Adeia Inc. (ADEA)

CIK: 0001803696. SIC: 4841 Cable & Other Pay Television Services. Latest 10-K as of: 2026-02-26.

SIC breadcrumb: Transportation, Communications, Electric, Gas, And Sanitary Services > Communications > SIC 4841 Cable & Other Pay Television Services

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1803696. Latest filing source: 0001193125-26-076549.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001803696.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001803696.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-208924.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-06. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is intended to promote understanding of the results of operations and financial condition and should be read in conjunction with our condensed consolidated financial statements and notes thereto, and with our audited financial statements and notes thereto for the year ended December 31, 2025 found in the Form 10-K filed by us on February 26, 2026 (the “Form 10-K”). This section of this Form 10-Q generally discusses quarter over quarter comparisons of 2026 against 2025.

This quarterly report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on information available to the Company as of the date hereof, as well as the Company’s current expectations, assumptions, estimates and projections that involve risks and uncertainties. In this context, forward-looking statements often address expected future business, financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “target,” similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond the Company’s control, and are not guarantees of future results. Forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: the Company’s ability to implement its business strategy; the Company’s ability to enter into new and renewal license agreements with customers on favorable terms; the Company’s ability to retain and hire key personnel; uncertainty as to the long-term value of the Company’s common stock; the Company’s ability to pay dividends on a consistent basis or at all; legislative, regulatory, geopolitical and economic developments affecting the Company’s business; general economic and market developments and conditions; the Company’s ability to grow and expand its patent portfolios and expand into additional addressable markets; changes in technology and development of new technology in the industries in which the Company operates; the evolving legal, regulatory and tax regimes under which the Company operates; unforeseen liabilities and expenses; the Company’s ability to carry out its share repurchase program and the timing of any such repurchases; risks associated with the Company’s indebtedness; unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, natural disasters and global health pandemics, each of which may have an adverse impact on the Company’s business, results of operations, and financial condition.

Although forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks, uncertainties, and changes in condition, significance, value and effect, including those discussed under the heading “Risk Factors” hereof and other documents we file from time to time with the Securities and Exchange Commission (the “SEC”), such as our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. Such risks, uncertainties and changes in condition, significance, value and effect could cause our actual results to differ materially from those expressed herein and in ways not readily foreseeable. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report and are based on information currently and reasonably known to us. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report, other than as required by law. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

Business Overview

Adeia Inc. (formerly known as Xperi Holding Corporation) (“Adeia”, “we”) is a technology company and an innovation incubator. We have spent decades investing in advanced research and development to create market-leading technologies for the entertainment, media, consumer electronics, and semiconductor industries. Our innovative solutions support practically every aspect of consumers’ day-to-day interaction with media, consumer electronics and entertainment, enabling our customers to build customized, next-generation solutions for users around the globe. We believe our commitment to and investment in innovation has resulted in a leading IP licensing platform in these industries, with an extensive portfolio of media and semiconductor IP and approximately 13,750 media and semiconductor patent assets worldwide. In order to serve an increasingly connected world, we invent, develop, acquire and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment and technology across a variety of platforms.

28

Our innovations address one of the biggest consumer trends in entertainment today – the massive proliferation of entertainment content and the rapidly changing habits of how consumers are finding, engaging with and enjoying entertainment and evolving technology, such as artificial intelligence (“AI”).

Headquartered in Silicon Valley with more than 35 years of operating experience, we have approximately 150 full-time employees, with substantially all of our employees located in the U.S.

Macroeconomic Conditions

Macroeconomic conditions due to inflation, geopolitical instability and global health events have in the past, and may in the future have, an adverse impact on our business. For example, such conditions may cause volatility in the markets we serve, particularly the broad consumer electronics market. Impacts from adverse macroeconomic conditions may negatively impact our financial condition and results of operations, which could result in an impairment of our long-lived assets, including goodwill, and increased credit losses.

Although a significant portion of our revenue is derived from fixed-fee and minimum-guarantee arrangements from large, well-capitalized customers, our per-unit and variable-fee based revenue will continue to be susceptible to global health concerns, outbreaks, pandemics, armed conflict, geopolitical factors, trade regulations and tariffs, market volatility, labor shortages, supply chain disruptions, microchip shortages, changes in demand for semiconductors and market downturns.

Reportable Segments

We operate and report in one segment: IP Licensing. We believe that this structure reflects our current operational and financial management and provides the best structure for us to focus on growth opportunities. Our Chief Executive Officer has been determined to be the Chief Operating Decision Maker (“CODM”) in consideration with the authoritative guidance on segment reporting.

