Q3 2023 InterDigital Inc Earnings Call

Okay.

Speaker 1: Good day and thank you for standing by. Welcome to the Interdigital Third Quarter 2023 Earnings call.

Good day, and thank you for standing by.

Welcome to the Interdigital third quarter 2023 earnings call.

Speaker 1: At this time, all participants are in the listen-only mode.

At this time all participants are in a listen only mode.

Speaker 1: After the speaker's presentation, there will be a question and answer session. And to ask a question during the session, you will need to press star 1 1 on your telephone. And you will then hear an automated message advising your hand is raised.

After the speaker's presentation, there will be a question and answer session.

To ask a question during the session you will need to press star one one on your cell phone and you will then hear an automated message.

Advising your hand this race.

Speaker 1: To withdraw your question, please press star 11 again. Please be advised that today's conference is adjourned.

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Please be advised that today's conference is being recorded.

Speaker 1: I would now like to hand the conference over to your speaker today, Rayford Garibret. Please go ahead.

I would now like to hand, the conference over to your Speaker today Raiford Garrabrant. Please go ahead.

Speaker 2: Good morning to everyone and welcome to Interdigital's third quarter of 2023 earnings conference call. I am Raefer Garabran, head of investor relations for Interdigital. With me on today's call are Liren Chen, our president and CEO , and Rich Bresky, our CFO .

Good morning to everyone and welcome to the Interdigital third quarter 2023 earnings Conference call.

I am ready for Gara Brown head of Investor Relations for Interdigital.

With me on today's call are they arent, Chen, our president and CEO and rich Bressler our CFO.

Speaker 2: Consistent with last quarter's call, we will offer some highlights about this quarter and the company and then open the call up for questions.

With last quarter's call, we'll offer some highlights about this quarter and the company.

And then open the call up for questions.

Speaker 2: Before we begin our remarks, I need to remind you that in this call, we will make forward-looking statements regarding our current beliefs, plans, and expectations, which are not guarantees of future performance and are made only as of the day thereof.

We begin our remarks I need to remind you that in this call. We will make forward looking statements regarding our current beliefs plans and expectations, which are not guarantees of future performance.

I'd only as of the date hereof.

Speaker 2: Forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward-looking statements.

Forward looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward looking statements.

Speaker 2: These risks and uncertainties include those described in the risk factor sections of our 2022 annual report on Form 10K and in our other SEC filing.

These risks and uncertainties include those described in the risk factors sections of our 2022 annual report on Form 10-K, and in our other SEC filings and.

Speaker 2: In addition, today's presentation may contain references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our financial metrics tracker, which is available on the investor relations section of our website. With that taken care of, I will turn the call over to Lyris.

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

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our financial metrics tracker, which is available on the Investor Relations section of our website.

With that taken care of I'll turn the call over to Larry.

Speaker 3: Thank you, Riefer, and good morning, everyone. Thanks for joining us.

Thank you Richard and good morning, everyone. Thanks for joining us today.

Speaker 3: This was another very strong quarter for our company, supported by outstanding execution across all aspects of our business.

This was another very strong quarter for our company.

Supported by outstanding execution across all aspects of our business.

Speaker 3: We have signed two new license agreement that built on our strong base of recurring revenue, expanded our industry leadership, had record setting pace from our inventors, expanding our innovation pipeline, and receive acknowledgement of our 5G patent portfolio leadership by a leading third party report. I'll start with a few.

We have signed two new license agreement that build on our strong base of recurring revenue.

Expanded our industry leadership had retro setting pace from our inventors, you're expanding our innovation pipeline.

And receive acknowledgement of our <unk> patent portfolio dealership by leading third party report.

I'll start with a few highlights from our financial readout.

Speaker 3: Revenue for the quarter was $140 million, of 22% year over year.

Revenue for the quarter was $140 million up 22% year over year.

Speaker 3: Our smartphone licensing revenue was up 19% year over year, and our CE and our T-licensing revenue was up 30% year over year.

Our smartphone licensing revenue was up 19% year over year, and our C. T licensing revenue was up 30% year over year.

Speaker 3: Our net income was almost $48 million, about 116% year over year.

Our net income was almost $48 million up 116% year over year.

Speaker 3: Our adjusted EBITDA was about $84 million, an increase of 48% year over year. All right, Rich, discuss.

Adjusted EBITDA was about $84 million.

Greece, a 48% year over year.

I'll, let rich discuss more details in his section.

Speaker 3: These strong financial results demonstrate the continued momentum we have created to grow our smartphone licensing program and our CEN IoT program, and demonstrate how our technologies are more important than ever to a green number of increasingly connected industries.

These strong financial results demonstrate the continued momentum we have created to grow smart from licensing program NRC Yan Our T program.

And demonstrate how our technologies are more important than ever.

Green number of increasingly connected industries.

Speaker 3: In late September , we signed a new multi-year royalty-bearing license with Lenovo, covering our HEVC video conference.

In late September we signed a new mouth here royalty bearing license with Lenovo.

Covering our H E B C video compression technology.

Speaker 3: The novel incorporates HDVC video compression in both smartphones and consumerized chronic devices such as PCs.

Noble incorporates H E. B C video compression in both smartphones and consumer electronic devices such as Pcs.

Speaker 3: Under this new agreement, we received a catch-up payment for the past use of our technologies and recurring revenue going forward for both our smartphone licensing and our CE and IoT licensing program.

Under this new agreement, we received a catch.

Catch up payment for the past use of our technologies and recurring revenue going forward for both our smartphone licensing NRC and out licensing programs.

Speaker 3: The latest agreement has brought our related HVAC litigation with Lenovo to an end, and we remain committed to resolve the rest of our licensing disputes with them.

The latest agreement has brought our related <unk> litigation with Lenovo and.

And we remain committed proves out the rest of our licensing disputes with them.

Speaker 3: Staying on the licensing front, in Q3, we also signed a new license agreement with Qmax to cover the company's setup box.

So you know on the licensing front in Q3, we also signed a new license agreement with <unk> to cover the company's set top boxes.

Speaker 3: Together with the Lenovo HVC agreement, this is another validation of our video portfolio as well as the largest and one of the highest quality in key technologies, such as HVC, but as well as the newer VVC video code.

Together with the Lenovo <unk> agreement. This is another validation of our video portfolio as one of the largest and one of the highest quality in key technologies, such as H E. B C as well as the newer BBC radio Kodak.

