InterDigital Q3 2025 Earnings Call Transcript

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DATE

Oct. 30, 2025, 10 a.m. ET

CALL PARTICIPANTS

President & CEO — Liren Chen

Chief Financial Officer — Rich Brezski

Investor Relations — Raiford Garrabrant

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TAKEAWAYS

Revenue -- $165 million in the third quarter, representing a 28% year-over-year increase compared to the same period last year, and surpassing both initial and updated top-end guidance.

Adjusted EBITDA -- Adjusted EBITDA was $105 million in Q3 2025, up 62% year over year compared to the same period last year (non-GAAP), and equating to a 64% margin, a 14-point adjusted EBITDA margin expansion compared to 50% in the same period last year.

Non-GAAP EPS -- $2.55 non-GAAP EPS in Q3 2025, a 56% increase in non-GAAP EPS compared to the same period last year, and above the raised non-GAAP guidance range of $2.08–$2.27 per share.

Annualized Recurring Revenue (ARR) -- $588 million in annualized recurring revenue (ARR) in Q3 2025, an all-time high, up 49% year-over-year, primarily driven by new smartphone licensing agreements.

Smartphone Program ARR -- $491 million in annualized recurring revenue (ARR) for smartphones in Q3 2025, up 65% year over year compared to the same period last year, and nearing the $500 million mid-term ARR goal targeted for 2027.

Consumer Electronics and IoT ARR -- $97 million in annualized recurring revenue (ARR) for CE and IoT in Q3 2025, a record, with management stating an expectation to more than double this figure by 2030.

Market Coverage -- Eight of the top ten smartphone vendors, accounting for approximately 85% of the smartphone market, are under license.

Contract Value -- Aggregate contract value for licenses signed since 2021 now exceeds $4 billion.

Samsung Arbitration -- Completed with a value of over $1 billion across eight years, with license extending through the end of the decade.

Honor License Agreement -- Signed in the quarter, increasing ARR by $26 million.

Dividend -- Increased by 17% to $0.70 per share.

Capital Returns -- More than $130 million returned to shareholders year-to-date, including $53 million in Q3 via $35 million in buybacks, and $18 million in dividends.

Free Cash Flow -- $381 million in the third quarter, free cash flow of $425 million year-to-date, driven by large collection events.

Patent Litigation and Enforcement -- Litigation initiated against Tencent in UPC, India, and Brazil; multi-jurisdictional enforcement ongoing against Disney; preliminary injunction in Brazil granted, with Disney required to comply by Nov. 30.

Acquisition of DeepRender -- Closed during the quarter, adding AI-native video technology and patents to accelerate research and innovation in next-generation video compression.

Leadership Appointment -- Julia Madness named Chief Licensing Officer, following leadership tenure on major deals including Apple and Samsung.

Award Recognition -- Inclusion in Newsweek’s Greatest Companies, Fortune’s Fastest-Growing Companies, and Time Magazine’s Growth Leaders of 2025.

Research Grant -- Awarded a contract by the National Spectrum Consortium to lead demonstrations on spectrum management for civil and military applications in the United States.

Upcoming Guidance -- For Q4, recurring revenue expected between $144 million and $148 million from existing contracts; full-year revenue from existing contracts projected at $820 million to $824 million.

Full-Year 2025 Outlook -- Based on existing contracts, expected adjusted EBITDA margin is 70% for the year, and non-GAAP diluted EPS is forecast between $14.57 and $14.83 for the year.

SUMMARY

InterDigital (NASDAQ:IDCC) reported quarterly results that not only eclipsed all prior guidance metrics but also reflected an acceleration of licensing momentum in smartphones and the broadening of its technology portfolio. The closure of the DeepRender acquisition marked a decisive step into AI-driven video innovation, enhancing both research capabilities and the company’s intellectual property position in preparation for emerging video standards. Multi-jurisdictional patent enforcement actions against both Tencent and Disney underscored a rigorous approach to value capture and market discipline in licensing, with the Disney injunction in Brazil serving as a critical juncture in ongoing negotiations. Looking to the balance of the year, management communicated expectations to achieve, or potentially exceed, its revised full-year revenue outlook, independent of any incremental agreements, indicating a high-visibility revenue base moving forward.

Management emphasized, “Our subscription-based IP as a service model offers a high level of visibility, and provides a reliable source of cash flow even in the face of an uncertain economic environment.”

The company highlighted that $1.5 billion in catch-up revenue has been recognized over the last ten years, predominantly used for share repurchases.