We primarily license our innovations to leading companies in the broader media entertainment and semiconductor industries, and those companies developing new technologies that will help drive these industries forward. Licensing arrangements include access to one or more of our foundational patent portfolios and may also include access to some portions of our industry-leading technologies and know-how.

Key Metrics

In evaluating our financial condition and operating performance, we primarily focus on revenue and cash flows from operations. For the three months ended March 31, 2026, as compared to the same period in 2025:

•
Revenue increased by $17.1 million, or 19.5%, from $87.7 million in 2025 to $104.8 million in 2026.

•
Recurring revenues decreased by $18.1 million, or 21.4% from $84.4 million in 2025 to $66.3 million in 2026.

•
Non-recurring revenues increased by $35.2 million, or 1067.0% from $3.3 million in 2025 to $38.5 million in 2026.

•
Cash provided by operating activities increased by $1.4 million, or 2.5% from $57.1 million in 2025 to $58.5 million in 2026.

•
We made $28.1 million in principal payments towards our term loan, bringing the outstanding balance to $398.6 million as of March 31, 2026.

•
We repurchased $10.0 million of our common stock in 2026.

Results of Operations

Revenue

We derive the majority of our revenue from the licensing of our IP rights to customers. For our revenue recognition policy, including descriptions of revenue-generating activities, refer to “Note 3 – Revenue” of the Notes to Condensed Consolidated Financial Statements.

29

The following table presents our operating results for the periods indicated as a percentage of revenue:

Three Months Ended

March 31,

2026

2025

Revenue

100

%

100

%

Operating expenses:

Research and development

17

19

Selling, general and administrative

29

32

Amortization expense

15

16

Litigation expense

6

7

Total operating expenses

67

74

Operating income

33

26

Interest expense

(8

)

(12

)

Other income and expense, net

2

2

Income before income taxes

27

16

Provision for income taxes

5

2

Net income

22

%

14

%

The following table sets forth our revenue for the three months ended March 31, 2026 and 2025 (in thousands, except for percentages):

Three Months Ended

March 31,

2026

2025

Increase

% Change

Revenue

$

104,772

$

87,670

$

17,102

20

%

The increase in revenue during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily attributable to the execution of two new multi-year license agreements with AMD and Microsoft in 2026; partially offset by declines in royalty revenue from certain Pay-TV customers.

Recurring revenue for the three months ended March 31, 2026 and 2025 were $66.3 million and $84.4 million, respectively. The decrease of $18.1 million was driven primarily by declines in royalty revenue from certain Pay-TV customers; partially offset by the execution of license agreements with new customers from April 1, 2025 to March 31, 2026.

Non-recurring revenues for the three months ended March 31, 2026 and 2025 were $38.5 million and $3.3 million, respectively. The increase of $35.2 million was primarily attributable to the execution of three new license agreements in the first quarter of 2026, including AMD and another new customer for access to our semiconductor IP portfolio, and Microsoft for access to our media portfolio.

Research and Development (in thousands, except for percentages):

Research and development (“R&D”) costs consist primarily of personnel costs, stock-based compensation, outside engineering consulting expenses associated with new IP development, as well as costs related to patent applications and examinations, reverse engineering, materials, supplies and an

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-26. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is intended to promote understanding of the results of operations and financial condition and should be read in conjunction with our consolidated financial statements and notes thereto.

This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons of 2025 against 2024. A discussion regarding 2023 items and year-to-year comparisons of 2024 against 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The following discussion of our financial condition and results of operations should be read together with the audited consolidated financial statements and notes to the consolidated financial statements included elsewhere in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed under “Risk Factors” in Part I, Item 1A above.

Business Overview

Adeia Inc. (formerly known as Xperi Holding Corporation) (“Adeia”, “we”) is a leading IP licensing platform in the consumer and entertainment space, with an extensive portfolio of media and semiconductor intellectual property and approximately 13,750 media and semiconductor patent assets worldwide. In order to serve an increasingly connected world, we invent, develop, and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment. Our inventions are key enabling technologies that drive how consumers interact with entertainment and devices at home and on the go around the world. Our foundational technologies help elevate content and improve how audiences connect with it in a way that is more intelligent, immersive and personal. Our innovative solutions help power smart devices, entertainment experiences and more, and have created a unified ecosystem that reaches highly-engaged consumers and uncovered new business opportunities.