Speaker 3: These technologies are applicable to smartphones, CE and other IoT devices, and looking forward to what we see as our large greenfield opportunity to license video streaming and cloud service.

These technologies are oxy bolt to smartphones.

<unk> and other Iot devices.

Looking forward to what we see at our large greenfield opportunity to licensed video streaming and cloud services.

Speaker 3: Adding to our momentum, we recently became a founding member of Avanti 5G automobile patent licensing platform as we looked to build up the success of related 4G patent pool.

Adding to our momentum we recently became a founding member of <unk> automobile patent licensing platform as we look to build up.

The success of related 40 patent pool.

Speaker 3: In the third quarter, the platform license boasts Mercedes-Benz and BMW 450.

In the third quarter the platform license, both Mercedes Benz and BMW for <unk>.

Due to the increased value of <unk> to automobile manufacturers.

The royalty rates are roughly twice the original 40 rates.

We believe our revenue from the connected cars will group with increasing <unk> adoption over time.

Speaker 3: We continue to make strong progress with our smartphone program. In our Samsung arbitration, based on the latest case schedule, the hearing day is set for summer of next year, and we are on fire to receive a final determination towards the end of 2024.

We continue to make strong progress with our smartphone program.

<unk> arbitration based on the latest case scheduled the hearing date is set for summer of next year and we are outside to receive a final determination towards the end of 2024.

Speaker 3: But the reminders, Samsung has already agreed to take a license to our portfolio, starting in January 1 of 2023.

As a reminder, <unk> has already agreed to take a license to our portfolio starting Germany first of 2023.

Speaker 3: with the final terms of the license due to be determined through arbitration.

With the final terms of the license due to be determined through arbitration.

Speaker 3: First we have said many times before the most valuable assets for our company are our people. We have some of the worst best innovators in the development of key wireless and reduced standards and other technology.

First we have said many times before the most valuable asset for our company our people.

We have some towards past innovators in the development of key wireless and video standards and other technologies.

Speaker 3: Recently, our leadership in several space was highlighted by the election of our senior wireless standard engineer, Deanna Panip, to chair the RAN-2 working group within 3GP.

Recently, our leadership et cetera space was highlighted by the last one of our senior wireless standard engineer the INR panic to chair the rank who working group within three GPP.

Speaker 3: The cellular wireless standard body responsible for 5G and FoodTRA 60D1.

The cellular wireless standard body responsible for <unk> and future <unk> development.

Speaker 3: The RAN-2 chair is one of the most critical leadership positions in 3DPP. In her election, the NR received broad support from more than 200 companies across the industry.

The Rand to chair, it's one of the most critical leadership positions in <unk> incurred you'll accident Deanna received broad support from more than 200 companies across the industry.

Speaker 3: underlying individual status as a strong leader in cellular technology.

Underlying interdigital status as a strong leader in cellular technologies.

Speaker 3: We also take great pride that Diana is the first woman to be elected to the post, as a critical point in 5G evolution with the introduction of 5G advance.

We also take great pride that Deanna is the first woman to be likely to the post as a critical point in <unk> evolution with the introduction of <unk> advanced.

Speaker 3: Her role within 3GPP is one of the more than 100 leadership positions that are in junior hold across multiple standard development automation for wireless and video testing.

Current rule within three GPP is one more than 100 leadership positions that arent junior hold across multiple standards about amalgamation of wireless and video technologies.

Speaker 3: In Q3, we also achieved an important milestone with our patent portfolio, now exceeding 30,000 granny patents and pending applications.

In Q3, we also achieved an important milestone with our patent portfolio now exceeding 30000 granted patents and pending applications.

Speaker 3: It was also our highest quarter ever for new invention fighting and be our own track for record year for new invention creation.

It was also our highest quarter ever for new and you mentioned your filings and we are on track for a record year for new you mentioned creation.

Speaker 3: The strings are portfolio was recently confirmed by a new analysis from Lexus next.

The strength of our portfolio was recently confirmed by a new analysis from Lexis Nexis.

Speaker 3: This analysis, which measures both the quality and the quantity of 5G portfolios from more than 130 companies, recognizes that this is interdigital, but having one of the top 5 5G patent portfolios in the world.

This analysis, which measures both the quality and the quantity of <unk> portfolios from more than 130 companies recognizes interdigital as having one of the top five <unk> patent portfolios in the world.

Speaker 3: ranking as a head of multiple well-known innovators in the cellulorous space.

Ranking also had a multiple well knowing innovators in the cellular space.

Speaker 3: This confirms our belief that we are in an excellent position to realize further value from our cellular assets at a time when we believe 5G advances will drive new use cases for our innovation.

This confirms our belief that we are in excellent position to realizing further value from our set of assets.

At a time when we believe <unk> will drive new use cases for our innovation.

Speaker 3: Recently, we have announced partnership with University in India and Spain to explore research in technology that could enable future 6G wireless networks.

Recently, we have announced partnership with University in India, and Spain to explore research into technologies that could enable future 60 wireless network.

Speaker 3: This is another example of the kind of early state research we do and our efforts to enable broader ecosystems in the wireless space.

This is another example of the kind of early stage research, we do and our efforts to enable browder ecosystem in the wireless space.

Speaker 3: As I look at our portfolio and our innovation pipeline in the wireless space, we are ideally positioned between our ongoing focus on 5G and our long-term research in fundamental technology for 6G and beyond.

First I look at our portfolio and our innovation pipeline in the wireless space.

He already positioned between our ongoing focus on <unk> and our long term research in fundamental technology for <unk> and beyond.

Speaker 3: In summary, we deliver an excellent performance across our business in the third quarter and continue to be a momentum to position a business for a long-term growth.

Okay.

In summary, we delivered an excellent performance across our business in the third quarter and continue to build momentum to biodiesel business for long term growth.

Speaker 3: With that, hand you work to reach to talk to the numbers in more detail.

With that I'll hand.

<unk> over to rich to talk through the numbers in more detail.

Speaker 4: Thanks, Lauren. I'm excited to report that in Q3, we delivered another excellent performance with revenue, diluted earnings per share, and adjusted evena that were all well above the high end of our guidance ring.

Thanks Lauren.

I am excited to report that in Q3, we delivered another excellent performance with revenue diluted earnings per share and adjusted EBITDA that were all well above the high end of our guidance range.

