InterDigital
Annual Report 2023

ANNUAL
REPORT

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Notice of 2024 Annual Meeting and  

Proxy Statement InterDigital, Inc.

A MESSAGE TO  
OUR SHAREHOLDERS

At InterDigital we pride ourselves on 
our leadership in developing the next 
frontier of connected technologies. 

Through the continued research in 
our Wireless, Video and AI Labs, we 
are at the heart of an ever-expanding 
connected world that reaches far 
beyond the phone in your pocket 
or the television in your living room. 

The momentum that we have built through  
our innovation leadership and licensing success 
continues to translate into significant financial 
growth. In 2023 our annual revenue reached $550 
million, up 20% year-over-year, including another 
record year of recurring revenue of just over $408 
million. We also saw significant improvements in our 
bottom line with adjusted EBITDA* up 36% year-
over-year to $345 million, giving us an adjusted 
EBITDA margin* of 63%.

This remarkable improvement in our profitability 
highlights the company’s strong financial position, 
which we believe allows us to invest in our 
innovation footprint, develop one of the strongest 
patent portfolios in the industry, act on strategic 
growth opportunities as they may arise, and deliver 
considerable value for our shareholders.  

In 2023 we returned almost $380 million to 
shareholders, meaning that since 2010 we have 
returned nearly $1.8 billion in stock buybacks 
and dividends. In recognition of this outstanding 
performance, we were named by Forbes as one 
of America’s top 100 most successful mid-cap 
companies in 2024. 

At the heart of our success is our innovation footprint 
which continues to be bolstered by our track record 
of using AI in our wireless and video work. While our 
research benefits from the work of our standalone AI 
Lab, one of the key drivers behind our AI leadership 
has been the fact that much of our AI expertise is 
embedded in our wireless and video teams.  

This leadership continues to deliver significant  
results in how AI can be used to make wireless  
and video technologies more efficient and reliable. 

2023 SNAPSHOT

$550 Million
Revenue 
20% Year-Year growth 

70%
Year-Year Increase: 
Record Setting 
Invention Creation

$379 Million
Return to 
Shareholders 

Top 100
Forbes Most 
Successful Mid-cap 
Companies

*Non-GAAP financial measure. For more information about these measures and a reconciliation to the closest GAAP financial measure, see the 
supplemental earnings materials filed with the SEC on February 15, 2024, also available on the Investor Relations section of our website.

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6G is set to become the 
first generation of mobile 
to be built with AI from  
the ground up.

At the most recent Mobile World Congress in 
Barcelona, our AI innovation was part of two 
demonstrations, with one showcasing how AI  
can be used to make energy consumption in  
video more efficient and another, in conjunction 
with our partner Keysight, demonstrating how an 
AI model, developed by InterDigital engineers, can 
improve the reliability of a 6G wireless network. 

Our AI leadership is particularly important because 
6G is set to become the first generation of mobile to 
be built with AI from the ground up. The foundations 
of 6G are taking shape and we believe InterDigital 
is once again well placed to play a leading role in 
another generation of mobile thanks not only to our 
research in AI but also because of our leadership 
in Integrated Sensing and Communication (ISAC), 
another important pillar of the next “G.” 

This leadership extends not only to the quality of  
our groundbreaking innovations but also to the way 
we lead the wireless, video and AI industries through 
our deep involvement in standards development 
organizations and other groups. 

We hold more than 100 leadership 
positions in various standard 
development organizations

In 2023 our global leadership of the wireless  
industry grew considerably and was highlighted  
with the election of one of our senior wireless 
engineers, Diana Pani, to chair a key working  
group within 3GPP, the industry body that plays  
a lead role in each generation of mobile. Diana 
enjoyed broad support in her election and she is  
the first woman to be elected to the post. 

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This election is particularly timely given the  
growth of 5G to more than two billion subscriptions, 
confirming it as the quickest mobile generation to 
reach the two billion mark. And, with the rollout of 
5G Advanced, 5G’s evolution promises to support a 
range of new use cases for wireless communications 
and underlines the value we continue to see in our  
5G innovation now and well into the future. 

In addition to Diana’s appointment, another  
of our senior wireless engineers was elected to 
the board of the European Telecommunications 
Standards Institute (ETSI), a leading organization  
in the development of global standards in wireless. 

We believe this leadership underlines not only 
the esteem in which our engineers are held in the 
innovation ecosystem but also the broader quality 
of our research in wireless, video and AI. This places 
us in an ideal position to not only capitalize on our 
licensing opportunities today but what we believe will 
be an expanding licensing universe in the longer term. 

The quality of our innovation continues to be 
recognized by third parties. We were included for  
the third successive year as one of the world’s leading 
innovators in LexisNexis’s “Innovation Momentum: 
The Global Top 100” report.  

This report not only analyzes the impact of our 
innovation today but also its likely impact in years  
to come. This is particularly significant because parts 
of our research are focused on early-stage innovation 
which might be several years away from commercial 
adoption.  

Through our technology leadership, the quality of our 
inventions, the development of our patent portfolio, 
and our investments in long-term research, we believe 
that our innovation pipeline has never been stronger.

As a business driven by our fundamental innovation, 
our patents are in many ways the product that we 
bring to market, and our patent portfolio contains 
more than 30,000 granted patents and applications. 
Our inventors and patents teams had an exceptional 
year in 2023, creating a record-setting number of 
inventions and new patent filings, up more than  
70% year-over-year.

While we own one of the largest wireless and 
video portfolios combined, we know that a key 
differentiator is the quality of our innovation. In a 
recent report that analyzed the patent portfolios  
of companies across the globe to advanced wireless 
technologies, LexisNexis found that our 5G portfolio 
ranks in the top five in the world when considering 
both quality and quantity. 

LexisNexis found that our  
5G portfolio ranks in the 
top five in terms of both 
quality and quantity.

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On the licensing front, we entered into new 
agreements with Lenovo for both our cellular  
and HEVC video portfolios and added a new  
licensee, TCL, to our mobile program. On the 
consumer electronics side, we agreed to a license  
with Samsung for the company’s digital TV and 
display monitors as part of our Madison joint  
licensing program with Sony.  

As the largest manufacturer of TVs in the world,  
our agreement with Samsung provides further  
proof of our strength in consumer electronics and 
the wider video industries. Our strength in video is 
based not only on our status as a leading contributor 
to the most advanced video compression standards 
including HEVC and VVC, but also on our leadership 
in areas like energy aware media, open source 
compression, and the application of AI to an  
array of video technologies.   

With a significant amount of Internet data 
transmitted as video and with the ongoing 
convergence of wireless and video innovation,  
we believe this video leadership gives us a  
formidable platform not only on the device side 
but also in a greenfield opportunity in cloud- 
based video services which we believe can  
deliver meaningful revenue.  

Through our automotive licensing partner, we 
also entered into our first 5G license agreements 
with several of the world’s largest automotive 
manufacturers, including Mercedes Benz, Ford  
and VW.  

Together, the more than 30 license 
agreements we have signed since 
early 2021 have an aggregate value 
of over $2.5 billion. 

Although the vast majority of our license agreements 
are signed through amicable bilateral negotiations, 
we remain committed to receiving fair compensation 
for our innovation and, when necessary, protecting 
our shareholders’ interests through the use of cost-
effective litigation. Recently we have received positive 
decisions from courts in Germany, India and the UK, 
underlining our ability to leverage global enforcement 
of our IP rights as part of our efforts to receive fair 
compensation for our innovation.   

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We know that our continued success is dependent 
not only on our execution across the business, but 
also on our ability to attract top talent. In 2023 we 
hired Skip Maloney as our new Chief People Officer 
and, more recently, added Ken Kaskoun as our new 
Chief Growth Officer, underlining our firm conviction 
that we have become a recognized destination for 
senior-level talent across all parts of the business. 

We have also continued to expand overseas and 
opened a new Beijing office led by our China General 
Manager Jason Wu. Our presence in Beijing not only 
strengthens ties with customers in China but also 
helps to raise our profile as a foundational innovator 
with Chinese stakeholders. 

As we broaden our horizons, deepen our industry 
leadership, and build on our financial success, we 
believe we’re ideally placed to execute on our goals 
and deliver even greater shareholder value.  

S. Douglas Hutcheson 
Chairman of  
the Board

Liren Chen 
President and  
Chief Executive  
Officer

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FINANCIAL
HIGHLIGHTS

For fiscal year 2023

$425M

$458M

$550M

$319M

$359M

$550M

REVENUE 15% CAGR

2019

2020

2021

2022

2023

$9.23

$5.08

$3.73

$2.32

$2.27

$9.23

NON-GAAP DILUTED EPS*

2019

2020

2021

2022

2023

4X GROWTH

63%

$345M

56%

$255M

49%

$208M

41%

43%

$131M

$155M

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$345M

ADJUSTED EBIDTA*

>2.5X GROWTH

2019

2020

2021

2022

2023

Adjusted Ebitda Margin*

*Non-GAAP financial measure. For more information about these measures and a reconciliation to the closest GAAP financial measure, see 
the supplemental earnings materials filed with the SEC on February 15, 2024, also available on the Investor Relations section of our website.

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FORWARD-LOOKING 
STATEMENTS

Statements made in the letter to shareholders and 
the introduction to this annual report that relate 
to our future plans, innovations, financial results 
or performance, including without limitation, 
statements relating to our beliefs that we are well 
positioned to expand our licensing opportunities 
and derive value from cloud-based services, the 
expected monetization and market adaption of our 
research and development efforts, and our expected 
long-term strength and value of our portfolio and 
our innovations, are forward  looking statements as 
defined under Private Securities Litigation Reform 
Act of 1995.

These statements are based upon current goals, 
estimates, information, and expectations. Actual 
result might differ materially from those anticipated 
as a result of certain risks and uncertainties 
including delays, difficulties, changed strategies, or 
unanticipated factors affecting the implication of 
the company’s plans. You should carefully consider 
the risks and uncertainties outlined in greater detail 
in the accompanying Form 10-K, including “Item 
lA. Risk Factors,” before making any investment 
decisions with respect to our common stock. We 
undertake no obligation to revise or publicly update 
any forward-looking statement for any reason except 
as otherwise required by the law.

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K

Í

‘

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from

to

Commission file number 1-33579

INTERDIGITAL, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction
of incorporation or organization)

82-4936666
(IRS Employer
Identification No.)

200 Bellevue Parkway, Suite 300, Wilmington, DE 19809-3727
(Address of Principal Executive Offices and Zip Code)
Registrant’s telephone number, including area code (302) 281-3600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock (par value $0.01 per share)

Trading Symbol(s)
IDCC

Name of each exchange on which registered
Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act. Yes Í No ‘

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes ‘ No Í

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes Í No ‘

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit such files). Yes Í No ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated
filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Í

Smaller reporting company ‘
Emerging growth company ‘
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ‘

Non-accelerated filer ‘

Accelerated filer ‘

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. Í

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements

of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ‘

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of
incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period
pursuant to §240.10D-1(b). ‘

Indicate by check mark whether

Act). Yes ‘ No Í

the registrant

is a shell company (as defined in Rule 12b-2 of

the

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to
the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last
business day of the registrant’s most recently completed second fiscal quarter: $2,515,255,990 as of June 30, 2023.
The number of shares outstanding of the registrant’s common stock was 25,487,354 as of February 13, 2024.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement to be filed pursuant to Regulation 14A in connection with the
registrant’s 2024 annual meeting of shareholders are incorporated by reference into Items 10, 11, 12, 13 and 14 of Part III of
this Form 10-K.

TABLE OF CONTENTS

PART I
ITEM 1. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1A. RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1B. UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1C. CYBERSECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 2. PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 4. MINE SAFETY DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 6. RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . . . . . .
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

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AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 9A. CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 9B. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 9C. DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT

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INSPECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE . . . . . . . . . . . .
ITEM 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16. FORM 10-K SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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In this Form 10-K, the words “we,” “our,” “us,” “the Company” and “InterDigital” refer to InterDigital, Inc.
and/or its subsidiaries, individually and/or collectively, unless otherwise indicated or the context otherwise
requires. InterDigital® is a registered trademark of InterDigital, Inc. All other trademarks, service marks and/or
trade names appearing in this Form 10-K are the property of their respective holders.

2023 Annual Report

2

Item 1.

BUSINESS.

Overview

PART I

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, 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, with a
significant AI research effort that intersects with both wireless and video technologies.

InterDigital is one of the largest pure research and development and licensing companies in the world, with
one of the most significant patent portfolios of fundamental wireless and video technologies. As of December 31,
2023, InterDigital’s wholly owned subsidiaries held a portfolio of more than 30,000 patents and patent
applications related to wireless communications, video coding, display technology, and other areas relevant to
communications and entertainment products and services. Our portfolio includes numerous patents and patent
applications that we believe are or may be essential to existing standards, or may become essential to future
standards, established by many Standards Development Organizations (“SDOs”). We have contributed
technology to wireless standards including the 3G, 4G, and 5G cellular standards and the IEEE 802 suite of
standards. We have contributed technology to video standards including standards established by ISO/IEC
Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative
Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET), among others.

Our wireless portfolio has largely been built

through internal development, supplemented by joint
development projects with other companies, and select acquisitions of patents and companies. Our video
technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the
patent licensing business and research and innovation unit of visual technology industry leader Technicolor SA
and patents and applications created by internal development. Our patented inventions have been implemented in
a wide variety of products, including smartphones, other wireless communication devices and infrastructure
equipment, such as tablets, and base stations, consumer electronics and Internet of Things (“IoT”) products, such
as televisions,
laptops, gaming consoles, set-top boxes, streaming devices and connected automobiles. In
addition, our patented inventions have been implemented in a wide variety of services, such as video streaming
and other cloud-based services.

InterDigital derives revenues primarily from licensing our patented innovations. In 2023 and 2022, our total
revenues were $549.6 million and $457.8 million, respectively. Additional information about our revenues,
profits and assets, as well as additional financial data, is provided in the Consolidated Financial Statements and
accompanying Notes in Part II, Item 8, of this Form 10-K.

Our Strategy

Our strategy is to continue to be a leading innovator, designer and developer of fundamental, horizontal
technologies and to receive fair compensation from the companies that implement our patented innovations in
their products and services across licensing programs.

To execute our strategy, we intend to:

• Grow and enhance our patent portfolio through continued investment in advanced research and
development. We intend to grow and enhance our worldwide patent portfolio in advanced wireless

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2023 Annual Report

technology, video coding, AI, and other related technology areas by growing our investment in our
industry-leading research and development organization, actively participating in SDOs and other
industry consortia, and partnering with leading inventors and industry players to source and develop new
technologies. We intend to protect our investment in this innovation by seeking patent coverage in
countries around the world for the technologies we develop.

• Maintain a collaborative relationship with key industry players and worldwide standards bodies. We
intend to continue contributing to the ongoing process of defining wireless, video and other standards and
other industry-wide efforts and incorporating our inventions into those technology areas. Those efforts,
and the knowledge gained through them, provide direction for internal development efforts and help
guide technology and intellectual property sourcing through partners and other external sources.

• Grow our patent-based revenue. We intend to grow our licensing revenue base by adding licensees in
the existing product markets that we serve, and by expanding our licensing activities into video streaming
and other cloud-based services. These licensing efforts may be direct or executed in conjunction with
licensing partnerships and other efforts, and may require the enforcement and defense of our intellectual
property through litigation and other means.

• Pursue strategic research partnerships with other technology companies. We have in the past and we
expect to continue to pursue partnerships to jointly develop technology with other companies in our
industries. In addition, as part of our ongoing research and development efforts, InterDigital may develop
proprietary solutions that may be most valuable when incorporated into commercial products or services
offered by others. As an example, we believe that our advanced capabilities in visual technologies will
continue to result in developing solutions that can be implemented in adjacent industries, such as content
production, gaming, and other areas. We will seek to bring such technologies, as well as other
technologies we may develop or acquire, to market through various methods including technology
licensing, joint ventures and partnerships.

• Attract and retain top talent

in wireless, video and AI research, patent portfolio creation, and
licensing. Our business success is dependent on our ability to attract, grow, and retain top talent, such
as specialized engineering and other technical talent.

Technology Research and Development

InterDigital R&I

InterDigital operates a diversified research and development operation, InterDigital Research & Innovation

(“InterDigital R&I”).

As an early and ongoing participant in the digital wireless market, InterDigital has developed pioneering
solutions for the cellular and Wi-Fi technologies that enable wireless transmission of voice, data and multimedia
content in use today. That early involvement and our continued development of advanced digital wireless
technologies have enabled us to create our significant worldwide portfolio of patents. InterDigital is also a leader
in key video technologies, including emerging technologies such as immersive video and AI-based video coding.
Our current research efforts are focused on a variety of areas related to future technology and devices, including
cellular wireless technology, advanced video coding and transmission, and AI. The InterDigital R&I team’s
technical expertise is recognized by the worldwide wireless and video standards bodies where our delegates hold
key leadership positions.

Our capabilities in the development of advanced technologies are based on the efforts of a highly
specialized engineering team, leveraging leading-edge equipment and software platforms. In 2023, 2022, and
2021, our research and innovation costs were $78.3 million, $74.3 million, and $89.4 million, respectively, and
the largest portion of this expense has been personnel costs.

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4

Wireless Technology

We have a long history of developing cellular technologies, including those related to CDMA and TDMA
and OFDM/OFDMA and MIMO. Many of our inventions are being used in all 2G, 3G, 4G and 5G wireless
networks and mobile terminal devices. We continue to be engaged in development efforts to build and enhance
our 3GPP (as defined herein) technology portfolio in the current and future generations including 5G, 5G
Advanced and 6G. The horizontal technologies we develop are essential to support a variety of use cases across
several vertical market segments that use connected devices such as automobiles and autonomous vehicles,
wearables, smart factories and smart homes, robots, drones and many other connected consumer electronic
products including mobile phones and tablets. We are developing evolutionary and revolutionary solutions that
enable connectivity in both licensed and unlicensed spectrum, terrestrial and non-terrestrial networks to provide
ubiquitous coverage, across a large range of frequencies up to the terahertz (THz) wave bands.

Segments outside of 3GPP primarily fall within the scope of the IEEE 802 and IETF standards. We continue
to grow a portfolio of technology related to Wi-Fi, Internet Standards, and Edge Computing, that includes, for
example, improvements to the IEEE 802.11 PHY and MAC to increase peak data rates (802.11be—Extremely
High Throughput), cloud gaming, security, and terminal mobility for edge services.

Advanced Video Coding and Transmission Technology

An important and growing segment of wireless traffic is devoted to video streaming. We have a rich history
in developing advanced technologies that address the challenges of video as it relates to mobile. Specifically, in
the area of video research, we have a long history of research and innovation in technologies that provide the
basis for nearly all of the modern video codecs. We have been actively engaged in video standards development
work in the ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG),
the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET). Those
efforts have focused on H.265/High Efficiency Video Coding (“HEVC”) versions 1 to 4, as well as development
of the VCC/H.266 and the MPEG Immersive (MPEG-I) standards suite for the future. InterDigital R&I is now
conducting research in groundbreaking technologies preparing for the next generation of video codecs beyond
VVC, investigating new media coding such as point cloud compression, haptics or avatars using both traditional
and AI-based techniques. Even codecs, such as AV1/VP9, developed by non-standard groups use fundamental
techniques we have been instrumental in developing.