The re-election of a senior engineer to lead development of next-generation (6G) wireless standards at 3GPP underscores the company's ongoing influence in the standard-setting ecosystem.

Guidance for Q4 and full-year 2025 is based solely on existing contracts, with any supplemental revenue from new licenses framed as additive, but not essential for meeting targets.

No direct monetization from the DeepRender acquisition is expected in the near term, but management believes the move is “a new paradigm to solve the video delivery problem across the Internet.”

INDUSTRY GLOSSARY

ARR (Annualized Recurring Revenue): The projected annual value of all active recurring revenue contracts as if current agreements remain unchanged for one full year.

3GPP: 3rd Generation Partnership Project, the global collaboration responsible for developing mobile telecommunications protocols, including 5G and upcoming 6G standards.

UPCs (Unified Patent Court): A unified patent court system in the European Union for resolving patent disputes covering participating EU member states.

HEVC/VVC codecs: High Efficiency Video Coding (HEVC) and Versatile Video Coding (VVC), advanced video compression standards used in streaming and device applications.

Catch-up Revenue: Non-recurring revenues earned when a licensing agreement retroactively covers prior periods of unlicensed use.

Full Conference Call Transcript

Liren Chen, our President and CEO, and Rich Brezski, our CFO. Consistent with prior calls, we will offer some highlights about the quarter and the company, and then open the call up for questions. For additional details, you can

Operator: In this call,

Raiford Garrabrant: we will make forward-looking statements regarding our current beliefs, plans, expectations, which are not guarantees of future performance and are made only as of the date hereof. 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. These risks and uncertainties include those described in the Risk Factors section of our 2024 Annual Report on Form 10-Ks and in other presentations. The call 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 the supplemental materials posted to the Investor Relations section of our website.

With that taken care of, I will turn the call over to Liren. Thank you, Raiford. Good morning, everyone. Thanks for joining us today.

Liren Chen: This was another outstanding quarter for InterDigital. We completed Samsung smartphone arbitration and signed four new license agreements. We increased our annualized recurring revenue by 49% year over year to an all-time high of almost $590 million. We appointed a new Chief Licensing Officer, and one of our senior wireless engineers was reelected to a chair position to lead the development of next-generation wireless standards, including 6G. And this morning, we announced that we completed the acquisition of an AI startup to add significant expertise to our research teams and accelerate our AI-native video research. Our business success was also recognized in recent high-profile rankings from Newsweek, Fortune, and Time Magazine.

Revenue for the third quarter was up 28% year over year to $165 million. Adjusted EBITDA and non-GAAP EPS were up 62% and 56%, respectively, year over year. In the quarter, we also increased our dividend by 17% to $0.70 per share, and over the course of the year, we have returned more than $130 million in capital to shareholders. As with previous calls, Rich will dig deeper into the numbers while I recap our recent business highlights and how we are executing our long-term growth strategy. Last month, we announced the appointment of Julia Madness as our Chief Licensing Officer.

Over the last fifteen years at InterDigital, Julia has served in a series of leadership roles within the licensing team, including Chief Licensing Counsel, Head of Smartphone Licensing, and most recently, as our Interim Chief Licensing Officer. She has played a critical role in negotiating many of our largest licenses, including Apple and Samsung. I am thrilled about this appointment, and I am confident she has the right skill set and experience to thrive in her new role. At the beginning of Q3, we announced that we have completed the Samsung smartphone arbitration valued at more than a billion dollars over eight years. Together with Apple, we have the two largest smartphone manufacturers licensed through the end of this decade.

As a reminder, after the announcement of the Samsung license, we raised our annual guidance by $110 million to $820 million at the midpoint. Also, in the third quarter, we signed a new license with a top smartphone vendor based in China. The agreement follows our recent agreements with OPPO and Vivo. We now have eight of the top 10 smartphone vendors and around 85% of the total market under license. The license also increased our annualized recurring revenue by $26 million to a record-setting $588 million. Of the $588 million in ARR, our smartphone program now accounts for over $490 million, putting us very close to our mid-term goal of $500 million in recurring revenue from smartphones by 2027.

Following the conclusion of our Honor agreement, we are taking active steps to license the two remaining top 10 smartphone vendors. These include initiating enforcement proceedings against Tencent in court in UPC, India, and Brazil. So as I have said before, while we always prefer to complete licensing deals through bilateral negotiation, we will take all necessary steps to ensure we receive fair value for our foundational innovation. In the third quarter, we also closed renewals with Sharp and Safehold in our smartphone program and with an EV charging company in our consumer electronics and IoT program. The agreement with the EV charging company is another example of how our horizontal technology has broad applicability across different industry verticals.