Headquartered in Silicon Valley with more than 35 years of operating experience, we have approximately 150 full-time employees, with substantially all of our employees located in the U.S.

Macroeconomic Conditions

Macroeconomic conditions due to inflation, geopolitical instability and global health events have in the past, and may in the future have, an adverse impact on our business. For example, such conditions may cause volatility in the markets we serve, particularly the broad consumer electronics market. Impacts from adverse macroeconomic conditions may negatively impact our financial condition and results of operations, which could result in an impairment of our long-lived assets, including goodwill, and increased credit losses.

Although a significant portion of our revenue is derived from fixed-fee and minimum-guarantee arrangements from large, well-capitalized customers, our per-unit and variable-fee based revenue will continue to be susceptible to global health concerns, outbreaks, pandemics, armed conflict, geopolitical factors, trade regulations and tariffs, market volatility, labor shortages, supply chain disruptions, microchip shortages, changes in demand for semiconductors and market downturns.

Reportable Segments

We operate and report in one segment: IP Licensing. We believe that this structure reflects our current operational and financial management and provides the best structure for us to focus on growth opportunities. Our Chief Executive Officer has been determined to be the Chief Operating Decision Maker (“CODM”) in consideration with the authoritative guidance on segment reporting.

We primarily license our innovations to leading companies in the broader media entertainment and semiconductor industries, and those companies developing new technologies that will help drive these industries forward. Licensing arrangements include access to one or more of our foundational patent portfolios and may also include access to some portions of our industry-leading technologies and know-how.

31

Key Metrics

In evaluating our financial condition and operating performance, we primarily focus on revenue and cash flows from operations. For the year ended December 31, 2025, as compared to the same period in 2024:

•
Revenue increased by $67.4 million, or 18%, from $376.0 million in 2024 to $443.4 million in 2025.

•
Recurring revenues increased by $9.8 million, or 3% from $341.5 million in 2024 to $351.3 million in 2025.

•
Non-recurring revenues increased by $57.4 million, or 166% from $34.6 million in 2024 to $92.0 million in 2025.

•
Cash provided by operating activities decreased by $54.4 million, or 26%, from $212.5 million in 2024 to $158.1 million in 2025.

•
We made $60.4 million in principal payments, bringing the outstanding balance to $426.7 million as of December 31, 2025.

•
We repurchased $20.0 million of our common stock in 2025.

Results of Operations

Revenue

We derive the majority of our revenue from the licensing of our IP rights to customers. For our revenue recognition policy, including descriptions of revenue-generating activities, refer to “Note 4 – Revenue” of the Notes to Consolidated Financial Statements. The following table presents our historical operating results for the periods indicated as a percentage of revenue:

Years ended December 31,

2025

2024

Revenue

100

%

100

%

Operating expenses:

Research and development

15

16

Selling, general and administrative

27

27

Amortization expense

13

19

Litigation expense

5

4

Total operating expenses

60

66

Operating income

40

34

Interest expense

(9

)

(14

)

Other income and expense, net

1

1

Loss on debt extinguishment

—

—

Income before income taxes

32

21

Provision for income taxes

7

4

Net income

25

%

17

%

The following table sets forth our revenue by year (in thousands, except for percentages):

Years Ended December 31,

2025 vs. 2024

2025

2024

Increase

% Change

Revenue

$

443,386

$

376,024

$

67,362

18

%

The increase in revenue during the year ended December 31, 2025, as compared to the prior year, was primarily attributable to the execution of a new long-term license agreement with Disney in the fourth quarter of 2025, partially offset by a multi-year license agreement with Amazon in the fourth quarter of 2024. A portion of revenue from both license agreements was recognized up-front in the respective period each agreement was executed.

32

Recurring revenues for the years ended December 31, 2025 and 2024 were $351.3 million and $341.5 million, respectively. The increase of $9.8 million was driven primarily by the execution of license agreements with new customers in 2024 and 2025, and increased royalty revenue from certain semiconductor customers, which were partially offset by declines in royalty revenue from certain Pay-TV customers.

Non-recurring revenues for the years ended December 31, 2025 and 2024 were $92.0 million and $34.6 million, respectively. The increase of $57.4 million was primarily attributable to the execution a new long-term license agreement with Disney in the fourth quarter of 2025, partially offset by a multi-year license agreement with Amazon in the fourth quarter of 2024. A portion of revenue from both license agreements was recognized up-front in the respective period each agreement was executed.

