InterDigital, Inc. (IDCC) | Investment Case

1. Company Snapshot

1.a. Company Description

InterDigital, Inc., together with its subsidiaries, designs and develops technologies that enable and enhance wireless communications in the United States, China, South Korea, Japan, Taiwan, and Europe.It provides technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks.The company develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G NR, beyond 5G (B5G), extended reality over wireless, and cellular Internet of Things (IoT) areas, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products.

It also provides video coding and transmission technologies; and engages in the research and development of artificial intelligence.The company's patented technologies are used in various products that include cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, which comprise base stations; components, dongles, and modules for wireless devices; and IoT devices and software platforms.As of December 31, 2021, it had a portfolio of approximately 27,500 patents and patent applications related to wireless communications, video coding, display technology, and other areas.

InterDigital, Inc.was incorporated in 1972 and is headquartered in Wilmington, Delaware.

Show Full description

1.b. Last Insights on IDCC

InterDigital's recent performance was positively driven by its Q4 earnings beat, with quarterly earnings of $2.12 per share exceeding the Zacks Consensus Estimate of $1.65 per share. The company's strong earnings announcement led to increased investor interest. Additionally, institutional investors such as Inspire Advisors LLC and Caprock Group LLC have taken stakes in the company, with Inspire Advisors acquiring 10,957 shares valued at approximately $3,783,000. However, some investors, including Alps Advisors Inc. and Shannon River, have reduced or trimmed their stakes in the company.

1.c. Company Highlights

Last Price	363.77
Change Percentage	1.88%
Open	350
Previous Close	357.06
Market Cap ( Millions)	9365
Volume	248465
Year High	412.6
Year Low	180.6
M A 50	340.87
M A 200	307.12

FCF Yield	5.65%
Dividend Yield	0.71%
ROE	38.50%
Debt / Equity	45.94%
Net Debt / EBIDTA	-39.77%
Price To Book	8.5
Price Earnings Ratio	23.01
Price To FCF	17.69
Price To sales	11.23
EV / EBITDA	15.58

2. InterDigital Delivers Strong Q4 2025 Results with Revenue and EPS Exceeding Expectations

InterDigital reported a strong fourth quarter, with revenue reaching $158 million, exceeding the high end of their outlook of $144 million to $148 million. The company's adjusted EBITDA margin was robust, and non-GAAP EPS came in at $2.12, surpassing estimates of $1.65. For the full year 2025, revenue was $834 million, the second-highest in the company's history, with adjusted EBITDA of $589 million and non-GAAP EPS of $15.31 per share, both at all-time highs. As Rich Brezski noted, "Q4 was a strong finish to an excellent year as we delivered revenue, adjusted EBITDA, and non-GAAP EPS in Q4 that all exceeded the high end of our outlook."

Publication Date: Feb -15

                                    📋 Highlights
                                    Smartphone Licensing Expansion:
                                                Secured record deals with Samsung (most valuable license), Vivo, and Honor, licensing 8/10 top manufacturers (85% market coverage).
CE & IoT Growth:
                                                New agreements with HP and a major social media company, achieving $4.6B in total contract value since 2021.
Patent Portfolio Strength:
                                                14% YoY growth, surpassing 38,000 granted patents/applications, with 6G and AI research advancements.
Financial Performance:
                                                2025 revenue hit $834M (second-highest), with non-GAAP EPS at $15.31 (all-time high) and 2026 guidance of $675M–$775M revenue.
Litigation Wins:
                                                Won all four Disney patent cases in Brazil and Germany; preliminary injunctions secured, with major trials pending in the U.S. and UPC.

                                

Licensing Agreements Drive Revenue Growth

The company's smartphone licensing program had a record-setting year in 2025, with new agreements with Samsung, Vivo, and Honor. The CE and IoT program also made significant progress, with new agreements with HP and a significant social media company. The total contract value of these agreements has exceeded $4.6 billion since 2021. The company's patent portfolio grew by 14% year over year and surpassed 38,000 granted patents and applications.

Outlook for 2026

InterDigital expects another strong year in 2026, with total revenue in the range of $675 million to $775 million, adjusted EBITDA of $381 million to $477 million, and non-GAAP diluted earnings per share of $8.74 to $11.84. Analysts estimate revenue growth at 3.4% next year. For Q1 2026, the company expects revenue to be $194 million to $200 million, with adjusted EBITDA margin of 52% to 55% and non-GAAP diluted earnings per share of $2.39 to $2.68.

Valuation Metrics

InterDigital's current valuation metrics indicate a P/E Ratio of 23.72, P/B Ratio of 8.76, and EV/EBITDA of 16.07. The company's ROE is 38.5%, and ROIC is 29.24%. These metrics suggest that the company's strong financial performance and growth prospects are reflected in its current valuation.

Litigation Strategy and M&A

The company is being cautious with its litigation strategy, preferring negotiations over deal-making. Liren Chen noted that the company is confident about its case with Disney and has seen positive results in Brazil and Germany. InterDigital is also open to considering M&A opportunities to expand and deepen its patent portfolio, but R&D investment remains a priority.

3. NewsRoom

InterDigital, Inc. $IDCC Stock Position Reduced by Fieldview Capital Management LLC

Mar -09

Source: defenseworld.net

Cresset Asset Management LLC Sells 1,561 Shares of InterDigital, Inc. $IDCC

Mar -08

Source: defenseworld.net

Disciplined Growth Investors Trim InterDigital After Strong Run in Wireless Technology Stock

Mar -07

Source: fool.com

InterDigital, Inc. $IDCC Shares Sold by Citigroup Inc.