Overall, the total contract value for licenses that we have signed since 2021 is now well over $4 billion. In our video service program, we are making more progress in enforcing efforts with Disney. Last month, a court in Brazil granted us a preliminary injunction against Disney after a court-appointed independent expert found that Disney infringed our two patent institutes related to video encoding technology. The independent expert report contains a detailed analysis of our innovation and the role it plays in enabling Disney's network streaming platforms, validating our belief that our portfolio is a critical enabler for the video service sector. The preliminary injunction in Brazil is an important learning step in a multi-jurisdictional enforcement campaign with Disney.

So as I mentioned before, we always prefer bilateral negotiation to get deals done and only use enforcement as a last resort. High-value litigation like this can be lengthy, but when choosing to enforce our rights, we have a very strong track record of ultimately signing long-term agreements with prospective licensees. As we drive our growth strategy across devices and on the video side, we continue to strengthen our research and innovation team. Earlier today, we announced our acquisition of AI startup DeepRender, which specializes in the application of AI to make video compression more efficient. Let me explain why we believe the deal is such a great fit.

This acquisition adds to our existing AI talent pool in our research and innovation team. It accelerates our AI-native video research. It strengthens our position in foundational research as the next video compression standards start to take shape and builds on our current leadership in HEVC and VVC codecs. And it adds depth to our IP position with DeepRender's AI and video patent portfolio. I will also add this is a great culture match. Much like InterDigital, DeepRender is a company of researchers and inventors who are dedicated to solving some of the most complex technical challenges in video and AI.

With the consumption of video booming across smartphones, consumer electronics, and video services such as streaming, we believe that video innovation will become an even more significant driver of our growth strategy. Staying with our research teams, in the third quarter, one of our senior wireless engineers was re-elected to lead a key engineering group within 3GPP, the organization which sets cellular wireless standards. This shows not only how we lead 5G but also means that we are ideally positioned to lead the development of 6G ahead of the expected rollout of next-gen mobile network devices and services in 2023.

Shortly after the end of the quarter, we also announced that we have been awarded a contract by the National Spectrum Consortium in partnership with the US government to lead research and conduct demonstrations on how to better manage the use of spectrum in the United States by both civil and military applications. This project reflects one of InterDigital's unique strengths in solving complex technical challenges to improve connectivity for consumers and enterprises and enhancing national security across the communication ecosystem. There are very few companies worldwide that can take on this sort of challenge, and I am delighted that the United States has turned to our engineering team for help.

As we continue to execute on our growth strategy, our progress is recognized by third parties. Newsweek recently named us as one of America's greatest companies, Fortune recognized us as one of America's fastest-growing companies, and Time Magazine listed us among America's growth leaders of 2025. These awards reflect the dedication and strong contributions from our employees and why we believe our platform has never been stronger to deliver more growth and even more shareholder value. And with that, I'll hand you over to Rich. Thanks, Liren.

Rich Brezski: I'm pleased to report that our strong momentum continued in Q3 with revenue and adjusted EBITDA all exceeding the high end of our guidance range. This was powered by our Samsung arbitration result, including a license with Honor, a top smartphone manufacturer based in China. These new agreements helped drive total revenue of $165 million, an increase of 28% year over year. This exceeds both our initial top-end guidance for Q3 total revenue of $140 million and our updated increased top-end guidance of $159 million that we announced at the time we signed the Honor agreement. The upside we delivered compared to our increased guidance was driven by additional license agreements we signed since then.

Our annualized recurring revenue, or ARR, increased 49% year over year to another all-time high. This year-over-year growth of $588 million in Q3 was driven primarily by new agreements signed over the intervening year in our smartphone program, including license agreements with OPPO, Vivo, Lenovo, and most recently, Honor. In this time, we increased our share of the smartphone market under license from about 50% to roughly 85%. These agreements, together with our excellent Samsung arbitration result, increased our smartphone ARR 65% year over year to $491 million in Q3, almost at the level of our smartphone mid-term ARR goal of $500 million. In CE and IoT, ARR increased to $97 million in Q3, also an all-time high.

