InterDigital (IDCC)
NASDAQ:IDCC
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InterDigital
(NASDAQ:IDCC)
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Rating:78Outperform
Price Target:
$402.00
▲(7.77% Upside)
Action:ReiteratedDate:04/30/26
IDCC scores well primarily on strong financial performance—exceptional margins, high-quality free cash flow generation, and improved balance-sheet flexibility. The earnings call supports the outlook with ARR growth and a guidance beat, though near-term cash timing (receivables), renewal completion, and litigation-related uncertainty temper the score. Technicals are mildly supportive, while valuation is fair with a modest dividend yield.
Positive Factors
High margins and cash generation
InterDigital's licensing model produces exceptionally high gross and operating margins and near-parity free cash flow to net income (FCF-to-net ~0.97). Those durable cash generation characteristics reduce dependence on volume, fund buybacks/debt paydown, and support multi-year IP monetization investments.
Negative Factors
Revenue volatility and lumpiness
InterDigital's licensing receipts can be highly lumpy as large agreements, catch-up payments, and enforcement outcomes cluster in quarters. This creates meaningful revenue and growth volatility which complicates near-term forecasting, budgeting and could pressure margins if catch-ups or settlements shift across reporting periods.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and cash generation
InterDigital's licensing model produces exceptionally high gross and operating margins and near-parity free cash flow to net income (FCF-to-net ~0.97). Those durable cash generation characteristics reduce dependence on volume, fund buybacks/debt paydown, and support multi-year IP monetization investments.
Read all positive factors
InterDigital (IDCC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.46B
Dividend Yield0.66%
Average Volume (3M)493.17K
Price to Earnings (P/E)25.8
Beta (1Y)0.80
Revenue Growth1.65%
EPS Growth-8.10%
CountryUS
Employees430
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)14.19
Shares Outstanding25,686,766
10 Day Avg. Volume297,226
30 Day Avg. Volume493,174
Financial Highlights & Ratios
PEG Ratio1.78
Price to Book (P/B)7.46
Price to Sales (P/S)9.85
P/FCF Ratio15.54
Enterprise Value/Market Cap0.91
Enterprise Value/Revenue8.22
Enterprise Value/Gross Profit9.86
Enterprise Value/Ebitda12.92
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)7.3
Revenue Forecast (FY)$706.13M
InterDigital Business Overview & Revenue Model
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 ...
How the Company Makes Money
InterDigital primarily makes money by licensing its intellectual property (IP), especially patents that are used in standardized technologies for wireless communications and related areas. Its main revenue stream is patent licensing: device makers...
InterDigital Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much of InterDigital’s sales come from licensing and patent royalties versus engineering services or product-related revenue, revealing whether the business depends on recurring, high-margin licensing income or on more cyclical services. Highlights concentration risk (heavy reliance on a few licensees or standards), sensitivity to handset and technology cycles, and the parts of the business most likely to drive margins, cash flow stability, and future growth.
Shows how much of InterDigital’s sales come from licensing and patent royalties versus engineering services or product-related revenue, revealing whether the business depends on recurring, high-margin licensing income or on more cyclical services. Highlights concentration risk (heavy reliance on a few licensees or standards), sensitivity to handset and technology cycles, and the parts of the business most likely to drive margins, cash flow stability, and future growth.
Data provided by:
The Fly
The FlyInterDigital Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call presented multiple strong positives: revenue, EBITDA and EPS beat guidance; ARR rose 13% YoY to $567M; record smartphone ARR and broad market coverage; decisive enforcement wins; leadership in standards and patents; and a robust balance sheet with active capital returns. Near-term headwinds include a sizable catch-up revenue quarter that increased licensing expense, a $139M accounts receivable build leading to modest operating cash in Q1, some pending litigation and incomplete renewals, and Q2 guidance that is lower on a like-for-like basis absent additional deals or enforcement results. On balance, the positives — particularly recurring ARR growth, licensing pipeline, IP enforcement momentum, and strong margins — materially outweigh the near-term operational and timing challenges.Positive Updates
Revenue and Earnings Beat Guidance
Total revenue of $205 million in Q1 2026 beat guidance of $194–$200 million; GAAP diluted EPS was $2.14 (vs guidance $1.61–$1.86) and non-GAAP EPS was $2.57 (above midpoint guidance). Adjusted EBITDA was $112 million (vs guidance $101–$110 million) with an adjusted EBITDA margin of 54%.