Speaker 4: This is primarily the result of the largest standalone HEVC license we've ever signed.

This is primarily the result of the largest standalone <unk> license we've ever signed.

Speaker 4: which drove upside to both recurring and catch up revenue.

Which drove upside to both recurring and catch up revenue.

Speaker 4: These results support our long-term objective of delivering consistent revenue growth combined with strong margin.

These results support our long term objective of delivering consistent revenue growth.

Bind with strong margins.

Speaker 4: Total revenue increased 22% year-over-year, highlighted by continued double-digit growth and recurring revenue for CE and IoT.

Total revenue increased 22% year over year highlighted by continued double digit growth in recurring revenue for <unk> and Iot.

Speaker 4: Year to date, recurring revenue for CE and IOT is up 17% and demonstrates the multiple growth vectors of our business.

Year to date recurring revenue for <unk>, and Iot is up 17% and demonstrates the multiple growth factors of our business.

Speaker 4: As Liran mentioned, the HEVC license covers both smartphones and PC.

As Linda mentioned, the GPC license covers both smartphones and Pcs.

Speaker 4: We have recognized $145 million of revenue from Lenovo over the first three quarters of this year with over $40 million coming in Q3, including a significant catch up for prior infringement.

We have recognized $145 million of revenue from Lenovo over the first three quarters of this year with over $40 million coming in Q3 <unk>.

Including a significant catch up for prior infringement.

Speaker 4: The recurring contribution from Lenovo pushed our Q3 annualized recurring revenue from CE and IoT to 62 million per year.

The recurring contribution from Lenovo pushed our Q3 annualized recurring revenue from <unk> and Iot to $62 million per year.

Speaker 4: As Lear mentioned, this license demonstrates the quality of our HEVC video compression technology. It's relevance for devices.

As Leo mentioned this license demonstrates the quality of our <unk> video compression technology it.

Its relevance for devices beyond smartphones.

Speaker 4: And looking forward highlights what we believe is a green field opportunity to license video streaming and cloud service.

And looking forward highlights what we believe is a greenfield opportunity to license video streaming and cloud services.

Speaker 4: Cash flow was extremely strong in Q3, with cash flow from operations and free cash flow, both in excess of $300 million.

Cash flow was extremely strong in Q3 with cash flow from operations and free cash flow both in excess of $300 million.

Speaker 4: As we noted in the past, due to the timing of customer payments, our free cash flow can fluctuate quarter to quarter, which is why we also publish adjusted even up.

As we've noted in the past due to the timing of customer payments, our free cash flow can fluctuate quarter to quarter, which is why we also publish adjusted EBITDA.

Speaker 4: are adjusted EBITDA to the quarter of 83 million dollars increased 48% year-over-year, while our adjusted EBITDA margin increased 11 points year-over-year to 60% in line with our long-term goal.

Our adjusted EBITDA for the quarter of $83 million increased 48% year over year.

While our adjusted EBITDA margin increased 11 points year over year to 60% in line with our long term goal.

Speaker 4: We continue to return cash to shareholders in Q3. First, by increasing our regular dividend by 14%.

We continued to return cash to shareholders in Q3.

First by increasing our regular dividend by 14%.

Speaker 4: And second, by repurchasing almost 700,000 shares for $57 million in the quarter.

And second by repurchasing almost 700000 shares for $57 million in the quarter.

Speaker 4: plus another 300,000 shares for $22 million in the month of October .

Plus another 300000 shares for $22 million in the month of October.

Speaker 4: That brings our year-to-date return of capital through October 31st to over $360 million.

That brings our year to date return of capital through October 31.

Over $360 million.

Speaker 4: including a reduction of almost 13% of the outstanding shares from the beginning of this year.

Including a reduction of almost 13% of the outstanding shares from beginning of this year.

Speaker 4: Over the past decade, we've been responsible stewards by returning over $1.5 billion in cash to shareholders.

Over the past decade, we've been responsible stewards by returning over one 5 billion in cash to shareholders.

Speaker 4: Looking forward to Q4. I'll remind you that our Q4 Revenue Guidance is based off of contract signed to date.

Looking forward to Q4.

I'll remind you that our Q4 revenue guidance is based off of contract signed to date.

Speaker 4: since the timing of license agreements is inherently uncertain.

Since the timing of license agreements is inherently uncertain.

Speaker 4: On that basis, we expect Q4 recurring revenues will be around $104 million.

On that basis, we expect Q4 recurring revenues will be around $104 million.

Speaker 4: with operating expenses of about $78 million.

With operating expenses of about $78 million.

Speaker 4: driving an adjusted EBITDA margin of about 49%.

Driving an adjusted EBITDA margin of about 49%.

Speaker 4: Furthermore, we expect to continue to repurchase stock.

Furthermore, we expect to continue to repurchase stock and.

Speaker 4: And finally, we expect GAP diluted earnings per share of 70 to 80 cents.

And finally, we expect GAAP diluted earnings per share of 70 to 80.

Speaker 4: longer term, our goal remains to achieve and sustain a 60% adjusted EBITDA margin on 60 shooting on 650 million of annual recurring revenue from device licenses.

Longer term our goal remains to achieve and sustain a 60% adjusted EBITDA margin on 60, excuse me on $650 million of annual recurring revenue from device licenses with.

Speaker 4: with additional upside from licensing new products and services.

With additional upside from licensing new products and services.

With that I'll turn it back to refer.

Speaker 2: Thanks, Rich. At this point, Operator, we are ready to take questions.

Thanks Rich at this point operator, we are ready to take questions.

Speaker 1: Thank you, and as a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Thank you and as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Please standby, while we compile the Q&A roster.

Speaker 1: And for your first question, it comes from the line with COTS Serial from Roth MKM. COTS, your line is open, please answer questions.

And for your first question comes from the line of Scott Searle from Roth Fkm.

Scott Your line is open please ask your question.

Speaker 5: Hey, good morning. Thanks for taking my questions guys. Hey, nice job on the quarter rich quickly. I'm not sure if I heard a mix between fixed fee and royalty on the recurring side. Love to have a little bit of visibility there and wanted to clarify Lenovo. Now, everything has been settled there. And I know there were some outstanding issues and concerns related to.

Hey, good morning, Thanks for taking my questions I'll take them now.

This job on the quarter.

Richard quickly I'm not sure if I heard a mix between fixed fee and royalty on the recurring side love to have a little bit of visibility there I wanted to clarify.