Artificial Intelligence/Machine Learning (AI/ML)

InterDigital is using AI to drive both wireless and video standards towards the future, leveraging AI as a
valuable tool to drive efficiency and new capabilities in wireless networks and in video compression and delivery
systems. We are researching a variety of aspects of AI that can be applied to complex problems in video and
wireless technologies. Those areas of research include: energy-efficient deep learning, aimed at reducing the
energy-intensive rollout of AI; deep video compression, seeking to design novel video codecs based on deep
learning techniques and optimized for different use cases (e.g., for machine consumption); and AI for dynamic
wireless environments, which could help enhance and optimize wireless systems, particularly when channel
characteristics are highly dynamic.

Patent Portfolio

As of December 31, 2023, our patent portfolio consisted of more than 30,000 patents and patent applications
worldwide. The patents and applications comprising our portfolio relate predominantly to cellular wireless
standards, including 3G, 4G and 5G technologies, other wireless standards, including 802.11 (Wi-Fi) technology,
and a variety of video technologies and standards, such as HEVC and VVC. Our issued patents expire at
differing times ranging from 2024 through 2043. We generally receive newly issued patents on a weekly basis,
which further extend the coverage of newly developed technologies and expiration dates of our patents.

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2023 Annual Report

Our Revenue Sources

Device-based Licensing Revenue

Companies making, importing, using or selling products compliant with the standards covered by our patent
portfolio, including all manufacturers of mobile handsets, tablets and other devices, and many consumer
electronics products, such as televisions, personal computers and other devices, require a license under our
license agreements with many of the leading mobile
patents. We have successfully entered into patent
Inc.
communications and consumer electronics companies globally,
(“Amazon”), Apple Inc.
(“Apple”), Lenovo Group Limited (“Lenovo”), Google LLC (“Google”), LG
Electronics, Inc. (“LG”), Samsung Electronics Co., Ltd. (“Samsung”), Sony Corporation of America (“Sony”),
and Xiaomi Corporation (“Xiaomi”), among others.

including Amazon Technologies,

Service-based Licensing Revenue Opportunities

We also believe that companies providing certain video streaming and other cloud services require a license

under our patents and we intend to seek license agreements with such companies.

Overview of Patent Licenses

The majority of our revenue is generated from fixed-fee patent license agreements, with a smaller portion
coming from variable royalty agreements. Upon entering into a new patent license agreement, consideration
should be paid for sales made prior to the period in which the agreement was executed, to the extent those past
sales were previously unlicensed (i.e., catch-up revenues), in addition to royalties or license fees on licensed
products sold during the term of the agreement. We expect that, for the most part, new license agreements will
follow this model. Almost all of our patent license agreements provide for the payment of royalties based on
sales of licensed products designed to operate in accordance with particular standards (convenience-based
licenses), as opposed to the payment of royalties if the manufacture, sale or use of the licensed product infringes
one of our patents (infringement-based licenses).

Our variable royalty license agreements typically contain provisions that give us the right to audit our
licensees’ books and records to ensure compliance with the licensees’ reporting and payment obligations under
those agreements. From time to time, these audits reveal underreporting or underpayments under the applicable
agreements. In such cases, we seek payment for the amount owed and enter into negotiations with the licensee to
resolve the discrepancy.

For a discussion of our revenue recognition policies with respect to patent license agreements, see “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Critical
Accounting Policies and Estimates—Revenue Recognition—Patent License Agreements.”

Licensing Through Platforms

As part of the Technicolor Patent Acquisition, we assumed Technicolor’s rights and obligations under a
joint licensing program with Sony relating to digital televisions (“DTVs”) and standalone computer display
monitors (“CDMs”) (such program, the “Madison Arrangement”), including Technicolor’s role as exclusive
licensing agent. Under the Madison Arrangement, Technicolor and Sony combined portions of their respective
DTV and CDM patent portfolios and created a combined licensing opportunity for DTV and CDM
manufacturers. As licensing agent for the Madison Arrangement, we are responsible for making decisions
regarding the prosecution and maintenance of the combined patent portfolio and the licensing and enforcement of
the combined patent portfolio in the field of use of DTVs and CDMs. Refer to Note 10, “Obligations,” within the
Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further
information about the Madison Arrangement.

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6

In 2016, InterDigital joined Avanci, the industry’s first marketplace for the licensing of cellular standards-
essential
technology for the IoT. The licensing platform brings together many of InterDigital’s peers in
standards-essential technology leadership, and makes 2G, 3G, 4G, and 5G standards-essential patents available to
IoT players in specific product segments with one flat-rate license. The Avanci licensing programs in specific
product segments for the IoT industry will provide access to the entire applicable standards-essential wireless
patent portfolios held by all of the platform participants, as well as any additions to their portfolios during the
term of the license. Since December 2017, Avanci has primarily focused on the automotive market, and has
signed patent license agreements with BMW Group, Audi, Porsche, Volkswagen, and Volvo Cars, among others,
collectively representing over 80% of annual connected car shipments.

Overview of Smartphone, Consumer Electronics, IoT, and Video Services Industries

The primary markets for our wireless and video technologies are the smartphone, consumer electronics, IoT/
Automotive, and Video Services markets. The smartphone market, with an estimated 1.2 billion units shipped
worldwide in 2023, is driven by several large, global brands. The market was relatively flat in 2023 due to a
broad economic slowdown in China and economic challenges globally, but smartphone sales began to recover in
the fourth calendar quarter. The market is expected to maintain this momentum in 2024 due to the continued
global uptake of 5G smartphones as well as the migration from feature phones to smartphones in emerging
regions.

In addition to smartphones there is a large universe of other consumer electronic devices and ecosystems,
with a mix of mature and emerging, as well as consolidated and fragmented, device segments. After
smartphones, televisions represent one of the largest markets with more than 200 million units shipped globally.
Other key consumer electronics device categories include tablets and personal computers, set-top-boxes and
streaming media players, gaming consoles, wearables and smart home products.

IoT/Automotive is an important and relatively new market that is expected to result in a significant increase
in the number of connected devices worldwide and unlock new business capabilities. Total global cellular IoT
device shipments are expected to grow from approximately 400 million in 2023 to approximately 700 million by
2027. Automobiles represent a significant opportunity within the IoT market, with approximately 50 million
connected vehicles shipped in 2023, which is expected to grow significantly in the future.

Video Services, a rapidly growing market, encompass a wide range of consumer video entertainment
platforms, including Subscription Video on Demand (SVOD), Advertising-Based Video on Demand (AVOD),
Virtual Multichannel Video Programming Distributor (vMVPD), Free Ad-Supported Streaming TV (FAST), and
social media platforms. Collectively, the Video Services market is expected to grow from $350 billion of annual
revenue in 2023 to $480 billion of annual revenue by 2027.

Overview of Standardization

To achieve economies of scale and support interoperability among different participants, many wireless and
consumer electronics products have been designed to operate in accordance with certain industry standards.
Wireless industry standards are formal requirements and guidelines for engineers, designers, manufacturers and
service providers that regulate and define the use of the radio frequency spectrum in conjunction with providing
detailed specifications for wireless communications products. New wireless standards are typically adopted with
each new generation of products, are often compatible with previous generations and are defined to ensure
equipment interoperability and regulatory compliance. The consumer electronics industry also implements many
of the same standards, including standards related to Wi-Fi and increasingly, cellular technologies, as well as a
broad range of video coding standards that enable the efficient transmission and rendering of video content.

SDOs, which facilitate and govern the development of standards, typically ask participating companies to
declare formally whether they believe they hold patents or patent applications essential or potentially essential to

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a particular standard and whether they are willing to license those patents on either a royalty-bearing basis on
fair, reasonable and nondiscriminatory terms or on a royalty-free basis. To manufacture, have made, sell, offer to
sell or use such products on a non-infringing basis, a manufacturer or other entity doing so needs to obtain a
license from the holder of essential patent rights. The SDOs neither have enforcement authority against entities
that fail to obtain required licenses, nor do they have the ability to protect the intellectual property rights of
holders of essential patents.

InterDigital often publicly characterizes aspects of

including license agreements and
development projects, as pertaining to industry standardized technologies such as, for example, 3G, 4G, 5G, Wi-
Fi, HEVC, and VVC. In doing this, we generally rely on the positions of the applicable SDOs in defining the
relevant standards. However,
including after we have
characterized certain transactions.

the definitions may evolve or change over time,

its business,

Business Activities

2023 Patent Licensing Activity

During 2023, we entered into eight patent license agreements as discussed below.

Direct Licenses

In 2023, we signed a multi-year, worldwide, non-exclusive, royalty bearing license with Lenovo, covering
InterDigital’s HEVC patents (the “Lenovo HEVC PLA”). The new license resolved all related HEVC litigation at
the time. We also entered into a multi-year, worldwide, non-exclusive, royalty bearing license with TCL
Communication Technology Holdings, Ltd. covering InterDigital’s portfolio of 3G and 4G patents.

In 2023, we also entered into five other licenses covering digital televisions, set-top boxes, and/or video
including licenses with Humax Co., Ltd., Alps Alpine Co., Ltd., Panasonic Entertainment &

patents,
Communication Co., LTD., and Funai Electronic Co., LTD.

Other Licensing Activities

On March 16, 2023, the UK’s High Court handed down its judgment in the Company’s licensing dispute
with Lenovo. The Court ruled that Lenovo should pay a total of $138.7 million for a license to InterDigital’s
portfolio of 3G, 4G and 5G patents, including past sales. On June 27, 2023, we were awarded an additional $46.2
million, increasing the total Lenovo must pay for a cellular patent license through 2023 to $184.9 million. During
2023, we recognized a total of $150.1 million of revenue from Lenovo, including amounts received under the
Lenovo HEVC PLA. The Company will defer recognizing any additional revenue related to the UK proceedings
until the appeal process progresses.

Customers Generating Revenues Exceeding 10% of Total 2023 Revenues

A small number of customers historically have accounted for a significant portion of our consolidated
revenues. In fiscal 2023, revenues (in descending order) from Lenovo, Apple, Samsung, and Xiaomi each
comprised 10% or more of our consolidated revenues. Additional information regarding revenue concentrations
is provided in this Annual Report in Note 4, “Geographic/Customer Concentration” in the Notes to Consolidated
Financial Statements included in Part II, Item 8, of this Form 10-K.

As discussed above in 2023 Patent Licensing Activity, we recognized a total of $150.1 million of revenue
from Lenovo, including amounts received under the Lenovo HEVC PLA and our UK proceedings. The Company
will defer recognizing any additional revenue related to the UK proceedings until the appeal process progresses.

In 2022, we renewed a multi-year, royalty-bearing, worldwide and non-exclusive patent license agreement
with Apple (the “Apple PLA”). The agreement sets forth terms covering the sale by Apple of its products and

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8

services, including, but not limited to, its 3G, 4G, and 5G cellular and wireless-enabled products. The term of the
Apple PLA extends through September 30, 2029.

In 2022, we agreed to renew our patent license agreement with Samsung and enter into binding arbitration
to determine the final terms of the license, including the amount payable by Samsung under the new agreement.
In 2023, we began recognizing revenue for Samsung at a conservative level consistent with the revenue we
recognized from our patent license agreement that expired on December 31, 2022. We believe that it is likely the
arbitration award will exceed the conservative estimate and require a true-up at that time. We expect resolution in
late 2024.

In 2021, we entered into a multi-year, worldwide, non-exclusive, royalty bearing license with Xiaomi. The
license covers Xiaomi’s cellular-enabled mobile devices under our standard essential patents related to 3G, 4G,
5G, WiFi and HEVC and extends through December 31, 2025.

Patent Infringement and Declaratory Judgment Proceedings

From time to time, if we believe a party is required to license our patents in order to manufacture, use and/or
sell certain products and such party refuses to do so, we may agree with such party to have royalty rates, or other
terms, set by third party adjudicators (such as arbitrators) or, in certain circumstances, we may institute legal
action against them. Enforcing our intellectual property through legal action is an important alternative to
bilateral negotiations with respect to licensees who engage in the pernicious practice of “holdout”. In recent
years, courts in various jurisdictions have addressed “holdout” behavior, recognizing that fair, reasonable and
non-discriminatory (“FRAND”) obligations are bilateral and failure of implementers to act in a FRAND manner
can result in certain penalties. We welcome this development as it incentivizes potential licensees to negotiate in
a timely and reasonable fashion as well as providing a necessary balance to FRAND negotiations.

Enforcement of our patent portfolio has typically taken the form of a patent infringement lawsuit or an
administrative proceeding, such as a Section 337 proceeding before the U.S. International Trade Commission
(“USITC” or the “Commission”). In a patent infringement lawsuit, we would typically seek damages for past
infringement, an injunction against future infringement, declaratory judgment and/or other relief. In a USITC
proceeding, we would seek an exclusion order to bar infringing goods from entry into the United States, as well
as a cease and desist order to bar further sales of infringing goods that have already been imported into the
United States. Parties may bring administrative and/or judicial challenges to the validity, enforceability,
essentiality and/or applicability of our patents to their products or seek to petition a court to establish a rate and/
or terms for a license to our patents. Parties may also allege that our efforts to enter into a license with that party
do not comply with any obligations we may have in connection with our participation in standards-setting
organizations, and therefore that we are not entitled to the relief that we seek. For example, a party may allege
that we have not complied with an obligation to offer (or be prepared to offer) a license to that party for patents
that are or may become standards-essential patents (“SEPs”) on FRAND terms and conditions, and may also file
antitrust claims or regulatory complaints on that or other bases, and may seek damages or other relief based on
such claims. In addition, a party might file a declaratory judgment action to seek a court’s declaration that our
patents are invalid, unenforceable, not infringed by the other party’s products or are not SEPs. Our response to
such a declaratory judgment action may include claims of infringement. When we include claims of infringement
in a patent infringement lawsuit, a favorable ruling for the Company can result in the payment of monetary
damages for past manufacture, use and/or sale of the patented invention, the setting of terms and conditions for a
license, issuance by the court of an injunction enjoining the infringer from manufacturing, using and/or selling
infringing products and/or a declaration of FRAND compliance.

Contractual Arbitration Proceedings

We and our licensees, in the normal course of business, may have disagreements as to the rights and
obligations of the parties under applicable agreements. For example, we could have a disagreement with a

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2023 Annual Report

licensee as to the amount of reported sales and royalties. Our patent license agreements typically provide for
private confidential arbitration as the mechanism for resolving disputes with our licensees. In arbitration,
licensees may seek to assert various claims, defenses, or counterclaims, such as claims based on waiver,
promissory estoppel, breach of contract, fraudulent inducement to contract, antitrust, and unfair competition.
Arbitration proceedings can be resolved through an award rendered by the arbitrators or by settlement between
the parties. Parties to arbitration might have the right to have the award reviewed in a court of competent
jurisdiction; however, based on public policy favoring the use of arbitration, it is generally difficult to have
arbitration awards vacated or modified. The party securing an arbitration award may seek to have that award
confirmed as a judgment through an enforcement proceeding. The purpose of such a proceeding is to secure a
judgment that can be used for, if need be, seizing assets of the other party.

In addition, arbitration may be a particularly effective means for resolving disputes with prospective
licensees concerning the appropriate FRAND terms and conditions for license agreements that include SEPs,
particularly where negotiations have otherwise reached an impasse. Binding arbitration to resolve the terms and
conditions of a worldwide FRAND license to our relevant portfolio of SEPs is an efficient and cost-effective
mechanism, as it allows the parties to avoid piecemeal litigation in multiple jurisdictions and ensures that an
enforceable patent license agreement that is consistent with FRAND commitments will be in place at the end of
the arbitration process.

Competition

With respect to our technology development activities and resulting commercialization efforts, we face
competition from companies, including in-house development teams at other wireless and video technology
companies, consumer electronics device companies, semiconductor companies, wireless operators, video
streaming and cloud service companies, and other technology providers, developing other and similar
technologies that are competitive with our technologies that we may market or set forth into the standards-setting
arena.

Due to the exclusionary nature of patent rights, we do not compete, in a traditional sense, with other patent
holders for patent licensing relationships or sale transactions. Other patent holders do not have the same rights to
the inventions and technologies encompassed by our patent portfolio. In any device, piece of equipment, or
service that contains intellectual property, the manufacturer or implementer may need to obtain licenses from
multiple holders of intellectual property. In licensing our patent portfolio, we compete with other patent holders
for a share of the royalties that certain licensees may argue to be the total royalty that is supported by certain
products or services, which they may argue face practical limitations. We believe that licenses under a number of
our patents are required to manufacture and sell 3G, 4G, 5G and other wireless products, as well as other
consumer electronics devices, and to implement certain technology services. However, numerous companies also
claim that they hold patents that are or may be essential or may become essential to standards-based technology
deployed on wireless products, other consumer electronics devices or services. To the extent that multiple parties
all seek royalties on the same product or service, the manufacturers could claim to have difficulty in meeting the
financial requirements of each patent holder. In the past, certain manufacturers have sought antitrust exemptions
to act collectively on a voluntary basis. In addition, certain manufacturers have sought to limit aggregate
licensing fees or rates for SEPs.

Environmental, Social and Governance (“ESG”)

We believe our innovation provides the framework for a future increasingly shaped by the profound
convergence of wireless, video, and AI technologies. As these technologies become more ubiquitous and deliver
immense benefits across the global ecosystem, we believe it is important that the future we are enabling
continues to be anchored by a core set of values, ethics, and principles. Our heritage of innovation has produced
technologies that fundamentally improve efficiency and power consumption across billions of devices, network
infrastructure, and delivered services. Our ESG principles continue this legacy and shape our pursuit of a more
sustainable, representative, diverse, and equitable world.

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10

Our Board of Directors has oversight over environmental, social and other sustainability matters, including
diversity initiatives, in conjunction with the committees of the Board. In addition, our Chief Financial Officer
oversees a committee of senior executives that steers the process of setting purpose, strategies, policies and goals
related to economic, environmental and social topics. We are committed to sustainable business principles, to
thinking long-term, and to making strategic decisions that adhere to our mission and values. Among other things,
this means supporting the United Nations Global Compact and its underlying principles around the environment,
the workforce, anti-corruption, and human rights.

We are committed to driving positive progress towards reducing the environmental footprint that the
deployment of 5G, wireless networks, and other video technologies will bring. While our business activities do
not entail the same concerns related to manufacturing or raw materials sourcing and disposal, our corporate
sustainability strategy addresses the following:

• investing in best practices to track and reduce our carbon footprint,

including environmental

considerations, tracking, and reporting related to data center needs;

• implemented a hybrid work program, allowing employees to work from for home part of the week;

• investigating and reducing unnecessary energy consumption; and

• selected a location for our new Rennes office that

is certified by BREEM (Building Research

Establishment Environmental Assessment Method), a sustainability assessment method.

