Good morning, everybody. Thank you for coming to the Midwest Ideas Conference. Up next, we have InterDigital trading on Nasdaq under symbol IDCC. On behalf of the company, we have Richard Brezski, EVP, CFO, and Treasurer. Thanks, Errol. Good morning, Chicago. Great to be here today at the Ideas Conference. Always happy to have the opportunity to speak to folks about InterDigital and the exciting things that we have going on there. We have our disclaimers in the presentation. I'll let you read those. Let me tell you a little bit about what I'll discuss over the next 20-some minutes or so. I'll give a brief introduction of the company. I want to talk about our premier team, which any company is all about the people. The people at InterDigital, from top to bottom, are great. That's certainly worth talking about. We are a technology and research company, so I'll spend some time talking about the technology development that we do. We've had some great business results, so I want to make sure I cover those. I want to leave you with our outlook and long-term strategy. At InterDigital, we've actually been around since 1972. From the very beginning, we're involved in the research around advanced technology. Specifically, in 1972, it was the idea of digital telephony. You know what we think of the modern-day cellular networks. Back in 1972, our founder wasn't even just thinking about voice, but also data and how to transmit and transact using wireless technologies. That's been part of our DNA from the very beginning. Today, there are three or arguably four things I would tell you that we do at a world-class level. First, it's research into fundamental technologies, which all started back in 1972 and continues today. The second is protecting the rights to the innovation created from that research, filing patents around the world. We do that at a world-class level. The third is monetizing the IP that we've created. The largest companies in the world use our technology. We're a much smaller company, but we can license at a world-class level. Where necessary, it usually isn't. Most of our agreements are concluded through bilateral licensing negotiations. Where necessary, we can enforce our rights and have done so very successfully. Let me talk a little bit about the people, at least the leadership team I'm proud to be a part of. It all starts with our CEO, Liren Chen. Liren joined us in 2021 as CEO. He came from Qualcomm, where he spent 25 years. He was involved in every aspect of what I just described as our key value chain while at Qualcomm. He originally joined Qualcomm as an engineer and inventor. He wound up getting an MBA and a law degree and got involved in running their patent portfolio. He eventually became a senior executive within QTL, the licensing business of Qualcomm, and was instrumental in their licensing program. Liren, as any good leader will do, had people that he admired and that admired him. He recruited Rajesh Pankaj, who was Qualcomm's head of corporate R&D, to become our CTO, and Ken Kaskoun, who worked with Liren at QTL to become our Chief Growth Officer. We have a good mix between the old and the new on the leadership team, because Julia Mattis, Josh, Rob, and myself have all been with the company for at least more or less 10 years. I myself have been with the company for 22 years and have been CFO for the last 13 years. Having described what we do at a world-class level, let me describe how that fits into our business model. It all starts, as I said, with research on the left. Our world-class research team does a lot of fundamental work around fundamental technologies that go primarily into standards. Think 5G, OK? We contribute the innovation to the standards bodies. Through the standards, like 5G, we share it with the world, and it gets massively adopted. For example, last year, there were about 1.2 billion smartphones produced and sold. Our technology was in every one of them, OK? That's the, on the bottom, what I call the technology track. Through that, we get our technology into these devices by the product implementers, and they're sold around the world. That doesn't mean that we get paid, OK? The business track, which is the top track, operates in parallel, but maybe a slightly different time sequence. We patent, as I said, the rights to our innovation to make sure that our rights are protected. Once they're deployed by the implementers, we seek to license the implementers, because they don't have our permission to use the technology until they're licensed. We monetize through that licensing process. The fundamental technologies that we focus on are wireless, video, and AI. Within wireless, it's cellular and Wi-Fi primarily. Think 4G, today 5G, tomorrow 6G. Wi-Fi, you can think like Wi-Fi 6 is one of the technologies out today. We're involved. That's all standards-based, and we're one of the key contributors to those standards. We don't own those standards, but we're a key contributor and, in fact, a leader, as I'll explain, in those standards. On the video side, one of the key areas is video compression. I'll describe, for those of you that may not be familiar with what exactly video compression is, but we have other key research areas, like immersive video and some of the more 3D and futuristic applications. Finally, we have an AI lab out on the West Coast. We've been doing this, we've had that since we acquired it from Technicolor in 2018. It's not because it's fashionable. It's because it's important to what we do in both video and wireless. It's not large language models or applications. It's really in support of our video and wireless technologies. Historically, I described that we've been involved in wireless technology since 1972. Why video? It became clear to us 10 or more years ago that video and wireless were really complementary technologies. In fact, as this chart describes, it's