Novo now everything.

Has been settled Loren I know there were some outstanding issues and concerns related to.

Speaker 5: ongoing royalty rates in smartphones, but it sounds like that's been wrapped up now with the HEVC latest agreement with them on that front. And also to clarify as well on the Samsung front for arbitration, while the timeline for final determination sounds like it's the end of next year, I'm interpreting this that there are no issues in terms of the baseline amount of ongoing payments that you would receive, which was consistent with the prior agreement. Is that correct?

Ongoing royalty rates and smartphones, but it sounds like that's been wrapped up now with the <unk>.

Latest agreement with them on that front and also to clarify as well on the Samsung front for arbitration and while the timeline for final determination. It sounds like it's the end of next year.

Good.

I am interpreting this that there are no issues in terms of the baseline amount of ongoing payments that you would receive which was consistent with the prior agreement is that correct.

Speaker 4: Yeah, so Scott, let me start on your 1st question. Yes, about fixed fee revenue and we do disclose in our metrics. I'll remind you that. And I'll tell you what the figure is for for Q3 fixed fee revenue as a percentage of recurring revenue is 88%.

Yes, So Scott let me start.

On your first question you asked about fixed fee revenue.

And we do disclose in our metrics I'll remind you that and I'll tell you what the figures for Q3 fixed fee revenue as a percentage of recurring revenue is 88%.

Yeah.

Speaker 3: Yeah, it's got this learn. Let me take on the Lenovo question. And the new deal we have announced today is covering the each EVC technology that's applied to BOSER PC and their smartphones.

Perfect Yeah, Hey, Scott has learned let me take on the Lenovo question and.

So the new deal we have announced today is covering the <unk> technology that is applied to both our PC and our smartphone.

Speaker 3: As you remember, we have the court decision from UK court covering the cellular technology that's 3G, 4G and 5G, that agreement as by the court decision goes until end of this year, December 31st of 2023.

As you remember we have a court decision from UK court covering the cellular technology. That's <unk> for Gen. <unk> data agreement us by the court decision goes out until end of this year December 31 of 2023 in the meantime, we are also pursuing.

Speaker 3: In the meantime, we are also pursuing values that they have benefited from from other technologies in our portfolio, such as Wi-Fi patents as well as valuable implementation patent technology. So those are...

Values that they have benefited from from other technologies in our portfolio.

Such as Wifi patterns as well as valuable implementation patent technology. So those are up.

Speaker 3: You know, quite a few moving parts, but we are really pleased by the new deal we have signed with.

A few moving parts, but we are really pleased by the new deal we have signed with them.

Speaker 3: So on the Samsung arbitration, what we have disclosed here, frankly, we touched on this issue in the last learning call also. We have the three panel arbitrate already assembled and they had their case management meeting.

So on the Samsung arbitration and what we have disclosed here frankly would be touched on this issue in the last earning call. So we have the three panel arbitrate already onboard and they had their case management meeting. So therefore, the hearing has already been said.

Speaker 3: So therefore, the hearing has already been set for summer of next year, 2024, and both parties will be working producing quite a few documents to the panel arbitrators and they will consider. So after the hearing, we do expect a decision before end of next year. So we are absolutely on pace.

Summer of next year 2024, and both parties will be working producing quite a few document to the panel of arbitrators on what they will consider so after the hearing we do expect at the season before end of next year. So we are absolutely on pace.

Speaker 4: And that reached upon me on the revenue recognition just a little bit. Yeah, and I'm sorry, Scott, could you just repeat that the last part of your question on the you an

Let rich comment on the revenue recognition, just a little bit yeah, and I'm sorry, Scott could you just repeat that the last part of your question on the Rev. Rec.

Speaker 5: I know that I think I think you answered all all three parts of that then I would have maybe Maybe the following then I'll get back in the queue Um, it looks like she's starting to accelerate Um, you had good results this quarter You've been continuing to build some momentum on learn I wonder if you could qualitatively talk about how that pipeline is ramping up I know you've talked about a bigger number of of where technical was bought that was 150 million or so We're now at a 60 plus million dollar run rate

No I think I think you answered all three parts of that.

Maybe Craig maybe as a follow up and then I'll get back in the queue.

It looks like you're starting to accelerate yet.

You had good results this quarter <unk> been continuing to build some momentum there and I Wonder if you could qualitatively talk about how that pipeline is ramping up I know you've talked about a bigger number.

We're Technicolor was bought there was a $150 million or so we're now at a 60 plus million dollar run rate is this the point, where we start to see that accelerating and also a clarification.

Speaker 5: Is this the point where we start to see that accelerating? And also a clarification on the streaming opportunity for you guys.

On the streaming opportunity for you guys.

Speaker 5: using your HEVC patents and otherwise on the video services model. I'm not sure if you made any comments on that earlier. I thought one of the license agreements referred to cloud, and I'm not sure if you're referring kind of indirectly to that opportunity in licensing agreement or opportunity going forward with streaming providers or if you could provide some color and timeline related to that.

Using your <unk> patents and otherwise.

On the video services model I'm not sure. If you made any comments on that earlier I thought one of the license agreements referred to cloud.

And I'm not sure if youre, referring kind of indirectly to that opportunity in licensing.

Agreement or opportunity going forward with streaming providers or if you could provide some color on timeline related to that.

Speaker 3: Yeah, he's got, let me take the question here. So we agree with your assessment that our momentum is accelerating in the CE and other devices.

Yes, Hey, Scott, let me take the question here. So we agree with your assessment that our momentum is accelerating in the CE.

And other devices.

Speaker 3: As of now, we remain committed to the over $150 million recurring revenue for the CE and IOT opportunity, but also additional, we will be recognizing case-by-case catch-up payment, as we have done in the Lenovo case here.

So as of now we remain committed to the overall $150 million recurring revenue for the <unk> opportunity.

But also a decent at all we will be recognizing on a case by case, a catch up payment because we have done.

In the Lenovo case here, so that will be on top of the $150 million recurring revenue.

Speaker 3: So that will be on top of the $150 million recurring revenue.

Speaker 3: regarding my earlier comments, make sure that we have signed two new deals in this quarter line for the HEV CDO for the know with the other lines that is a HUMAX deal. That's covering set top box.

Regarding my earlier comments to make sure that we have signed two new deals in this quarter lines for the <unk>. The other lines that is a few Max deal that's covering a set top boxes, so thats still a device deal.