Our new license with an EV charger company is another example of the growth opportunities that exist beyond the smartphone market. And we believe we can more than double ARR from CE and IoT by 2030. Our subscription-based IP as a service model offers a high level of visibility and provides a reliable source of cash flow even in the face of an uncertain economic environment. This enables us to continue to fuel our innovation engine and drive future revenue growth. Based on the strength of our intellectual property and the huge markets built upon it, we believe we are on track to grow ARR at a double-digit CAGR towards our 2030 target of $1 billion plus.

And it's important to remember that while ARR is a great metric to track the growth of our business, there is economic value above ARR alone. Over the last ten years, we have recognized $1.5 billion of catch-up revenue. This has been tremendously valuable because we have used the majority of that money to fund share repurchases over that time period. Today, we continue to have a lot of catch-up opportunity remaining, which tends to be 100% gross margin as we pursue our goal of $1 billion of ARR by 2030.

Our adjusted EBITDA for the quarter of $105 million increased 62% year over year and equates to an adjusted EBITDA margin of 64%, an increase of 14 points compared to 50% a year ago. The significant increase in adjusted EBITDA margin year over year demonstrates the leverage inherent in our model. You might remember that on our last earnings call, I said strong free cash flow over the second half of the year would drive free cash flow for the full year of 2025 above $400 million or close to double 2024 levels.

I am happy to report we did, in fact, collect large payments during the quarter, driving free cash flow to $381 million for the quarter and $425 million year to date. Finally, non-GAAP EPS rose 56% year over year to $2.55 and exceeded our increased guidance of $2.08 to $2.27 per share. Consistent with our capital allocation priorities, we continue to maintain a fortress balance sheet, invest for growth, and return excess capital to shareholders. In Q3, we increased our dividend by 17% and returned $53 million to shareholders through $35 million in buybacks and $18 million through dividends.

In October, we bought back another $15 million of stock, bringing the total return of capital to more than $130 million year to date. In just the last three-plus years, we have repurchased more than half a billion dollars of stock. And we expect to continue to buy back shares over the remainder of this year. Looking forward to Q4, we expect recurring revenue will include $144 to $148 million of revenue from existing contracts. That means we expect full-year revenue from existing contracts will be $820 to $824 million.

So before adding any potential contributions from new agreements we may sign over the next two months, we expect to meet or beat the midpoint of the increased full-year guidance we issued last quarter. Of course, revenue from any new agreements we may sign over the balance of the quarter would be additive to these amounts. Based again only on existing contracts, in Q4 we expect an adjusted EBITDA margin of about 50% and non-GAAP diluted earnings per share of $1.38 to $1.63. For the full year, again, based only on existing contracts, we expect an adjusted EBITDA margin of 70% and non-GAAP diluted earnings per share of $14.57 to $14.83 for the full year.

With that, I'll turn it back to Raiford. Thanks, Rich. Before we move to Q&A, I'd like to mention that we'll be attending a number of investor events in Q4, including the RBC Tech Conference and the ROTH Tech Conference, both in New York City, the South Southwest IDEAS Conference in Dallas, and the Nasdaq Investor Conference in London. Please reach out to your representatives at those firms if you'd like to schedule a meeting. At this point, Haley, we are ready to take questions.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kevin Garrigan from Jefferies. Your line is now open.

Kevin Garrigan: Congratulations on the strong results. Hey, I just want to drill in on the consumer IoT side. So just wondering if you can walk us through your biggest prospects as we look for the rest of the year and into 2026. And your first agreement with an EV charging manufacturer, do you see the EV charging space being a significant contributor to ARR growth?

Liren Chen: Kevin, hey. This is Liren. Good morning. Regarding the consumer electronic IoT space, if you look at this, it is really a class of multiple opportunities. Our largest single opportunity under the consumer electronic is smart TVs, where we continue to make progress. We have licensed the largest TV maker, Samsung. We are currently working with multiple other players, including LG, Hisense, and TCL. So that's our largest opportunity. Regarding our key opportunities here, we also have quite different collections, including automobile, EV charging as we announced today, and a few other consumer-driven IoT platforms. One more thing I also want to emphasize is in our consumer electronics, we also include PCs and desktops.

So if you go to our supplemental deck on our IR website, we actually try to break it down with the size of the market where we are in each segment. Regarding the question for EV charging, we do think it's an interesting market for us. It's green. Because some of the charging market is consumer-driven, some of them are commercial-driven, and they have different technology in there. Some of them are Wi-Fi enabled, and some others have cellular connectivity, and we try to get a value that's fair to what the technology is incorporating in those devices, those stations. Got it. Okay. That makes sense.

