We also renewed our license agreement with Sony itself, which is one of our long-term licensees, added a new agreement with Buffalo Americas, and new agreements with DTV manufacturers related to our extensive video portfolio. All these deals were done through bilateral negotiations. Overall, the total contract value of the agreements that we have signed since 2021 is about $4.7 billion. In our video services program, we continued to make good progress during the quarter. We were awarded our fourth injunction against Disney by a German court, which ruled that Disney infringed an InterDigital, Inc. patent related to EVC compression technology. We are also moving forward in our enforcement action against smartphone manufacturer Tencent.
In late March, a court in Brazil awarded us an injunction against Tencent after the court ruled that Tencent infringed our two 5G patents in suit, and that our licensing offer to Tencent was fair and reasonable. Combined with our Disney cases, this makes six out of six wins in our recent patent injunction proceedings. In Q1, we also launched a multi-jurisdictional enforcement action against TCL and Hisense, two of the world’s largest TV manufacturers. As I mentioned before, we always prefer concluding license deals through bilateral negotiation, and most deals do get done this way.
But we will vigorously pursue fair value for decades of investment in our research, and defend the value of intellectual property, which will allow us to continue to invest in the next generation of technology that benefits the whole industry and consumers worldwide in the future. Throughout our history, when we enforce our IP, we have a strong track record of ultimately reaching agreements that are effective for both parties. Our research engine and our leadership in global standards continue to be a major competitive advantage for us. During the quarter, one of our top wireless engineers was re-elected to a chair position within 3GPP, the standards body leading the development of six g.
We are already actively contributing to six g technology research and this re-election demonstrates we are ideally positioned to lead the development of six g standards, which are expected to be routed in 2029 with wide commercial deployment in [inaudible]. With this re-election, we remain one of the only three companies in the world to hold multiple chair positions within 3GPP. Since the start of this year, seven of our engineers and standards leads have been re-elected or appointed to new leadership positions in standards-related organizations, broadening total standards leadership roles to more than 110 positions. In the quarter, we also named our 2026 Inventor of the Year, Samir Ferdi, who is a senior engineer in our wireless lab.
Samir is a key contributor to cellular standards and one of our most prolific inventors. Inventor of the Year is one of the most prestigious awards we make each year and it speaks to the culture of innovation at InterDigital, Inc., and how our success as a company is built on the work of our inventors and the quality of their research. The cellular wireless industry is moving towards six g, and our research team is at the center of that transition.
At Mobile World Congress in March, we were at the heart of several of our demonstrations, including the development of AI-native networks, new imaging sensing and communication, and a showcase of the world’s first collaborative cellular and Wi-Fi sensing demonstration using a prototype six g architecture. In our video research, we launched our Haptic Excellence Center in partnership with gaming technology company Razer. This initiative brings together InterDigital, Inc.’s expertise in immersive media with Razer’s leadership in gaming and immersive hardware to advance haptic technology as a core component of the video experience. With haptics well established in gaming, we are now actively expanding it to new use cases.
For example, at Mobile World Congress, we partnered with Razer to demonstrate how haptic-powered technology can make streaming TV shows and video at home an even more immersive experience. With more than 4 billion haptic-enabled devices already in use, this is an important area of research and we believe it is a significant opportunity for us. Staying with video, we have developed a new energy-efficient video streaming technology, which expands our work in reducing the energy footprint of video-driven devices and services. As video consumption grows across networks and devices, making that delivery more energy efficient is the kind of impactful research that our team does so well.
When we combine our foundational research across wireless, video, and AI with our leadership in global standards, we believe the readouts speak for themselves in the quality and reach of our patent portfolio. In the latest European Patent Office ranking for patent applications in 2025, we are ranked among the top five U.S. companies alongside Qualcomm, Microsoft, and Auspic. Our portfolio is also consistently recognized as among the highest quality in the world. For our fifth year in a row, we were included in LexisNexis Innovation Momentum: The Global Top 100 report, which analyzes companies’ patent portfolios according to the quality of their innovation.
This ranking reflects the sustained investment we make in our research, and the discipline of our patent team in transforming that research into a world-class portfolio of IP assets. Before I finish, I want to highlight that we have recently been promoted to the S&P MidCap index, a clear reflection of the growth we have delivered in recent years. With that, I will hand it over to Rich, who will talk you through the quarter’s financial performance in more detail.
Rich Brezski: Thanks, Liren. I am pleased to report that we delivered another strong quarter to start 2026, with revenue, adjusted EBITDA, and EPS all above the high end of our guidance range. The upside was driven by new licenses signed during the quarter. Total revenue for the quarter was $205 million, above our guidance range of $194 million to $200 million. Total revenue included $64 million of catch-up revenue. Annualized recurring revenue, or ARR, for the quarter was $567 million, including a record $492 million of smartphone ARR. It is worth noting that our smartphone ARR is based in part on a guaranteed level of revenue under a hybrid agreement.