Speaker 3: So that's still a device deal, and we also put that under the CE program here.

We also put that under the CE.

Speaker 3: So that's not from the streaming services, but as we have touched on before, we believe our video technology, HEVC and other technology, VVC, and frankly, there's alternative implementations for AV1 VP9s, which we all have very strong IP on. It's very important to the online streaming service, and that's redefined as a greenfield.

Program here, so thats not from the streaming services, but as we have touched on before we believe our street our video technology.

<unk> and other technology, we see and frankly theres alternately we include patients for <unk>, which we all have very strong IP is very important to the online streaming service and Thats, what we define as a greenfield working very hard on and we believe that's a very large opportunity and we will try to get.

Speaker 3: working very hard on we believe that's a very large opportunity and we will try to get

Speaker 3: Ragnizing for the value we have delivered to the industry over time Great, thanks so much, I'll get back in the...

Recognizing for the body, we have deliver to that industry overtimes.

Great. Thanks, so much ill get back in the queue.

Alright, one moment for your next question.

Speaker 1: And for your next question, it comes from the line of Taliyani from Bank of America. So all your lines open, please ask your question.

FRE next question. It comes from the line of <unk> from Bank of America. Your line is open. Please ask your question.

Yes, I have.

Speaker 6: First question is about financials. Can you elaborate on the EBITDA margins this quarter? Also your free cash flow generations strongly are performed, are numbers? Can you touch on the drivers there? And lastly, just on the smart phone strengths in the quarter, would you mind to summarize again and double click on what drove the strengths? Thank you.

First question is about the financials.

Can you elaborate on the EBITDA.

Margins. This quarter also your free cash flow generation strongly outperformed our numbers can you.

Touch on the drivers there and lastly, just on the smartphone strength in the quarter would you mind, just summarize again and double click on what drove the strength. Thank you.

Speaker 4: Yeah, so I can take those pal. So, and there's some related, a related thread to all three aspects of your question.

Yes, so I can take those tall.

And there are some related.

Related thread to all three aspects of your question.

Speaker 4: The first on the EBITDA margins, it really speaks to the operating leverage that exists within our business. So as we drive performance on the top line as we did this quarter, with the new licenses Lirin spoke about, principally the Lenovo HEVC agreement, there's not really any incremental costs associated with that. So that's a bottom line drop and drives up that margin. That's why we say long-term at 650 million, we think we can maintain a 60% margin because there's just not as much expense growth necessary to achieve that in our view.

The first on the EBITDA margins it really speaks to the operating leverage that exists within our business. So as we drive performance on the top line as we did this quarter.

With the.

The new the new licensees, we arent spoke about principally the Lenovo <unk> agreement.

There's not really any incremental cost associated with that so that's a bottom line drop and drives up that margin and Thats why we say long term at $650 million. We think we can get to maintain a 60% margin because there's just not as much expense growth necessary to achieve that in our view.

Speaker 4: Free cash flow there, it's a little bit, you know, the margin speaks to kind of, or correlates with cash flow over time. But in the quarter, we coming in, we expected a large customer receipt. And I think we referred to that in our guidance at the beginning of the year, or the beginning of the quarter and then also with some of the agreements we signed, we're able to increase the cash receipts in the quarter as well.

Free cash flow there, it's a little bit the margin speaks to kind of correlates.

Correlates with cash flow over time, but in the quarter.

Coming in we expected a large customer receipt and I think we referred to that in our guidance at the beginning of the year.

Beginning of the quarter.

And then.

Also with some of the agreements we signed were able to increase the cash receipts in the quarter as well.

Speaker 4: So also, you know, in part related to the new agreements.

So.

Also in part related to the to the new agreements.

Speaker 4: and the Lenovo HEVC deal, it is video codec, but it doesn't apply only to consumer electronics. That also applies to smartphone. So there is an allocation there to smartphone.

And the Lenovo <unk> deal. It is video codec, but it doesn't apply only to consumer electronics that also applies to smartphone. So there is an allocation there too to smartphone.

Got it thank you.

One moment for your next question.

Speaker 1: And for the next question, a concern to line up. Mark with passes from Jeff Rees. Your line is open. Please ask your question.

And your next question comes from the line of Mark Hood passes from Jefferies. Your line is open. Please ask your question.

Speaker 7: Hi, thanks for taking my questions on the licensing, the streaming IP, the cloud service providers, can you talk about how does that play out?

Hi, Thanks for taking my questions on the the.

The licensing this streaming IP to cloud service providers can you.

To accomplish can you talk about like how how does that play out.

Speaker 7: is there an ability to quantify the size of the market or the timing and where would that be a new category for you or is that in CE and IoT or is that in a different category as that plays out? And then I had a follow-up.

Is there an ability to quantify the size of the market or or the timing and where would that would that be a new category for you or is that in CE and Iot or is that in a different category.

You play as that plays out.

And then I had a follow up yes.

Speaker 3: He marked on this learn. So we mentioned the protocol and we highlight this call. So we believe the streaming and online services, cloud services is a very large green field for our company.

Yeah, Hey, Mark this is Larry.

We mentioned in our prior call and we highlight these call. So we believe the streaming online services cloud services is a very large greenfield for our company.

Speaker 3: And we have been working on it for frankly multiple years now, and remember with our technical acquisition as well as the combining innovation we have done with interdigital engineers.

We have been working on it for frankly multiple years now and remember with our Technicolor acquisition as well as the combining the leasing we have done we've seen toward digital as engineers. We believe we have one of the largest and probably one of the most valuable co that IP in the industry and we continue to drive the standard development going.

Speaker 3: We believe we have one of the largest and probably one of the most valuable Kodak IP holding in the industry and we continue to drive the standard development going forward.

Speaker 3: So we believe we are really well positioned in that field. Regarding the size opportunity here, we are obviously the overall time of the market's fairly well known and based on third party report, that market for the streaming service alone will be by 2027 to be about the same size as the overall smartphone industry in terms of annual revenue. And we currently do.

Forward.

So we believe we are really well producing that field regarding the size opportunity here we are.

The overall Tam of the market is fairly well known and based on third party report that market for the streaming service alone will be by 2027% will be about the same size.

Overall smartphone industry in terms of annual revenue.

Currently do not have.

