recurring revenue.

The contributions from these new agreements were partly offset by our estimate for a sequential decline in per unit royalties of about 20% from Q1 into Q2.

This represents our best estimate the impact of the current health and economic climate.

On our customers cheechoo sales of royalty bearing products.

As is always the case true up already estimates next quarter, when we received related royalties reports.

Our Q2 operating expenses increased $1 million from Q1.

This increase was driven by an expected $2 million charge to step up compensation pools based on newly signed license agreements and the 2 million dollar increase in litigation expense, both of which were offset by one time and other cost reductions from Q1 2020 [noise].

The increase in litigation expense reflected increased activities in order to students with Lenovo and I recently filed patent infringement case again schaumayer in India.

We currently anticipate Archie three operating expense could increase in the two women dollar range driven by additional litigation expense and revenue sharing within our portfolio.

Let me I'll take a moment to discuss our cash flow in some detail.

Recently I've received no more questions about our cash now and how it relates to our revenue in a given period.

He reported free cash flow $60 million in Q2.

This is a 95 million dollar increase over the 35 million dollar cash outflow <unk> isn't in Q1.

Many of you that follow us recognize that such corridor variation is not.

Over 90% of our revenue comes from fixed price degrees.

Such agreements typically have prescribed payments governance.

Some agreements copper quarterly or annual payments to be spread evenly over the term as an agreement.

Others might include not even payment schedule that for example, maybe frontloaded to a degree.

Ultimately these payment schedules result in a timing difference between when we recognize revenue and when we collected related cash payments.

Did you extend the payments are noted we recognized a deferred revenue liability.

That liability is then reduce as we recognize revenue over the balance is easily.

The sequential increase in cash flows into one to Q2 was driven in part from the collection of approximately 1 million under agreement signed over the last week theaters.

These payments covered the $20 million of nonrecurring revenue.

Well, it's a recurring revenue we recognize from these customers in future.

We also represents a partial payment towards the royalties due over the really in terms of these agreements.

This is a big reason why we often see deferred revenue and long term deferred about <unk>.

Collectively increased by $50 million from Q1.

In fact, you can look at the total deferred revenue balance of 280 million.

Total amount of cash collected to date relating to future periods under signed agreements.

As a final comment on this topic you, sometimes it's up nonfinancial consideration as a component of the consideration due to us under patent license agreements.

Overall this is a very small percentage, averaging just 5% of our total revenue over the last three years.

All of this illustrates why recurring revenue is such an important measures for business and why the free cash flow generated more used in any given quarter must be taken in context.

Finally, moving on taxes, our recent agreements helped drive a level of profitability sufficient to somewhat normalized our effective tax rate.

Coming in about 20% for the quarter and 27% year to date.

With continued success in expanding our revenue platform, we still expect our long term pathway to be roughly 15% until about 2026, we expect it to increase to about 80% leased one prescribed changes in testing.

Now I'll turn it back over the past.

Thank you rich. Thank you Bill in terms of Susan no calling for questions.

Thank you if he would like to ask a question. Please signaled by pressing star one or your telephone keypad fewer using a speakerphone. Please make sure. Your mute function is turned off to allow your signaled to reach our equipment you Press star one to ask a question.

I was just for a moment to allow every one of the opportunity to signal for questions.

Our first question comes from Ian So funnel Salvino Oppenheimer.

Hi, Thank you very much.

If you guys are going after the patent enforcement pretty aggressively can you maybe give us color on somebody other ones that are not paying right now or those kind of close to litigation or you know where you personally just in negotiations and what should we expect as far as the remaining the remaining ones. Thanks.

Sure. So again, a one of the.

Well I guess your question, let me just Ah. Thank you went from for initiating coverage on the company, obviously I appreciate that and we welcome you to the first Oh as an Atlas that a company so.

Patent enforcement in it.

I guess I'm wondering.

There is a breakingpoint with customer sometimes that we just saying that we've exhausted all options.