Research and Development

Research and development (“R&D”) costs consist primarily of personnel costs, stock-based compensation, outside engineering consulting expenses associated with new IP development, as well as costs related to patent applications and examinations, reverse engineering, materials, supplies and an allocation of facilities costs. All R&D costs are expensed as incurred. We intend to make a continued investment in our R&D efforts because we believe they are essential to grow our patent portfolios to secure new customers and renew agreements with existing customers.

Years Ended December 31,

2025 vs. 2024

2025

2024

Increase

% Change

Research and development

$

67,519

$

59,598

$

7,921

13

%

The increase in R&D costs during the year ended December 31, 2025, as compared to the prior year, was primarily due to an increase in patent portfolio expenses, patent technical support expenses, and an increase in personnel related costs.

Selling, General and Administrative

Selling, general and administrative (“SG&A”) expenses consist primarily of personnel costs, sales commission, advertising, branding activities, stock-based compensation, professional services, facilities costs, and expenses related to our executive, finance, human resource, legal, and information technology organizations.

Years Ended December 31,

2025 vs. 2024

2025

2024

Increase

% Change

Selling, general and administrative

$

119,534

$

103,443

$

16,091

16

%

The increase in SG&A expense during the year ended December 31, 2025, as compared to the prior year, was primarily due to increases in personnel related costs and advertising expense, partially offset by decreases in outside services.

Amortization Expense

Years Ended December 31,

2025 vs. 2024

2025

2024

Decrease

% Change

Amortization expense

$

56,621

$

70,721

$

(14,100

)

(20

)%

The decrease in amortization expense during the year ended December 31, 2025, as compared to the prior year, was primarily due to certain intangible assets becoming fully amortized during 2024. The decrease was partially offset by the acquisition of patent portfolios and the resulting amortization of those assets.

Litigation Expense

Years Ended December 31,

2025 vs. 2024

2025

2024

Increase

% Change

Litigation expense

$

24,709

$

13,653

$

11,056

81

%

33

The increase in litigation expense during the year ended December 31, 2025, as compared to the prior year, was primarily due to increased activity in current litigation matters. See Part I, Item 3. – Legal Proceedings for additional information regarding these matters.

We expect that litigation expense will continue to be a significant portion of our operating expenses, as it is used to enforce and protect our IP and contract rights. Litigation expense may fluctuate between periods because of planned or ongoing litigation, as described in Part I, Item 3 – Legal Proceedings.

Interest Expense

Years Ended December 31,

2025 vs. 2024

2025

2024

Decrease

% Change

Interest expense

$

40,359

$

52,539

$

(12,180

)

(23

)%

The decrease in interest expense during the year ended December 31, 2025, as compared to the prior year, was primarily due to lower debt balances, the reduction of the interest rate margin resulting from the repricing of our Term Loan B during the second quarter of 2024 and the first quarter of 2025, and the effects of the Federal Reserve interest rate cuts during 2024 and 2025.

Other Income and Expense, Net

Years Ended December 31,

2025 vs. 2024

2025

2024

Increase

% Change

Other income and expense, net

$

6,279

$

5,570

$

709

13

%

The increase in other income and expense, net during the year ended December 31, 2025, as compared to the prior year, was primarily due to an increase in interest income from significant financing components from certain revenue contracts and interest income from our cash, cash equivalents and marketable securities.

Loss on Debt Extinguishment

During the year ended December 31, 2024, we recognized $0.5 million associated with the repricing of our Term Loan B. There were no such costs in 2025. Refer to discussion below for further detail on the repricing of our Term Loan B.

Provision for Income Taxes

Years Ended December 31,

2025 vs. 2024

2025

2024

Increase

% Change

Provision for income taxes

$29,848

$16,564

$13,284

80%

For the year ended December 31, 2025, we recorded an income tax expense of $29.8 million on pretax income of $140.9 million, resulting in an effective tax rate of 21.2%. The income tax expense for the year was primarily attributable to tax on current year income, partially offset by foreign tax credits, the foreign-derived intangible income deduction, and releases of uncertain tax positions. The increase in income tax expense for the year ended December 31, 2025, as compared to the prior year, was primarily attributable to higher pretax income.

For the year ended December 31, 2024, we recorded an income tax expense of $16.6 million on pretax income of $81.2 million, resulting in an effective tax rate of 20.4%. The income tax expense for the year was primarily attributable to tax on current year income, foreign withholding taxes, and unrealized foreign exchange losses related to prior year South Korea refund claims, partially offset by releases of uncertain tax positions.

The Korea Supreme Court issued a decision overturning the long-standing territorial sourcing framework for royalty income, under which royalty income was sourced by reference to the place of patent registration, and adopted a new sourcing rule based on where a licensed patent is used. In the fourth quarter of 2025, we were notified by Korea tax authorities that our pending withholding tax refund claims were denied, reducing the likelihood of the recovery of withholding tax receivables in Korea. Given this development, we determined that we could not sufficiently demonstrate eligibility for a refund under the revised sourcing rule. As a result, we concluded that realization of the related income tax receivable was no longer more-likely-than-not and derecognized the asset. The derecognition contributed $1.6 million in income tax expense for the year ended December 31, 2025.

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The need for a valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more-likely-than-not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. In making such an assessment, significant weight is given to evidence that can be objectively verified. Given our history of sustained profitability, we concluded that it was more-likely-than-not that we would realize our U.S. federal and certain state deferred tax assets. We continue to maintain a valuation allowance against tax attributes in California and other state tax attributes that can only be utilized against the income of specific legal entities.

Liquidity and Capital Resources

The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents as of and for the years ended December 31, 2025 and 2024:

December 31,

(in thousands)

2025

2024

Cash and cash equivalents

$

73,136

$

78,825

Marketable securities

63,597

31,567

Total cash, cash equivalents and marketable securities

$

136,733

$

110,392

Years Ended December 31,

2025

2024

Net cash from operating activities

$

158,086

$

212,461

Net cash used in investing activities

$

(40,261

)

$

(24,022

)

Net cash used in financing activities

$

(123,514

)

$

(164,174

)

Our primary sources of liquidity and capital resources are our operating cash flows and our short-term investments in marketable securities. Cash, cash equivalents and marketable securities were $136.7 million at December 31, 2025, an increase of $26.3 million from $110.4 million at December 31, 2024. This increase resulted primarily from $158.1 million of cash generated from operations and $2.4 million in proceeds from our employee stock purchase program and exercise of stock options, partially offset by $60.4 million in repayment of long-term debt, $8.8 million in purchases of long-lived assets, $21.8 million in dividends paid, $20.0 million in repurchases of common stock ($1.3 million in repurchases of common stock executed during the year ended December 31, 2024 were settled in January 2025), and $22.5 million in repurchases of common stock for tax withholdings on equity awards.

The primary objectives of our investment activities are to preserve principal and to maintain liquidity, while at the same time capturing a market rate of return. To achieve these objectives, we maintain a diversified portfolio of securities including money market funds and debt securities such as corporate bonds and notes, municipal bonds and notes, commercial paper, treasury and agency notes and bills and certificates of deposit. Our marketable debt securities are classified as available-for-sale (“AFS”) with credit losses recognized as a credit loss expense and non-credit related unrealized gains and losses, net of tax, recorded in accumulated other comprehensive income or loss.

We expect to continue to make additional payments on our existing debt from cash generated from operations. Our material cash requirements include the following contractual and other obligations:

Debt

As of December 31, 2025, we had outstanding long-term debt in an aggregate principal amount of $426.7 million, with a minimum of $24.4 million payable within the next 12 months. Based on achieving certain leverage ratios and as a result of voluntary prepayments, we were not required to make excess cash flow payments as pursuant to the agreement for either of the years ended December 31, 2024 and 2025.

Future interest payments associated with the debt, based on current interest rates, total $63.4 million, with $27.2 million payable within 12 months. The interest payments may vary with changes in interest rates, as well as due to reductions of the principal amount. Refer to “Note 10 – Debt” of the Notes to Consolidated Financial Statements for additional information on debt obligations and maturities.

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Leases

We have lease arrangements for office and research facilities, data centers and office equipment. As of December 31, 2025, fixed lease payment obligations amounted to $9.3 million, with $0.7 million payable within 12 months. Refer to “Note 8 – Leases” of the Notes to Consolidated Financial Statements for additional information on lease obligations and maturities.

Guarantee

Prior to the Separation, we and a subsidiary of Xperi Inc. (“Xperi Sub”) entered into an agreement (the “Specified Agreement”) with a third party pursuant to which we guarantee the performance of Xperi Sub under the Specified Agreement, including its payment obligations to such third party. In connection with the Separation, we and Xperi Sub entered into a separate cross business agreement (the “Cross Business Agreement”) effective as of October 1, 2022 under which we agreed to make guarantee payments to Xperi Sub in amounts based on certain of its operating expenses and other minimum performance obligations under the Specified Agreement through 2031. Consequently, on October 1, 2022, we recognized a guarantee liability of $19.7 million, which represents the fair value of Adeia Media’s projected payments of such operating expenses during the term of the Cross Business Agreement. Subsequent changes to the carrying value of the guarantee are recognized as part of our results of operations. As of December 31, 2025, the balance of the guarantee liability is $16.3 million, including a current portion of $0.8 million. Operating expense reimbursements are capped at a maximum of $7.5 million per annum. To date, such reimbursements have not been material.

Other Purchase Obligations

Our other purchase obligations primarily consist of non-cancelable obligations related to advertising, engineering services and internet and telecommunications services. As of December 31, 2025, we had purchase obligations of $7.5 million, including $3.2 million due in 2026, $2.4 million due in 2027, and $1.9 million due thereafter. These purchase obligations represent commitments under enforceable and legally binding agreements and do not represent the entire anticipated purchases in the future. Refer to “Note 15 – Commitments and Contingencies” of the Notes to Consolidated Financial Statements for additional detail.

Income Tax Payable

As of December 31, 2025, we had accrued $7.3 million of unrecognized tax benefits in long-term income taxes payable related to uncertain tax positions, which include an immaterial amount of accrued interest and penalties. At this time, we are unable to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease over time.

In addition to the cash requirements outlined above, we have returned cash to stockholders through both quarterly dividend payments and repurchases of our common stock under our stock repurchase plan, as further described below:

Quarterly Dividends

In 2025 and 2024, we paid quarterly dividends of $0.05 per share in each of the March, June, September and December quarterly periods. Our capacity to pay dividends in the future depends on many factors, including our financial condition, results of operations, capital requirements, capital structure, industry practice and other business conditions that the Board of Directors considers relevant. We anticipate that any quarterly dividends if and when paid, will be paid out of cash, cash equivalents and short-term investments in marketable securities.

Stock Repurchase Plan

In October 2024, our Board of Directors approved an increase to the existing share repurchase authorization up to a total of $200.0 million. The stock repurchases may be made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions, or pursuant to a Rule 10b5-1 plan. During the year ended December 31, 2025, we repurchased a total of approximately 1.5 million shares of common stock, at an average price of $13.55 per share for a total cost of $20.0 million. During the year ended December 31, 2024, we repurchased a total of approximately 1.4 million shares of common stock, at an average price of $13.95 per share for a total cost of $20.0 million. As of December 31, 2025, the total remaining amount available for repurchase under this plan was $160.0 million.

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We may continue to execute authorized repurchases from time to time under our existing stock repurchase plan. The amount and timing of any repurchases under the stock repurchase plan depend on a number of factors, including, but not limited to, the trading price, volume and availability of our common shares. There is no guarantee that such repurchases under the stock repurchase plan will enhance the value of our common stock.

We believe that based on current levels of operations and anticipated growth, our cash from operations, together with cash and cash equivalents currently available, will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and thereafter for the foreseeable future. Poor financial results, unanticipated expenses, unanticipated acquisitions of technologies or businesses, or unanticipated strategic investments could give rise to additional financing requirements sooner than we expect. There can be no assurance that equity or debt financing will be available when needed or, if available, that such financing will be on terms satisfactory to us. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness could result in increased debt service obligations and may include covenants that would restrict our operations.

Cash Flows from Operating Activities

Cash flows provided by operations were $158.1 million for the year ended December 31, 2025, primarily due to our net income of $111.1 million being adjusted for non-cash items of amortization of intangible assets of $56.6 million, stock-based compensation expense of $34.7 million, amortization of debt issuance costs of $3.4 million, depreciation of $2.0 million, and change in deferred income tax and other of $33.7 million, partially offset by $(82.8) million net change in operating assets and liabilities.

Cash flows provided by operations were $212.5 million for the year ended December 31, 2024, primarily due to our net income of $64.6 million being adjusted for non-cash items of amortization of intangible assets of $70.7 million, stock-based compensation expense of $26.6 million, amortization of debt issuance costs of $3.5 million, depreciation of $2.1 million, partially offset by the change in deferred income tax of $(7.1) million, and $53.2 million net change in operating assets and liabilities.

Cash Flows from Investing Activities

Net cash used in investing activities was $40.3 million for the year ended December 31, 2025, primarily related to purchases of short-term investments in marketable securities of $57.3 million, and purchases of long-lived assets of $8.8 million, partially offset by maturities of marketable securities of $24.3 million and proceeds from sales of short-term investments of $1.5 million.

Net cash used in investing activities was $24.0 million for the year ended December 31, 2024, primarily related to purchases of short-term investments in marketable securities of $33.2 million, and purchases of long-lived assets of $22.3 million, partially offset by maturities of marketable securities of $31.5 million.

Capital Expenditures

Our capital expenditures for property and equipment consist primarily of leasehold improvements, purchases of computer hardware and software, information systems, and production and test equipment. During each of the years ended December 31, 2025 and 2024, we spent $1.8 million on capital expenditures. Our capital expenditures for intangible assets consists primarily of acquired patents. During the years ended December 31, 2025 and 2024, we spent $7.0 million and $20.5 million on purchases of intangible assets, respectively. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs.

Cash Flows from Financing Activities

Net cash used in financing activities was $123.5 million for the year ended December 31, 2025 principally due to $60.4 million in repayment of indebtedness, $21.8 million in dividends paid, $20.0 million in repurchases of common stock ($1.3 million in repurchases of common stock were pending settlement as of December 31, 2024), and $22.5 million in repurchases of common stock for tax withholdings on equity awards, partially offset by $2.4 million in proceeds from our employee stock purchase program and exercise of stock options.

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Net cash used in financing activities was $164.2 million for the year ended December 31, 2024 principally due to $114.2 million in repayment of indebtedness, $21.8 million in dividends paid, $20.0 million in repurchases of common stock ($1.3 million in repurchases of common stock were pending settlement as of December 31, 2024), and $12.8 million in repurchases of common stock for tax withholdings on equity awards, partially offset by $3.2 million in proceeds from our employee stock purchase program and exercise of stock options.

Long-term Debt

The 2020 Credit Agreement dated June 1, 2020 (the “2020 Credit Agreement”), provides for a senior secured term loan B facility (the “Term Loan B”) with maturity on June 8, 2028.

On May 20 2024, we entered into Amendment No. 3 (“Amendment No. 3”) to the 2020 Credit Agreement, which provided for a repricing of the entire outstanding aggregate principal amount of $561.1 million. Amendment No. 3 also reduced interest margins (50 basis points) from SOFR plus a margin of 3.50% to SOFR plus a margin of 3.00% per annum or base rate plus a margin of 2.00% per annum. In addition, Amendment No. 3 lowered the excess cash flow mandatory payment thresholds and credit spread adjustment provision.

On January 30, 2025, we entered into Amendment No. 4 (“Amendment No. 4”) to the 2020 Credit Agreement, which provided for a repricing of the entire outstanding aggregate principal amount of $487.1 million. Amendment No. 4 further reduced the interest margins (50 basis points) to SOFR plus a margin of 2.50% per annum or base rate plus a margin of 1.50% per annum.

The obligations under the 2020 Credit Agreement, as amended, continue to be guaranteed by our wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all our assets and those of the Guarantors.

As of December 31, 2025, $426.7 million was outstanding under the term loan B facility. In addition, we had $8.3 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt. The interest rate on the Term Loan B, including the amortization of debt discount and issuance costs, was 7.3% and interest is payable monthly.

Under the existing loan agreement, we have future minimum principal payments for our debt of $24.4 million each year from 2026 through 2027, with the remaining principal balance of $378.0 million will be due June 8, 2028. The 2020 Credit Agreement, as amended, also requires that we continue to make cash payments on an annual basis based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year. The cash payments are applied to the remaining principal balance due at final maturity. Based on certain leverage ratios and the voluntary prepayments the Company made during the year ended December 31, 2024, no excess cash flow payments were required for the years ended December 31, 2025 and 2024. The term loan B facility contains customary covenants, and as of December 31, 2025, we were in full compliance with such covenants.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States which requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty. We evaluate our estimates based on our historical experience and various other assumptions that are believed to be reasonable under the circumstances. These estimates relate to revenue recognition, the assessment of recoverability of goodwill and intangible assets, business combinations, recognition and measurement of deferred income tax assets and liabilities, the assessment of unrecognized tax benefits and others. Actual results could differ from those estimates, and material effects on our operating results and financial position may result.

We believe the following accounting policies and estimates are most critical to understanding our consolidated financial statements. See “Note 2 – Summary of Significant Accounting Policies” and “Note 4 – Revenue” of the Notes to Consolidated Financial Statements for a full description of our accounting policies.

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Revenue recognition

We derive the majority of our revenue from the licensing of our IP rights to customers. Revenue is recognized when control of the IP rights is transferred to a customer in an amount that reflects the consideration that we expect to be entitled to in exchange for the licensing of our IP. The primary judgments include identifying the performance obligations in the contract, determining standalone selling price used to allocate consideration in a contract with multiple performance obligations, estimating the fair value of noncash consideration, estimating variable consideration relating to potential future price adjustments as a result of legal contract disputes, and estimating quarterly royalties prior to receiving the royalty reports from the licensee.

At times, we enter into contracts with customers that include releases from past patent infringement claims and a prospective license. In these contracts, we allocate the transaction price between releases for past patent infringement claims and prospective licenses based on their relative standalone selling prices. Determining standalone selling price requires significant management judgment. In determining the standalone selling price of each performance obligation, we consider such factors as the customer’s revenues, the number of past and projected future subscribers, units shipped, and units manufactured, as well as the per-subscriber or per-unit licensing rates we generally receive from licensees of comparable sizes in comparable markets and geographies. As a release from past patent infringement claims is generally satisfied at execution of the contract, the transaction price allocated to the release from past patent infringement claims is generally recognized in the period the contract is executed. Transaction price allocated to prospective Media IP licenses is recognized ratably over the license term, and transaction price allocated to prospective Semiconductor IP licenses is generally recognized upon execution of the contract.

At times, we enter into contracts with customers that include noncash consideration in the form of patents. During 2025, 2024 and 2023, revenue recognized from noncash consideration represented 5.8%, 0.6% and 0.2%, respectively, of our total revenue. Determining the fair value of patents is performed at contract inception using one of, or a combination of, an analysis of comparable market transactions (the market approach), and/or an analysis of the costs that would be required to develop and maintain a comparable set of patents (the cost approach). Each methodology involves the use of significant judgments and assumptions, including which market transactions are most comparable to the specific transaction and the identification of relevant costs incurred by comparable companies to develop and maintain a comparable set of patents. Changes in these assumptions could have a substantial impact on the fair value assigned to the patents for accounting purposes. These inputs and assumptions represent management's best estimates at the time of the transaction.

When the uncertainty associated with variable consideration relates to potential future price adjustments as a result of a legal contract dispute, we estimate variable consideration using the expected value method or the most likely amount method, whichever is more appropriate in the circumstances, and consider all available information, including historical data and experience. Estimating variable consideration related to potential future price adjustments requires significant management judgment in evaluating the possible outcomes.

We generally recognize royalty revenue from per-unit or per-subscriber licenses based on units shipped or manufactured or number of subscribers. Revenue is recognized in the period in which the customer’s sales or usage are estimated to have occurred. This may result in an adjustment to revenue when actual sales or usage are subsequently reported by the customer, generally in the month or quarter following sales or usage. Estimating a customer’s quarterly royalties prior to receiving the royalty reports requires us to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate sales or usage, which could have a material impact on the amount of revenue we report on a quarterly basis.

Accounting for income taxes

We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments are used in the calculation of tax credits, tax benefits and deductions and in the calculation of tax assets and liabilities. Significant changes to these estimates may result in an increase or decrease to our tax provision in a subsequent period.

We must assess the likelihood that we will be able to realize our deferred tax assets. If realizability is not likely on a more-likely-than-not basis, we must increase our provision for income taxes by recording a valuation allowance against our deferred tax assets. We considered the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Should there be a change in our ability to recover our deferred tax assets, our provision for income taxes would fluctuate in the period of the change.

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We account for uncertain tax positions in accordance with authoritative guidance related to income taxes. The calculation of our unrecognized tax benefits involves dealing with uncertainties in the application of complex tax regulations. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. We record unrecognized tax benefits for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional tax liabilities are more-likely-than-not, assuming the tax authorities have full knowledge of all relevant information. If we ultimately determine that the tax liabilities are unnecessary, we reverse the liabilities and recognize a tax benefit during the period in which it occurs. This may occur for a variety of reasons, such as the expiration of the statute of limitations on a particular tax return or the completion of an examination by the relevant tax authority. We record an additional charge in our provision for taxes in the period in which we determine that the recorded unrecognized tax benefits are less than the expected ultimate settlement.

Our policy is to classify accrued interest and penalties related to the accrued liability for unrecognized tax benefits in the provision for income taxes. For the years ended December 31, 2025 and 2024, respectively, we did not recognize any significant interest or penalties. See “Note 14 – Income Taxes” of the Notes to Consolidated Financial Statements for additional detail.

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