video that has driven the massive increase in mobile data traffic, OK? Video is 80%, 90% of the mobile data traffic in terms of the bits, because it's so data-rich. When you think about how people use their phones today, it's much less about the phone call and more about the text and the streaming, TikToks, etc. Video, we recognized, was going to be very important. It was also attractive to us as an investment area, because like wireless, like cellular, it's really complex to deliver video in an efficient manner. It's also a standardized process, OK? In 2018-2019, we acquired Technicolor. If you're not familiar with Technicolor, it's a company that's been around over 100 years. Like InterDigital and wireless, from its very beginning, it was very involved in fundamental research around video, including the first color movie, The Wizard of Oz, which was shot with Technicolor cameras, OK? That rich history of video research and development continued all the way up through our acquisition of Technicolor's patent portfolio, but more importantly, their entire research team in 2018 and 2019, OK? We are sometimes mistaken for other patent licensing models, because we do monetize that way. What was critical is actually acquiring the research team, which is now part of the InterDigital research team, part of the work that we do every day. That's been a very important development for the company. Why is video so important? What exactly is video compression? If you take a current feature-length movie like Deadpool and Wolverine, if you were to take an uncompressed format and try to download that, you could start today, and you'd be done in mid-September, OK? That's how long it would take. With video compression, modern video compression, you can do it in minutes, all right? That enables the entire streaming ecosystem, all right? That was so interesting to us back in 2018, first and foremost, because at the time, we were focused on smartphone licensing. This is, as I just showed, a very important technology for smartphones, because so much of the mobile traffic is based on video. Initially, we acquired that portfolio and the research team, and we were first and foremost focused on adding value to our smartphone customers through delivering that technology and the rights to use it to them. It also opened the consumer electronics market for us. Things like TVs, computer displays, Roku Sticks, all these devices are now part of the ecosystem that our technology supports. The new area that I'll talk about as we talk about growth in the end is streaming, because I would argue that today's streaming ecosystem could not exist without video compression, OK? Again, it would take you until end of September to download an uncompressed format. Today, you can do it in minutes. That makes it all possible. On the chart, by the way, you see a picture of this, the uncompressed 11.6 thousand gigabytes on the left, a 1,001 compression ratio on the right, OK? The right is a blow-up of the small corner of the bottom right box from the left, OK? 1,001 compression. Like cellular, like Wi-Fi, video compression is a standard as well. Why are standards important? First off, we probably don't recognize that standards exist all around us. Whether it's the light bulbs, you can buy light bulbs from different manufacturers, screw them in, they have a standardized fitting, OK? The power in the outlets is a standard. Standards exist all around us. 5G, which we presumably all have on our phones today, that is a standard that we participate in, the video compression standards, OK? What do they do? First and foremost, they benefit the consumer, because they provide interoperability, all right? If you buy a GE light, you don't necessarily need to buy a GE light bulb, OK? You can buy any light bulb. It benefits the implementers, because it lowers the barriers to entry. A great example of this is in 2007, when Apple introduced the iPhone. They created the smartphone category, right? They were able to focus on what Apple does really well, which is create a great user interface. They did not have to worry about all the machinations of the cellular network, because that standard existed, and it was available to manufacturers to come in and use. Finally, the operators and service providers benefit, because it basically lowers their cost of ownership and also increases the flexibility in terms of how they deploy their networks. It is important to know that we do not just participate in the standards, but we actually drive the standards through our leadership. We have leadership positions on over 100 different standards. This is just a picture of some of them. That includes cellular, Wi-Fi, and video. Let's just talk for a moment about cellular, where there are, within 3GPP, the body that sets the 5G standard, OK? It is now in the process of setting the 6G standard, which we will see on our devices maybe around 2030, OK? That is something we have actually been working on for years. Within 3GPP, that body, there are 15 key chair positions. InterDigital is fewer than 500 employees. I dare say any other logo on this chart has many multiples of that in terms of employee headcount. Yet, we have two chair positions out of the 15. Only three other companies, and that is Samsung, Huawei, and China Mobile, have more than one, OK? I am not saying that you need to have a chair position or even multiple chair positions to be an important contributor to the standards, because we were an important contributor for decades now, dating back to 2G and our contributions in the 1990s. We did not always have chair positions. I say this because we have never been in a stronger position than we are right now. This just reflects that. The respect that our engineers and the company has in the technical community is at a level it has never been before. We are very proud of that. You see that