And we move ahead to litigation.

As we do the Chanate.

The other customers you know we have a.

These mortgages with Andy Barish, obviously between customers.

Is there's a lot of thought that goes into why we bring litigation that particular times. Its you know.

Obviously, the late into the company against soon be seek litigation, but there could be other strategic reasons as well so.

Thank you know what do we would commence additional litigation either against current folks with whom are in litigation.

Oh or new litigations that we we.

Take into account a lot of factors in.

In making that decision [laughter], it's it's not something we do lightly I I always hope that we can securely agreements without resorting to litigation because there's a cost litigation and if you could avoid that costs. It's a good thing but also at some point you have to make sure that you get people on the paying side of the letter telephone is.

We'll see how it all plays out you know the current litigations I think are.

Yeah, I think there there.

Well establish meaning we've got good patents in these cases that people have good schedules to move forward on.

You know there they're also don't just part of the larger discussion with any licensee. So you know that show me, it's not going to be just all about litigation. We obviously would continue get engaged with them in other ways and see the.

Reach an amicable result.

You know that's fallen somebody that starts as our.

Alright, great. Thanks for that color on that just as a follow up you guys are sitting with a lot. It's kinda net cash even after you even.

Beyond what you need to run the business.

So what are you thinking here as far as capital returns me you couldn't we bought back a lot of stock in the past you know where are your heads now what are you thinking as far as buybacks, how many people dividend, but specifically on buybacks. Thanks.

Yeah, I'll be happy to take that so yeah, you you're exactly right that we have a really strong history.

Returning capital to shareholders through dividends, and especially to buybacks I think it's more than 600 million over the last five years or so including almost 200 million last year.

You know like a lot of companies in the current environment.

We really value cash right now given the overall uncertainty that exist in the bottom market, but also for us the potential for opportunities to.

Invest it in a way that could you know drive the Moshe who are the most value for shareholders.

So it's kind of on our current postures right now, but you know there's this continues to be a topic as I always say it is a every every time, we get together with <unk>.

Hi, great. Thank you very much.

Exactly.

Our next question comes from Eric Wold B. Riley.

Thank you good morning, guys.

Couple of questions I guess, one bill.

Can you maybe you can talk about the rationale is falling that suit.

I can tell me in India I know you mentioned, obviously that it's a big market for them just trying to get a sense of.

The benefit that market versus you watch the UK yet to go towards a global licenses the Indian imports going to share the same.

Stance towards global licenses that like you kick works do.

Yeah, I think that you know the Indian imports.

It's yes, obviously, it's a big market.

For them and you know.

Yeah. The purpose of litigation is really for the other side can take this issue seriously so bringing on litigation.

And he is very important venue for some something and I think achieved that result, you know the Indian courts have not yet there's there's some opportunity at early on in the cases with respect to preliminary injunction is a as well as other sort of bonding escrowing requirements that also.

Yeah, but achieved the same result, which is to just make the other side.

I think seriously about continuing to willfully infringed the times that we have Oh I think I think the court has been yeah. So far it's still a lot of these fran related matters in many courts are new but so far the Indian courts that seems a deal within minutes fairway and that's that's really all we want.

No we don't need the playing field tilting in our favor.

Plainfield that level and beginning court seem to be no doing a good jobs are there.

You know and despite the pandemic issues around the world. The imports on these particular matters had them along.

At reasonable Steve. So you know for all those reasons. It was it seemed like a really good choice and it also shows I think the fact that portfolio diverse not only technologically but geographically.

You know, we can bring actions in different countries that.

So yeah I got the factors I think those are important.

No that's never would you.

That's a given your your litigation strategy on a public call I guess, but is there I know your focus is always a global license.

Would you ever stray from that if there is a market that is large enough for a single entity you'd be okay. Good he.

A single country license isn't gonna heard some orders if you can if he did that does that.

Castro rents in the works the other global licensee Archie have.