InterDigital ranks among the industry leaders for ETSI-disclosed patents and applications as potentially
essential to 5G standards. 5G technology is designed to efficiently use energy throughout its ecosystem and will
play a significant role in promoting and attaining sustainability goals. We have published white papers exploring
how 5G and the emerging IoT ecosystem might shape sustainability efforts for the ICT industry. While the
proliferation of connected devices can drive increases in energy consumption, innovative solutions can mitigate
these outcomes to help lower our carbon footprint and engage more sustainably. In fact, one of our reports found
that by 2030, IoT deployment and its subsequent disruption of various industries is projected to save more than
eight times the energy it consumes – which could help to save up to 230 billion cubic meters of water and
eliminate up to one gigaton of CO2 emissions. Additionally, 5G technology has significant potential societal
benefits, including promoting productivity-led economic growth, increasing medical diagnostic capabilities,
creating more sustainable cities and communities, improving remote education, and reducing inequalities in
education and income. We believe that the benefits to be derived from 5G are substantial and will be felt
throughout society.

The foregoing discussion includes information regarding ESG matters that we believe may be of interest to
our shareholders generally. We recognize that certain other stakeholders (such as customers, employees and non-
governmental organizations), as well as certain of our shareholders, may be interested in more detailed
information on these topics. We encourage you to review our most recent Corporate Sustainability Report
(located on our website) for more detailed information regarding our Corporate Sustainability and ESG
governance, goals, priorities, accomplishments and initiatives, as well as the Corporate Governance section of
our most recent Proxy Statement, and our Corporate Governance Principles and Practices (located on our
website), for additional information regarding governance matters, including Board and Committee leadership,
oversight, roles and responsibilities, and Director independence, tenure, refreshment and diversity. Nothing on
our website,
including the aforementioned reports and documents, or sections thereof, shall be deemed
incorporated by reference into this Annual Report.

Human Capital

Overview

We strive to make InterDigital an exceptional place to work for all employees. We are committed to
creating a workplace where employees feel valued, respected, included, and challenged, while fostering an

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2023 Annual Report

environment that attracts and engages a talented workforce who contribute to the company’s growth and
sustained success. Our Human Capital Committee (formerly known as the Compensation Committee) is
responsible for overseeing our policies and strategies related to our culture and human capital, including
diversity, equity and inclusion.

As of December 31, 2023, we had approximately 450 employees worldwide, of whom approximately 230
were based outside of the U.S, and nearly all of whom were full-time. Our employees based in France are
represented by works councils and subject to collective bargaining agreements. None of our employees based in
the United States or Canada are unionized or subject to collective bargaining agreements. Management believes
that its relations with our employees and works councils are strong and healthy.

Health, Safety & Well-Being

As the way we live and work has evolved with the pandemic, we have been focused on creating a new work
model that supports our employees. We have been on the forefront of providing employees with the flexibility to
work full time in the office, fully virtually, or a hybrid of both. We provide holistic benefits and maintain
company policies that promote a culture of wellness. We recently increased our paid parental leave from eight to
twelve weeks and have kept employees connected to volunteer opportunities that benefited both their mental
health and communities through our ‘Charity Day’ paid time off program.

Compensation & Benefits

Our compensation program is rooted in market competitive base salaries and incentives that reward
contributions that advance the Company’s strategy and mission. We provide a total compensation package that is
targeted to be competitive with the markets in which we compete for talent, while allowing individual pay to
vary equitably based on performance, skills and experience. Our total rewards plans include base salary, short-
and long-term incentives, healthcare benefits, retirement savings plans, physical and mental well-being programs,
hybrid-work schedules, monetary and social recognition in each of our locations around the globe. In addition to
comprehensive health benefits, depending on location, employees may also enjoy subsidized fitness programs,
commuter benefits, wellness incentives, tuition reimbursement opportunities and professional development
opportunities among other benefits. We routinely review our total rewards programs to ensure they are
competitive, allowing us to recruit and retain the diverse talent we need to be successful.

Talent and Culture

Research, learning and growth are fundamental to executing our promise to the world to invent the
technologies that make life boundless. In addition, consistently evaluating our talent promotes opportunities to
provide actionable learning experiences for our employees to further their career development. Our Talent
Acquisition philosophy is based on InterDigital’s cultural attributes and business goals. Our talent programs are
instrumental in our ability to attract the right talent to the organization by offering learning opportunities and
career advancement.

Our Leadership Essentials competency development model is available to all employees and provides a
comprehensive suite of tools and resources for growth across four key areas; thought leadership, results
leadership, people leadership and self-leadership. This model has been seamlessly integrated into our
organizational culture initiatives, forming an integral part of our Performance Management philosophy.
incorporating these
Moreover, we’ve integrated the Leadership Essentials into our recruitment strategies,
competencies into our interview guides to align with our competency model.

By encouraging an ongoing dialogue between leaders and employees, we promote proactive planning for
is to empower individuals to leverage the resources available to create
personal development. Our goal
meaningful and actionable development plans that not only drive personal growth but also contribute to the
Company’s overall advancement.

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12

All employees are encouraged to actively explore and participate in external development opportunities.
These experiences enhance their knowledge and skills while also bringing valuable perspectives to our Company.

The development of leadership skills is pivotal in fostering our culture of innovation, inclusivity, and
collaboration. To support this, our leaders have access to a range of structured development and learning
experiences. These include our performance management training, which guides employees and managers on
integrating Leadership Essential competencies into our performance model. Additionally, our global coaching
program provides one-on-one coaching focused on career goals, leadership and performance enhancement.
Emphasis is also placed on the importance of feedback in performance, educating individuals on both requesting
and delivering constructive feedback.

We continue to invest in processes to help the organization assess and develop talent, including a formalized
annual performance evaluation program, an annual critical skills and potential analysis, and succession planning
for the organization’s most critical and senior roles. All employees receive an annual performance review. We
conducted an engagement survey in 2023 that provided direct insight and guidance from our employees on what
our strengths in building an innovative and inclusive culture are, and how we can continue to be a winning team.

We believe that our workplace culture, values, and competitive employee compensation are critical to
thereby enabling us to attract and retain talent. For the year ended

maintaining low levels of attrition,
December 31, 2023, our voluntary attrition percentage was less than 3%.

Diversity, Equity and Inclusion (“DE&I”)

We participate in the highly competitive process to evolve and revolutionize communication, video, and AI
technologies through our participation in worldwide SDOs. We require a highly educated and specialized
workforce and maintaining a diverse, equitable and inclusive workforce is critical to our ability to succeed in the
global marketplace. Since its launch in 2022, our employee-led DE&I Taskforce has focused on supporting the
execution of InterDigital’s DE&I strategy.

In 2023, we designed and launched our DE&I mission under the four pillars of TEAM—Talent,
Empowerment, Amplify, Membership. Within our pillar of Talent, our talent acquisition and talent development
teams evaluated and evolved their processes to optimize results for diversity and inclusion with our hiring,
onboarding, and employee development. This resulted in participation in diversity and outreach events,
supporting production of internal company media with inclusive material, and the development of a plan to
launch our DE&I LinkedIn Life page, which is intended to create visibility and connection to our DE&I journey
for external constituents. We empowered our workforce through education and launched a mandatory company-
wide training on DE&I to create understanding of this initiative, the benefits, and the tools to create inclusive and
equitable environments. Work under the Amplify pillar focused on socializing and creating awareness of our
purpose with the execution of our company DE&I branding and a company-wide townhall dedicated to providing
an understanding of the taskforce’s work, and insight into future actions. As part of the Membership pillar, we
established our first model for Employee Resource Groups (ERG) at InterDigital to promote employee-led
groups to encourage inclusion, belonging, and camaraderie for shared interests, characteristics, experiences, or
causes. Through this Membership strategy, InterDigital committed to the creation of a global Women’s Network
ERG, which we plan to launch in 2024 and which is designed to offer women and their allies career development
opportunities within InterDigital free from obstacles.

All of our targeted 2023 achievements occurred in addition to our foundational efforts to provide
opportunity to employees from historically underrepresented groups and maintain policies that support a strong
DE&I environment. We have continually provided leaders from historically underrepresented groups the
opportunity to attend targeted world-class external development programs that speak to the unique experiences
these employees can face in the workplace while investing in their continued growth both personally and
professionally. We have also continued to maintain the core principles of our culture of inclusion are reflected in

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the mandatory all-employee training programs we offer on our policies against harassment and discrimination of
any kind.

The diversity in our workforce is clear given that our approximately 450 person workforce originates from
over sixty countries. Still, with approximately 72% male employees and 28% female employees, we recognize
that there is more to be done. Our 2024 efforts will take the next step to enhance the community experience for
our diverse workforce and to create better opportunities to attract a diverse workforce in the long-term with the
aim to provide an inclusive environment where employees are encouraged to utilize their unique experiences and
backgrounds when collaborating to develop new technologies. We will continue our journey this year with the
formal launch of our Women’s Network ERG, the growth of that global community, and the actions we take for
all employees to support an environment that enables women, alongside their allies, to do their greatest work and
be the greatest version of themselves. Our DE&I Taskforce will continue to expand our actions within the TEAM
pillars and support this journey. We believe this investment will continue to better our workplace inclusion and
will eventually contribute to the scientific community.

We publish our most recent Consolidated EEO-1 reports on our website to provide additional transparency
into our workforce. The foregoing discussion includes information regarding Human Capital matters that we
believe may be of interest to shareholders generally. We recognize that certain other stakeholders (such as
customers, employees and non-governmental organizations), as well as certain of our shareholders, may be
interested in more detailed information on these topics. We encourage you to review the “Workforce” section of
our most recent Corporate Sustainability Report (located on our website) for more detailed information regarding
our Human Capital programs and initiatives. Nothing on our website, including our Consolidated EEO-1 reports
and our Corporate Sustainability Report or sections thereof, shall be deemed incorporated by reference into this
Annual Report.

Geographic Concentrations

See Note 4, “Geographic/Customer Concentration,” in the Notes to Consolidated Financial Statements
included in Part II, Item 8, of this Form 10-K for financial information about geographic areas for the last three
years.

Corporate Information

The ultimate predecessor company of InterDigital, Inc. was incorporated in 1972 under the laws of the
Commonwealth of Pennsylvania and conducted its initial public offering in November 1981. Our headquarters
are located in Wilmington, Delaware, USA. Our research and development activities are conducted primarily in
facilities located in Conshohocken, Pennsylvania, USA; London, United Kingdom; Montreal, Canada; New
York, New York, USA; Los Altos, California, USA; and Rennes, France. We are also a party to leases for several
smaller research and/or office spaces, including in Brussels, Belgium; Espoo, Finland; Indianapolis, Indiana,
USA; Melville, New York, USA; Paris, France, and Beijing, China. In addition, we own an administrative office
space in Washington, District of Columbia, USA.

Our Internet address is www.interdigital.com, where, in the “Investors” section, we make available, free of
charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
certain other reports and filings required to be filed under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and all amendments to those reports or filings as soon as reasonably practicable after such
material is electronically filed with or furnished to the United States Securities and Exchange Commission at
www.sec.gov. The information contained on or connected to our website or any other website referenced herein
is not incorporated by reference into this Form 10-K.

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Item 1A. RISK FACTORS.

We face a variety of risks that may affect our business, financial condition, operating results, the trading
price of our common stock, or any combination thereof. You should carefully consider the following information
and the other information in this Form 10-K in evaluating our business and prospects and before making an
investment decision with respect to our common stock. If any of these risks were to occur, our business, financial
condition, results of operations or prospects could be materially and adversely affected. In such an event, the
market price of our common stock could decline and you could lose all or part of your investment. The risks and
uncertainties we describe below are not the only ones facing us. Additional risks not presently known to us or
that we currently deem immaterial may also affect our business.

Risks Related to Our Business

Challenges relating to our ability to enter into new license agreements and renew existing license agreements
could cause our revenue and cash flow to decline.

We face challenges in entering into new patent license agreements. Most implementers of our technology do
not voluntarily seek to enter into license agreements with us before they commence manufacturing and/or selling
devices that use our patented inventions. The process of identifying users of our inventions and negotiating
license agreements with reluctant prospective licensees requires significant time, effort and expense. Some
infringers may act
in bad faith, by attempting to hold out on taking a license altogether or behaving
opportunistically in license negotiations. Even good faith negotiations are often very long and complex,
involving significant company time and resources. Given these challenges, we cannot ensure that we will be able
to enter into patent license agreements either at all or on terms acceptable to us. Additionally, given the large
number of implementers using our patented inventions, we may not be able to identify all potential licensees.
Once identified, it is not feasible for us to seek licenses from all users of our patented technologies, so we may
have to make strategic decisions with respect to which companies we should approach for license negotiations.
Uncertainty related to entry into new license agreements could impact our forecasts and ultimately, revenue, cash
flow and business.

We also face challenges in renewing our existing license agreements. Although we endeavor to renew
license agreements prior to their expiration, due to various factors, including the technology and business needs
and competitive positions of our licensees and, at times, reluctance on the part of our licensees to participate in
renewal discussions, we may not be able to renegotiate the license agreements on acceptable terms before the
expiration of the license agreement, or at all. If there is a delay in renegotiating and renewing a license agreement
prior to its expiration, there could be a gap in time during which we may be unable to recognize revenue from
that licensee or we may be forced to renegotiate and renew the license agreement on terms that are more
favorable to such licensee. If we fail to renegotiate and renew our license agreements prior to their expiration, at
all or on terms that are favorable to us, our forecasts, revenue and cash flow could be materially adversely
affected.

Royalty rates, or other terms, under our patent license agreements could be subject to determination through
arbitration or other third-party adjudications or regulatory or court proceedings, and arbitrators, judges or
other third-party adjudicators or regulators could make unfavorable determinations.

Historically, we strive for the terms of our patent license agreements, including our royalty rates, to be
reached through arms-length bilateral negotiations with our licensees. We could agree, as we did with Samsung
pursuant to a binding arbitration agreement, to have royalty rates, and any other disputed terms, set by third party
adjudicators (such as arbitrators). We have no guarantee that the royalty rates or other terms set by arbitrators,
courts or other third parties will be favorable to us. It is possible that courts or regulators could decide to set or
otherwise determine the FRAND consistency of such terms or the manner in which such terms are determined,
including by determining a worldwide royalty rate for our SEPs. Changes to or clarifications of our obligations to
be prepared to offer licenses to SEPs on FRAND terms and conditions could require such terms, including our

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royalty rates, to be determined through third party adjudications. Finally, we and certain of our current and
prospective licensees have initiated, and we and others could in the future initiate, legal proceedings or regulatory
proceedings requesting third party adjudicators or regulators to set FRAND terms and conditions for a worldwide
license to our SEPs, or to determine the FRAND-consistency of current terms and conditions in our patent
license agreements. In particular, in 2021, the IP Tribunal of the Supreme People’s Court of the People’s
Republic of China (SPC) affirmed its position that in certain SEP licensing disputes, Chinese courts can set
worldwide royalty rates, and in December 2023, the Chongqing First Intermediate People’s Court issued such a
decision setting a worldwide rate for Nokia’s cellular patents in response to a complaint filed by Oppo. We
currently face similar proceedings that Oppo initiated before the Guangzhou Intellectual Property Court to
determine a worldwide rate for our 3G, 4G, 5G, 802.11 and HEVC SEPs. If the court in our case applied the
same framework as the court did in the Nokia decision, our standard essential patent portfolio would be
significantly devalued as it relates to the FRAND royalty Oppo should pay. Also in 2023, Tesla and certain of its
subsidiaries filed a claim in the UK High Court against InterDigital and Avanci seeking a determination of what
the FRAND terms would be for a worldwide license between Tesla and Avanci covering Avanci’s 5G Connected
Vehicle platform.

To the extent that our patent royalty rates for our patent license agreements are determined through
arbitration or other third party adjudications or regulatory or court proceedings rather than through bilateral
negotiations, because such proceedings are inherently unpredictable and uncertain and there are currently few
precedents for such determinations, it is possible that royalty rates may be lower than our comparable rates. This
could also have a negative impact on royalties we are able to obtain from future licensees, which may have an
adverse effect on our revenue and cash flow. Prospective customers may delay, and in some cases have delayed,
negotiations on the basis of an adverse decision. In addition, to the extent that other terms and conditions for our
patent license agreements are determined through such means, such terms and conditions could be less favorable
than our historical terms and conditions, which may have an adverse effect on our licensing business.

We could continue to be involved in a number of costly litigation, arbitration and administrative proceedings
to enforce or defend our intellectual property rights and to defend our licensing practices.

While some companies seek licenses before they commence manufacturing and/or selling devices or
services that use our patented inventions, most do not. Consequently, we approach companies and seek to
establish license agreements for using our inventions. We expend significant time and effort identifying users and
potential users of our inventions and negotiating license agreements with companies that may be reluctant to take
licenses. However, if a third party implementer is unwilling to take a license on reasonable terms or in a
reasonable time frame, or at all, we have in the past commenced, and may in the future commence, legal or
administrative actions against such third parties to enforce our intellectual property rights. In turn, we have faced,
and expect to continue to face, counterclaims and other legal proceedings that challenge the essential nature of
our patents, or that claim that our patents are invalid, unenforceable or not infringed. Litigation adversaries have
and may continue to allege that we have not complied with certain commitments to standards-setting
organizations and therefore that we are not entitled to the relief that we seek. For example, Lenovo and other
parties have alleged that we have not complied with an obligation to offer a license to a party on FRAND terms
and conditions. Parties have also filed, and may in the future file, antitrust claims, unfair competition claims or
regulatory complaints on that or other bases, and may seek damages and other relief based on such claims.
Litigation adversaries have also filed against us, and other third parties may in the future file, validity challenges
such as inter partes proceedings in the USPTO or the China National Intellectual Property Administration, which
can lead to delays of our patent infringement actions as well as potential findings of invalidity. Such parties may
also seek to obtain a determination that our patents are not infringed, are not essential or are unenforceable.

Litigation may be also required to protect our trade secrets, enforce patent license and confidentiality
agreements or determine the validity, enforceability and scope of proprietary rights of others. The cost of
enforcing and defending our intellectual property and of defending our licensing practices has been and may
continue to be significant, in particular with rising fees from outside counsel. As a result, we could be subject to

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significant legal fees and costs, including in certain jurisdictions the costs and fees of opposing counsel if we are
unsuccessful. In addition, litigation, arbitration and administrative proceedings require significant key employee
involvement for significant periods of time, which could divert these employees from other business activities.

Potential patent and litigation reform legislation, potential USPTO and international patent rule changes,
potential legislation affecting mechanisms for patent enforcement and available remedies, and potential
changes to the intellectual property rights (“IPR”) policies of worldwide standards bodies, as well as rulings in
legal proceedings, may affect our investments in research and development and our strategies for patent
prosecution, licensing and enforcement and could have a material adverse effect on our licensing business as
well as our business as a whole.

Potential changes to certain U.S. and international patent laws, rules and regulations may occur in the future,
some or all of which may affect our research and development investments, patent prosecution costs, the scope of
future patent coverage we secure, the number of forums in which we can seek to enforce our patents, the
remedies that we may be entitled to in patent litigation, and attorneys’ fees or other remedies that could be sought
against us, and may require us to reevaluate and modify our research and development activities and patent
prosecution, licensing and enforcement strategies. For example, the State Administration for Market Regulation
in China regularly reviews its policies related to intellectual property and antitrust laws, and any such review
could result in ambiguous standards and/or create a worse position for patent holders like us. Additionally, the
European Commission (“EC”) has initiated a review of the EU’s IP policies as they relate to SEPs and FRAND.
This review is currently being discussed and debated inside the European Parliament and the European Council
and any change to the legal or regulatory landscape as a result of this review could impact our ability to negotiate
license agreements on favorable terms or at all, while also limiting our potential legal remedies and materially
impacting our business. Further, legislation designed to reduce the value of SEPs and alter the U.S. patent
system, including legislation designed to reduce the jurisdiction and remedial authority of the USITC, has
periodically been introduced in Congress.