not just in the standards leadership, but also various third-party reports. LexisNexis, long known for a lot of law publications and research, does a lot of research and analysis on the IP landscape. They publish a report called the Global Innovation Global Top 100. It lists the top 100 most innovative companies in the world, OK? Bar none. No restriction on size, industry, anything, just whoever is the most innovative. For the last four years in a row, InterDigital, with fewer than 500 employees, has been listed among the 100 most innovative companies in the world, OK? Let's look for another data point. The EPO, the European Patent Office, each year ranks the top 50 patent filers in the EP, OK? The European Patent Office. Companies from all around the world file patents in Europe. In 2023, InterDigital had moved up to number 24 on the list. Of all the companies in the world, we were 24, a couple spots ahead of Airbus. Last year, we moved up to number 18, just ahead of Apple. That's the kind of research that we do. That results in a very large patent portfolio, OK? 34,000 assets today, up from 19,000 prior to the Technicolor acquisition. We actually had the right to acquire over 20,000 assets from Technicolor. What we did was basically take the best of our legacy portfolio, the best of Technicolor's portfolio, and left some of the stuff we didn't feel like we needed anymore, because patents are expensive to file and to maintain. Where we are today is 34,000 assets and growing. It was 30,000 not much more than a year ago. It is growing quite a bit, about six patents a day issued to InterDigital. Let me talk a little bit about our business momentum. Since 2021, when Liren joined, we've signed more than 40 license agreements, many with some of the largest companies in the world, including Apple, which was a renewal. Apple's been a licensee of ours since 2007, when Steve Jobs walked out on the stage and introduced the iPhone to the world, OK? At that moment, we had already more or less negotiated our license agreement with Apple and executed it soon after. Samsung has been a licensee since the mid-1990s, OK? Both Apple and Samsung are under long-term licenses that run through roughly the end of this decade, OK? When these companies take licenses from us, at the highest level, I'll say that I view them like subscriptions, because unlike other patent licensing models, or for instance, if you're familiar with pharma or biotech, where you have a couple of patents and you're worried about patent cliffs, we have 34,000 assets and growing. We're participating in 5G, now 6G, in the video codec standards as they move from one generation to the next, in the Wi-Fi standards as they move from one generation to the next. These large companies know that our portfolio is going to continue to grow and that their needs around licensing our technology are going to evolve. Without being too specific, I'd say, generally speaking, they want access to that over that time period. Therefore, we kind of view the license agreements a little bit more like subscriptions, OK? They're paying for the right to access our portfolio as it evolves over time. You see on the left-hand side of the chart, from 2021- 2022 or 2023, it was more or less a flat line in terms of our ARR, annualized recurring revenue. We're doing important work over that time period to get Apple and Samsung renewed. We had a great business prior to 2021. Our former CEO, Bill Merritt, retired at that point when Liren took over. Bill built the foundation of what we are today. We had a really good business. Liren joining has really taken us to the next level, along with the other people that have joined the company since. You kind of see that as we get those renewals done to fortify the foundation that was built. Because we have such operating leverage in our model and because we've been able to really increase the reputation of the company and demonstrate the increased value of our portfolio, you see that over more recent years, we've really been taking revenue up to new levels. The thing I love, I mentioned the operating margin in the business. We've been growing revenue at about 25% CAGR since 2020. That's great. What's even better is that adjusted EBITDA and other profit metrics have grown even faster, because as a generalization, new revenue is basically 100% gross margin. We're licensing today. If we sign, we just signed HP in the second quarter, OK? When we sign HP or anybody else as a new licensee, they're licensing technology they're already using, OK? Remember that chart in the beginning of the business model? We have the technology track where it's shared, and then on a different time sequence, the business track where we go and get folks licensed. They were already using our technology. When we execute a license agreement with them, there's nothing to deliver. There's nothing to ship. There's no call center to open, OK? It's 100% gross margin. There are some small exceptions to that, but generally speaking, it's a very, very high gross margin and a bottom line drop net of tax. That's why you see on this chart that strong revenue growth leads to enormous growth in profitability, because we're basically at the point that we've covered our kind of fixed costs and our semi-fixed costs, call it. Our research today, that semi-fixed cost that we're covering, actually doesn't relate to our revenue today. The research today, again, is around 6G, which doesn't become commercial until 2030, OK? It's around advanced video codec and advanced video technologies that won't be massively adopted for a number of years. It's just a great business model once you hit the point that you've covered your cost and now you're adding on and seeing this bottom line drop. It's made even better, because we've long been a believer in the company. Since 2011, almost $2 billion of return of capital, most