Negative Updates
Large Catch-up Revenue and Associated Cost Impact
Q1 included $64 million of catch-up revenue tied to new consumer electronics agreements; this drove a significant increase in licensing expense (revenue share) in the quarter and contributed to higher enforcement costs year-over-year.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Earnings Beat Guidance
Total revenue of $205 million in Q1 2026 beat guidance of $194–$200 million; GAAP diluted EPS was $2.14 (vs guidance $1.61–$1.86) and non-GAAP EPS was $2.57 (above midpoint guidance). Adjusted EBITDA was $112 million (vs guidance $101–$110 million) with an adjusted EBITDA margin of 54%.
Read all positive updates
Company Guidance
InterDigital reiterated that Q2 revenue from existing contracts is expected to be $139–$143 million (generally consistent with Q1 ARR), with adjusted EBITDA of $67–$73 million (about a 50% margin), GAAP diluted EPS of $0.80–$0.97 and non‑GAAP diluted EPS of $1.41–$1.60; management is maintaining its full‑year guidance at prior levels and noted that any new agreements or enforcement outcomes would be incremental to these ranges. For context, Q1 results were above guidance—total revenue $205 million (vs. guidance $194–$200M) including $64 million of catch‑up revenue, adjusted EBITDA $112 million (54% margin), GAAP diluted EPS $2.14, non‑GAAP EPS $2.57, ARR $567 million (up 13% YoY) with smartphone ARR $492 million—and cash from operations was $16 million while accounts receivable rose $139 million (collections of which management expects will drive strong Q2 cash flow).InterDigital Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
72
Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 828.92M | 834.01M | 868.52M | 549.59M | 457.79M | 425.41M |
| Gross Profit | 690.94M | 669.67M | 699.28M | 470.19M | 386.38M | 360.78M |
| EBITDA | 527.36M | 586.19M | 544.75M | 357.22M | 225.63M | 160.97M |
| Net Income | 366.37M | 406.64M | 358.61M | 214.07M | 93.69M | 55.30M |
Balance Sheet | ||||||
| Total Assets | 2.07B | 2.06B | 1.84B | 1.77B | 1.90B | 1.63B |
| Cash, Cash Equivalents and Short-Term Investments | 1.09B | 1.24B | 958.21M | 1.01B | 1.20B | 941.63M |
| Total Debt | 401.72M | 505.84M | 490.94M | 625.16M | 626.99M | 444.37M |
| Total Liabilities | 967.11M | 963.17M | 978.31M | 1.19B | 1.17B | 875.24M |
| Stockholders Equity | 1.10B | 1.10B | 857.22M | 581.55M | 724.89M | 745.24M |
Cash Flow | ||||||
| Free Cash Flow | 579.03M | 528.56M | 265.68M | 169.11M | 243.29M | 90.84M |
| Operating Cash Flow | 580.52M | 544.45M | 271.53M | 213.73M | 286.04M | 129.12M |
| Investing Cash Flow | -183.38M | -140.28M | 109.45M | -85.17M | -314.71M | -36.91M |
| Financing Cash Flow | -327.66M | -201.45M | -272.39M | -388.76M | 18.60M | -74.47M |
InterDigital Technical Analysis
Positive
373.02
Price Trends
348.39
Positive
340.03
Positive
321.82
Positive
Market Momentum
7.27
Negative
67.41
Neutral
92.44
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IDCC, the sentiment is Positive. The current price of 373.02 is above the 20-day moving average (MA) of 327.82, above the 50-day MA of 348.39, and above the 200-day MA of 321.82, indicating a bullish trend. The MACD of 7.27 indicates Negative momentum. The RSI at 67.41 is Neutral, neither overbought nor oversold. The STOCH value of 92.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IDCC.
InterDigital Risk Analysis
InterDigital disclosed 36 risk factors in its most recent earnings report. InterDigital reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
InterDigital Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.46B | 25.78 | 38.50% | 0.66% | 1.65% | -8.10% | |
76 Outperform | $6.10B | 11.51 | 16.44% | ― | 7.93% | 41.49% | |
69 Neutral | $6.05B | 54.82 | 50.21% | 0.16% | 3.50% | 75.14% | |
69 Neutral | $4.13B | -168.63 | 7.31% | ― | 24.38% | 25.18% | |
65 Neutral | $4.38B | 48.48 | 35.35% | ― | 18.89% | -7.44% | |
63 Neutral | $5.03B | 224.68 | -9.44% | ― | 17.29% | 38.72% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.