InterDigital, Inc.

Good day and thank you for standing by. Welcome to the InterDigital First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's prepared remarks, there will be a question and answer session. To ask a question during this session, you'll need to press star 1 1 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Rayford Garabrant, Head of Investor Relations. Please go ahead.

Good morning to everyone, and welcome to InterDigital's first quarter 2023 earnings conference call. I am Rayford Garabrant, and I recently joined the company as Head of Investor Relations. With me on today's call are Liren Chin, our President and CEO, and Rich Breske, our CFO. With this being my first earnings call with the company, I'd like to say how excited I am to be part of the team and for the opportunity to work with all of you in the investment community going forward. Consistent with last quarter's call, we will offer some highlights about this quarter and the company, and then open the call up for questions. Before we begin our remarks, I need to remind you that in this call, we will make forward-looking statements regarding our current beliefs, plans, and expectations, which are not guarantees of future performance and are made only as of the date hereof. Forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward-looking statements. These risks and uncertainties include those described in the risk factor sections of our 2022 Annual Report on Form 10-K and in our other SEC filings. In addition, today's presentation may contain references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our financial metrics tracker, which is available on the Investor Relations section of our website. With that taken care of, I will now turn the call over to Larry. Thank you, Rupert.

Good morning, everyone, and thanks for joining us today. In spite of challenging market conditions, this was another excellent quarter as we continue to make good progress on the licensing front with key customers, had our best quarter ever in terms of new invention disclosures, and extended our track record of consistently returning capital to shareholders. Our last call, I highlighted our belief that the company was in as a strong position as it has ever been in, and our first quarter results further demonstrate the strengths of our business. We doubled our revenue to $202 million and nearly tripled our adjusted EBITDA to $155 million. I'll let Rich talk you through the details, but I want to emphasize that this result only happened because of our outstanding performance across the business. On the licensing front, our binding arbitration with Samsung, which we announced in January, It's proceeding in a timely fashion and according to plan. I should reiterate that Samsung has agreed to take a license to our portfolio effective January 1st, 2023, where the arbitration process will decide the monetary terms. We remain confident that our new license with Samsung will reflect the value of portfolio and continue our long-term relations with Samsung that starts more than 25 years ago. Next, I want to provide an update on our cases with Lenovo. As some of you may know, this litigation involves multiple trials in the UK and to date have proven Lenovo's infringement of our patents and the foundational nature of our innovation to the mobile industry. In three separate trials, including two that was heard by UK's Court of Appeal, our patents have been found to be valid essential to various cellular wireless standards and infringed by Lenovo. We recently received a judgment from the UK High Court in the trial to determine how much Lenovo must pay for a license to our portfolio of cellular assets. The court ruled that Lenovo should pay us almost $140 million for a license to our 3G, 4G, and 5G patents through the end of 2023. Lenovo has been ordered to pay us in full for all its past sales for cellular-enabled devices. As the court noted, this is intended to be a powerful way of discouraging licenses from delaying or holding out on taking a friend license. This week, there was a hearing regarding topics such as interest, cost, and permission to appeal, the rate of determination, and we are waiting for the judge's final decision before deciding our next steps. It's also worth noting that the positive decisions we have received in our Lenovo dispute have had a beneficial impact in our UK litigation with OPPO, where the judge has fast-tracked our dispute to focus on how much OPPO should pay us for a license, given that our patents have already been found to be valid, essential to various cellular wireless standards, and infringed by OPPO. We are pleased that across both our Lenovo and OPPO cases, we have proven the strength of our portfolio. As I have said before, we will not waver in our determination to defend our IP and to ensure that we see a fair return on our investment in global adopted innovation. Our recent license momentum has placed the business in an incredibly strong position and enabled us to further accelerate our commitment to return capital to shareholders through share buybacks and dividends. Rich will provide more details in our recent share repurchases, but I want to highlight that since 2019, we have returned more than $700 million to shareholders. As always, our licensing success has been built on top of quality and breadth of innovation. And we believe our innovation pipeline is as robust as it has ever been. In Q1, we filed our highest ever number of invention disclosures in a quarter, providing a good indication of how our engineers are turning our foundational research into new breakthroughs. We also had a record quarter in new 5G related findings, which emphasizes how our work in advanced 5G research and standardization continues as the latest G is rolled out around the world. Our success in translating our innovation to patents was also highlighted by a recent report from European Patent Office, in which we were named among the top 50 recipients of European patents in 2022. That underlines the global nature of our portfolio, which is now about 30,000 granted patents and applications. Our innovation was also at the forefront of our presence at Mobile World Congress in Barcelona, where we engaged with various stakeholders and presented demos on several key areas of our research, including how AI and machine learning can enhance 5G networks and how video innovation will entertain more immersive connected occurrence. As our presence at MWC demonstrated, our innovation continues to redefine what it means to be connected and in turn is opening up of what we believe are new and exciting licensing opportunities. Last month, we appointed Skip Maloney as our new Chief People Officer Skip has 25 years of industry experience and joined us from Aspen Technology, where he led its global HR functions. He will help with the further growth and development of our workforce to transform the company to achieve our strategic goals. I also highlight, I'm also delighted by the recent nomination of former TiVo and Xperia executive Samir Amali to our board of directors. Like former Qualcomm president, Derek Eberle, who joined our board last year, if elected, Samir will bring considerable licensing experience and excellent insight into the video space as we look to expand our licensing program into new products and services. Before I hand it over to Rich to talk you through the numbers, I want to reflect on various significant recent milestones for the wireless industry. Last month was the 50th anniversary of the first call made from a mobile phone, which was made shortly after InterDigital was founded. From this landmark moment, our inventors have played a pivotal role in developing foundational innovations that underpins every generation of mobile technologies for connected devices and services. We are proud of the role that we have played over the last 50 years and look forward to deliver even more value to the industry and consumers in the future. And with that, I'll hand it over to Rich.