Business Description

BACKGROUND AND BASIS OF PRESENTATION InterDigital, Inc. ("InterDigital") is a global research and development company focused primarily on wireless, video, artificial intelligence ("AI"), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, internet of things ("IoT") devices, cars and other motor vehicles and providers of cloud-based services such as video streaming. As a leader in wireless technology, our engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today's most advanced Wi-Fi technologies. We are also a leader in video processing and video encoding/decoding technology used in video-enabled products and services. Our AI research effort is focused on the intersection of AI with both wireless and video technologies. Principles of Consolidation The accompanying consolidated financial statements include all of our accounts and all entities in which we have a controlling interest and/or are required to be consolidated in accordance with Generally Accepted Accounting Principles in the United States ("GAAP"). All significant intercompany accounts and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a variable interest entity and therefore required to consolidate, we apply a qualitative approach that determines whether we have both the power to direct the economically significant activities of the entity and the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. These considerations impact the way we account for our existing collaborative relationships and other arrangements. We continuously assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in us consolidating or deconsolidating our partner(s) to collaborations and other arrangements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. If different assumptions were made or different conditions had existed, our financial results could have been materially different. Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. Supplemental Cash Flow Information The following table presents additional supplemental cash flow information for the year ended December 31, 2025, 2024, and 2023 (in thousands): Year Ended December 31, Supplemental Cash Flow Information: 2025 2024 2023 Interest paid $ 16,100 $ 17,361 $ 18,623 Income taxes paid: Federal 15,389 35,050 45,500 State 357 704 1,541 Korea 63,332 10,918 4,645 China 27,829 19,044 5,700 Other Foreign Jurisdictions 2,224 1,825 1,816 Non-cash investing and financing activities: Non-cash acquisition of patents 21,219 7,000 — Dividend payable 17,980 11,557 10,226 Accrued capitalized patent costs and property and equipment 6,108 (2,077) 670 Right-of-use assets obtained in exchange of operating lease liabilities 1,387 2,066 93 Accrued taxes on the repurchase of common stock 277 — 3,170 Settlement of the 2027 and 2024 Hedge Transactions 40 37,120 —