Speaker 3: Set number for our revenue target yet primarily because we want to frankly get more clarity licensing progress before we put target on it. And once we make more progress and over time, by the way, this is a brand new program. So we do believe we will take time to establish and grow. This will be a new category for us. This is not part of the CE program. The CE and our T program is still focusing on the device size.

Sat number for our revenue target yet primarily because we wanted to frankly get more clarity.

Licensing progress be followed our target Eid.

And.

Whilst we make more progress and over time by the way. This is a brand new program. So we do believe it will take time to establish that grew this will be a new category for us. This is not part of the CE program to see in our T program still focusing on the DIY side.

Speaker 4: And I'll just add that, therefore, the $650 million device target does not include this opportunity. That's additive to the $650 million.

And I'll just add that therefore, the $650 million device target does not include.

This opportunity that's additive.

To the $650 million.

Speaker 7: All right, that's very helpful. And a follow-up, if I may.

Alright, Thats very helpful and a follow up if I may.

Speaker 7: on the, just to talk about capital allocation.

On the <unk>.

If you could talk about capital allocation.

Speaker 7: It's nice to see that, you know, the dividend bump and the buybacks.

And nice to see that the dividend bump in the buybacks rich can you talk about the cash that you you want to have on your balance sheet or like to have on the balance sheet to run the business and.

Speaker 7: Rich, can you talk about the cash that you want to have on your balance sheet or like to have on the balance sheet to run the business? And can you talk about how you think about M&A going forward from here?

Can you talk about how you think about M&A going forward from here.

Speaker 4: Yeah, so Mark, you know, good question. We started the year with over a billion in cash. We've returned 360 million to shareholders and we're still sitting here with over a billion in cash because of the cash flow generation of the business.

Yes, so mark.

Good question, we started the year with.

Over $1 billion in cash we've returned $360 million to shareholders and we're still sitting here with over $1 billion in cash because of the general cash flow generation of the business.

Speaker 4: which is a great thing, but still more cash than we need. So we continue to be aggressive when returning capital to shareholders, provide an update through the end of October . And I expect that to be the case going forward. At this point, we're under $80 million on the authorization, but that's something that the authorization and buybacks and the dividend, and it's something we're looking at every quarter with a...

Which is great thing, but still more cash than we need so.

We continue to be aggressive in returning cash.

Capital to shareholders.

Provide an update through the end of October.

I expect that to be the case going forward at this point, we're under $80 million on.

On the authorization.

But that's something.

Authorization and buybacks and the dividend.

It's something we're looking at every quarter with our.

Speaker 4: So there's a lot of room, I think, to continue to return capital. With respect to M&A, we're always looking for opportunities. But because of the very strong in-house research capabilities we have in cellular and Wi-Fi in video, it's not something that our business model, all aspects and all categories, including the OTT. It's not something that we feel were dependent on. So it's more...

So.

There's a lot of a lot of room I think to continue to return capital.

With respect to M&A.

We're always looking for opportunities, but because of the very strong in house research capabilities, we have in cellular and Wi Fi in video.

It's not something that our business model.

All aspects in all categories, including the OTT, it's not something that we feel we're dependent on.

So it's more opportunistic.

Speaker 7: Got you a final question if I may.

Okay got you.

Final question, if I may.

Speaker 7: Lauren, you talked about being cited by, was it Lexus Nexus as a top?

Larry you talked about being sighted.

By was it Lexisnexis is a top.

Speaker 7: of 5 ca

Five <unk> IP player is but can you talk what is the significance of that report is that considered an authority in the industry is that something you.

Speaker 7: Can you talk what is the significance of that report? Is that considered like an authority in the industry? Is that something you now can cite during negotiations or during litigation? Is that like a piece of evidence of litigation? How can you just talk about the significance of that report? Thank you.

Now can site during negotiations or during litigation is that is that like a piece of evidence that litigation. How can you just talk about the significance of that.

Thank you yes.

Speaker 3: Yes, Hey Mark. Yes, there's a new report from LACS and access, which is a quite comprehensive report.

Yes, Hey, Mark yes.

New report from <unk>, and access which is a quite a comprehensive report.

Speaker 3: What they did do is they look at both the quality as well as the quantity, you know, by how many families, how many patents people have. That's this close to, you know, 5G standard process.

What they did do it the look at both the quality as well as the quantity by how many families. How many patents people have that these close to <unk> standard process and they have looked at all of the patent holders who have declared.

Speaker 3: And they have looked at all the patent holders who have declared potential issues of patent to 3GPP for 5G. And there's about 130 companies who hold those patents.

Potentially essential tied into <unk> and there was about 130.

Companies, who hold those patents.

Speaker 3: And running there I would be ranked in the digital as well, the top five in the industry, combining those factors.

<unk> revenue in there or would they ranked interdigital is one of the top five in the industry.

Combining those factors.

Speaker 3: We find this report properly acknowledge our leadership in the industry, even though any such report, there's always frankly different level of nuances people can comment on.

We find these report property acknowledge our leadership in the industry, even though any SaaS Shreveport theres always frankly at different levels nuanced as people can can comment on.

Speaker 3: And as far as usefulness for this report, we do fracking damage with the overall value to our licensees during negotiation. And we do it in fracking in a number of different ways. We damage it to the mayor, padded group research. We damage the overall portfolio. We give them some third party report, but also we fracking if they want it to get much deeper in terms of, you know, whereas proof of youth, topple report.

And as far as the usefulness for this report we do track it demonstrate the overall value to our licensees, Dr negotiation and there'll be do it in fact, a number of different ways. We demonstrated emera pedigree of research we demonstrate the overall portfolio. We gave them. Some third party report, but also we frankly, if they wanted to get.

Much deeper in terms of.

Ryan it's proof of use top of report.

Speaker 3: regarding the negations and these are also well-prepared things people can point to but frankly we also bring much more in-depth evidence in this process

Regarding <unk> and this is also one of the things people can point to but frankly would be also bringing much more in depth.

Evidenced in this process.

Very helpful. Thank you very much.

Of course.

Speaker 1: Thank you and for your next question, it comes from the line of Anja Sotas-Traum from Tidori. Anja, your line is open, please ask your question.

Thank you Andrew next question it comes from the alignment and your soldiers shrunk from Sidoti and your line is open. Please ask your question.

Speaker 8: Hi and thank you for taking my questions. Most of them have been answered already, but I'm just curious in terms of the other opportunity, you noted that you're a founding member now of Avanci, where are you in terms of that opportunity and how do you expect that to build up?