Any potential changes in the law, the IPR policies of standards bodies or other developments that reduce the
available forums or the types of relief available in such forums (such as injunctive relief), restrict permissible
licensing practices (such as our ability to license on a worldwide portfolio basis) or that otherwise cause us to
seek alternative forums (such as arbitration or state court), would make it more difficult for us to enforce our
patents, whether in adversarial proceedings or in negotiations. Because we have historically depended on the
availability of certain forms of legal process to enforce our patents and obtain fair and adequate compensation for
our investments in research and development and the unauthorized use of our intellectual property, developments
that undermine our ability to do so could have a negative impact on future licensing efforts.

Rulings in our legal proceedings, as well as those of third parties, may affect our strategies for patent
prosecution, licensing and royalty rate setting and enforcement. For example, in the past, the USITC and U.S.
courts, including the U.S. Supreme Court, have taken actions that have been viewed as unfavorable to patentees,
including us. Decisions that occur in the U.S. or in international forums may change the law applicable to various
patent law issues, such as, for example, patentability, validity, claim construction, patent exhaustion, patent
misuse, permissible licensing practices, available forums, and remedies such as damages and injunctive relief, in
ways that are detrimental to the ability of patentees to enforce patents and obtain suitable relief. There are
regularly discussions within the EC regarding potential regulations and policy changes that could determine how
and whether a patent is essential to a standard. The risk of having our patents determined essential based on a
single methodology or specific criteria and conditions associated with patent enforcement and licensing as
imposed by the EC would affect our strategies as well. Ongoing uncertainty related to the feasibility and criteria
used for this evaluation as well as the cost associated with such essentiality determination could impact the
assessment of our SEP portfolio.

We continue to monitor and evaluate our strategies for prosecution, licensing and enforcement with regard
to these developments; however, any resulting change in such strategies may have an adverse impact on our
business and financial condition.

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Our plans to renew license agreements with current licensees as well as additional handset manufacturers in
China may be adversely affected by a deterioration in United States-China trade and geopolitical relations,
our customers facing economic uncertainty there or our failure to establish a positive reputation in China,
which could materially adversely affect our long-term business, financial condition and operating results.

Companies headquartered in China currently comprise a substantial portion of the handset manufacturers
that remain unlicensed to our patent portfolio. Our ability to renew license agreements with current licensees in
China as well as license new manufacturers is, among other things, affected by the macroeconomic and
geopolitical climate, as well as our business relationships and perceived reputation in China. The U.S. and
Chinese governments are regularly engaged in various trade discussions, and the U.S. State Department
originally issued a travel advisory in January 2019 and reissued this travel advisory on January 11, 2023 advising
U.S. citizens to exercise increased caution in China due to arbitrary enforcement of local laws. In January 2020,
the U.S. and China entered into Phase One of the Economic and Trade Agreement Between the United States of
America and the People’s Republic of China (the “Phase One Trade Agreement”). The Phase One Trade
Agreement takes steps to ease certain trade tensions between the U.S. and China, including tensions involving
intellectual property theft and forced intellectual property transfers by China. Although the Phase One Trade
Agreement was an encouraging sign of progress in the trade negotiations between the U.S. and China, questions
still remain as to the enforcement of its terms, the resolution of a number of other points of dispute between the
parties, and the prevention of further tensions. If the U.S.-China trade dispute re-escalates or relations between
the United States and China deteriorate, these conditions could adversely affect our ability to renew license
agreements with current licensees as well as license our patent portfolio to currently unlicensed Chinese handset
manufacturers. Our ability to renew or conclude new license agreements with such manufacturers could also be
affected by economic uncertainty, particularly in the handset market, in China or by our failure to establish a
positive reputation and relationships in China. The occurrence of any of these events could have an adverse effect
on our ability to enter into any renewal or new license agreements with Chinese handset manufacturers, which, in
turn, could cause our long-term business, financial condition and operating results to be materially adversely
affected.

Setbacks in defending our patent licensing practices could cause our cash flow and revenue to decline and
could have an adverse effect on our licensing business.

Adverse decisions in litigation or regulatory actions relating to our licensing practices, including, but not
limited to, findings that we have not complied with our FRAND commitments and/or engaged in anticompetitive
or unfair licensing activities or that any of our license agreements are void or unenforceable, could have an
adverse impact on our cash flow and revenue. Regulatory bodies may assess fines in the event of adverse
findings, and as part of court or arbitration proceedings, a judgment could require us to pay damages (including
the possibility of treble damages for antitrust claims). In addition, to the extent that legal decisions find patent
license agreements to be void or unenforceable in whole or in part, that could lead to a decrease in the revenue
associated with and cash flow generated by such agreements, and, depending on the damages requested, could
lead to the refund of certain payments already made. Such decisions could also cause serious reputational harm.
Finally, adverse legal decisions related to our licensing practices could have an adverse effect on our ability to
enter into license agreements, which, in turn, could cause our cash flow and revenue to decline.

We are subject to risks resulting from customer concentration.

We earn a significant amount of our revenues from a limited number of licensees or customers, and we
expect that a significant portion of our revenues will continue to come from a limited number of licensees or
customers for the foreseeable future. For example, in 2023, Apple, Samsung, Lenovo, and Xiaomi each
comprised 10% or more of our consolidated revenues. Further, because of the limited number of licensees and
potential licensees, any opportunistic behavior during license negotiations by a company or companies using our
technology could create large exposure for us. In the event that we are unable to renew one or more of such
license agreements at all or on terms that are favorable to us, our future revenue and cash flow could be

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materially adversely affected. In the event that one or more of our significant licensees or customers fail to meet
their payment or reporting obligations (for example, due to a credit issue or in connection with a legal dispute or
similar proceeding) under their respective license agreements, our future revenue and cash flow could be
materially adversely affected. In addition, in the event that there is a material decrease in shipments of licensed
products by one of our per-unit licensees, our revenues from such licensee could significantly decline and our
future revenue and cash flow could be adversely affected.

Additionally, there is significant concentration in the wireless communications industry in general, and
these trends may continue. For example, in 2022, Samsung, Apple and Xiaomi collectively accounted for
approximately 50% of worldwide smartphone shipments, and we anticipate a similar level of concentration in
worldwide shipments for 2023 and beyond. Any further concentration or sale within the wireless industry among
handset providers may reduce the number of licensing opportunities or, in some instances, result in the reduction,
loss or elimination of existing royalty obligations. Further, if wireless carriers consolidate with companies that
utilize technologies that are competitive with our technologies or that are not covered by our patents, we could
lose market opportunities, which could negatively impact our revenues and financial condition.

We face competition from companies developing other or similar technologies.

We face competition from companies developing other and similar technologies that are competitive with
our technologies, including in the standards-setting arena. Due to competition, our technologies may not find a
viable commercial marketplace or, where applicable, be adopted by the relevant standards. In particular,
increasing participation within standards-setting organizations has contributed to greater competition for
influence within such organizations and for ultimately setting standards. In addition, in licensing our patent
portfolio, we may compete with other companies, many of whom also claim to hold SEPs, for a share of the
royalties that certain licensees may argue to be the total royalty that is supported by a certain product or products.
In any device or piece of equipment that contains intellectual property, the manufacturer may need to obtain a
license from multiple holders of intellectual property. To the extent that multiple parties all seek royalties on the
same product, the manufacturers could claim to have difficulty in meeting the financial requirements of each
patent holder.

Royalty rates could decrease for future license agreements due to downward product pricing pressures and
competition over patent royalties.

Royalty payments to us under future license agreements could be lower than anticipated. Certain licensees
and others in the wireless and consumer electronics industries, individually and collectively, are demanding that
royalty rates for patents be lower than historic royalty rates and/or that such rates should be applied to royalty
bases smaller than the selling price of an end product (such as the “smallest salable patent practicing unit”).
There is also increasing downward pricing pressure on certain wireless products, including handsets, and other
consumer electronics devices that we believe implement our patented inventions, and some of our royalty rates
are tied to the pricing of these devices. In addition, a number of other companies also claim to hold patents that
are essential with respect to products we aim to license. Demands by certain licensees to reduce royalties due to
pricing pressure or the number of patent holders seeking royalties on these technologies could result in a decrease
in the royalty rates we receive for use of our patented inventions, thereby decreasing future revenue and cash
flow.

Our technologies may not become patented, adopted by wireless or video standards or widely deployed.

We invest significant resources in the development of advanced technology and related solutions. However,
certain of our inventions that we believe will be employed in current and future products, including 4G, 5G,
HEVC, VVC and others, are the subject of patent applications where no patent has been issued to us yet by the
relevant patent issuing authorities. There is no assurance that these applications will issue as patents, either at all
or with claims that would be required by products in the market currently or in the future. Our investments may

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not be recoverable or may not result in meaningful revenue if a sufficient number of our technologies are not
patented and/or adopted by the relevant standards or if products based on the technologies in which we invest are
not widely deployed. Competing technologies could reduce the opportunities for the adoption or deployment of
technologies we develop. In addition, it is possible that in certain technology areas, such as in the IoT space, the
adoption of proprietary systems could compete with or replace standards-based technology. It is also possible in
certain technology areas, such as video coding and the IoT, that open source and/or purportedly royalty-free
solutions such as AV1, VP-9 and OCF could compete with or replace proprietary standards-based technology. If
the technologies in which we invest do not become patented, are not adopted by the relevant standards, or are not
adopted by and deployed in the mainstream markets, at all or at the rate or within time periods that we expect,
our business, financial condition and operating results could be adversely affected.

Setbacks in defending and enforcing our patent rights could cause our revenue and cash flow to decline.

Some third parties have challenged, and we expect will continue to challenge, the infringement, validity and
enforceability of certain of our patents. In some instances, certain of our patent claims could be substantially
narrowed or declared invalid, unenforceable, not essential or not infringed. For example, in limited cases, certain
of our patents have been held invalid by courts in proceedings initiated by counterparties to our litigation
proceedings. We cannot ensure that the validity and enforceability of our patents will be maintained or that our
patents will be determined to be applicable to any particular product or standard. Moreover, third parties could
attempt to circumvent certain of our patents through design changes. Any significant adverse findings as to the
validity, infringement, enforceability or scope of our patents and/or any successful design-around of our patents
could result in the loss of patent licensing revenue from existing licensees, through termination or modification
of agreements or otherwise, and could substantially impair our ability to secure new patent
licensing
arrangements, either at all or on beneficial terms.

Our plans to expand our revenue opportunities may not be successful.

As part of our business strategy, we regularly seek to expand our revenue opportunities both organically and
inorganically. For example, we are currently seeking to expand our licensing activities beyond device-based
licensing revenue to certain video and cloud-based service providers. The market for licensing video and cloud-
based services is not as developed as device-based licensing programs. As a result, video and cloud-based service
providers do not have a significant volume of comparable agreements against which to compare our offers and
may use this as a reason to delay our negotiations with such providers. Additionally, our pricing models may not
reflect the demand for our value of our technologies. Accordingly, we may not be able to enter into license
agreements with these providers on terms that are favorable to us, or at all.

We also seek to expand our business opportunities through targeted acquisitions, research partnerships, joint
ventures and licensing platforms. We face intense competition within our industry and otherwise for acquisitions
of high-quality businesses, technologies and assets. As such, even if we are able to identify an acquisition target
that we would like to acquire, we may not be able to complete the acquisition on commercially reasonable terms,
or at all. If we are not able to consummate any of these inorganic growth opportunities on a reasonable time
frame, on terms that are attractive to us or at all, we may not be able to grow our business in line with our
expectations and as such, our business, financial condition and operating results could be harmed.

Macroeconomic conditions including rising inflation may result in increased costs of operations.

A decline in economic conditions, such as a recession, economic downturn or inflationary conditions in the
U.S. or elsewhere could adversely affect our business. In particular, inflation has accelerated in the U.S. and
globally. A majority of our revenue is derived from patent license agreements that provide for fixed payments
that were negotiated before the recent rise in inflation. An inflationary environment can increase our cost of
labor, as well as our other operating costs, without a corresponding increase in our revenue, which may have a
material adverse impact on our operating results and financial condition.

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Scrutiny by antitrust authorities may affect our strategies for patent prosecution, licensing and enforcement
and may increase our costs of doing business and/or lead to monetary fines, penalties or other remedies or
sanctions.

Domestic and foreign antitrust authorities regularly review their policies with respect to the use of SEPs,
including the enforcement of such patents against competitors and others. Such scrutiny has in the past resulted
in enforcement actions against Qualcomm and other licensing companies, and could lead to additional
investigations of, or enforcement actions against, us. Such inquiries and/or enforcement actions could impact the
availability of injunctive and monetary relief, which may adversely affect our strategies for patent prosecution,
licensing and enforcement and increase our costs of operation. Such inquiries and/or enforcement actions could
also result in monetary fines, penalties or other remedies or sanctions that could adversely affect our business and
financial condition.

We have in the past and may in the future make acquisitions or engage in other strategic transactions that
could result in significant changes, costs and/or management disruption and that may fail to enhance
shareholder value or produce the anticipated benefits.

We have in the past and may in the future acquire companies, businesses, technology and/or intellectual
property, and enter into joint ventures or other strategic transactions. Acquisitions or other strategic transactions
may increase our costs, including but not limited to accounting and legal fees, and may not generate financial
returns or result in increased adoption or continued use of our technologies or of any technologies we may
acquire.

The integration of acquired companies or businesses may result in significant challenges, including, among
others: successfully integrating new employees,
technology and/or products; consolidating research and
development operations; minimizing the diversion of management’s attention from ongoing business matters;
and consolidating corporate and administrative infrastructures. As a result, we may be unable to accomplish the
integration smoothly or successfully. In addition, we cannot be certain that the integration of acquired companies,
businesses, technology and/or intellectual property with our business will result in the realization of the full
benefits that we anticipate will be realized from such acquisitions. Our plans to integrate and/or expand upon
research and development programs and technologies obtained through acquisitions may result in products or
technologies that are not adopted by the market, or the market may adopt solutions competitive to our
technologies.

A portion of our revenue and cash flow is dependent upon our licensees’ sales and market conditions and
other factors that are beyond our control or are difficult to forecast.

A portion of our licensing revenues is dependent on sales by our licensees that are outside our control and
that could be negatively affected by a variety of factors, including global, regional and/or country-specific
economic conditions and/or public health concerns, country-specific natural disasters impacting licensee
manufacturing and sales, demand and buying patterns of end users, which are often driven by replacement and
innovation cycles, the service life of products incorporating our technologies, competition for our licensees’
products, supply chain disruptions, and any decline in the sale prices our licensees receive for their covered
products. In addition, our operating results also could be affected by general economic and other conditions that
cause a downturn in the market for the licensees of our technologies. Our revenue and cash flow also could be
affected by (i) the unwillingness of any licensee to satisfy all of their royalty obligations on the terms or within
the timeframe we expect, (ii) a decline in the financial condition or market position of any licensee or (iii) the
failure of sales to meet market forecasts due to global or regional economic conditions, political instability,
natural disasters, competitive technologies, lower demand or otherwise. It is also difficult to predict the timing,
infringement (including as a result of the
nature and amount of licensing revenue associated with past
infringement) and new licenses, strategic
unwillingness of our licensees to compensate us for such past
relationships and the resolution of legal proceedings. The foregoing factors are difficult to forecast and could
adversely affect both our quarterly and annual operating results and financial condition.

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In addition, some of our patent license agreements provide for upfront fixed payments or prepayments that
cover our licensees’ future sales for a specified period and reduce future cash receipts from those licensees. As a
result, our cash flow has historically fluctuated from period to period. Depending upon the payment structure of
any new patent license agreements into which we may enter, such cash flow fluctuations may continue in the
future.

Our revenue may be affected by the deployment of future-generation wireless standards in place of 3G, 4G
and 5G technologies or future-generation video standards, by the timing of such deployment, or by the need to
extend or modify certain existing license agreements to cover subsequently issued patents.

We own an evolving portfolio of issued and pending patents related to 3G, 4G and 5G cellular technologies
and non-cellular technologies including video coding technologies, and our patent portfolio licensing program for
future-generation wireless standards or video coding standards may not be as successful in generating licensing
income as our current licensing programs. Although we continue to participate in worldwide standards bodies
and contribute our intellectual property to future-generation wireless and video coding standards, including
standards that will define 5G, our technologies might not be adopted by the relevant standards. In addition, we
may not be as successful in the licensing of future-generation products as we have been in licensing products
deploying existing wireless and video coding standards, or we may not achieve a level of royalty revenues on
such products that is comparable to that which we have historically received on products deploying existing
wireless and video coding standards. Furthermore, if there is a delay in the standardization and/or deployment of
5G or future video coding standards, our business and revenue could be negatively impacted.

The licenses that we grant under our patent license agreements typically only cover products designed to
operate in accordance with specified technologies and that were manufactured or deployed or anticipated to be
manufactured or deployed at the time of entry into the agreement. Also, we have patent license agreements with
licensees that now offer for sale types of products that were not sold by such licensees at the time the patent
license agreements were entered into and, thus, are not licensed by us. We do not derive patent licensing revenue
from the sale of products by our licensees that are not covered by a patent license agreement. In order to grant a
patent license for any such products, we will need to extend or modify our patent license agreements or enter into
new license agreements with such licensees, and we may not be able to do so on terms acceptable to us or at all.
Further, such extensions, modifications or new license agreements may adversely affect our revenue on the sale
of products covered by the license prior to any extension, modification or new license.

We may not be able to attract and retain qualified employees.

Competition for top talent is substantial. In order to be successful, we must attract, develop, and retain
employees. Implementing our business strategy requires specialized engineering and other technical talent, and
these skills are in high demand among our competitors. The market for employees in our industry is extremely
competitive, and competitors for talent, particularly engineering talent, increasingly attempt to hire, and to
varying degrees have been successful in hiring, our employees or employment candidates. Further, the increased
availability of remote working arrangements, largely driven by the COVID-19 pandemic, has expanded the pool
of companies that can compete for our employees and employment candidates. A number of such competitors for
talent are significantly larger than us and may be able to offer compensation, benefits or work arrangements
perceived as more desirable than what we are able to offer. If we are unable to recruit, retain, and motivate our
employees, then we may not be able to innovate, execute on our strategy and grow our business as planned.
Further, the cost and loss of efficiency related to turnover, particularly at senior levels, may be significant.

A potential public health crisis, pandemic or similar event could adversely impact our business, financial
condition and results of operations.