Under this agreement, there is a guaranteed fixed fee, and additional royalties will become due if our customer’s shipments exceed a certain volume. Adjusted EBITDA for the quarter was $112 million, above our guidance range of $101 million to $110 million. Our adjusted EBITDA margin of 54% was above the midpoint of our guidance. GAAP diluted EPS for the quarter was $2.14, above our guidance range of $1.61 to $1.86. Non-GAAP EPS for the quarter was $2.57, above the midpoint of our guidance range of $2.39 to $2.68. Cash from operations was $16 million, even as cash due from new agreements drove a $139 million increase in accounts receivable.
We expect collections of these new accounts receivable will drive strong cash flow in Q2. As Liren said, we have signed new agreements with total contract value of $4.7 billion over the last five years. This demonstrates the strength of our IP-as-a-service model. The long-term fixed-fee nature of most of these agreements provides visibility into our business, supports ongoing investment in research and portfolio development, and helps us pursue further growth across our licensing programs. Consistent with our capital allocation priorities, we continue to maintain a fortress balance sheet, invest for growth, and return excess capital to shareholders. During the quarter, we paid down $88 million of our debt and returned $26 million to shareholders.
Even with these distributions, we ended the quarter with cash and short-term investments in excess of $1 billion. And after accounting for additional repurchases in April, we have $108 million remaining on our share repurchase authorization. We have a portion of our license agreements come up for renewal every year-end. Our ability to renew many of those agreements and add new agreements in Q1 demonstrates the resilience of our model and the opportunity we see to drive additional ARR growth over time through renewals, new agreements, and enforcement outcomes. Looking forward to Q2, we expect revenue from our existing contracts will be in the range of $139 million to $143 million, which is generally consistent with our Q1 ARR.
Again, these revenue expectations are based only on existing contracts, so any new agreements and/or enforcement action results over the balance of the quarter would add to these expectations. But based only on existing contracts, we expect adjusted EBITDA of $67 million to $73 million, or an adjusted EBITDA margin of about 50%, diluted EPS of $0.80 to $0.97, and non-GAAP diluted EPS of $1.41 to $1.60. We are maintaining our full-year guidance at the levels we issued on our Q4 earnings call. For full-year guidance, we continue to think about our results through a multi-path approach, with different combinations of new agreements and enforcement outcomes that can deliver financial results within those ranges.
With that, I will turn it back to Raiford. Thanks, Rich.
Raiford Garrabrant: Before we move to Q&A, I would like to mention that we will be attending a number of investor events in Q2, including the William Blair Growth Stock Conference in Chicago, the Needham Tech Conference in New York, the J.P. Morgan Tech Conference in Boston, and the Evercore TMT Conference in San Francisco. Please reach out to your representatives at those firms if you would like to schedule a meeting. We will now open the call for questions.
Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, press star then the number one on the telephone keypad. That will be star one on the telephone keypad. We kindly ask for participants to ask one question and one follow-up. We will pause for just a moment to compile the Q&A roster. First question comes from the line of Arjun Rohit Bhatia from William Blair. Your line is now open. You may ask your question.
Arjun Rohit Bhatia: Perfect. Thank you so much. Liren, maybe if we can just start, I would love to get a little bit of the, you know, sort of a state of the union on where we are in the streaming opportunity. We have seen positive results in the litigation against Disney. But I am curious what all the injunctions mean for Disney. Have they had to alter their service? And if you could just give us a sense of what your expected timeline is from here, that would be great.
Liren Chen: Hey, Arjun. Good morning. Regarding Disney, as you are aware, we filed a multi-jurisdictional injunction and patent litigation process in February. We are roughly a year plus into it, and so far, we have five patents being decided by courts in Brazil and Germany, and we won five out of five. Not only were our patents found to be infringed, the courts issued injunctions against them in each of the cases. Regarding what is needed to address each case, it is a case-by-case basis. Sometimes they claim to have workarounds; some of them we are in the process of enforcing. So it is hard to tell directly how everything will play out.
It is also worth noting that we have at least half a dozen more patents coming to trial, including the cases we have in the UPC that are coming in May, June, and July of this year, so it is really coming up in the coming months. We also have cases in the United States pending against them. We feel very strong about where we are, and so far, five out of five is an extraordinary win.
Arjun Rohit Bhatia: Okay. Perfect. That is helpful color. And maybe going to the smartphone side, you have a long-term target out there for $500 million in smartphone revenue. From your ARR base, you are essentially there already. So where do we go from here? It seems like there is obviously upside as the six g cycle kicks in, but that is maybe still a few years away as you pointed out. So what should we look out for in terms of catalysts or additional potential outcomes to watch for in the smartphone business through 2026 and 2027?
Liren Chen: Hey, Arjun. As I said in my prepared remarks, we have so far licensed eight of the top 10 smartphone vendors, with ARR about $492 million and about 85% of the market under license. As you pointed out, we are very close to our $500 million ARR target, and we do expect to license the remaining unlicensed customers. Frankly, once we license them, we will double-check where we are. It is also important to note that not only are we very close to the ARR target, but the top three customers we have in the smartphone space—frankly Apple, Samsung, and Xiaomi—are all licensed to the end of the decade.
So we really have multi-year runway with those major customers under contract. We feel very strong about that program, and we will provide priority updates as we add new customers.