When they run pricing and whatnot.

Yeah.

I think it's a slippery slope.

You know if you think about.

Mobile devices.

What's the nature of the mobile device right. It's it's designed in one country torture sourced from another country. Its manufactured in the third country. It's you know sold at a fourth country and then use Didnt deal Yeah 20 other countries. So the whole concept of the.

Hey license just covers one country is it's a difficult cousins I'm not saying, it's impossible, but you know we've always taken the view that.

Worldwide license mix.

So there's no says here and frankly the other.

Don't really have a strong rationale so I think it's a slippery slope and that's why we've always yeah.

Been very adamant as you know Olympic gold rather than it was I know, it's all about a worldwide license. This is there anything about the standards themselves the standards Bill.

Enables failed in a country the whole nature of the standards that enabled sales worldwide. So adding enable sales worldwide license should fall.

[noise] that make sense HM.

Question for me on M. A C side I guess.

Yes, you previously signed set top boxes license a TV license. Its first question as you know what end market was the <unk>. The seeking license you mentioned signed in Q2 and then.

How should we think about.

These smaller licensees, providing a tailwind towards.

Larger licensees and you're talking about these guys writing some level of pricing framework as you talk to the bigger entities you did a bigger entities.

Considerably smaller deals as it relate aboard providing framework or do they.

Them is more irrelevant smaller deals and a larger and he would provide more of the framework needed.

Yeah.

Yes, so I'll go into last question firstly the.

You know that I think every deal becomes important.

Oh.

Yep.

They can turn into revenue which is great.

Second is when you go to Lancaster and unlicensed customer they do provide validation good.

Even though deals maybe smaller companies that signed a deal or big and therefore, you know they don't give away significant sums of money.

Further we are.

And you can use does that benchmarks in negotiations on people the Turkey.

It's very important shouldn't because when you go to litigation.

All of those agreements become important right. It could you actually in litigation. This idea of you know very significant volume discounts. They there's there's some limits oh on that and so I think.

Yeah. There are important for all those reasons you know they give us placed validation patent Dalmatian they give us.

Usable materially litigation and.

So I I think it's I think in that context, and as I mentioned this is Fred momentum in licensing I've been doing it for you know forever. It seems like it is really important and and because people see others signing.

This then you get this when that you're backing that's really helpful. So I'll, let changes how many other questions I guess it says that he's got traditions and things like that but I just wanted to handle that strategic point.

Yes, Eric I hear you kind of framed it correctly in your question no. We had some good successfully some smaller licensees on your side, but you know turns the traction they provide it's just what bill was saying its traction within the business.

It's the are smaller so on the Collin basis anyway.

That's nice recurring I'm, sorry, nonrecurring contributions from some of the new deals.

Flight on incurring basis, it hasn't moved to meet need on a dramatic fashion.

Generally discuss that you know the of the 150 million dollar kind of topline goal, we have for that business, we're roughly 10% of away now that that kind of ebbs and flows quarter to quarter. Because it is more per unit in nature. So it's going to depend on or underlying customer sales just put that in.

Perspective, and the current quarter or when you know we are estimating a lower level per unit royalty and also had some and true ups that come through that reduces revenue from the current quarter, we're actually turning bought about 10% launch so it's going to move around.

We haven't changed I Didnt day, but they do a set us up for more deals and further traction and eventually that begins to panel.

And we'll see I'm working closely with one.

Oh for for the most recent deals I believe it was televisions.

Great. Thank you guys.

[laughter].

Our next question comes from Charlie Anderson <unk> co your securities.

Yeah. Thanks for taking my questions I read something great quarter. So wanted to start with Opex rich I Wonder if you could maybe just provide a little bit extra context or that you alluded to a two to 4 million.

Dollar bump or they could I heard that right. There was sequentially I know there was a performance based comp increase embedded in Q2 or 3 million or so somebody thinking about this right that's actually come back actually.

$6 million move up.

And I know you there was a revenue share component there or whatever you may begin to speak to that one directly to and.

How much of the lift is related to that follow up.

Yeah. So at this point trolleys, there's there's not too much watching that I I mean, as you know, we typically don't providing what in terms of expense guidance.

But we have.

You know a meeting or you know a charge that we anticipate we'll try to provide a heads up on that and we of course happen doing a little bit more than traditionally a given the technicolor acquisitions, and and kind of the impact that having a piano.

Well, Yes litigation is definitely a factor there with the local case kind of going in and no picking up a little better momentum as well is now having a new case, which obviously was was just recently filed so yeah, there's typically going to be or someone else prior to filing a case. So it's not as if it's not in.

Q2 at all but not to the level that it would we'd expect it to be in Q3 I'm sure. That's definitely a component you know probably the biggest component of it.

And then there's a there's there's some smaller nonrecurring items, that's when things as though.

Okay, Great and then Bill just I'm thinking big picture about the ability to get a.

The rest of China under license, obviously, great progress with Walgreens de T., but I'm sort of just curious from your perspective.

There anything over the course the next year you you see as maybe a.

An external factor or whether it be fiveg phone launches or whatnot second maybe caused some of those negotiations to click of a base relative to normal. Thanks.

Okay.

Oh, Yes, I think that's there.

Our factors rate does.

You know that there is obviously the things that we can get right and so bringing litigation or even the threat of litigation is Intel flooding.

One of the benefits of now having that you know happens violent.

And then with lawsuits against while a lenovo and now showing its pretty clear the company is ready willing and able to to protect its IP and that that's been pretty strong message People's I'd say, that's one second.

I'm not sure that fiveg launch or things like that in.

It's in July or.

But what external driver on the legal side has been.

Hey, you know development in Germany, which has been which which is a great development firm I actually I think for the industry and basically what it is yes, absolutely not.

Framework.

It says that.

Yeah, if you're a customer and you're using these innovation and you've failed to negotiate in good faith.

With that.

That you may not be able to remedy that later like to wait until the see it you are actually infringing and then make it more that there may be more draconian.

For having negotiated is bad faith.

Yeah, there can be different just calling in penalties I guess I, if that's a patent holder either go should benefit.

I can think that that could have.

Significant impact in just causing people to be reasonable.

And you maybe things when people are reasonable guess what deals get done.

I actually thought it wasn't really well thought out a structure that the German courts have come up with so I think that that can be an external forcing function.

Yeah, I think other than that I think as I mentioned before you know.

If we can.

[music].

Yes to the finish line with a shop, there are no, though and inhale import assisted by the litigation I think that yeah, that'd be other customers start to become outliers.

And.

And on that.

With the heightened focus by the Trump administration, but frankly, a lot of people on.

Ill India's respect.

[noise] China's respect for IP being outliers not worry about one day. So I think there's you know like we should there's like we had a lot of buyers in the fire.

And then there's things we can do Oh, there's external policies that we could influence there is other policies that get developed that we can simply highlight to our customers and I think you know if that whole at the end of the base also our ability to.

Be fair and reasonable and our negotiations.

Offer a variety of factors for deals to get things done so.

Yeah, I feel good about where we are.

And you know hopefully that means you know we drive a few more cost efficient.

Okay, great. Thank you so much protocol appreciate it.

That's right.

Our next question comes from Scott Surely Roth capital.

Hey, good morning. Good afternoon. Thanks for taking my questions. The rich rich just quickly I'm not sure. If I missed this but did you give a a number for video or Technicolor in the quarter and I have a couple of follow ups or the India and China.

Oh, you said number you need revenue.

Yes Yep.

Yes, yes, yes got I mentioned that.

We were.

Yeah, we've been kinda operating costs, roughly 15 million annualized.

But you know even with new deals work, we're trending a little below that this last quarter and that's based on really two things. We had a couple of a true ups that came through.