of that through stock buyback. Over that time period, we've reduced the share count by 40%- 45%, including a lot over the last just five years. You see strong revenue growth, even stronger profitability metrics, even stronger EPS growth. That's something any CFO probably loves to see. Let me talk about where we go from here. What's our long-term growth strategy look like? We have a goal of $1 billion in annualized recurring revenue by 2030. If you remember from the first chart, we said we had over $860 million of revenue last year. That doesn't sound like much. Let's unpack that for a second. In any year, and we would expect that in 2030, we could benefit from this as well. When we sign new license agreements, remember, the folks that we signed typically had already been using our technology. At the onset of the agreement, there oftentimes is catch-up, catch-up for the use of the technology prior to signing. That becomes a big influx of revenue and cash when you sign that agreement. One of the reasons we focus on ARR, annualized recurring revenue, it excludes that, OK? It understates our total revenue. It shows on a recurring basis where the company is at. You can see how that growth occurs. Otherwise, if one quarter you have a large agreement and there's a lot of catch-up, and the next quarter you don't, maybe you have a smaller win, OK, and your ARR has gone up, your total revenue on a sequential basis maybe looks like it went or maybe goes down. That's OK, because that catch-up is very valuable. In fact, it correlates well to the return of capital over that 13, 14-year time period. It's really funded a lot of that stock buyback. In any event, if you compare where we are last year at our investor day when we introduced this target, we were around, I think, less than $400 million of ARR, OK? Today, we're at $555 million, OK? $553 million, I think, for the second quarter. Huge growth in ARR just over the last year, because we've been doing good things and getting a lot of these license agreements signed. Our ARR in smartphone is now up to $465 million. Our stated goal, about $500 million by 2027, OK? We're pretty close there. A lot of progress in the last year if you compare it to the slide last year. In CE and IoT, consumer electronics and IoT, that includes auto, we're about $87 million of ARR with a goal of $200 million by 2030. The really exciting growth opportunity is in streaming and cloud services, where I explained how our technology is so valuable, zero today, OK? That doesn't mean it's not adopted. We contributed to all those standards. Our technology is in those standards that are being used by the streamers today and were frankly used yesterday, OK? That's an opportunity going forward. Remember, that business track isn't necessarily time sequenced with that technology sharing track. That's the work that we got cut out for us over the next couple of years. We think by 2030, we can get to $300 million plus on the streaming side, OK? Bringing the total to $1 billion, almost double the $550 some that we have today. That's the goal that we've set out. I invite you to look back at the chart, which is on our website from a year ago. You can see just how much progress we've made. I think about a $170 million increase in ARR in the last year. Let's unpack that a little bit. If you look at smartphone, I said we're getting pretty close. We're about 80% of the market under license. That includes agreements over the last year with Lenovo, Oppo, and Vivo, all top 10 manufacturers in the world. The remaining open license agreements are Transient, Honor, and Huawei. I'm going to go pretty quickly through the next couple of slides so I leave time for questions. On the CE side, we got about 60% of the PC and tablet market, about 35% of televisions. Let's just focus on televisions, where Samsung, the number one manufacturer in the world, is under license. LG, TCL, and Hisense, who are all kind of vying for number two, are all unlicensed and an opportunity for us. If you look at auto, we are a member of a patent pool there, along with Qualcomm, Ericsson, Nokia, others, who, and through that pool, we license our cellular technology to the automotive market. Today, that market is predominantly 4G, believe it or not. It is growing at a double-digit rate when we look at connected cars. Importantly, there's a shift from 4G- 5G that's just starting to take place. You see the lighter blue is the projected 5G share in 2028, OK? That's important because 5G is so important to autos as we move to autonomous and semi-autonomous driving. The value proposition is different. The rate that Avanci gets is stated rate for the pool is 2x 4G. Increased unit volume and a nice shift in mix. Cellular IoT, a little bit more of a fragmented market, but we think a really great opportunity that it's really hard to put a limit on where that could be over time. On the streaming side, a couple of example logos there. Our $300+ million target is focused on SVOD and AVOD. That's subscription video on demand, Netflix, Disney being an example, and advertising video on demand. The short-form user-generated content like TikTok and YouTube, OK? We think that they're great opportunities, because again, without that video compression, arguably, these services don't exist. We generate a lot of cash, as you might imagine looking at those financial charts. We often are asked, what are our plans? What do we do? The first thing is, as a small company with fewer than 500 employees, licensing the largest companies in the world, like Apple and Samsung, we think it's important, strategically important, to maintain a strong balance sheet, OK? We have close to $1 billion of cash, maybe more than we need, but we want to maintain a strong balance sheet. The folks that we need to license know that we're here. They know we're not going anywhere. We don't want to