Hi, and thank you for taking my questions.

Most of them have been asked already but I'm just curious in terms of the odd opportunity.

Would that be a founding member.

Where are you in terms of that opportunity and how do you expect that.

And to build up.

Speaker 3: Okay, hey, hi, young good morning. So for the automobile, we are, by the way, we were a founding member for the 4G, a fancy program. And we are quite excited to see how that program has developed over the years. And as we reported in the prior quarter, they have more than 80% of the connective card licensed under 4G.

Okay, Hey, hi, there and good.

<unk>.

So for the automobile we are.

By the way we were a founding member of all of the 40.

Of anti program and we are quite excited to see how that program has developed over the years and as we.

Reporting in the prior quarter, they have more than 80% of the connected car licensed under <unk>, So now to <unk>.

Speaker 3: So now the 5G program has been launched and we are equally excited to be a founding member for 5G program.

E program, that's being launched and we are equally excited to be a founding member of <unk> program. So as I said in my prepared remark the five key value for connected cars significant higher than <unk>. So therefore, the overall rate is about doubling the <unk> rate.

Speaker 3: So as I said in my prepared remark, the 5G value for connected cars is significantly higher than 4G. So therefore, the overall rate is about doubling the 4G rate.

Speaker 3: So we've been, if we're from, you can say, a higher value per device regarding that dynamic, but keep in mind that those of now about half the cars sold every year are connected, but that's scheduled to increase. That's more and more new cars will be all connected. So therefore, I believe that connectivity portion of the 4G is growing roughly 15% year-to-year, and then the 5G adoption of the connect car will also increase.

So we benefit from essentially a higher abiding part device regarding that dynamic, but keep in mind that that's all for now about half. The cars sold every year are connected but thats scheduled to increase as more and more new cars will be all connected so therefore that I believe the connectivity portion of the <unk>.

<unk> is growing roughly 15% year over year and then the <unk> adoption of the connected car. We have also increased so compounding those two parameters, we feel that that gave us a very good driving factor, but we're probably at the next five to 10 years.

Speaker 3: So compounding those two parameters, we feel that was a very good driving factor who were probably the next five to 10 years.rators.

Okay. Thank you that was all for me.

Thank you.

Speaker 1: Alright, thank you and for your next question, it comes from the line of Arjun Bhatia from William Blair. Arjun, your line is open, please ask your question.

Alright, Thank you and for your next question comes from the line of Arjun Bhatia from William Blair. Your line is open. Please ask your question.

Speaker 9: Yep, hey, thanks guys. Laren, maybe for you the Lenovo deal is interesting because you have...

Yes, hey, thanks, guys.

Larry maybe maybe for you to Lenovo.

It was interesting because you have.

Speaker 9: You have video for both Smartphone and CE. When you look at your Smartphone contracts, what kind of room is there to do a cross-dell for say to get some of those Smartphone agreements to...

You have video for both smartphone and.

CE when you look at your smartphone contracts, what kind of room is there to do a cross sell.

Per se.

Get some of those smartphone agreements too.

Speaker 9: Sign on for CE, IOT as well. I imagine a lot of those customers have both.

Sign on for CE, Iot as well I imagine a lot of those customers have both in their portfolio, but where are you in discussions of that.

Speaker 9: in their portfolio. But where are you in discussions of that and getting those potential licensing agreements signed?

And getting those potential licensing agreement side.

Speaker 3: Yeah, so around. Yeah, let me comment on the, what you said the first part. Yes, so we signed the...

Yes, so our own.

Yes, let me comment on the.

What you said the first part yes, so we signed the Lenovo deal for the <unk> technology that apply both to the CE, which is primarily their PC as well as the smartphone. So regarding other vendors here is somewhat a case by case base because some of the vendors frankly.

Speaker 3: Lenovo D.O. for the HEVC technology that apply both to their CE, which is primarily their PC, as well as a smartphone. So regarding other vendors here, it's somewhat a case by case space, because some of the vendors, you know, Frankie have primarily smartphone devices. They in those contacts here, we are trying to get valuation both for cellular technology, as well as our HEVC technology on the smartphone.

I'm already smartphone devices. They eat those contacts here, we'll try to guide valuation boost for our cellular technology as well as our <unk> technology on the smartphone, but there may be other vendors, who have a mix of different products and some of them may be cellular base. Some of them may be frankly, we do without.

Speaker 3: But there may be other vendors who have a mix of different products. And some of them may be cellular-based. Some of them may be, frankly, video without cellular. And some of them may be Wi-Fi connected for IoT. So when we negotiate, we actually try to bring all those assets and highlight how they are benefiting from all of them and try to get paid, frankly, most of our technology.

Cellular and some of them may be Wi Fi connected filed with key so when we negotiate the average high to bring all of those assets and highlight how they are benefiting from all of them and try to get paid frankly, most of our technology.

Speaker 9: Okay, got it. And the settlement with Lenovo this quarter for the HEBC, does that have any impact on the other outstanding litigation that you have going with them?

Okay got it and the settlement with Lenovo this quarter for the HBC does that have any impact on.

The other outstanding.

Litigation that you have going with them.

Speaker 3: Yeah, so we mentioned as part of the HEVC license, we have dismissed the HEVC related delegation.

Yeah. So we mentioned as part of the <unk> license we have dismissed.

The <unk> related litigation.

Speaker 3: However, we do have other pending litigation with them as we have disclosing our 10Q. And naming later, there's a ITC case that's out covering our implementation patterns and there's frankly cases pending in Germany that we all kick in after the current cellular pattern, cellular license expires and other UK court decisions.

However, we do have other pending litigation with them as we have disclosed in our 10-Q and naming leaders.

<unk> case that filed covering already implementation patents and Theyre shrank eight cases pending in Germany that will kick in after the current cellular patents.

Our license that expires end of the UK Court decision.

Speaker 3: So that's sort of related to the novel. But I do want to add one more thing here because we have established a value for our HEVC, patent portfolio.

So that's sort of related to Lenovo, but I do want to add one more thing here because we have established the value of our HCR <unk>.

Speaker 3: We believe that's very useful when we negotiate with other licensees on both the CE and the mobile side. And we also believe that will have a beneficial effect as far as our sense on arbitration.

Patent portfolio we.

We believe that's why our useful when we negotiate other licensees on both the CE and mobile side and we also believe that we will have beneficial effects. Thus far are SaaS on arbitration.

