InterDigital Q2 revenue beats; raises full-year revenue outlook

Overview

• US wireless and video tech firm's Q2 revenue beat analyst expectations but fell 13% yr/yr

• Adjusted EPS and net income declined yr/yr amid higher IP enforcement and compensation costs

• Company raised full-year 2026 revenue outlook by $85 mln, citing new Amazon agreement

Outlook

• InterDigital raises full-year 2026 revenue outlook to $775-$845 mln from $675-$775 mln

• Company sees Q3 2026 revenue between $154 mln and $158 mln

• InterDigital expects full-year 2026 non-GAAP EPS of $10.85-$12.81

Result Drivers

• AMAZON AGREEMENT - New agreement with Amazon covering services and devices, including Prime Video, drove Q2 results above outlook

• RECURRING REVENUE GROWTH - Annualized recurring revenue rose 13% yr/yr to an all-time high, reflecting increased licensing activity

• HIGHER OPERATING COSTS - Operating expenses increased due to higher IP enforcement costs and share-based compensation

Company press release: ID:nGNX97qQYk

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the communications & networking peer group is "buy."

• Wall Street's median 12-month price target for InterDigital Inc is $469.22, about 79.7% above its July 29 closing price of $261.14

• The stock recently traded at 32 times the next 12-month earnings vs. a P/E of 40 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)