get pushed around, OK? All we want is a fair rate for the use of our technology, OK? The second thing is we have a great business. We want to keep investing in it, OK? Our revenue today, again, is all based on technology that we developed years ago. We're making hundreds of millions of investment in our research and patent portfolio this year and every year, OK? We have a great business. We want to keep that business model going forward. We want to keep some dry powder for inorganic investment. Because we have a great business, we have a very high bar. We're not a terribly acquisitive company. The Technicolor example that I gave earlier shows you that we can identify great opportunities. We can really benefit our shareholders. The headline price on the Technicolor acquisition was $150 million, very low when you look at what we were able to do, because we knew that that asset and that R&D team needed care and feeding. I told people in 2018 when we announced it, this was a dilutive acquisition. We're going to invest before you ever see a return. We had to kind of get through that. Now we're seeing just how powerful those returns can be. In the end, we still have excess cash when we account for the strong balance sheet and the investment, organic or inorganic. We return that to shareholders, as I've described. Our 2030 target is $1 billion of annualized recurring revenue. Attached to that is a 60% adjusted EBITDA margin. So $600 million of adjusted EBITDA. 60%, by the way, if that sounds high, it's actually lower than I think we were 78% in Q2. We were 71% in 2024, I think. It's actually lower than what we've been delivering on even less revenue. It allows room for us to invest going forward so that when we get to 2030, we can be talking hopefully about $1.5 billion or a $2 billion target. I'll leave you with, again, the key takeaways. World-class leadership team. You saw the accelerating business momentum. We deliver this technology to large markets. I apologize I didn't leave a lot of time for questions, but I'd love to answer whatever questions you have. Yeah? Your Q2 revenue, you mean sub-capture revenue from the stakeholder? That is correct, yeah. Samsung actually had been licensed since 2023 on the current license agreement, and since the 1990s overall. What happened is Samsung knew they needed a license on renewal. We obviously want to give them a license. We couldn't agree. It was a 10-year since the prior agreement, OK? It was a 10-year license agreement. So much had changed that it was hard for us to agree on what the fair rate would be. We let a third-party arbitration panel decide that. We just got the result after about two years and a quarter. There was nine quarters of catch-up to the new rate off of what we had been accruing. Our relative stream involved one-time revenue at Q3? Yeah, so we gave guidance for Q3. We typically, one quarter out, only guide. It's not really guidance. We almost report on what we expect Q3 revenue to be off of existing contracts. In our business, you never know exactly when a license agreement is going to come across the line. It's not like I'm shipping a component my customer needs to make a decision by this date so they can have the lead time and build it in, right? They're already using it. It's hard for me to predict when will they agree to pay a fair rate. We don't, in short instances, add in new business. Our full-year guidance, we typically add in what we believe we can achieve through one of a couple different paths. Yeah. There might be dozens of startups unknowingly using your technology. How does this sort of enforce with the work you've done to Apple? Yeah, the way that we operate with the fundamental technologies we invest in, they're big investments. They're hundreds of millions of dollars a year of investment in research and portfolio cost. We need to operate at a scale where smartphones ship 1.2 billion a year. Video codec is used in all devices that stream video, display video, the streaming services. These are massive markets that are typically developed before they become licensing candidates in terms of justifying the investment to collect on the usage. If a startup, if a small company is using it, we have the right to collect a royalty. We'll seek to collect royalties across the full spectrum. We also have to be mindful of where we're making that investment. Yeah. Who are some of the big operators that are in the development that you would compete with? I assume Qualcomm would be one. Yeah, great question. Let's just focus on the cellular standards. I think there's over 200 companies that participate at some level in those cellular standards. We're among the leaders in terms of the companies that have a lot of contributions, certainly in terms of the leadership of the standard based on the chair positions, et cetera, that I showed you. In terms of the companies that are really making a big investment and contributing a lot of technology and, importantly, quality technology, Qualcomm, Nokia, Ericsson, and then you have Huawei and others. It's a massively complex standard. There's lots of innovation in every generation, so there's plenty of room for all of us to participate. We do compete on an individual basis, like, OK, we need to solve this problem. Who has the solution? We'll raise our hand and say we do, and maybe some of these other companies do as well. In that moment, we may be competing. In some other solution, we may collaborate to work together to solve that. Once the technology is in the standard and an essential part of the standard, you're no longer competing, because a patent by definition is protecting an individual right that only you have. Only we can license our patents in the standard, and therefore, at that point, we're not competing in the traditional sense. Thank you for your time, and have a great day here at the Ideas Conference.