Adeia Q4 Earnings Call Highlights

Key Points

• Adeia reported record results — Q4 revenue of about $183 million and full-year revenue of $443 million — driven by nine Q4 deals and major licensing wins, including a dispute-resolving agreement with Disney and a multi-year license signed with Microsoft.
• The company is accelerating diversification away from pay‑TV: non‑pay‑TV recurring revenue grew ~30% YoY in Q4 and >20% for 2025, pay‑TV is forecast to decline to ~35%–40% of revenue in 2026, and semiconductor revenue rose ~40% to about $26 million in 2025.
• For 2026 Adeia guided revenue of $395M–$435M with an adjusted EBITDA margin near 55%, but said litigation expense will rise by roughly $5M–$10M above 2025’s ~$25M; management also highlighted $60M of debt reduction, share repurchases and ongoing dividends.

Adeia NASDAQ: ADEA executives said the company closed out 2025 with record results and entered 2026 with early deal momentum, highlighted by new licensing agreements in media and semiconductors and a multi-year license agreement signed with Microsoft early in the year.

Fourth-quarter results driven by nine deals and new customers

CEO Paul Davis said Adeia delivered “record revenue for both the quarter and the year,” attributing performance to a focus on growth areas including over-the-top (OTT) services and continued efforts to maintain customer relationships while resolving disputes efficiently. For the fourth quarter, Adeia reported revenue of $183 million (CFO Keith Jones cited $182.6 million), which management said was supported by nine deals—eight in media and one in semiconductors—and four new customers.

Davis said the company’s efforts to diversify away from traditional pay-TV licensing continued to show progress, noting non-pay TV recurring revenue grew 30% year-over-year in the quarter. Jones added that in Q4, recurring and non-recurring revenue was “pretty close to 50/50,” reflecting the size of the Disney agreement and recognition of amounts related to prior periods.

Disney agreement resolves dispute; additional media deals include MLB and Vodafone

Management highlighted Disney as the company’s largest new customer in the quarter. Davis said Adeia and Disney reached a “comprehensive agreement resolving all disputes” following roughly a year of litigation, with Adeia saying it demonstrated applicability of its portfolio to Disney’s services during the process. Davis framed the outcome as reinforcing the strength and broad applicability of Adeia’s IP portfolio and providing momentum for further OTT opportunities. With Disney and Amazon, Adeia said it has licensed two of the largest OTT providers globally.

Other media-related activity disclosed for the quarter included:

• A multi-year agreement with Major League Baseball, which Davis described as the second major U.S. professional sports league to sign for access to Adeia’s media portfolio.
• A multi-year renewal with Vodafone, which management said reaffirmed Adeia’s position in international pay-TV markets.
• Additional deals including a new OTT customer in South Korea, a new consumer electronics customer in Japan, a domestic consumer electronics renewal, and two pay-TV renewals.

Full-year 2025: record revenue, expanding customer base, and capital allocation

For the full year, Adeia reported revenue of $443 million, with operating income of $276 million and adjusted EBITDA of $278 million, all of which management said exceeded the high end of guidance. Davis said the company executed 26 license agreements across OTT, semiconductors, consumer electronics, pay-TV, and e-commerce verticals, and added a record 12 new customers.

Davis said Adeia grew non-pay-TV recurring revenue by more than 20% in 2025 and by more than 60% since 2022. He also said the company expects pay-TV as a percentage of revenue to decline from a historical 50%–60% range to about 35%–40% of forecasted revenue in 2026.

On capital allocation, Davis and Jones said Adeia reduced debt by $60 million during 2025, returned capital through dividends and repurchases, acquired six tuck-in patent portfolios during the year, and grew its cash balance. Jones said the company ended Q4 with $136.7 million in cash, cash equivalents, and marketable securities and generated $60 million in cash from operations in the quarter. Adeia repurchased about 718,000 shares for $10 million in Q4, leaving $160 million available under its current repurchase program, and paid a quarterly dividend of $0.05 per share, with the board approving another $0.05 per share dividend payable March 30 to shareholders of record as of March 16.

Semiconductor: hybrid bonding progress and RapidCool positioning

Jones said semiconductor revenue increased from about $18 million in 2024 to about $26 million in 2025, a roughly 40% increase, citing traction from deals signed in late 2024 and early 2025, including STMicroelectronics. On 3D NAND, Jones said Adeia benefits from unit volume rather than price increases, with royalty structures based on a fixed amount per unit and volume discounts. He added that minimums in a NAND agreement affected revenue recognition timing, with a more pronounced impact expected after working through most minimums in 2027.

Davis described broader industry momentum for hybrid bonding in logic and memory markets, pointing to public roadmaps and investments by major semiconductor companies and equipment suppliers. In response to investor questions on RapidCool, Davis said Adeia’s approach is to license technology portfolio-wide rather than compete like a typical product company. He characterized RapidCool as “plug and play,” designed to work with existing equipment and integrate into liquid-cooling data center environments similarly to a liquid cooling cold plate.

2026 outlook: guidance range and litigation costs

Jones provided 2026 guidance calling for revenue of $395 million to $435 million. He said Adeia expects the first and second halves of the year to be “relatively equal” in revenue contribution. Operating expenses are projected at $184 million to $192 million, with modest single-digit growth expected in R&D and SG&A as the company invests in technology and infrastructure.

Adjusted EBITDA margin is expected to be approximately 55%. Jones attributed margin compression versus recent years primarily to higher expected litigation expense, noting litigation spending was historically low in 2022–2024 and increased to about $25 million in 2025. For 2026, he said litigation expense is expected to increase by $5 million to $10 million above the 2025 level, as Adeia continues pursuing additional large licensing opportunities. Davis said the company prefers to reach agreements without litigation but is willing to litigate when necessary to defend its IP.

Management also discussed active pay-TV-related litigation. Davis said DirecTV filed litigation challenging the need for a new license agreement, which Adeia views as a violation of existing agreements; Adeia has filed a breach of contract suit in response. Davis said Adeia remains confident it can resolve the matter, citing prior disputes including Altice USA and Disney.

On early 2026 deal activity, Davis said Adeia executed several new agreements, “most notably” a multi-year license agreement with Microsoft covering Adeia’s media portfolio with applicability across Microsoft businesses including consumer electronics and social media products and services. Davis and Jones did not provide financial specifics, though Davis characterized Microsoft as a significant customer and said the deal structure is similar to other non-pay-TV agreements.

In closing remarks, Davis reiterated Adeia’s longer-term objective of reaching $500 million in annual licensing revenue and said the company is “off to a strong start in 2026,” supported by recent agreements and a growing pipeline.

About Adeia NASDAQ: ADEA

Adeia Inc NASDAQ: ADEA is a technology licensing company that focuses on acquiring, managing and monetizing intellectual property assets in the electronics and communications sectors. The company’s core business involves the strategic purchase of patent portfolios followed by the negotiation of licensing agreements, collaborative partnerships and, where necessary, enforcement actions to generate revenue from those assets. Adeia’s technology coverage spans semiconductor design, data communications, wireless networking, imaging systems and other advanced electronics applications.

By assembling a diversified collection of high-value patent families, Adeia works closely with original equipment manufacturers, semiconductor suppliers and service providers across North America, Europe and Asia.

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