As we saw with the COVID-19 pandemic, any such event can create significant worldwide uncertainty,
volatility and economic disruption. The extent to which any potential future public health crises, pandemics or

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22

similar events could adversely impact our business, financial condition and results of operations is dependent
upon numerous factors, many of which are highly uncertain, rapidly changing and uncontrollable. These factors
include, but are not limited to: (i) the duration and scope of the pandemic or other event; (ii) governmental,
business and individual actions that have been and continue to be taken in response to the pandemic or other
event, including travel restrictions, quarantines, social distancing, work-from-home and shelter-in-place orders
and shut-downs; (iii) the impact on our customers, including those that are presently unlicensed, and other
business partners; (iv) the impact on U.S. and global economies and the timing and rate of economic recovery;
(v) potential adverse effects on the financial markets and access to capital; (vi) potential goodwill or other
impairment charges; (vii) increased cybersecurity risks as a result of pervasive remote working conditions;
(viii) our ability to effectively carry out our operations due to any adverse impacts on the health and safety of our
employees and their families; (ix) the ability of our customers to timely satisfy their payment obligations to us;
and (x) fluctuations in global shipments of handsets and consumer electronics devices.

We face risks from doing business and maintaining offices in international markets.

A significant portion of our licensees, potential licensees and customers are international, and our licensees,
potential licensees and customers sell their products to markets throughout the world. In addition, in recent years,
we have expanded, and we may continue to expand, our international operations, opening offices in China,
France, Belgium and Finland. Accordingly, we are subject
to the risks and uncertainties of operating
internationally. Our international operations could exacerbate the other risk factors we have identified, and we
could be affected by a variety of uncontrollable and changing factors, including, but not limited to: difficulty in
protecting our intellectual property in foreign jurisdictions; enforcing contractual commitments in foreign
jurisdictions or against foreign corporations; government regulations, tariffs and other applicable trade barriers;
biased enforcement of foreign laws and regulations to promote industrial or economic policies at our expense;
retaliatory practices by foreign actors; currency control regulations; export license requirements and restrictions
on the use of technology; social, economic and political instability; costly, time consuming and changing
regulatory regimes; natural disasters, acts of terrorism, widespread illness and war; potentially adverse tax
consequences; general delays in remittance of and difficulties collecting non-U.S. payments; foreign labor
regulations; anti-corruption laws; public health issues; and difficulty in staffing and managing operations
remotely. Managing operations and complying with relevant laws and regulations in China may be particularly
complex, costly and time-consuming. We also are subject to risks specific to the individual countries in which we
and our licensees, potential licensees and customers do business.

In addition, adverse movements in currency exchange rates may negatively affect our business due to a

number of situations, including the following:

• If the effective price of products sold by our licensees were to increase as a result of fluctuations in the
exchange rate of the relevant currencies, demand for the products could fall, which in turn would reduce
our royalty revenues.

• Assets or liabilities of our consolidated subsidiaries may be subject to the effects of currency fluctuations,

which may affect our reported earnings.

• Certain of our operating and investing costs, such as foreign patent prosecution, are based in foreign
currencies. If these costs are not subject to foreign exchange hedging transactions, strengthening currency
values in selected regions could adversely affect our near-term operating expenses, investment costs and
cash flows. In addition, continued strengthening of currency values in selected regions over an extended
period of time could adversely affect our future operating expenses, investment costs and cash flows.

Environmental. social and governance (ESG) matters may expose us to reputational risks and legal liability.

There is an increasing focus from investors, customers and employees as well as other stakeholders
concerning ESG matters. Current and prospective investors are increasingly utilizing ESG data to inform their

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decisions including investment and voting using a multitude of evolving score and rating frameworks.
Additionally public interest and legislative pressure related to public companies’ ESG practices continue to grow.
If our ESG practices fail to meet the expectations of any of our stakeholders’ evolving standards, our reputation,
brand and employee retention may be negatively impacted. If we do not adapt our strategy or execution quickly
enough to meet the evolving expectations, our business, financial condition, results of operations and reputation
could be adversely affected.

Our industry is subject to rapid technological change, uncertainty and shifting market opportunities.

Our success depends, in part, on our ability to define and keep pace with changes in industry standards,
technological developments and varying customer requirements. Changes in industry standards and needs could
adversely affect the development of, and demand for, our technology, rendering our technology currently under
development obsolete and unmarketable. The patents and applications comprising our portfolio have fixed terms,
and, if we fail to anticipate or respond adequately to these changes through the development or acquisition of
new patentable inventions, patents or other technology, we could miss a critical market opportunity, reducing or
eliminating our ability to capitalize on our patents, technology solutions or both.

Our commercialization, licensing and/or M&A activities could lead to patent exhaustion or implied license
issues that could materially adversely affect our business.

The legal doctrines of patent exhaustion and implied license may be subject

judicial
interpretations. Our commercialization or licensing of certain technologies and/or our M&A activities could
potentially lead to patent exhaustion or implied license issues that could adversely affect our patent licensing
program(s) and limit our ability to derive licensing revenue from certain patents under such program(s), whether
through the assumption of license agreements that would result
in our patents being captured by such
agreements, the acquisition of a business that sells or licenses products that practice our patents, or otherwise. In
the event of successful challenges by current or prospective licensees based on these doctrines that result in a
material decrease to our patent licensing revenue, our financial condition and operating results may be materially
adversely affected.

to different

Our use of open source software could materially adversely affect our business, financial condition, operating
results and cash flow.

Certain of our technology and our suppliers’ technology may contain or may be derived from “open source”
software, which, under certain open source licenses, may offer accessibility to a portion of a product’s source
code and may expose related intellectual property to adverse licensing conditions. Licensing of such technology
may impose certain obligations on us if we were to distribute derivative works of the open source software. For
example, these obligations may require us to make source code for derivative works available or license such
derivative works under a particular type of license that is different from what we customarily use to license our
technology. While we believe we have taken appropriate steps and employ adequate controls to protect our
intellectual property rights, our use of open source software presents risks that, if we inappropriately use open
source software, we may be required to re-engineer our technology, discontinue the sale of our technology,
release the source code of our proprietary technology to the public at no cost or take other remedial actions,
which could adversely affect our business, operating results and financial condition. There is a risk that open
source licenses could be construed in a way that could impose unanticipated conditions or restrictions on our
ability to commercialize our solutions, which could adversely affect our business, operating results and financial
condition. In addition, developing open source products, while adequately protecting the intellectual property
rights upon which our licensing business depends, may prove burdensome and time-consuming under certain
circumstances, thereby placing us at a competitive disadvantage.

We may have exposure to additional tax liabilities.

The United States government enacted tax reform in 2017 and continues to provide regulatory guidance
related to tax reform provisions, and state authorities continue to provide guidance around the application of tax

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24

reform provisions, that in each case, could impact future effective tax rates favorably or unfavorably. The United
States government could enact further tax reform legislation, which could adversely impact our tax rate. The
international tax environment also continues to change as a result of both coordinated efforts by governments and
unilateral measures designed by individual countries, which could ultimately have an adverse effect on the
taxation of international businesses such as ours. Accordingly, our tax rate could be adversely affected by several
factors, many of which are outside of our control, including: changing tax laws, regulations and interpretations
thereof; changes in tax rates; and assessments and any related tax, interest or penalties. If we are deemed to owe
additional taxes, our business, financial condition, and results of operations could be adversely affected.

Changes to our tax assets or liabilities could have an adverse effect on our consolidated financial condition or
results of operations.

The calculation of tax assets and liabilities involves significant judgment in estimating the impact of
uncertainties in the application of complex tax laws. We are subject to examinations by the Internal Revenue
Service (“IRS”) and other taxing jurisdictions on various tax matters, including challenges to various positions
we assert in our filings and foreign tax liability and withholding. Pursuant to the guidance for accounting for
uncertainty in income taxes, certain tax contingencies are recognized when they are determined to be more likely
than not to occur. Although we believe we have adequately recorded tax assets and accrued for tax contingencies
that meet this criterion, we may not fully recover our tax assets or may be required to pay taxes in excess of the
amounts we have accrued. In the event that the IRS or another taxing jurisdiction levies an assessment in the
future, it is possible the assessment could have an adverse effect on our consolidated financial condition or
results of operations.

Market projections and data are forward-looking in nature.

Our strategy is based on our own projections and on analyst, industry observer and expert projections, which
are forward-looking in nature and are inherently subject to risks and uncertainties. We utilize these projections in
various ways, including key strategic decisions that we regularly make regarding the direction of our business,
research and licensing efforts. The validity of their and our assumptions, the timing and scope of wireless
markets, economic conditions, customer buying patterns, timeliness of equipment development, pricing of
products, growth in wireless telecommunications services that would be delivered on wireless devices and
availability of capital for infrastructure improvements could affect these predictions. Projections on the size of
various markets may be inaccurate. In addition, market data upon which we rely is based on third party reports
that may be inaccurate. The inaccuracy of any of these projections and/or market data could adversely affect our
business prospects, operating results and financial condition.

The high amount of capital required to obtain radio frequency licenses, deploy and expand wireless networks
and obtain new subscribers, as well as the cost of new handsets could slow the growth of the wireless
communications industry and adversely affect our business.

Our growth is partially dependent upon the increased use of wireless communications services and cellular
handsets that utilize our technology. In order to provide wireless communications services, wireless operators
must obtain rights to use specific radio frequencies. The allocation of frequencies is regulated in the United
States and other countries throughout
the world, and limited spectrum space is allocated to wireless
communications services. Industry growth may be affected by the amount of capital required to obtain licenses to
use new frequencies, deploy wireless networks to offer voice and data services, expand wireless networks to
grow voice and data services and obtain new subscribers. The significant cost of licenses, wireless networks and
subscriber additions may slow the growth of the industry if wireless operators are unable to obtain or service the
additional capital necessary to implement or expand advanced wireless networks. Growth in the number of
cellular handsets may slow as the number of people worldwide without a cellular handset declines. In addition, if
the cost of cellular handsets increases, customers may be less likely to replace their existing devices with new
devices. The growth of our business could be adversely affected if either of these events occur.

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2023 Annual Report

We regularly make strategic decisions about our patent portfolio. Although we seek to focus our operations in
areas where we see the potential for growth and to divest assets where we see more limited opportunities,
dispositions we decide to undertake may involve risks, and the anticipated benefits of such actions may not be
realized.

From time to time, we intend to make strategic decisions about our patent portfolio, whether through a
formal portfolio review or opportunistic dispositions. Cost savings expectations of any portfolio review are
inherently uncertain and, therefore, we cannot provide assurance that we will achieve any expected, or any actual
cost savings from any such action. Our portfolio review activities may place substantial demands on our
management, which could lead to the diversion of management’s attention from other business priorities. We
have divested a number of assets, including as part of a recent strategic portfolio rationalization review. Any
assets that we divest could turn out to be more valuable than we had anticipated and we may not realize the
anticipated benefits of any strategic decision about our patent portfolio.

It can be difficult for us to verify royalty amounts owed to us under our per-unit licensing agreements, and
this may cause us to lose potential revenue.

The standard terms of our per-unit license agreements require our licensees to document the sale of licensed
products and report this data to us on a quarterly basis. Although our standard license terms give us the right to
audit books and records of our licensees to verify this information, audits can be expensive, time consuming,
incomplete and subject to dispute. From time to time, we audit certain of our licensees to verify independently
the accuracy of the information contained in their royalty reports in an effort to decrease the likelihood that we
will not receive the royalty revenues to which we are entitled under the terms of our license agreements, but we
cannot give assurances that these audits will be sufficient or effective.

Our technology development activities may experience delays.

We may experience technical, financial, resource or other difficulties or delays related to the further
development of our technologies. Delays may have adverse financial effects and may allow competitors with
comparable technology offerings to gain an advantage over us in the marketplace or in the standards setting
arena. There can be no assurance that we will continue to have adequate staffing or that our development efforts
will ultimately be successful. Moreover, certain of our technologies have not been tested for commercial use, and
it is possible that they may not perform as expected. In such cases, our business, financial condition and
operating results could be adversely affected, and our ability to secure new licensees and other business
opportunities could be diminished.

We rely on relationships with third parties to develop and deploy technology solutions.

Successful exploitation of our technology solutions is partially dependent on the establishment and success
of relationships with equipment producers and other industry participants. Delays or failure to enter into licensing
or other relationships to facilitate technology development efforts or delays or failure to enter into technology
licensing agreements to secure integration of additional functionality could impair our ability to introduce into
the market portions of our technology and resulting products, cause us to miss critical market windows or impair
our ability to remain competitive.

Our business and operations could suffer in the event of security breaches.

Attempts by others to gain unauthorized access to information technology systems are becoming more
sophisticated. These attempts, which in some cases could be related to industrial or other espionage, include
covertly introducing malware to computers and networks and impersonating authorized users, among others. We
seek to detect and investigate all security incidents and to prevent their recurrence, but, in some cases, we might
be unaware of an incident or its magnitude and effects. While we have not identified any material incidents of

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26

unauthorized access to date, the theft, unauthorized use or publication of our intellectual property and/or
confidential business or personal information (whether through a breach of our own systems or the breach of a
system of a third party that provides services to us) could harm our competitive or negotiating positions, reduce
the value of our investment in research and development and other strategic initiatives, compromise our patent
enforcement strategies or outlook, damage our reputation or otherwise adversely affect our business. In addition,
to the extent that any future security breach results in inappropriate disclosure of our employees’, licensees’, or
customers’ confidential and /or personal information, we may incur liability or additional costs to remedy any
damages caused by such breach.

Our business is subject to a variety of domestic and international laws, rules and policies and other obligations
regarding data protection.

We may be affected by existing and proposed laws and regulations, as well as government policies and
practices related to cybersecurity, privacy and data protection. For example,
the European General Data
Protection Regulation (“GDPR”), the United Kingdom’s GDPR, the California Consumer Privacy Act of 2018
and the California Privacy Rights Act of 2020 impose obligations on companies such as ours regarding the
handling of personal data. Additionally, in 2021, China adopted the Personal Information Protection Law
(“PIPL”), which, together China’s existing cyber and data securities regulations, have required and will continue
to require significant investment and resources to ensure compliance. Complying with the these and other privacy
and cybersecurity regulations could cause us to incur substantial costs or require us to change our business
practices. If we cannot implement an effective compliance mechanism for cross-border privacy and security
matters, we may face increased exposure to regulatory actions, substantial fines and other penalties. Further,
these areas are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.

Risks Relating to Our Common Stock and our Convertible Notes

Our operating results may fluctuate significantly, which could make our future results difficult to predict and
could cause our operating results to fall below expectations.

Our operating results may fluctuate from quarter to quarter as a result of a number of factors, many of which
are outside of our control and may be difficult to predict. In particular, the timing of revenue recognition may
cause our revenues and earnings to fluctuate, and there is significant judgment in the application of our revenue
recognition principles. For example, accounting principles sometimes require us to recognize revenue before the
is certain, which could add to uncertainty in our revenue guidance. The variability and
actual amount
unpredictability of our results of operations or other operating metrics could result in our failure to meet our
expectations or those of industry or financial analysts. If we fail to meet or exceed such expectations for these or
any other reasons, the market price of our common stock could fall substantially.

Our stock repurchase program may not result in a positive return of capital to shareholders.

Our stock repurchase program, including the tender offer that we completed during 2023, may not return
value to shareholders as it was designed to do because the market price of the stock may decline below the levels
at which we repurchased shares of stock. Stock repurchase programs are intended to deliver shareholder value
over the long term, but stock price fluctuations can reduce the effectiveness of such programs. In addition, our
Board of Directors could choose to suspend or terminate the stock repurchase program at any time or not to
renew the program.

Our shareholders may not receive the level of dividends provided for in our dividend policy or any dividend at
all, and any decrease in or suspension of the dividend could cause our stock price to decline.

Our current dividend policy contemplates the payment of a regular quarterly cash dividend of $0.40 per
share on our outstanding common stock. We expect to continue to pay quarterly cash dividends on our common

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2023 Annual Report

stock at the rate set forth in our current dividend policy. However, the dividend policy and the payment and
timing of future cash dividends under the policy are subject to the final determination each quarter by our Board
of Directors that (i) the dividend will be made in compliance with laws applicable to the declaration and payment
of cash dividends, including Section 1551(b) of the Pennsylvania Business Corporation Law, and (ii) the policy
remains in our best interests, which determination will be based on a number of factors, including our earnings,
financial condition, capital resources and capital requirements, alternative uses of capital, restrictions imposed by
any existing debt, economic conditions and other factors considered relevant by the Board of Directors. Given
these considerations, our Board of Directors may increase or decrease the amount of the dividend at any time and
may also decide to vary the timing of or suspend or discontinue the payment of dividends in the future. Any
decrease in the amount of the dividend, or suspension or discontinuance of payment of a dividend, could cause
our stock price to decline.

Securities analyst coverage or lack of coverage may have a negative impact on our common stock’s market
price.

The trading market for our common stock will depend, in part, on the research and reports that securities or
industry analysts publish about us or our business. We do not have any control over these analysts. If securities
or industry analysts stop their coverage of us or additional securities and industry analysts fail to cover us in the
future, the trading price for our common stock would be negatively impacted. If any analyst or analysts who
cover us downgrade our common stock, changes their opinion of our shares or publishes inaccurate or
unfavorable research about our business, our stock price could decline. If any analyst or analysts cease coverage
of us or fail to publish reports on us regularly, demand for our common stock could decrease and we could lose
visibility in the financial markets, which could cause our stock price and trading volume to decline.

Our indebtedness could adversely affect our business, financial condition and results of operations and our
ability to meet our payment obligations under such indebtedness.

Our total indebtedness as of December 31, 2023 was approximately $615.2 million. This level of debt could

have significant consequences on our future operations, including:

• reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and
other general corporate purposes, and limiting our ability to obtain additional financing for these
purposes;

• limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our

business, the industry in which we operate and the general economy; and

• placing us at a competitive disadvantage compared to our competitors that have less debt or are less

leveraged.

Any of the above-listed factors could have an adverse effect on our business, financial condition and results

of operations and our ability to meet our payment obligations under the 2024 Notes and the 2027 Notes.

The convertible note hedge transactions and warrant transactions that we entered into in connection with the
offering of the 2024 Notes and the 2027 Notes may affect the value of the such notes, and the market price of
our common stock.

In connection with the offerings of the 2024 Notes and the 2027 Notes, we entered into convertible note
hedge transactions with certain financial institutions (the “option counterparties”) and sold warrants to the
respective option counterparties. These transactions will be accounted for as an adjustment to our shareholders’
equity. The convertible note hedge transactions are expected to reduce the potential equity dilution upon any
conversion of the notes. The warrants will have a dilutive effect on our earnings per share to the extent that the
market price of our common stock exceeds the applicable strike price of the warrants on any expiration date of
the warrants.

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28

In addition, the respective option counterparties (and/or their affiliates) may modify their respective hedge
positions from time to time (including during any observation period related to a conversion of the notes) by
entering into or unwinding various derivative transactions with respect
to our common stock and/or by
purchasing or selling our common stock in open market transactions and/or privately negotiated transactions.

The potential effect, if any, of any of these transactions and activities on the market price of our common
stock will depend in part on market conditions and cannot be ascertained at this time, but any of these activities
could adversely affect the market price of our common stock.

We are subject to counterparty risk with respect to the convertible note hedge transactions.