Did you are estimates for Q1 that were booked in Q1 and then the actual reports come through in Q2.

Suppressed things little bit and then in addition, you know that this business is largely per unit and at this point.

As I mentioned you know we're anticipating included in our numbers and estimate for lower per unit royalties in the core.

Perfect and on the India front.

Could you give us a better idea of what the timing is of the Indian legal process in terms of injunction and otherwise and what we can expect in terms of the the cadence of the litigation.

Yeah, I think as well have a there's some disclosure in acute.

Around the case.

You know.

Yeah generally right yeah.

[laughter] it moves and say.

A little quicker on the front end or you know and things I think that occur in the front end or.

He was like preliminary injunction request.

And also to the extent that Ah.

No money put up for an eventual like maybe I said those those things happen sooner.

Yeah, I think after that it when you get into the but that's the case yeah.

I think like it makes sense isn't it.

Yeah, we'll probably see that very skilled council in that area.

And our internal folks are that but this is a is somewhat due for the company.

My sense is it a little.

It probably has the same level of lack of predictability.

As other other sports you.

But is that it's I think it's the front end process that exist here that again I think the purpose of all this is to get the company Camayd just take this issue theaters.

And I think that that is.

Hopefully achieve early on in the process. So we'll see so so bill just a follow up on that point is there is is there a timeline or a date associated with the injunction because that seems like it. It's the real trigger point here to get them to the table and start to engage is that something that would be decided upon this year.

Oh so my.

I feel like again I have to go back and look at the disclosures that we put out and honesty, it's developing sort of as we speak. So that's you know that Tonight and.

We can we can follow up on.

So I.

I think the important right if it is relatively quick.

Some of my understanding.

Okay, and we're only halfway through the years Yep.

I think that that's it I think that's a good thing.

Fair enough and then to two.

Transition over to some of the larger or trying to be so he comes in particular vivo and oppo.

You've seen walk away get a lot more aggressive within the domestic market given the limitations of using certain Android features internationally, it's translated to a pretty meaningful increase in share I think from the first quarter. The second quarter. So I'm wondering if that the licensing agreement with walk away in combination and even through.

On show Me litigation in India on top of it how is that changing the tone or the the cadence in the to the pace of engagement with vivo napo, particularly given now it seems like they're shifting more of their attention on the export fun.

So.

Right I mean Uh huh.

While a head is you know.

It is focused on that domestic market for the reasons that you gave in the result of that.

I wonder if you're getting pushed out little bit. So then they've got to decide where to go.

To grow their businesses and they're going to places you expect me to places like Conoco. So there and then he is a one Wally that's never been very strong and any other in your and to some extent there in the U.S.

Ah, yes, historically as companies have moved into regions, where IP enforcement is.

More predictable and we're been stronger that the they do need to take the licensing issues were seriously there's other.

Things that occur within those jurisdictions as well beyond just sort of the core systems, but yeah. There's there's regulatory pressure that can be brought to bear yeah. If it I'll give an example.

You know back.

Allison ended 2018.

Yeah, there was a provision.

We're not saying that there was a provision put into the.

National Defense.

And that comes out of the U.S. once a year, yeah, specifically was eating.

And I pay and so you know it and that created as somebody wants.

Uh huh on TV. So so I know these companies focused on the international markets more they're subject to said both regulatory and judicial.

In a in a more.

A significant way and that that helps.

So hasn't gotten I feel I feel like the level of engagement is a is good and you know and obviously when we don't feel it's good you know the company has not been shy about bringing the appropriate losses.

And lastly, just maybe a quick update on Aiotv and avant what you're seeing on that front I know, it's early stage and it's been taking a little bit longer but it seems like there.

The coven environment constant conductivity or the ability to efficiently optimize et cetera devices that are connected seems like it's gaining more momentum whether it's an auto when otherwise. So just kind of wondering if there are any thoughts or update says we're going into 2021 does that become a little more measurable in terms of result, thanks.

Sure.