Speaker 4: Okay. And Argin Autostad as a reminder that on the UK judgment that we received over the first half of this year, we are conservatively recognizing only a portion of that revenue and have, you know, deferred the rest pending the outcome of the appeal, which is we noted in the Q has been scheduled for June of 24. So we'd expect that to be resolved sometime in the second half of 24.

Okay, and <unk> I'll, just add as a reminder, that on the UK judgment that we received.

Over the first half of this year.

We are conservatively recognizing only a portion of that revenue and have <unk>.

Deferred the rest pending the outcome of.

The appeal, which as we noted in the Q has been scheduled for June of 'twenty. Four so we would expect that to be resolved sometime in the second half of 'twenty four.

Speaker 9: Okay, got it. Thanks. And, and do for last one for me, Lauren, can you just talk a little bit about how you're thinking about the smartphone opportunity with some of the other Chinese manufacturers, LivaOpo, etc., is that a near-term kind of catalyst or something that you're looking at a couple of years out?

Got it thanks and.

Just last one for me.

Can you just talk a little bit about how you're thinking about that.

Smartphone opportunity with some of the other Chinese.

Chinese manufacturers.

Apple et cetera is that a near term kind.

Catalysts or something that Youre looking at a couple of years out.

Yes.

Speaker 3: So we are continuing to make a lot of progress on those negotiations, as we have discussed before. The largest online since smartphone vendors are OPPO, Waveo, and Lenovo. We talked a lot about Lenovo on this particular call here, but we are also making progress on the litigation from this OPPO in multiple jurisdictions, and we have discussed the details here. Thank you for adding.

So we continue to make progress on those in negotiation as we have disclosed before.

The largest unlicensed smartphone vendors are open label and Lenovo, we talk a lot about that no. One on this particular call here, but we are also making progress on the litigation foundries.

Multiple jurisdictions and we have disclosed the details in our 10-Q filing.

Speaker 3: Regarding Weibo, we continue to negotiate with them. As we said multiple times, we always prefer bilateral negotiation.

Regarding <unk>, we will be continue to negotiate with them as we said multiple times and we always prefer a bilateral negotiation and as of now we have not filed any lawsuits against them yet.

Speaker 3: And, as of now, we have not filed any lawsuits against them yet.

Alright, Thank you guys.

Alright, thank you.

Speaker 1: And we have a follow up question coming from the line of Scott Cyril. Your line is open. Please go ahead.

And we have a follow up question coming from the line of Scott Searle. Your line is open. Please go ahead.

Speaker 5: Thanks, two quick follow-up to Rich. On the litigation front, it was a little elevated again this quarter. You got a lot going on. It seems like implied in the guidance for the fourth quarter that continues.

Hey, Thanks, two quick follow ups rich on the litigation front. It was a little elevated again this quarter you got a lot going on it seems like implied in the guidance for the fourth quarter that continues but now with Lenovo total resolved, we expect that to start to come down in 2024 and layering on the Avanti front now that youre throwing.

Speaker 5: But now with Lenovo, total resolved. Do we expect that to start to come down in 2024? And Liren, on the Avanti front, now that you're throwing your 5G intellectual property into the pool for autos, I'm wondering what your plan is for the rest of the IoT world. Will you be looking to use and license that directly? Or is that going to be contributed to the Avanti pool as well? Thanks.

Youre <unk> intellectual property into the pool for autos I'm wondering what's your plan is for the rest of the Iot World would you be looking to use in and license that directly or is that going to be contributing to the advancing pool as well. Thanks.

Speaker 4: Yes, so it's kind of start with the litigation question. Yes, so it was elevated a little bit in the quarter. As we had some activity and we move forward on the Samsung arbitration, the good thing about the arbitration is it's kind of ring fenced and doesn't kind of mushroom into other cases and jurisdictions.

Yes, so Scott I'll start with the litigation question, Yes, so it was elevated a little bit in the quarter.

As we had some activity and we move forward on the Samsung arbitration.

The good thing about the arbitration is it's kind of ring fenced and doesn't kind of mushroom into other other cases and jurisdictions.

Speaker 4: But, you know, and it's a little bit accelerated compared to other venues, but, you know, both now and going forward into 24, that'll continue to be a theme.

<unk>.

And it's a little bit accelerated compared to other venues.

Both now and going forward into 'twenty for.

That will continue to be a theme.

Speaker 4: We also had, of course, some action in the Lenovo HEVC arena in the quarter as that got resolved, but it had other matters with Lenovo. So I'm not going to make a call at this point on 24. We'll let it stand with the Q4 Op-Ex guidance.

Also had of course, some action in the Lenovo HBC.

Arena in the quarter is that got resolved, but have other matters with lenovo, so I'm not going to make a call at this point on 24, just let.

I'll, let stand with the Q4 Opex guidance.

Speaker 3: Yeah, he's got regarding the out licensing. We frankly are pursuing both direct licensing model as well as pool model. It depends on use case because of the discussed before out is really a collection of different use cases here. So for some of the more direct higher value high dollar negotiations we are preference generally through direct negotiation, but we are open for the pool model also in different use cases.

Yeah, Hey, Scott regarding the out licensing.

We frankly are pursuing both <unk> licensing model as well as pool model eight depending on use case, because obviously these guys before out is really a classroom different use cases here. So for some more direct higher value higher dollar negotiations, we our preference generally through youre asking negotiation.

We are open for the Puma also in different use cases.

Great. Thanks.

Alright, so presenters.

Speaker 1: I don't see any further questions and I would like to turn to conference back over to leering channel through team executive officer for closing your mouth.

I don't see any further questions and I would like to turn the conference back over to Larry Chen <unk>, Chief Executive Officer for closing remarks.

Speaker 3: Thank you operator before we close, I like to thank our employees for their dedication and contribution to interdigital as well as our many partners and licensing.

Thank you operator, before we close I'd like to thank our employees for their dedication and contribution between the digital but as well as our many partners signed licensees.

Speaker 3: Thank you to everyone who joined our call today and we look forward to updating you on our progress next.

Thank you to everyone, who joined our call today, and we look forward to updating you on our progress next quarter.

Speaker 1: Thank you, and this concludes today's conference call. Thank you for participating, and you may now disconnect.

Thank you and this concludes today's conference call. Thank you for participating and you may now disconnect.

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