The respective option counterparties are financial institutions or affiliates of financial institutions, and we
will be subject to the risk that such option counterparties may default under the respective convertible note hedge
transactions. Our exposure to the credit risk of the option counterparties is not secured by any collateral. If an
option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those
proceedings with a claim equal to our exposure at that time under the applicable convertible note hedge
transactions. Our exposure will depend on many factors but, generally, the increase in our exposure will be
correlated to the increase in our common stock market price and in volatility of our common stock. In addition,
upon a default by an option counterparty, we may suffer adverse tax consequences and dilution with respect to
our common stock. We can provide no assurance as to the financial stability or viability of the option
counterparties.

Provisions of the 2024 Notes and 2027 Notes could discourage an acquisition of us by a third party.

Certain provisions of the 2024 Notes and the 2027 Notes could make it more difficult or more expensive for
a third party to acquire us. Upon the occurrence of certain transactions constituting a fundamental change under
the indentures, holders of the notes will have the right, at their option, to require us to repurchase all of their
applicable notes or any portion of the principal amount of such notes at a price of 100% of the principal amount
of the notes being repurchased, plus accrued and unpaid interest. We may also be required to issue additional
shares upon conversion in the event of certain fundamental change transactions. These provisions could limit the
price that some investors might be willing to pay in the future for shares of our common stock.

Item 1B. UNRESOLVED STAFF COMMENTS.

None.

Item 1C. CYBERSECURITY.

We take a defense-in-depth approach, leveraging multiple, layered security measures, to protect our data,
our customers’ data, our infrastructure, and our employees. We embed data protection throughout our operations
and information technology programs, relying on multiple and various controls to prevent and detect threats, with
the goal of safeguarding our assets, data and personnel.

InterDigital evaluates cybersecurity risks as part of our overall enterprise risk management. A steering
committee of senior executives meets quarterly to evaluate any changes to the Company’s exposure to
cybersecurity risks, discuss potential mitigation plans and provide updates on mitigation efforts already
underway. Our cybersecurity team keeps up to date on the latest threats and risks through multiple channels and
is also involved in evaluating risks associated with any new proposed service providers. The Company employs a
Director of Cybersecurity & Networks, reporting directly to our CIO, who manages our cybersecurity team that
is comprised entirely of security professionals with industry recognized top tier certifications. The cybersecurity
team within IS is responsible for assessing and managing risks and informing/gaining feedback from the
cybersecurity steering committee.

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Additionally, InterDigital’s team of dedicated cybersecurity experts/professionals maintain a comprehensive
set of cybersecurity policies and standards, including a security incident response framework. The framework is a
set of coordinated procedures and tasks that the InterDigital incident response team executes to ensure timely and
accurate reporting and resolution of computer security incidents. The framework details who, how and when
appropriate persons or committees, including the Audit Committee are kept informed on the status of potential
cybersecurity incidents. A summary of recent incidents is also presented by the Chief Information Officer
(“CIO”) at each regular Audit Committee meeting. Our policies and standards were developed in collaboration
with a wide range of disciplines, such as information technology, cybersecurity, legal, compliance and business.
Our cybersecurity strategy and policies are continually reassessed to ensure they attempt to identify and
proactively address the constant changes in the global threatscape, including through the use of tabletop
exercises. Decision makers such as the CIO, executive team, and Audit Committee are regularly kept up to date
on cybersecurity trends. Ongoing collaboration with stakeholders throughout the business also helps to build
continued awareness and visibility of future needs.

We engage external vendors to assess the cybersecurity program as needed. An independent third party,

never used consecutively, performs annual multi-stage penetration testing of our IT environment.

Our cybersecurity program is governed by the Audit Committee of our Board. The Audit Committee of the
Board and the full Board each receive quarterly updates on cybersecurity risks identified through the enterprise
risk management processes described above.

Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or
mitigating a cybersecurity incident that could have a material adverse effect on us. We identify nation state-
sponsored threat actors and the rise in sophistication and proliferation of ransomware campaigns as top
reasonable material risks to the business. The theft, unauthorized use or publication of our intellectual property
and/or confidential business or personal information (whether through a breach of our own systems or the breach
of a system of a third party that provides services to us) could harm our competitive or negotiating positions,
reduce the value of our investment in research and development and other strategic initiatives, compromise our
patent enforcement strategies or outlook, damage our reputation or otherwise adversely affect our business. See
Item 1A. “Risk Factors” for a discussion of cybersecurity risks.

Item 2.

PROPERTIES.

Our headquarters are located in Wilmington, Delaware, USA. Our research and development activities are
conducted primarily in facilities located in Conshohocken, Pennsylvania, USA; London, United Kingdom;
Montreal, Canada; New York, New York, USA; Los Altos, California, USA; and Rennes, France.

The following table sets forth information with respect to our principal leased properties:

Location

Wilmington, Delaware . . . . . . . . . .
Rennes, France . . . . . . . . . . . . . . . .
Conshohocken, Pennsylvania . . . . .
New York, New York . . . . . . . . . . .
Montreal, Quebec . . . . . . . . . . . . . .
Los Altos, California . . . . . . . . . . . .

Approximate
Square Feet

7,190
33,000
30,300
19,400
11,918
4,900

Principal Use

Lease Expiration Date

Corporate headquarters
Office and research space
Office and research space
Office and research space
Office and research space
Office and research space

November 2025
August 2031
September 2029
July 2030
June 2026
November 2027

We are also a party to leases for several smaller research and/or office spaces, including in Brussels,
Belgium; Espoo, Finland; Indianapolis, Indiana, USA; London, United Kingdom; Melville, New York, USA;
Paris, France, and Beijing, China. In addition, we own an administrative office space in Washington, District of
Columbia, USA.

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30

We believe that the facilities described above are suitable and adequate for our present purposes and our

needs in the near future.

Item 3.

LEGAL PROCEEDINGS.

See Note 12, “Litigation and Legal Proceedings,” to the Notes to Consolidated Financial Statements
included below in Part II, Item 8 of this Form 10-K for a description of our material legal proceedings, which is
incorporated herein by reference.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS

AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

The Nasdaq Global Select Market (“Nasdaq”) is the principal market for our common stock, which is traded

under the symbol “IDCC.”

Holders

As of February 13, 2024, there were 408 holders of record of our common stock.

Dividends

Cash dividends on outstanding common stock declared in 2023 and 2022 were as follows (in thousands,

except per share data):

2023

2022

First quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

First quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Per Share

Total

Cumulative by
Fiscal Year

$0.35
0.35
0.40
0.40

$1.50

$0.35
0.35
0.35
0.35

$1.40

$ 9,449
9,273
10,348
10,226

$39,296

$10,803
10,380
10,382
10,384

$41,949

$ 9,449
18,722
29,070
39,296

$10,803
21,183
31,565
41,949

We increased the quarterly cash dividend from $0.35 to $0.40 per share beginning with the dividend paid in
fourth quarter 2023. We currently expect to continue to pay comparable dividends in the future; however,
continued payment of cash dividends and changes in the Company’s dividend policy will depend on the
Company’s earnings, financial condition, capital resources and capital requirements, alternative uses of capital,
restrictions imposed by any existing debt, economic conditions and other factors considered relevant by our
Board of Directors.

2023 Annual Report

32

Performance Graph

The following graph compares five-year total shareholder return on common stock with the cumulative total
returns of the Nasdaq Telecommunications index and the Russell 2000 index. The graph tracks the performance
of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from
12/31/2018 to 12/31/2023.

S
R
A
L
L
O
D

200

180

160

140

120

100

80

60

40

20

0
12/18

12/19

12/20

12/21

12/22

12/23

InterDigital, Inc.

NASDAQ Telecommunications

Russell 2000

InterDigital, Inc.

Russell 2000

12/18

12/19

12/20

12/21

12/22

12/23

100.00

83.89

95.89

115.54

81.73

182.79

100.00

125.52

150.58

172.90

137.56

160.85

Nasdaq Telecommunications

100.00

118.74

130.71

133.51

97.62

108.00

The above performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act,
or incorporated by reference into any filing of InterDigital under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference in such filing.

33

2023 Annual Report

Issuer Purchases of Equity Securities

Repurchase of Common Stock

The following table provides information regarding Company purchases of its common stock during fourth

quarter 2023.

Period

October 1, 2023—October 31, 2023 . . . . . . . . . . . . . .
November 1, 2023—November 30, 2023 . . . . . . . . . .
December 1, 2023—December 31, 2023 . . . . . . . . . . .

Total
Number
of Shares
(or Units)
Purchased
(1)

274,000
160,504
36,611

Average
Price
Paid
Per
Share
(or
Unit)

$79.73
$88.33
$96.90

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

471,115

$83.99

Total Number of
Shares (or Units)
Purchases as
Part of Publicly
Announced
Plans or
Programs (2)

Maximum Number
(or Approximate
Dollar Value) of
Shares (or Units)
That May Yet Be
Purchased Under the
Plans or Programs (3)

274,000
160,504
36,611

471,115

$ 79,882,188
$ 65,701,580
$296,259,145

(1) Total number of shares purchased during each period reflects share purchase transactions that were

completed (i.e., settled) during the period indicated.

(2) Shares were purchased pursuant to the Company’s share repurchase program (the “Share Repurchase
Program”), $300 million of which was authorized by the Company’s Board of Directors in June 2014, with
an additional $100 million authorized by the Company’s Board of Directors in each of June 2015,
September 2017, December 2018, May 2019, and May 2022, respectively, an additional $333 million in
December 2022, and an additional $235 million in December 2023. The Share Repurchase Program has no
expiration date.

(3) Amounts shown in this column reflect the amounts remaining under the Share Repurchase Program at the

end of the period.

Item 6.

[RESERVED]

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS.

OVERVIEW

The following discussion should be read in conjunction with the Consolidated Financial Statements and the
Notes thereto contained in this Form 10-K. The following section generally discusses our financial condition and
results of operations for our fiscal year ended December 31, 2023 compared to our fiscal year ended
December 31, 2022. A discussion regarding our financial condition and results of operations for December 31,
2022 compared to our fiscal year ended December 31, 2021 can be found in Part II, Item 7 of our Annual Report
on Form 10-K for fiscal year 2022, filed with the Securities and Exchange Commission (the “SEC”) on
February 15, 2023.

Throughout the following discussion and elsewhere in this Form 10-K, we refer to “recurring revenues” and
“catch-up revenues.” For variable and dynamic fixed-fee license agreements, “catch-up revenues” primarily
represents revenue associated with reporting periods prior to the execution of the license agreement, while
“recurring revenue” represents revenue associated with reporting periods beginning with the execution of the
license agreement. For static fixed-fee license agreements, we typically classify the associated revenue as catch-
up revenues.

2023 Annual Report

34

Business

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
immersive experiences in a broad range of communications and
technologies that enable connected,
entertainment products and services. We license our innovations worldwide to companies providing such
products and services, including makers of wireless communications devices, consumer electronics, 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, with a
significant AI research effort that intersects with both wireless and video technologies.

InterDigital is one of the largest pure research and development and licensing companies in the world, with
one of the most significant patent portfolios of fundamental wireless and video technologies. As of December 31,
2023, InterDigital’s wholly owned subsidiaries held a portfolio of more than 30,000 patents and patent
applications related to wireless communications, video coding, display technology, and other areas relevant to
communications and entertainment products and services. Our portfolio includes numerous patents and patent
applications that we believe are or may be essential to existing standards, or may become essential to future
standards, established by many Standards Development Organizations (“SDOs”). We have contributed
technology to wireless standards including the 3G, 4G, and 5G cellular standards and the IEEE 802 suite of
standards. We have contributed technology to video standards including standards established by ISO/IEC
Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative
Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET), among others.

Our wireless portfolio has largely been built

through internal development, supplemented by joint
development projects with other companies, and select acquisitions of patents and companies. Our video
technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the
patent licensing business and research and innovation unit of visual technology industry leader Technicolor SA
and patents and applications created by internal development. Our patented inventions have been implemented in
a wide variety of products, including smartphones, other wireless communication devices and infrastructure
equipment, such as tablets, and base stations, consumer electronics and Internet of Things (“IoT”) products, such
as televisions,
laptops, gaming consoles, set-top boxes, streaming devices and connected automobiles. In
addition, our patented inventions have been implemented in a wide variety of services, such as video streaming
and other cloud-based services.

Revenue

In 2023, 2022, and 2021, our total revenues were $549.6 million, $457.8 million, and $425.4 million,
respectively. Our recurring revenues in 2023, 2022 and 2021 were $408.4 million, $403.9 million, and $351.7
million, respectively. In 2023, 2022, and 2021, we recognized $141.2 million, $53.9 million and $73.7 million,
respectively, of catch-up revenues as more fully discussed below. In 2023, fixed-fee royalties accounted for 89%
of our recurring revenues. These fixed-fee revenues are not affected by the related licensees’ success in the
market or the general economic climate. The majority of the remaining portion of our recurring revenue was
variable in nature due to the per-unit structure of the related license agreements.

The Company considers Smartphone and CE, Auto/IoT as the groupings that best reflect the Company’s
core licensing programs. The Smartphone revenue grouping consists primarily of smartphones and also includes
other wireless communication devices and infrastructure equipment, such as tablets, and base stations. The CE,
IoT/Auto revenue grouping consists of consumer electronics and IoT products, such as televisions, laptops,
gaming consoles, set-top boxes, streaming devices, and connected automobiles.

35

2023 Annual Report

New Agreements

During 2023, we entered into eight patent license agreements as discussed below.

Direct Licenses

In 2023, we signed a multi-year, worldwide, non-exclusive, royalty bearing license with Lenovo, covering
InterDigital’s HEVC patents (the “Lenovo HEVC PLA”). The new license resolved all related HEVC litigation at
the time. We also entered into a multi-year, worldwide, non-exclusive, royalty bearing license with TCL
Communication Technology Holdings, Ltd. covering InterDigital’s portfolio of 3G and 4G patents.

In 2023, we also entered into five other licenses covering digital televisions, set-top boxes, and/or video
including licenses with Humax Co., Ltd., Alps Alpine Co., Ltd., Panasonic Entertainment &

patents,
Communication Co., LTD., and Funai Electronic Co., LTD.

Other Licensing Activities

On March 16, 2023, the UK’s High Court handed down its judgment in the Company’s licensing dispute
with Lenovo. The Court ruled that Lenovo should pay a total of $138.7 million for a license to InterDigital’s
portfolio of 3G, 4G and 5G patents, including past sales. On June 27, 2023, we were awarded an additional $46.2
million, increasing the total Lenovo must pay for a cellular patent license through 2023 to $184.9 million. During
2023, we recognized a total of $150.1 million of revenue from Lenovo, including amounts received under the
Lenovo HEVC PLA. The Company will defer recognizing any additional revenue related to the UK proceedings
until the appeal process progresses.

Samsung TV Agreement

In January 2024, we signed a new patent license agreement with Samsung Electronics. The agreement
licenses Samsung’s digital TVs and computer display monitors under InterDigital’s joint licensing program with
Sony and includes licenses to key technologies including ATSC 3.0, as well as licenses under InterDigital’s
patents including HEVC, VVC and Wi-Fi. No revenues or revenue share costs associated with this patent license
agreement were recognized in 2023.

Expiration of License Agreements

Our patent license agreements with a number of licensees that expired between January 1, 2023 and
December 31, 2023 have not yet been renewed. These patent license agreements, including with Huawei and the
Lenovo cellular license resulting from the UK proceedings, contributed $59.5 million of recurring revenues in
2023.

Seven of our revenue generating patent license agreements were scheduled to expire during 2024, of which
two agreements were renewed during 2023. Collectively, the five expiring agreements not yet renewed accounted
for $17.6 million, or approximately 4%, of recurring revenues in 2023.

We are actively working to renew these agreements on terms consistent with the licensees’ respective

market positions and utilization of our technology.

Intellectual Property Rights Enforcement

If we believe a party is required to license our patents in order to manufacture, use and/or sell certain
products or services and such party refuses to do so, we typically offer such party to have royalty rates, or other
terms, set by third party adjudicators (such as arbitrators). If the party refuses that offer and we believe they are

2023 Annual Report

36

unwilling to agree to a patent license on a fair, reasonable and non-discriminatory basis, we may have no other
viable recourse but to institute legal action against them to enforce our patent rights. This legal action has
typically taken the form of a patent infringement lawsuit or an administrative proceeding. In addition, we and our
licensees, in the normal course of business, might seek to resolve disagreements as to the rights and obligations
of the parties under the applicable license agreement through arbitration or litigation. Such legal actions
ultimately may be decided by the presiding court, third party adjudicator, or a negotiated resolution between the
parties.

In 2019, we were engaged in litigation with ZTE, Huawei, and Lenovo. During 2020, we filed patent
infringement actions against Xiaomi. We negotiated resolutions to the matters involving ZTE, Huawei and
Xiaomi in October 2019, April 2020 and July 2021, respectively, and resolution with Lenovo on our HEVC
patents in September 2023. Other open matters with Lenovo continue to proceed. During 2021, we filed patent
infringement actions against Oppo, OnePlus and realme, which proceedings are ongoing. During 2022, we
agreed to have a panel of arbitrators establish the royalties to be paid by Samsung Electronics for a worldwide
license to certain of the Company’s patents, as well as any other terms to a patent license agreement on which the
parties are not able to agree, and the arbitration proceeding is ongoing.

The matters are more fully discussed in Note 12, “Litigation and Legal Proceedings,” to the Notes to
Consolidated Financial Statements included below in Part II, Item 8 of this Form 10-K. We filed these actions,
other than our arbitration with Samsung, after lengthy periods of negotiation and after the refusal of our
counterparties to accept our various proposals to them, including our proposals to have a third party adjudicator
set a royalty rate and resolve certain other terms upon which we could not mutually agree.

In 2023, our intellectual property enforcement costs increased to $48.8 million, from $44.4 million and
$34.3 million in 2022 and 2021, respectively. These costs represented 61% of our total licensing costs of $79.4
million in 2023. Intellectual property enforcement costs will vary depending upon activity levels, and it is likely
they will continue to be a significant expense for us in the future.

Cash and Short-Term Investments

As of December 31, 2023, we had $1.0 billion of cash, restricted cash, and short-term investments and an
additional $1.2 billion of cash payments due under contracted fixed price agreements, which includes our
conservative estimates of the minimum cash receipts that we expect to receive under the wireless patent license
agreement with Samsung.

89% of our recurring revenue comes from fixed-fee royalties. Such agreements often have prescribed
payment schedules that are uneven and sometimes front-loaded, resulting in timing differences between when we
collect the cash payments and recognize the related revenue.