Mar -03

Source: defenseworld.net

The Stocks Taking Off Now

Feb -28

Source: investorplace.com

Empirical Asset Management LLC Buys Shares of 3,117 InterDigital, Inc. $IDCC

Feb -25

Source: defenseworld.net

At MWC 2026, InterDigital to Showcase New Services and Immersive Experiences Underpinned by Wireless and AI

Feb -23

Source: globenewswire.com

InterDigital and Türk Telekom Achieve World's First Collaborative Cellular and Wi-Fi Sensing Using Preliminary 6G Architecture

Feb -23

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Wireless Communications Equipment

Expected Growth: 7.0%

The growth rate is higher than the global average due to the increasing demand for 5G infrastructure and the company's strong position in the wireless communications market. The adoption of 5G technologies is driving the growth of this segment, and the company's expertise in wireless technologies is expected to continue to drive revenue growth.

7. Detailed Products

5G Millimeter Wave (mmW) Technology

InterDigital's 5G mmW technology enables high-speed, low-latency wireless communication, ideal for applications requiring massive bandwidth and low latency.

Video Compression (VVC, HEVC, AVC)

InterDigital's video compression technologies, including VVC, HEVC, and AVC, enable efficient video encoding and decoding for various applications.

Artificial Intelligence (AI) and Machine Learning (ML) Solutions

InterDigital's AI and ML solutions enable intelligent decision-making, predictive analytics, and automation in various industries.

Internet of Things (IoT) Solutions

InterDigital's IoT solutions enable secure, efficient, and scalable connectivity for various IoT applications.

5G New Radio (5G NR) Technology

InterDigital's 5G NR technology enables fast, reliable, and low-latency wireless communication for various applications.

Wi-Fi and WiGig Solutions

InterDigital's Wi-Fi and WiGig solutions enable fast, reliable, and secure wireless connectivity for various applications.

Patent Licensing and Innovation

InterDigital's patent licensing and innovation enable companies to access and leverage its extensive portfolio of wireless and video technologies.

8. InterDigital, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

InterDigital, Inc. operates in the technology industry, where substitutes are readily available. However, the company's focus on 5G and IoT technologies provides a competitive edge, reducing the threat of substitutes.

Bargaining Power Of Customers

InterDigital, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's patented technologies provide a unique value proposition, limiting customers' ability to negotiate prices.

Bargaining Power Of Suppliers

InterDigital, Inc. is a technology company with a strong intellectual property portfolio, which reduces its dependence on suppliers. The company's suppliers have limited bargaining power due to the availability of alternative suppliers.

Threat Of New Entrants

The technology industry is highly competitive, and new entrants can easily disrupt the market. InterDigital, Inc. faces a high threat of new entrants, particularly from startups and established companies expanding into new markets.

Intensity Of Rivalry

The technology industry is highly competitive, and InterDigital, Inc. operates in a crowded market with many established players. The company faces intense rivalry from competitors, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	51.81%
Debt Cost	7.97%
Equity Weight	48.19%
Equity Cost	10.66%
WACC	9.26%
Leverage	107.50%

11. Quality Control: InterDigital, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

InterDigital

A-Score: 6.6/10

Value: 3.7

Growth: 8.8

Quality: 9.0

Yield: 3.0

Momentum: 9.5

Volatility: 5.7

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SS&C Technologies Holdings

A-Score: 5.9/10

Value: 3.7

Growth: 6.1

Quality: 7.0

Yield: 2.0

Momentum: 7.0

Volatility: 9.7

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Zoom Video

A-Score: 5.5/10

Value: 3.6

Growth: 8.1

Quality: 8.8

Yield: 0.0

Momentum: 6.0

Volatility: 6.3

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Alarm.com

A-Score: 4.9/10

Value: 5.3

Growth: 8.2

Quality: 6.2

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

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Alkami Technology

A-Score: 3.5/10

Value: 4.6

Growth: 7.1

Quality: 4.1

Yield: 0.0

Momentum: 0.5

Volatility: 4.7

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Commvault Systems

A-Score: 3.4/10

Value: 1.0

Growth: 6.9

Quality: 6.5

Yield: 0.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

5.00%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.26%

InterDigital, Inc. - US45867G1013

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on IDCC

1.c. Company Highlights

Better Quality

Higher Yield

Less Volatile

Earnings Beats

Revenues Beats

Higher Growth

Strong Momentum

Revenues Miss

Earnings Miss

2. InterDigital Delivers Strong Q4 2025 Results with Revenue and EPS Exceeding Expectations

Licensing Agreements Drive Revenue Growth

Outlook for 2026

Valuation Metrics

Litigation Strategy and M&A

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Wireless Communications Equipment

Expected Growth: 7.0%

7. Detailed Products

5G Millimeter Wave (mmW) Technology

Video Compression (VVC, HEVC, AVC)

Artificial Intelligence (AI) and Machine Learning (ML) Solutions

Internet of Things (IoT) Solutions

5G New Radio (5G NR) Technology

Wi-Fi and WiGig Solutions

Patent Licensing and Innovation

8. InterDigital, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: InterDigital, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

363.77$

Current Price

363.77$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA