Adeia Inc.

Good day, everyone. Thank you for standing by. Welcome to Audia's first quarter 2026 earnings conference call. During today's presentation, all parties will be in a listen only mode. Following the presentation, the call will be open for questions. I would now like to turn the call over to Chris Cheney, Vice President and Investor Relations for Audia. Chris, please go ahead.

Good afternoon, everyone. Thank you for joining us as we share with you details of our quarterly financial results. With me on the call today are Paul Davis, our President and CEO, and Keith Jones, our CFO. Paul will share with you some general observations regarding the quarter, and then Keith will give further details on our financial results and guidance. We will then conclude with a question and answer period. In addition to today's earnings release, there is an earnings presentation which you can access along with the webcast in the IR portion of our website. Before turning the call over to Paul, I would like to provide a few reminders. First, today's discussion contains forward-looking statements that are predictions, projections, or other statements about future events, which are based on management's current expectations and beliefs, and therefore subject to risks, uncertainties, and changes in circumstances. For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discussed today, please refer to the risk factors section in our SEC filings, including our annual report on Form 10-K and our quarterly report on Form 10-Q. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. To enhance investors' understanding of our ongoing economic performance, we will discuss non-GAAP information during this call. We use non-GAAP financial measures internally to evaluate and manage our operations. We have therefore chosen to provide this information to enable you to perform comparisons of our operating results as we do internally. We have provided reconciliations of these non-GAAP measures to the most directly comparable GAAP measures in the earnings release, the earnings presentation, and on the investor relations section of our website. A recording of this conference call will be made available on the investor relations website at adia.com. Now, I'd like to turn the call over to our CEO, Paul Davis.

Thank you, Chris, and thank you everyone for joining us today. I'm pleased to be here to share our results for the first quarter of 2026. After last year's strong finish, including our license agreement with Disney, we entered 2026 with significant momentum, which continued into the first quarter. We signed foundational agreements with both AMD and Microsoft, along with additional deal activity across multiple verticals. Our strong execution is demonstrated in our first quarter results. We delivered revenue of $105 million with an adjusted EBITDA margin of 60% and $58 million in operating cash flow. We also continued to execute on all four pillars of our balanced capital allocation strategy, paying down our debt, which is now less than $400 million, returning capital to shareholders through dividends and share repurchases, and investing in our portfolios through five strategic tuck-in acquisitions. The eight license agreements we closed during the first quarter were highlighted by AMD and Microsoft, which were among our three new customers. We closed five renewals with customers across a diverse set of verticals, including pay TV, consumer electronics, semiconductors, and OTT. I'm very pleased that in early March, we resolved our dispute and signed a seminal multi-year license agreement with AMD for access to our semiconductor portfolio, which includes our hybrid bonding technology. The agreement was reached within four months of filing litigation, underscoring the strength of our semiconductor portfolio and the effectiveness of our approach. It also represents an important milestone for our semiconductor business and provides further momentum as we pursue additional semiconductor opportunities in both logic and memory that will be driven by continued adoption of hybrid bonding. The significance of our agreement with AMD cannot be overstated. AMD is a highly respected innovator and a leader in advanced semiconductor design. Their early adoption of chiplet architecture and hybrid bonding highlights the relevance of our technology in next generation computing. While AMD was an early adopter, hybrid bonding is now becoming more broadly adopted across the semiconductor industry. We are seeing increased adoption in both logic and memory, supported by significant investment in next generation architectures and increasing use in advanced semiconductors for high volume consumer electronic devices. This adoption is being driven by AI and high performance computing, which are fundamentally increasing power density and interconnect demands. As traditional Moore's Law scaling reaches its limits, our hybrid bonding and thermal management technologies have become essential to enabling continued performance gains. We believe our portfolio is well positioned to deliver value across both logic and memory markets as the industry pushes beyond the limits of traditional scaling. The AI driven growth in semiconductors is remarkable with the total semiconductor market anticipated to exceed $1 trillion annually by the end of 2026. In addition to AMD, we also added Microsoft as a new customer in the first quarter with a multi-year license agreement for access to our media portfolio. Our media portfolio has broad applicability across Microsoft's products and services, including its consumer electronics and social media businesses, such as Xbox and LinkedIn. In recent weeks, we also expanded our presence in e-commerce with a new license agreement with L'Oreal, adding another global brand to our expanding customer base in e-commerce. While e-commerce remains a relatively small portion of our revenue to date, our growing momentum and robust pipeline in this market gives us confidence that it could be much more significant in the future. We continue to make steady progress towards reaching our long-term goal of $500 million in annual licensing revenue. Our strong start to 2026 reinforces our confidence in that trajectory. A key driver of this progress is our ability to add new, high-value customers such as AMD and Microsoft, agreements that provide sustainable recurring revenue streams. These new deals are contributing to the continued diversification of our business. In the first quarter, non-pay TV recurring revenue grew 28% year-over-year, reflecting further expansion into growth markets. Our most significant growth market is semiconductors. The rapid evolution of AI and high performance computing is driving fundamental changes in chip design, including the broad adoption of chiplet architectures with hybrid bonding. Our agreement with AMD is an important validation of our position in this space. Other leading logic and memory companies are following similar paths, and we believe hybrid bonding will play an increasingly central role across both logic and memory applications for years to come. In addition, demand for high performance memory continues to grow rapidly, particularly in NAND and high bandwidth memory. We are already seeing contributions from earlier agreements with NAND manufacturers, and we expect further adoption as production volumes scale. We are also beginning to see early indication that these technologies are expanding beyond data centers into consumer devices, which represents an additional long-term high volume opportunity. Importantly, as AI and high performance computing workloads continue to scale, thermal management becomes a critical constraint. Our rapid cool technology is designed to address these challenges, and we continue to make meaningful progress. Through further development, we have improved its cooling capability to approximately 5 watts per square millimeter, up from 3 watts less than a year ago. And interest from potential partners continues to grow. Our IP portfolio remains the foundation of our business. Since the beginning of 2023, we have grown our portfolio from approximately 10,000 to over 13,750 patent assets. While we have delivered strong double digit growth in recent years, we expect portfolio growth to moderate over time. We believe our portfolio today is well positioned to support multiple licensing cycles in both our core and growth markets, and our innovation engine is primed to continue to refresh these licensing cycles well into the future. We continue to invest strategically in both organic R&D and targeted tuck-in acquisitions to ensure we maintain and enhance the value of our portfolio over time. In the first quarter, we increased our M&A activity, closing five tuck-in IP portfolio acquisitions across a wide spectrum of technologies focused on growth areas. We are very proud of these accomplishments. We continue to focus on expanding our customer base, which includes our history of developing long-term relationships. This has been a primary objective as we invest heavily in our portfolio development to support the ever evolving technology solutions that help drive our customers' products and services. Despite our tremendous track record of renewals, we occasionally find ourselves in customer disputes on the value of our portfolios. To that end, we are disappointed we could not reach acceptable terms for a renewal with DISH Network after their agreement expired at the end of March. DISH and their predecessor companies have been customers for decades, and throughout many renewals over the years, they have enjoyed the use of our IP. Since the last renewal, we have continued to innovate, add to our portfolio, and strengthen our relevance within the pay TV industry. In the past few years, we've successfully signed agreements with Hulu Plus Live TV, Optimum formerly Altice, Verizon, and Frontier. Even through litigation, we keep the channels of communication open for the purpose of reaching terms on a license agreement, which is our ultimate goal. Leveraging our success with recent similar situations with Optimum, Disney, and AMD, each of which was resolved efficiently and relatively quickly, we are confident we will reach successful outcomes with DISH and DirecTV. Our technologists remain at the forefront in their fields and are often panelists or speakers at industry conferences. We are recognized as market leaders and innovators and are actively engaged in the ecosystems in which we operate. I'm proud we were named one of the top 100 global innovators by LexisNexis Intellectual Property Solutions. We earned this recognition based on the quality and strength of our portfolios and the measurable improvements we've made in our innovation impact over the past two years. Unlike rankings based solely on patent volume, this award highlights companies driving meaningful advances in technology. And that is exactly what our teams do every day. We had a strong first quarter and we have built meaningful momentum to start 2026. I'm particularly pleased with the addition of AMD and Microsoft as new customers, both multi-year agreements that expand our presence in key growth markets and strengthen our recurring revenue base. Our strong financial performance supports continued investment in our portfolio and ongoing balance sheet improvement. And with a growing and diversified pipeline, we believe we have multiple paths to achieve our objectives for the year. Before I turn the call over to Keith, I would like to address the other news we announced today. As noted in the press release, after much consideration and consultation with my family, I have informed the board of my intent to step down as CEO later this year to focus on my health and other personal pursuits. As I reflect on my last four years leading Adia, including through its separation from Xperia, I could not be more proud of what the company has accomplished. Our exceptional leadership team has transitioned the company from being primarily reliant on the pay TV market to one with robust and diversified revenue streams supported by our evolving and growing IP portfolios and technology leadership. Our balance sheet is strong, having cut our debt nearly in half since separation, and we are positioned well for continued growth. I have committed to the board that I will continue in my current role until a successor has been identified and appointed and through any necessary transition period. During this period, it will be business as usual as I remain focused on driving the team toward achieving our goals for 2026 and setting us up for continued long-term success. Our goal is to find the next leader for Audia by the fourth quarter. The board has engaged a nationally recognized search firm, and I am confident we will find a leader that will continue the successes we have built and drive the next phase of growth for the company. I want to thank my family, the executive leadership team, and the board for helping me through this difficult decision. I also want to thank the dedicated Audia employees that are at the heart of all of our success. I will now turn the call over to my friend and our CFO, Keith, to cover our financial results.