Kevin Garrigan: And then as a follow-up, can you just explain a little bit more on how you plan to integrate DeepRender with your own video codec technology and, you know, not to give away any plans, but are there other companies out there that you're looking into to kind of complement your streaming business?

Liren Chen: Yeah. Hey, Kevin. Yeah. Good question too. This morning, we announced the closing of DeepRender. DeepRender is a startup company. They are headquartered in London. And what they have been focusing on is this thing called native AI for video codec end-to-end. So it's really a more different way of solving the problem end-to-end by incorporating the AI function from the bottom up. So we have an AI team. We have been working on the video space for, frankly, many, many years. And the native AI function is one of the areas we have been working on. But by acquiring this team, we added a lot of, you know, really strong expertise.

It speeds up our AI capability for the native AI video research. And interestingly enough, it's also a critical juncture of time for the next generation video standard that's coming under discussion. So we feel we have a strong chance of integrating some of the AI features into the next video standard. And lastly, as part of the acquisition, we bought DeepRender's IP patent portfolio team and patent portfolio. So there are some AI patents and video patents, and we are in the process of integrating them. So it's a strategic acquisition, and we feel very good about it. Regarding other opportunities, we frankly have a very robust pipeline.

We look at all kinds of different opportunities and have a dedicated team passing through them. But I don't have anything else to report at this time.

Kevin Garrigan: Got it. Okay. Great. I appreciate the color and congrats on the results. Thanks.

Liren Chen: Thank you.

Operator: Our next question comes from the line of Scott Searle from ROTH Capital. Your line is now open.

Scott Searle: Hey, good morning. Thanks for taking my questions. I apologize, Liren, if this was covered earlier. I got on the call a little bit late. But in terms of the Disney injunction, I'm wondering if you could give us an update in terms of what next steps there are that we should be looking for as you go forward and how this is impacting conversations and discussions with other streaming vendors.

Liren Chen: Yeah. Hey. Good morning, Scott. So regarding this injunction, in my prepared remarks, we received the injunction by the court in Brazil. The injunction was supported by a third-party independent expert the court has appointed, which frankly supports our position on all the important issues. The trial court issued the injunction, and Disney appealed the injunction. And in the appeal court, we reinstated the injunction. So the injunction is currently in effect. But the court has given Disney until November to comply, November 30, if I remember right. So needless to say, we are watching and monitoring the situation quite carefully. And I don't want to speculate on what Disney will do from there.

But it's also worth noting that the Brazil PI injunction is just one step of a multi-jurisdictional enforcement we have been taking on. As we disclosed in the 10-Q filing with a lot of details, we have multiple cases coming up for trial in Germany, in UPC, and in the United States starting this month, starting in October. So there are over a dozen patent cases that are going to trial between now and the middle of next year. So needless to say, we feel good about the position we are in. But in the meantime, we are always looking for negotiations. Gotcha.

And just to follow up on that, has that actually improved the dialogue with Disney or impacted any other conversations you're having with other streaming vendors?

Scott Searle: Just in terms of DeepRender, to dive down a little bit more, do you see this as helping with the existing streaming customers in terms of enhancing your product portfolio there and really being able to get monetization across the goal line? Or is this going to predominantly open up some other opportunities? There's a lot of edge AI that goes on, which sounds like some of the DeepRender patent portfolio would seem to cover. So I'm wondering, is it for existing core opportunities, or does this really expand the product breadth that you've got now within the video codec and streaming market?

Liren Chen: Yeah. Hey, Scott. So the DeepRender opportunity, they are currently in a stage of startup. So when we acquire them, they don't really have revenue or paying customers. However, we are super excited about the technology. The technology, as I explained earlier, was really based on this native AI end-to-end. We actually believe it's a new paradigm to solve the video delivery problem across the Internet. As you are aware, video is super important for many use cases. About 80% of Internet traffic on every single day is driven by video. So being able to come up with a brand new way of solving that problem is super exciting for us.

So regarding how we plan to monetize it, frankly, we believe we have multiple options. But as of today, we are not really trying to determine exactly how we can make money other than solving the most difficult problems. Make sure our technology is leading the industry and obviously making sure we build a strong patent portfolio built on what we already have and the DeepRender patent portfolio they are merging with our portfolio as well as new IP. We continue to do that.