Operator: Thank you. Again, if anyone would like to ask a question, simply press star one on your telephone keypad. That will be star one on your telephone keypad to ask a question. Next question comes from the line of Anja Soderstrom from Sidoti. Your line is now open. You may now ask your question.
Anja Soderstrom: Hi, and thank you for taking my question. I have some modeling questions. In terms of the licensing expense, it went up quite a bit in the first quarter. How should we think about that?
Rich Brezski: Yes, the licensing expense did go up quite a bit in the first quarter. There was a significant amount of catch-up revenue on the revenue line related to our new consumer electronics agreement with LG, and with that comes some corresponding revenue share tied to that catch-up revenue. So that was the primary driver. If we are looking year-over-year, there was also some increase in our enforcement costs.
Anja Soderstrom: Thank you. And then as you start to expand your licensing portfolio, how should we think about the fixed-fee portion of your revenue?
Rich Brezski: Certainly in smartphone, and also in consumer electronics, the largest customers tend to prefer fixed-fee agreements. That has been our experience. Going forward, as we look to grow in video services, we are not sure exactly what form those contracts will take, but we are going to make sure that we get the right value through whatever form.
Anja Soderstrom: Okay. Thank you. That was all for me.
Operator: Thank you. Again, if anyone would like to ask a question, please press star one. Next question comes from the line of Scott Wallace Searle from ROTH Capital. Your line is now open.
Scott Wallace Searle: Hey, good morning. Thanks for taking the questions. Maybe just quickly on the renewals front, I think in the K it was about $31 million of expiring contracts at the end of 2025. I am wondering where we are through the first quarter—there were a number of different deals. How much of that has been recovered at this point? I am sure you are in negotiations with all of them. And second, to follow up on the earlier comment related to smartphones, most of your deals are fixed fees, but it seems like some of them have royalty-based minimums.
I am wondering, given the headwinds that you are seeing from a macro standpoint in the marketplace really affecting the lower end of the marketplace, how much exposure do you have on that front to unit volume softening in 2026 versus the fixed-fee deals, which I think you have as part of these three larger customers that were constituting the majority of the volume?
Rich Brezski: Yes. So, Scott, I will take the first part of your question, and then maybe Liren will address the second. On the expirations for the end of 2025, we have renewed roughly two-thirds, or maybe a little more than two-thirds, of what has expired so far. And again, Liren mentioned a key part of that was our renewal of Xiaomi, the third-largest smartphone customer in the world.
Liren Chen: Hey, Scott. Regarding your second part of the question, as you are aware, historically our largest customers tend to prefer fixed-fee agreements. I think our disclosure for the prior quarter was that 94% of revenue came from fixed-fee agreements. It is also worth noting, in Rich’s prepared remarks and also in our 10-Q filing, we mentioned a hybrid agreement that gives us guaranteed payment and upside if shipments exceed a certain threshold. While we cannot identify which contract it was due to confidentiality, this is a way for us to deal with certain amounts of market uncertainty as well as the difficulty of projecting volume over a long period of time.
We feel that is fair to both parties and allows us to capture upside when the market rebounds over time.
Scott Wallace Searle: Thank you. And if I could, Liren, maybe just to follow up, in terms of some other markets that you are thinking about, at Mobile World Congress you continued to feature a lot of different technologies from haptics and sensing as it relates to six g as well as AI. Any high-level thoughts you have in terms of timeline and monetization opportunities within some of those markets? Thanks.
Liren Chen: So six g, as I mentioned here—and this is shared by some of our peer companies in the industry—we expect six g to be finalized and standardized by 2029, with smaller deployments also in 2029. We do see wide adoption of six g in 2030, and frankly that adoption is projected to be pretty fast. As I said in my prepared remarks, we feel we are leading six g standard development. We identified a few things in the Mobile World Congress demonstrations, including native AI integration and sensing as well as communications in those demonstrations. Regarding other collaboration, I highlighted a couple of things in my prepared remarks.
We are working quite a bit in haptics research, and we also did a joint excellence-in-research initiative with a leading gaming company. What we are trying to do with Razer is not only to enable Razer haptic devices for Razer devices, but to build an end-to-end gaming as well as entertainment experience, including streaming video. We are really excited about this opportunity. We also feel we are one of the very few companies who can combine connectivity, AI, and video experience and be able to introduce them into the standards process. It is also a major competitive advantage we have. Some of the use cases, honestly speaking, will take time to play out.
Operator: Thank you. That will conclude our question and answer session, and I will now turn the call back over to Liren Chen.
Liren Chen: I was appointed to the CEO role for InterDigital, Inc. almost exactly five years ago. Since then, we have strengthened InterDigital, Inc.’s foundation, driven growth across different businesses, and built an even stronger pipeline of innovation for future growth. I would like to take the opportunity to thank our employees for their continued dedication and all their contributions to what has been a period of historic success for the company, and for positioning the company to deliver even more shareholder value going forward. Thank you.
Operator: Thank you. Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
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InterDigital (IDCC) Q1 2026 Earnings Transcript was originally published by The Motley Fool