So I think you're right I think that.

You know wildly the Io team market.

Hasn't accelerated away I think people wouldn't.

So I.

I think some of that was hype.

The direction is certainly correct.

And that it is others I see.

Yeah.

There was only just need for connectivity constant kinda give me actually I think what you're seeing independent business sort of made that even more apparently this is just kind of thing kind of could easily Gordon you know I think at.

The Avanci ER automobile platform yeah. It if it had a nice.

Measurements access, it's really going to getting license words on board on board.

The litigation in Europe that they're working their way through I feel like different and good position. There I think that their approach is one that is very much embraced by a lot of people because.

Yeah, ultimately I don't think people want this continuing.

You know eggs filled environment around licensing on such a critical technology, and <unk> and <unk> and I take it back to that German recent German decision I think that underlying in some ways that decision, which is this is not good. All these cases end up before it's consuming a lot more resources there should be rash.

You know result, or that there should be a rational results here and simply putting in place a structure that forces people to be reasonable.

Hey, there so.

Yeah, we'll see you know to some extent yeah I'd say, there's two pieces here. One is you know how how quickly the car himself a roll off the lines with that kind of any kind of can be built.

And then you know how effective is advancing in licensing and all you know very confident with where a lot, but yes I think the other part is just it's gotta happened it should happen rules.

Great. Thank you.

Right.

Our next question comes from Michael Cohen, M.D.C. financial research.

Yeah, Hi, Bill Thanks, and congratulations on the quarter I was wondering if you could share the names of some parties that are not fully license that you would like to have under license other than went over on family.

Okay.

So.

Yes, mostly the Chinese manufacturers. So it's a it's also a it's a it's to be though it's the tcl.

Here are the ones that were in litigation with Orlando, though and and in Chalmette If you.

Okay. Yeah. There's there's this matter I think I'm missing anything major Chinese companies, but every once a while they [laughter] the beauty of <unk> cellular market is and the cellular standards as people can become major players in a relatively short period of time.

Our smaller players.

Outside of China.

China, but I'd say most of them are relatively small.

So I think that the ones I gave you are pretty much.

The drivers that get us to up to our desired revenue platform.

And and we saw the U.S. government Department of Justice file a statement of interest and Qualcomm case and that we've seen it file them in your case and Lenovo. Its wondering you have any comments on that.

[noise] Yeah, I think you know you know this particular department of Justice has.

Taken in interest in.

Making sure that particularly antitrust laws are or not.

Abused in a sense that there, but they're not applied in circumstances that they were not intended to be applied it.

Because we did you state you start to stretch out a law beyond its original purpose it starts to lose its effect and so.

You know the ER.

They come to already so let's this particular division within the year Jay has been an advocate of making sure that there's discipline around the use of anti just anti trust provision.

And that's why you know they they filed the statement in our case you know basically.

Yeah.

Claiming that the you know the claims.

I Trust claims that are causing case or not well founded.

And so yeah, we were happy to see that support yeah, we think it.

It makes a lot of says.

I think that's.

Ultimately, we will look I mean.

It stands on plan.

There are actually very slate or.

[laughter] it's yeah.

Hi undertaken the obligation somebody unfair reasonable nondiscriminatory terms.

And.

The other side has an observation that negotiating in good faith to get to that end as well and if there's a disagreement that [laughter]. It says it's essentially the bridge, Kentucky Oh.

So I think its fan you know last another thing that then tried to be applied into it to make it more complicated costly you know exactly.

A lot of things can make the licensing weren't at all.

And I think that's what you're saying is.

Oh, yeah, hopefully [laughter] simplification of the issue.

Right.

So again, we're very we were very young I wouldn't do that supports into the object.

There are no further questions in the queue at this time.

Okay, well, thank you very much Travis and thanks for joining our call. This quarter, we look forward to the next quarter. Thanks, everyone.

Thank you ladies and gentlemen, this concludes todays teleconference. You may now disconnect.