Scott Searle: Gotcha. And then maybe I'll just throw in two quickly at the end. AI in general, you guys have been investing not just with DeepRender, but organically within the organization. In terms of AI capabilities, which have, I think, from a 5G and 6G standpoint, kind of facilitated your core business there. But is there an explicit opportunity to license AI as it is as a standalone? And then second, from an M&A standpoint, you guys have not been particularly acquisitive in recent history outside of Technicolor. Now you've added DeepRender to that. How aggressive are you thinking about the opportunities as you go forward over the next several years?

It sounds like there's a pipeline of opportunities there, but is it really a stated goal to close some things as we look out over the next two to three years? Thanks.

Liren Chen: Acknowledge, we have very deep depths in AI expertise. We have a dedicated team. We have been working in the AI field for multiple decades. And our CTO, Rajesh Pankaj, is actually an industry-recognized AI leader who spans wireless AI and video space. So our current main sort of leverage of AI technology is to apply AI to solve foundational problems in wireless and video systems. As you are aware, the upcoming 6G standard, you know, the native AI built-in wireless is a key research area that we are leading. Regarding monetization strategy here, Scott, I really think there will be multiple opportunities for us to monetize AI technology.

But we have a very robust existing technology-driven, standard-driven IP licensing model. But I believe, yeah, it could give us new opportunities as we keep on driving the technology forward. Regarding the M&A pipeline here, as I referred to a bit earlier, we have a dedicated team internally led by our Chief Growth Officer, Ken Kush Kang. And we process a lot of opportunities. You know, some are bigger ones, that's maybe driven by, you know, IP assets. Some others are driven by technology development as we have done through DeepRender.

But our bar is very high, and with our recent business success, as Rich referred to here, we have a very strong balance sheet, and we believe it gives us different opportunities we can pursue.

Scott Searle: Great. Thanks so much.

Operator: Thank you. Our next question comes from the line of Arjun Bhatia from William Blair.

Arjun Bhatia: Hi. Thanks for taking the question. Alinda Lee here on for Arjun. I wanted to ask just to piggyback on the prior question regarding the acquisition. What other areas within the existing focus points of technology IPs are you looking forward to in adding fields through M&A?

Liren Chen: Yeah. Hi, Linda. Good morning. So regarding the M&A space here, we are frankly casting a wide net. As you are aware, our three pillars of research are wireless, video, and artificial intelligence. And we continue to look at to see do we have the industry-leading team, do we have the key research in those areas that's, you know, driving things forward. But we frankly also look at the edges in the area. We are always sort of applying those opportunities with different criteria. Right? We want to make sure we have critical mass that we can move the industry. We also like to see how we can build a competitive advantage over a long period of time.

And then frankly, with our increasing balance sheet and financial capability, we also try to look for bigger opportunities over time.

Alinda Lee: That's helpful. And in terms of the Tencent litigation, you announced it today that you are officially going on with litigation. Can you just give us maybe any more color in terms of maybe timeline, and additional kind of color in terms of that in general?

Liren Chen: So as I said in the prepared remarks, we have frankly built a lot of momentum in the smartphone licensing program. We currently license eight of the top 10 smartphone vendors already. That's essentially making up roughly 85% of the market. So Tencent is the largest unlicensed vendor as of today. They make roughly 100 million devices per year. And those devices tend to be lower-end and are sold to emerging markets. So we have been negotiating with them for multiple years, and we feel we have made them really fair offers. But so far, they have refused to take our offer.

So we feel it's necessary for us to defend our position for IP and, frankly, equally important to set a level field with other customers who are paying us licensing fees. Right? It's not fair that they get a free ride on our IP. So we have launched a multi-jurisdictional patent litigation against them. That's in UPC, that's in India, and Brazil. Those are significant markets for them. It's hard to predict precisely the timeline because some of the cases are frankly still being processed by the court. We don't have definitive dates yet. But as always, during negotiation, we always try to negotiate patent licensing deals with the party involved.

And even though the timing precisely is hard to predict, but given our history, we frankly have a very strong track record of, you know, if we have to enforce our rights, we almost always end up with bilateral agreements that are fair to both parties.

Alinda Lee: Alright. Thank you.

Operator: Thank you. At this time, I'm showing no further questions in the queue. I would now like to turn it back to Liren Chen for closing remarks.

Liren Chen: Thank you, Haley. Before we close, I really like to thank our employees for their dedication and contribution to InterDigital, as well as many partners and licensees for a very strong quarter. Thank you all for everyone who joined today's call. And we look forward to updating you on our progress next quarter.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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