InterDigital Inc (IDCC)

[FISH21049]

InterDigital (IDCC) Inks Multiple Patent License Agreements

IDCC
+4.25%

Zacks Equity Research
Wed, January 4, 2023 at 10:16 AM CST
In this article:

InterDigital, Inc. IDCC recently inked a slew of patent license renewal agreements with Samsung Electronics and Panasonic Entertainment & Communication Co., Ltd. for an undisclosed amount. In addition, it signed an HEVC (High Efficiency Video Coding) and VVC (Versatile Video Coding) patent license agreement with LG Electronics. The multiple licensing deals underscore the healthy momentum of its licensing portfolio, which includes some of the biggest industry stalwarts.

Samsung had a licensing deal for InterDigital’s portfolio of cellular wireless and video technologies, which expired on Dec 31, 2022. The renewal of the contract will enable this South Korea-based multinational electronics corporation to continue using its technology without any dispute. Panasonic also renewed two patent license agreements relating to HEVC technology. The new license agreements with LG Electronics cover a plethora of LG products, such as TVs and PCs, for a mutually beneficial relationship.

InterDigital’s commitment to licensing its broad portfolio of technologies to wireless terminal equipment makers, which allows it to expand its core market capability, is laudable. It has leading companies, such as Huawei, Samsung, LG and Apple, under its licensing agreements. Consequently, the company expects to generate solid recurring revenues from the patent licensing business in the forthcoming quarters as well.

InterDigital’s global footprint, diversified product portfolio and ability to penetrate different markets are impressive. Apart from the company’s strong portfolio of wireless technology solutions, the addition of technologies related to sensors, user interface and video to its offerings is likely to drive significant value, considering the massive size of the market it licenses. Furthermore, the company remains committed to pursuing acquisitions to drive its product portfolio and boost organic growth.

The company is focused on pursuing agreements with unlicensed customers in the handset and consumer electronics markets. InterDigital aims to become a leading designer and developer of technology solutions and innovation for the mobile industry, IoT and allied technology areas by leveraging its research and development capabilities, technological know-how and rich industry experience. At the same time, it intends to enhance its licensing revenue base by adding licensees and expanding into adjacent technology areas that align with its intellectual property position.

Additionally, more and more companies are increasingly offering the work-from-home option to employees to ensure their safety and well-being. Several firms are also providing a secure and connected workplace setup through quick onboarding and enablement services to support the seamless continuity of businesses and enable employees to fulfill their professional obligations. This, in turn, is likely to create new revenue-generating opportunities for InterDigital, as humans become solely dependent on the digital platform to stay connected not only for their professional lives but also for online education, shopping, dining and entertainment.

The stock has lost 21.7% over the past year compared with the industry’s decline of 33.3%.