The following table reconciles the timing differences between cash receipts and recognized revenue on a

quarterly basis for each of the last three years, including the resulting operating cash flow (in thousands):

Cash vs. Non-cash revenue:

Q1

Q2

2023

Q3

Q4

Total

Fixed fee cash receipts (a) . . . . . . . . . . . . . . . . . . . $ 24,669 $
Other cash receipts (b) . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in deferred revenue . . . . . . . .
Increase (decrease) in receivables . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,972
42,766
90,856
24,110

9,406 $ 368,608 $ 30,185
18,649
3,684
11,160
45,243
38,641
(77,474)
(167,222)
92,756
47,720
(36,279)
12,510
(50,372)

$432,868
53,465
49,176
64,110
(50,031)

Total Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $202,373 $101,591 $ 140,106 $105,518

$549,588

Net cash (used in) provided by operating activities . $ (27,852) $ (45,440) $ 310,610 $ (23,585) $213,733

37

2023 Annual Report

Cash vs. Non-cash revenue:

Q1

Q2

2022

Q3

Q4

Total

. . . . . . . . . . . . . . . . . . $ 43,803 $

Fixed fee cash receipts (a)
Other cash receipts (b) . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in deferred revenue . . . . . . . .
Increase (decrease) in receivables . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,592
50,741
(7,475)
5,657

3,339 $ 26,662 $ 384,252
20,154
6,403
16,620
(274,034)
76,959
60,931
(349,861)
354,242
25,163
1,579
1,491
2,576

$458,056
51,769
(85,403)
22,069
11,303

Total Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $101,318 $124,657 $ 114,764 $ 117,055

$457,794

Net cash (used in) provided by operating activities . $ (17,972) $ (33,768) $ (18,729) $ 356,508

$286,039

Cash vs. Non-cash revenue:

Q1

Q2

2021

Q3

Q4

Total

. . . . . . . . . . . . . . . . . . $ 47,312 $

Fixed fee cash receipts (a)
Other cash receipts (b) . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in deferred revenue . . . . . . . .
Increase (decrease) in receivables . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,676
23,429
(3,507)
4,453

3,050 $ 143,050 $ 123,050
15,556
17,808
7,739
(150,703)
63,230
80,912
(110,546)
129,655
(499)
2,843
13,755
4,146

$316,462
51,779
16,868
15,103
25,197

Total Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 82,363 $ 87,735 $ 143,496 $ 111,815

$425,409

Net cash (used in) provided by operating activities . $ (9,842) $ (27,259) $ 96,264 $ 71,229

$130,392

(a) Fixed fee cash receipts are comprised of cash receipts from Dynamic Fixed-Fee Agreement royalties,

including the associated catch-up revenues.

(b) Other cash receipts are primarily comprised of cash receipts related to our variable patent royalty revenue

and catch-up revenues.

When we collect payments on a front-loaded basis, we recognize a deferred revenue liability equal to the
cash received and accounts receivable recorded which relate to revenue expected to be recognized in future
periods. That liability is then reduced as we recognize revenue over the balance of the agreement. The following
table shows the projected amortization of our current and long term deferred revenue as of December 31, 2023
(in thousands):

Deferred Revenue

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$153,597
129,022
78,777
12,450
1,141
2,476

$377,463

Return of Capital

In June 2014, our Board of Directors authorized a $300 million share repurchase program (the “Share
Repurchase Program”). Subsequently our Board of Directors authorized five $100 million increases to the
program, an additional $333 million in December 2022, and an additional $235 million in December 2023,
bringing the total amount of the Share Repurchase Program to nearly $1.4 billion. Since 2014, we have
repurchased $1.1 billion of shares at an average price of $58.36, adjusted for dividends. This amount includes the
$199.9 million, excluding fees, expenses and excise tax, repurchased as part of the modified “Dutch auction”
tender offer in 2023. As of December 31, 2023, there was $296.3 million remaining under the Share Repurchase
Program authorization.

2023 Annual Report

38

Since January 2014, we have paid $394.4 million in dividends, bringing our total return of capital over the

last ten years to nearly $1.5 billion.

The table below sets forth the total number of shares repurchased and the dollar value of shares repurchased
under the Share Repurchase Program, cash dividends on outstanding common stock declared, and the total
capital returned to our shareholders (in thousands):

2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Share Repurchase
Program

Cash Dividends
Declared

# of
Shares

4,411
1,224
458
6
2,962
1,478
107
1,304
1,836
3,554

Value

$ 339,704
74,445
30,000
349
196,269
110,505
7,693
64,685
96,410
152,625

Per
Share

$ 1.50
1.40
1.40
1.40
1.40
1.40
1.30
1.00
0.80
0.70

Value

$ 39,296
41,949
43,041
43,111
43,718
47,922
45,122
34,359
28,726
27,153

Total
Capital
Returned to
Shareholders

$ 379,000
116,394
73,041
43,460
239,987
158,427
52,815
99,044
125,136
179,778

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,340

$1,072,685

$12.30

$394,397

$1,467,082

Restructuring Activities

On June 10, 2021, we announced that, as a result of a strategic review of our research and innovation
priorities, we commenced the process of a collective economic layoff in which we proposed a reduction in force
of our research and innovation unit. Additionally, in October 2021, we expanded our restructuring efforts to
include general and administrative functions largely centered in the U.S.

During 2023, we did not recognize any restructuring expenses and the Company considers the plan to be

complete.

Impact of Macroeconomic and Geopolitical Factors

We have been actively monitoring the impact of the current macroeconomic environment in the U.S. and
globally characterized by inflation, supply chain issues, rising interest rates, labor shortages, and the potential for
a recession. These market factors, as well as the impacts of the COVID-19 pandemic and the Ukraine-Russia and
Israel-Hamas conflicts, have not had a material impact on our business to date. However, if these conditions
continue or worsen, they could have an adverse effect on our operating results and our financial condition.

Comparability of Financial Results

When comparing our 2023 financial results against the financial results of other periods, the following items

should be taken into consideration:

Revenue

• Our 2023 revenue includes $141.2 million of catch-up revenues primarily related to the two Lenovo

agreements entered into in 2023.

39

2023 Annual Report

Operating Expenses

•

•

•

In 2023, we incurred a $7.5 million charge for a net litigation fee reimbursement associated with the
Lenovo proceedings. See Note 12, “Litigation and Legal Proceedings,” within the Notes to the
Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for more information
on this matter.

In 2023, we incurred $3.0 million of nonrecurring share-based compensation costs driven by licensing
successes.

In 2023, we incurred a $2.5 million impairment on Convida’s sale of a portion of its patent portfolio.

Non-Operating Income (Expense), Net

•

•

In 2023, we recognized $10.4 million of gains resulting from observable price changes of our long-
term strategic investments, which was included within “Other income (expense), net” in the
consolidated statement of income.

In 2023, we recognized a $4.0 million reduction to interest expense due to a change in estimate of our
Technicolor Patent Acquisition Long-Term Debt, which was included within “Interest expense” in the
consolidated statement of income. For more information regarding this arrangement, refer to Note 10,
“Obligations,” to the Notes to Consolidated Financial Statements included below in Part II, Item 8 of
this Form 10-K.

Income Tax Provision

•

In 2023, we recognized a $11.7 million tax benefit resulting from the release of a valuation allowance
from certain foreign jurisdictions and interest due on a federal refund.

Critical Accounting Policies and Estimates

Our consolidated financial statements are based on the selection and application of GAAP, which require us
to make estimates and assumptions that affect the amounts reported in both our consolidated financial statements
and the accompanying notes. Future events and their effects cannot be determined with absolute certainty.
Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from
these estimates and any such differences may be material to the financial statements. Our significant accounting
policies are described in Note 2, “Summary of Significant Accounting Policies and New Accounting Guidance”
within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. We
believe the accounting policies that are of particular importance to the portrayal of our financial condition and
results and that may involve a higher degree of complexity and judgment in their application compared to others
are those relating to revenue recognition, compensation, and income taxes. If different assumptions were made or
different conditions existed, our financial results could have been materially different.

Revenue Recognition

We derive the vast majority of our revenue from patent licensing. The timing and amount of revenue
recognized from each licensee depend upon a variety of factors, including the specific terms of each agreement
and the nature of the deliverables and obligations. Such agreements are often complex and include multiple
performance obligations. These agreements can include, without limitation, performance obligations related to
the settlement of past patent infringement liabilities, patent and/or know-how licensing royalties on covered
products sold by licensees, access to a portfolio of technology as it exists at a point in time, and access to a
portfolio of technology at a point in time along with promises to provide any technology updates to the portfolio
during the term.

2023 Annual Report

40

In accordance with US GAAP, we use a five-step model to achieve the core underlying principle that an
entity should recognize revenue to depict the transfer of goods or services to customers at an amount that the
entity expects to be entitled to in exchange for those goods or services. These steps include (1) identifying the
contract with the customer, (2) identifying the performance obligations, (3) determining the transaction price,
(4) allocating the transaction price to the performance obligations, and (5) recognizing revenue as the entity
satisfies the performance obligation(s). Additionally, we have elected to utilize certain practical expedients in the
application of ASC 606. In evaluating the presence of a significant financing component in our agreements, we
utilize the practical expedient to exclude any contracts wherein the gap between payment by our customers and
the delivery of our performance obligation is less than one year. We have also elected to utilize the practical
expedient related to costs of obtaining a contract where an entity may recognize the incremental costs of
obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise
would have recognized is one year or less. Timing of revenue recognition may differ significantly from the
timing of invoicing to customers. Contract assets are included in accounts receivable and represent unbilled
amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds
the amount billed, and right to payment is subject to the underlying contractual terms. Contract assets are
classified as long-term assets if the payments are expected to be received more than one year from the reporting
date. Contract assets due within less than twelve months of the balance sheet date are included within accounts
receivable in our consolidated balance sheets. Contract assets due more than twelve months after the balance
sheet date are included within other non-current assets.

For certain patent license agreements or other contractual arrangements, the amount of consideration that we
will receive is uncertain. In such cases, we estimate and recognize licensing revenues only when we have a
contract, as defined in the revenue recognition guidance. Such estimates are only recognized to the extent it is
probable that a significant reversal of cumulative revenues recognized will not occur. We analyze the risk of a
significant revenue reversal considering both the likelihood and magnitude of the reversal and, if necessary,
constrain the amount of estimated revenues in order to mitigate this risk, which may result in recognizing
revenues less than amounts we expect we are most likely to receive. These aforementioned estimates may require
significant judgment.

Patent License Agreements

Upon signing a patent license agreement, we provide the licensee permission to use our patented inventions
in specific applications. We account for patent license agreements in accordance with the guidance indicated
above.

Certain patent license agreements contain revenue from non-financial sources in the form of patents
received from the customer. Under our patent license agreements, we typically receive one or a combination of
the following forms of payment as consideration for permitting our licensees to use our patented inventions in
their applications and products.

Consideration for Past Patent Royalties

Consideration related to a licensee’s product sales from prior periods may result from a negotiated
agreement with a licensee that utilized our patented inventions prior to signing a patent license agreement with us
or from the resolution of a disagreement or arbitration with a licensee over the specific terms of an existing
license agreement. We may also receive consideration for past patent royalties in connection with the settlement
of patent litigation where there was no prior patent license agreement. In each of these cases, we record the
consideration as revenue as prescribed by the five-step model.

41

2023 Annual Report

Fixed-Fee Agreements

Fixed-fee license agreements include fixed, non-refundable royalty payments that fulfill the licensee’s
obligations to us under a patent license agreement for a specified time period or for the term of the agreement for
specified products, under certain patents or patent claims, for sales in certain countries, or a combination thereof -
in each case for a specified time period (including for the life of the patents licensed under the agreement).

Dynamic fixed-fee license agreements contain a single performance obligation that represents ongoing
access to a portfolio of technology over the license term, since our promise to transfer to the licensee access
to the portfolio as it exists at inception of the license, along with promises to provide any technology
updates to the portfolio during the term, are not separately identifiable. Upon entering a new agreement, we
allocate the transaction price to the performance obligations delivered at signing (e.g. our existing patent
portfolio) and future performance obligations (e.g. the technology updates). We use a time-based input
method of progress to determine the timing of revenue recognition, and as such we recognize the future
deliverables on a straight-line basis over the term of the agreement. We utilize the straight-line method as
we believe that it best depicts efforts expended to develop and transfer updates to the customer evenly
throughout the term of the agreement.

Static fixed-fee license agreements are fixed-price contracts that generally do not include updates to
technology we create after the inception of the license agreement or in which the customer does not stand to
substantively benefit from those updates during the term. Although we have few static fixed-fee license
agreements, we generally satisfy our performance obligations under such agreements at contract signing,
and, as such, revenue is recognized at that time.

Variable Agreements

Upon entering a new variable patent license agreement, the licensee typically agrees to pay royalties or
license fees on licensed products sold during the term of the agreement. We utilize the sales- or usage- based
royalty exception for these agreements and recognize revenues during the contract term when the underlying sale
or usage occurs. Our licensees under variable agreements provide us with quarterly royalty reports that
summarize their sales of covered products and their related royalty obligations to us. We typically receive these
royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, we are
required to estimate revenues and recognize sales-based royalties on such licensed products in the period in
which the associated sales occur, considering all relevant information (historical, current and forecasted) that is
reasonably available to us. Estimating licensees’ quarterly royalties prior to receiving the royalty reports requires
us to make assumptions and judgments related to forecasted trends and growth rates used to estimate our
licensees’ sales, which could have an impact on the amount of revenue we report on a quarterly basis. As a result
of recognizing revenues in the period in which the licensees’ sales occur using estimates, adjustments to revenues
are required in subsequent periods to reflect changes in estimates as new information becomes available,
primarily resulting from actual amounts reported by our licensees.

Agreements with Multiple Performance Obligations

During 2023, we signed two new fixed-fee agreements that had multiple performance obligations.
Consistent with the revenue recognition policies disclosed above, we (1) identified the contract with the
customer, (2) identified the performance obligations, (3) determined the transaction price, (4) allocated the
transaction price to the performance obligations, and (5) recognized revenue as we satisfy the performance
obligations. We allocated the transaction price to each performance obligation for accounting purposes using our
best estimate of the term and value. The process for determining the value of the standalone selling prices of
identified performance obligations in dynamic fixed-fee license agreements requires the exercise of significant
judgment when evaluating the valuation methods and assumptions, including the assumed royalty rates, projected
sales volumes, discount rate, identification of comparable market transactions which are not directly observable
and other relevant factors. Changes in any of a number of these assumptions could have had a substantial impact

2023 Annual Report

42

on the relative fair value assigned to each performance obligation for accounting purposes. These inputs and
assumptions represent management’s best estimates at the time of the transaction.

The impact that a five percent change in the aggregate amount allocated to past patent royalties under these

agreements would have had on 2023 revenue is summarized in the following table (in thousands):

Allocation to past patent royalties

Change in amount
allocated

+5%

-%5

Change in Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,887

$(3,887)

Revenue from Non-financial Sources

During 2023, 2022 and 2021, approximately 3%, 4% and 5%, respectively, of our total revenue was based
on the estimated fair value of patents. The process for determining the value of revenue from non-financial
sources requires estimating the fair value of patents received. We estimated the fair value of the patents in the
above transactions using one of, or a combination of, an analysis of comparable market transactions (the market
approach), a discounted cash flow analysis (the income approach) and/or by quantifying the amount of money
required to replace the future service capability of the assets (the cost approach). For the market approach,
judgment was applied as to which market transactions were most comparable to the transaction. For the income
approach, the inputs and assumptions used to develop these estimates were based on a market participant
perspective and included estimates of projected royalties, discount rates, economic lives and income tax rates,
among others. For the cost approach, we utilized the historical cost of assets of similar technologies to determine
the estimated replacement cost, including research, development, testing and patent application fees. The
development of a number of these inputs and assumptions requires a significant amount of management
judgment and is based upon a number of factors, including identification of comparable market transactions,
assumed royalty rates, projected sales volumes, economic lives of the patents and other relevant factors. Changes
in any of a number of these assumptions could have had 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.

The impact that a five-percent change in the estimated aggregate value of the patents acquired would have
had on 2023 revenue, patent amortization and pre-tax income is summarized in the following table (in
thousands):

Estimated value of patents acquired in connection with PLAs

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Patent amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

+5%

$ 730
841

Pre-tax income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(111)

-5%

$(730)
(841)

$ 111

Change in estimate

Compensation Programs

We use a variety of compensation programs to attract, retain and motivate our employees, and to align
employee compensation more closely with company performance. These programs include, but are not limited
to, short-term incentives tied to performance goals, cash awards to inventors for filed patent applications and
patent issuances, and long-term incentives in the form of stock option awards, time-based restricted stock unit
(“RSU”) awards, performance-based RSU awards and cash awards, noting equity awards are granted pursuant to
the terms and conditions of our Equity Plans (as defined within the Notes to the Consolidated Financial
Statements included in Part II, Item 8 of this Form 10-K). Our long-term incentives, including equity awards,
typically include annual equity or cash award grants with three to five year vesting periods; as a result, in any one
year, we are typically accounting for at least three active cycles.

43

2023 Annual Report

The aggregate amount of performance compensation expense we record in a period, under both short-term
and long-term incentive compensation programs, requires the input of subjective assumptions and is a function of
our estimated progress toward performance goals at both the beginning and the end of the period. Our estimated
progress toward goals under performance equity grants is based on meeting a minimum confidence level of
achievement in accordance with accounting rules for share-based compensation. Due to the binary nature of
patent license agreements, performance awards with milestone goals are typically not expensed until the goal has
been achieved. Achievement rates can vary by performance cycle and from period to period, resulting in
variability in our compensation expense.

We account for compensation costs associated with share-based compensation based on the fair value of the
instruments issued. The estimated value of stock options includes assumptions around expected life, stock
volatility and dividends. For stock options considered to be “plain vanilla” options, the Company estimates the
expected term based on the simplified method as prescribed by Staff Accounting Bulletin Topic 14. The
simplified method was used because the Company does not believe it has sufficient historical exercise data to
provide a reasonable basis for the expected term of its grants. In all periods, our policy has been to set the value
of RSUs awards equal to the value of our underlying common stock on the date of measurement. For grants with
graded vesting, we amortize the associated unrecognized compensation cost using an accelerated method. For
grants that cliff vest, we amortize the associated unrecognized compensation cost on a straight-line basis over
their vesting term. For awards containing performance conditions, we recognize compensation expense ratably
over the vesting period when it is probable that the stated performance targets will be achieved and record
cumulative adjustments in the period in which estimates change.

In the event of canceled awards, we adjust compensation expense recognized to date as they occur. Tax
windfalls and shortfalls related to the tax effects of employee share-based compensation are included in our tax
provision. On the consolidated statements of cash flows, tax windfalls and shortfalls related to employee share-
based compensation awards are included within operating activities and cash paid to tax authorities for shares
withheld are included within financing activities. The inclusion of windfalls and shortfalls in the tax provision
could increase our earnings volatility between periods. Tax windfalls and shortfalls related to share-based
compensation was windfalls of $3.1 million and $0.8 million for the years ended 2023 and 2021, respectively,
and shortfalls for the year ended 2022 of $0.4 million.

The below table summarizes our supplemental compensation expense for 2023, 2022 and 2021,

in

thousands:

Short-term incentive compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Time-based awards (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance-based awards (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$19,780
26,426
10,035

$24,341
15,422
8,155

$18,820
12,490
17,933

Total supplemental compensation expense . . . . . . . . . . . . . . . . . . . .

$56,241

$47,918

$49,243

2023

2022

2021

(a) For 2023, 2022 and 2021, approximately 3%, 8%, and 7%, respectively, of the aggregate expense associated

with time-based and performance-based awards related to cash awards.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets
and liabilities are recognized for the estimated future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in
effect for the year in which those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statement of income in

2023 Annual Report

44

the period in which the change was enacted. A valuation allowance is recorded to reduce the carrying amounts of
deferred tax assets if management has determined that it is more likely than not that such assets will not be
realized.

In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of
uncertainties in the application of complex tax laws. We are subject to examinations by the U.S. IRS and other
taxing jurisdictions on various tax matters, including challenges to various positions we assert in our filings. In
the event that the IRS or another taxing jurisdiction levies an assessment in the future, it is possible the
assessment could have a material adverse effect on our consolidated financial condition or results of operations.

The financial statement recognition of the benefit for an uncertain tax position is dependent upon the benefit
being more likely than not to be sustainable upon audit by the applicable tax authority. If this threshold is met,
the tax benefit is then measured and recognized at the largest amount that is greater than 50 percent likely of
being realized upon ultimate settlement. In the event that the IRS or another taxing jurisdiction levies an
assessment in the future, it is possible the assessment could have a material adverse effect on our consolidated
financial condition or results of operations.

Between 2014 and 2023, we paid approximately $138.1 million in foreign taxes to foreign governments that
have tax treaties with the U.S., for which we have claimed foreign tax credits against our U.S. tax obligations,
and for which the tax treaty procedures are still open. It is possible that as a result of tax treaty procedures, the
U.S. government may reach an agreement with the related foreign governments that will result in a partial refund
of foreign taxes paid with a related reduction in our foreign tax credits. Due to foreign currency fluctuations, any
such agreement could result in foreign currency gain or loss. If the matter had been resolved as of December 31,
2023, we would have recognized a loss up to $13.8 million based on exchange rates and prior competent
authority resolutions.

On November 8, 2019, the Company received notification that its request for competent authority pertaining
to Article 25 (Mutual Agreement Procedure) of the United States-Republic of Finland Income Tax Convention
had been reviewed by the IRS and an agreement has been reached (the “Finland Competent Authority
Proceeding”). As a result of this agreement, the Company does not anticipate any tax consequences.

New Accounting Guidance

Refer to Note 2, “Summary of Significant Accounting Policies and New Accounting Guidance” within the
Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for a discussion of
recently issued accounting guidance.

Legal Proceedings

We are routinely involved in disputes associated with enforcement and licensing activities regarding our
intellectual property, including litigations, arbitrations and other proceedings. These litigations, arbitrations and
other proceedings are important means to enforce our intellectual property rights. We are a party to other disputes
and legal actions not related to our intellectual property, but also arising in the ordinary course of our business.
Refer to Note 12, “Litigation and Legal Proceedings,” to the Notes to Consolidated Financial Statements
included below in Part II, Item 8 of this Form 10-K for a description of our material legal proceedings.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash, cash equivalents and short-term investments, as well as cash
generated from operations. We believe we have the ability to obtain additional liquidity through debt and equity
financings. From time to time, we may engage in a variety of transactions to augment our liquidity position as
our business dictates and to take advantage of favorable interest rate environments or other market conditions,

45

2023 Annual Report

including the incurrence or issuance of debt and the refinancing or restructuring of existing debt. Based on our
past performance and current expectations, we believe our available sources of funds, including cash, cash
equivalents and short-term investments and cash generated from our operations, will be sufficient to finance our
operations, capital requirements, debt obligations, existing stock repurchase program, dividend program, and
other contractual obligations discussed below in both the short-term over the next twelve months, and the long-
term beyond twelve months.

Cash, cash equivalents, restricted cash, and short-term investments

As of December 31, 2023 and December 31, 2022, we had the following amounts of cash, cash equivalents,

restricted cash, and short-term investments (in thousands):

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash included within prepaid and other current

assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total cash, cash equivalents, restricted cash, and short-

December 31,
2023

December 31,
2022

Increase /
(Decrease)

$ 437,076

$ 693,479

$(256,403)

5,885
569,280

9,682
508,298

(3,797)
60,982

term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,012,241

$1,211,459

$(199,218)

The net decrease in cash, cash equivalents, restricted cash, and short-term investments was attributable to
cash used in financing activities of $388.8 million and cash used in investing activities of $46.5 million,
excluding sales and purchases of short-term investments, partially offset by cash provided by operating activities
of $213.7 million. Refer to the sections below for further discussion of these items.

Cash flows from operations

We generated the following cash flows from our operating activities in 2023 and 2022 (in thousands):

For the Year Ended December 31,

2023

2022

Increase /
(Decrease)

Cash flows provided by operating activities . . . . . . . . . . . . . . . . .

$213,733

$286,039

$(72,306)

Our cash flows provided by operating activities are principally derived from cash receipts from patent
license agreements, offset by cash operating expenses and income tax payments. The $72.3 million change in net
cash provided by operating activities was driven by higher cash outflows related to tax payments made in 2023
and an increase in cash operating expenses. Cash receipts decreased largely due to timing of cash receipts under
existing agreements. The table below sets forth the significant items comprising our cash flows provided by
operating activities during the years ended December 31, 2023 and 2022 (in thousands):

Total Cash Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash Outflows:

For the Year Ended December 31,

2023

2022

Increase /
(Decrease)

$ 486,333

$ 509,825

$(23,492)

Cash operating expenses (a) . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(211,525)
(59,202)

(204,153)
(6,805)

(7,372)
(52,397)

Total cash outflows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(270,727)

(210,958)

(59,769)

Other working capital adjustments . . . . . . . . . . . . . . . . . . . .

(1,873)

(12,828)

10,955

Cash flows provided by operating activities . . . . . . . . . . . . .

$ 213,733

$ 286,039

$(72,306)

2023 Annual Report

46

(a) Cash operating expenses include operating expenses less depreciation of fixed assets, amortization of

patents, and non-cash compensation.

(b)

Income taxes paid include foreign withholding taxes.

Cash provided by or used in investing and financing activities

Net cash used in investing activities in 2023 was $85.2 million, a $229.5 million change from
$314.7 million in 2022. During 2023, we purchased $38.7 million of short-term marketable securities, net of
sales, and capitalized $44.6 million of patent costs and property and equipment purchases. During 2022, we
purchased $272.0 million of short-term marketable securities, net of sales, and capitalized $42.8 million of patent
costs and property and equipment purchases.

Net cash used in financing activities for 2023 was $388.8 million, a $407.4 million change from net cash
provided by financing activities of $18.6 million in 2022. This change was primarily attributable to a
$265.3 million increase in share repurchases in 2023 compared to 2022, of which $203.4 million was related to
the Company’s modified “Dutch auction” tender offer in 2023. The change was also due to net proceeds of
$138.9 million from the debt refinancing in 2022.

Other

Our combined short-term and long-term deferred revenue balance at December 31, 2023 was
$377.5 million, a decrease of $49.2 million from December 31, 2022. Based on current license agreements, we
expect the amortization of dynamic fixed-fee royalty payments to reduce the December 31, 2023 deferred
revenue balance by $153.6 million over the next twelve months.

Convertible Notes

Refer to Note 10, “Obligations” within the Notes to the Consolidated Financial Statements included in

Part II, Item 8 of this Form 10-K for definitions of capitalized terms used below.

Our 2027 and 2024 Notes, which for purposes of this discussion are also referred to as the “Convertible
Notes”, are included in the dilutive earnings per share calculation using the if-converted method. Under the if-
converted method, we must assume that conversion of convertible securities occurs at the beginning of the
reporting period. The Convertible Notes are convertible into cash up to the aggregate principal amount of the
Convertible Notes to be converted and any remaining obligation may be settled in cash, shares of the Company’s
common stock or a combination thereof. As the principal amount must be paid in cash and only the conversion
spread is settled in shares, we only include the net number of incremental shares that would be issued upon
conversion. We must calculate the number of shares of our common stock issuable under the terms of the
Convertible Notes based on the average market price of our common stock during the applicable reporting period
and include that number in the total diluted shares figure for the period.

At the time we issued the Convertible Notes, we entered into the 2027 Call Spread Transactions and 2024
Call Spread Transactions that together were designed to have the economic effect of reducing the net number of
shares that will be issued in the event of conversion of the Convertible Notes by, in effect, increasing the
conversion price of the Convertible Notes from our economic standpoint. However, under GAAP, since the
impact of the 2027 Note Hedge Transactions and 2024 Note Hedge Transactions (together, the “Note Hedge
Transactions”) is anti-dilutive, we exclude from the calculation of fully diluted shares the number of shares of
our common stock that we would receive from the counterparties to these agreements upon settlement.

During periods in which the average market price of our common stock is above the applicable conversion
price of the Convertible Notes ($77.49 per share for the 2027 Notes and $81.29 per share for the 2024 Notes as of
December 31, 2023) or above the weighted average strike price of the warrants ($106.35 per share for the 2027

47

2023 Annual Report

Warrant Transactions and $109.43 per share for the 2024 Warrant Transactions as of December 31, 2023), the
impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted
earnings per share. As a result, in periods where the average market price of our common stock is above the
conversion price or strike price, as applicable, under the if-converted method, we calculate the number of shares
issuable under the terms of the Convertible Notes and the warrants based on the average market price of the stock
during the period, and include that number in the total diluted shares outstanding for the period.

Under the if-converted method, changes in the price per share of our common stock can have a significant
impact on the number of shares that we must include in the fully diluted earnings per share calculation. As
described in Note 10, “Obligations” within the Notes to the Consolidated Financial Statements included in
Part II, Item 8 of this Form 10-K, the Convertible Notes are convertible into cash up to the aggregate principal
amount of the Convertible Notes to be converted and any remaining obligation may be in cash, shares of the
Company’s common stock or a combination thereof (“net share settlement”). Assuming net share settlement
upon conversion, the following tables illustrate how, based on the $460.0 million aggregate principal amount of
the 2027 Notes and the $126.2 million aggregate principal amount of the 2024 Notes outstanding as of
December 31, 2023, and the approximately 5.9 million warrants related to the 2027 Notes and the 1.6 million
warrants remaining related to the 2024 Notes, outstanding as of the same date, changes in our stock price would
affect (i) the number of shares issuable upon conversion of the Convertible Notes, (ii) the number of shares
issuable upon exercise of the warrants subject to the 2027 Warrant Transactions and 2024 Warrant Transactions
(together, the “Warrant Transactions”), (iii) the number of additional shares deemed outstanding with respect to
the Convertible Notes, after applying the if-converted method, for purposes of calculating diluted earnings per
share (“Total If-Converted Method Incremental Shares”), (iv) the number of shares of our common stock
deliverable to us upon settlement of the Note Hedge Transactions and (v) the number of shares issuable upon
concurrent conversion of the Convertible Notes, exercise of the warrants subject to the Warrant Transactions, and
settlement of the Note Hedge Transactions (in thousands):

Market Price Per
Share

Shares Issuable
Upon
Conversion of
the 2027 Notes

Shares Issuable
Upon Exercise of the
2027 Warrant
Transactions

Total Treasury
Stock Method
Incremental
Shares

Shares Deliverable
to InterDigital
upon Settlement of
the 2027
Note Hedge
Transactions

Incremental
Shares Issuable (a)

2027 Notes

$80
$85
$90
$95
$100
$105
$110
$115
$120
$125

186
524
825
1,094
1,336
1,555
1,754
1,936
2,103
2,256

—
—
—
—
—
—
197
446
675
886

186
524
825
1,094
1,336
1,555
1,951
2,382
2,778
3,142

(186)
(524)
(825)
(1,094)
(1,336)
(1,555)
(1,754)
(1,936)
(2,103)
(2,256)

—
—
—
—
—
—
197
446
675
886

2023 Annual Report

48

Market Price Per
Share

Shares Issuable
Upon
Conversion of
the 2024 Notes

Shares Issuable
Upon Exercise of the
2024 Warrant
Transactions

Total Treasury
Stock Method
Incremental
Shares

Shares Deliverable
to InterDigital
upon Settlement of
the 2024
Note Hedge
Transactions

Incremental
Shares Issuable (a)

2024 Notes

$85
$90
$95
$100
$105
$110
$115
$120
$125
$130

68
150
224
290
351
405
455
501
543
582

—
—
—
—
—
8
75
137
193
246

68(68)
150
224
290
351
413
530
638
736
828

(150)
(224)
(290)
(351)
(405)8
(455)
(501)
(543)
(582)

—
—
—
—
—

75
137
193
246

(a) Represents incremental shares issuable upon concurrent conversion of convertible notes, exercise of

warrants and settlement of the hedge agreements.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2023 (in thousands):

2024 and 2027 Notes (a) . . . . . . . . . . . . . . . . . . . . . . . . .
Contractual interest payments on the 2024 and 2027

Notes (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . .
Defined benefit plan obligations (b) . . . . . . . . . . . . . . . .
Purchase obligations (c) . . . . . . . . . . . . . . . . . . . . . . . . .

Payments Due by Period

Total

Less Than
1 year

1-3 Years

3-5 Years

Thereafter

$586,174

$126,174

$ — $460,000

$ —

56,111
25,804
4,304
11,255

17,158
4,290
399
11,255

32,200
8,561
202
—

6,753
7,525
567
—

—
5,428
3,136
—

Total contractual obligations . . . . . . . . . . . . . . . . . . . . .

$683,648

$159,276

$40,963

$474,845

$8,564

(a) The table above represents the payment made on the maturity dates of the 2024 and 2027 Notes. From the
period January 1, 2024 through March 31, 2024, the holders of the 2027 Notes have the right, but not the
obligation, to convert any portion of the principal amount of the 2027 Notes. We will pay cash up to the
aggregate principal amount of the 2027 Notes to be converted, if any, and will pay cash, shares of our
Common Stock, or a combination of cash and shares of our Common Stock for any conversion obligation in
excess of the aggregate principal amount being converted at our election. Refer to Note 10, “Obligations,”
within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for
details of our 2024 Notes and 2027 Notes.

(b) Refer to Note 11, “Commitments,” within the Notes to the Consolidated Financial Statements included in
Part II, Item 8 of this Form 10-K for details of our defined benefit plan obligations. Estimated future benefit
payments included above are through 2030.

(c) Purchase obligations consist of agreements to purchase goods and services that are legally binding on us, as
well as accounts payable. Our consolidated balance sheet as of December 31, 2023 includes a $14.4 million
non-current liability for uncertain tax positions. The future payments related to uncertain tax positions have
not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement
with the taxing authorities.

49

2023 Annual Report

As discussed above we believe our available sources of funds, including cash, cash equivalents and short-
term investments and cash generated from our operations, will be sufficient to finance these contractual
obligations discussed below in both the short-term over the next twelve month, and the long-term beyond
twelve months.

As of December 31, 2023, we have recorded long-term debt of $29.0 million related to the Technicolor
Patent Acquisition. Additionally, we are subject to a revenue-sharing arrangement with Technicolor resulting
from the Technicolor Acquisitions. There is no liability associated with the revenue-share agreement at
December 31, 2023, as there are no minimum or maximum payments under the revenue-sharing arrangement,
and, except in certain circumstances, the arrangement continues through December 31, 2038. Refer to Note 10,
“Obligations,” within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this
Form 10-K for further information. Due to the uncertainty regarding the timing and amount of future payments
related to these items, the amounts are excluded from the contractual obligations table above.

RESULTS OF OPERATIONS

2023 Compared with 2022

Revenues

The following table compares 2023 revenues to 2022 revenues (in thousands):

For the Year Ended
December 31,

2023

2022

Total Increase/
(Decrease)

Recurring revenues:
Smartphone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CE, IoT/Auto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total recurring revenues . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Catch-up revenues a

$347,124
59,858
1,410

408,392
141,196

$351,064
51,717
1,107

403,888
53,906

$ (3,940)
8,141
303

4,504
87,290

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$549,588

$457,794

$91,794

(1)%
16%
27%

1%
162%

20%

(a) Catch-up revenues are comprised of past patent royalties and revenues from static fixed-fee agreements.

Total revenues of $549.6 million increased 20% from $457.8 million in 2022 primarily due to catch-up
revenues from the Lenovo cellular license resulting from the UK proceedings and the Lenovo HEVC PLA.
Recurring revenues were relatively flat compared to 2022.

In 2023 and 2022, 76% and 60% of our total revenues were attributable to companies that individually
accounted for 10% or more of our total revenues, respectively. In 2023 and 2022, the following licensees or
customers accounted for 10% or more of our total revenues:

Customer A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the Year Ended
December 31,

2023

2022

27%
24%
14%
11%

—%
30%
17%
13%

2023 Annual Report

50

Operating Expenses

The following table summarizes the change in operating expenses by category (in thousands):

For the Year Ended
December 31,

2023

2022

Increase/
(Decrease)

Research and portfolio development
. . . . . . . . . . . . . . . .
Licensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring activities . . . . . . . . . . . . . . . . . . . . . . . . . . .

$195,285
79,397
53,291
—

$185,202
71,419
47,377
3,280

$10,083
7,978
5,914
(3,280)

5%
11%
12%
(100)%

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . .

$327,973

$307,278

$20,695

7%

Operating expenses increased 7% to $328.0 million in 2023 from $307.3 million in 2022. The $20.7 million
increase in total operating expenses was primarily due to increases/(decreases) in the following items (in
thousands):

Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net litigation fee reimbursement
Fair value changes of deferred compensation liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patent impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intellectual property enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase/
(Decrease)

$13,587
7,537
4,968
2,500
(3,153)
(3,280)
(1,464)

Total increase in operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,695

The $20.7 million increase in operating expenses was primarily due to a $13.6 million increase in share-
based compensation costs driven by both higher accrual rates and higher award levels to non-executive
employees and a $5.0 million increase from fair value changes of our deferred compensation liability, which was
offset by a related gain recorded within “Other income (expense), net” on the investments that we hold under the
plan. Additionally, 2023 included nonrecurring items, including a $7.5 million net litigation fee reimbursement
primarily related to the Lenovo proceedings and a $2.5 million impairment on Convida’s sale of a portion of its
patent portfolio.

These increases were partially offset by a $3.2 million decrease in intellectual property enforcement costs
primarily driven by decreased costs from the Lenovo proceedings, partially offset by an increase in costs from
the Oppo proceedings, and a $3.3 million decrease in non-recurring restructuring activities recognized in 2022.

Research and portfolio development expense: Research and portfolio development expense increased by
$10.1 million primarily resulting from the above-noted increases in share-based compensation, fair value changes
of our deferred compensation liability, and Convida’s sale of a portion of its patent portfolio.

Licensing expense: The $8.0 million increase in licensing expense primarily resulted from the above-noted
litigation fee reimbursement, increases in share-based compensation, and fair value changes of our deferred
compensation liability, partially offset by the decrease in intellectual property enforcement costs.

General and administrative expense: The $5.9 million increase in general and administrative expense was
primarily driven by the above-noted increases in share-based compensation and fair value changes of our
deferred compensation liability, partially offset by a decrease in short-term incentive compensation costs.

51

2023 Annual Report

Restructuring Activities: Restructuring expenses associated with our overall restructuring plan decreased
due to the plan being substantially complete in 2022. For more information on the restructuring activities refer to
Note 20, “Restructuring Activities” within the Notes to the Consolidated Financial Statements included in Part II,
Item 8 of this Form 10-K.

Non-Operating Income (Expense), Net

The following table compares 2023 non-operating income to 2022 non-operating expense (in thousands):

For the Year Ended
December 31,

2023

2022

Change

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and investment income . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment of long-term debt . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(44,817)
46,628
—
11,184

$(29,496)
14,452
(11,190)
(6,719)

$(15,321)
32,176
11,190
17,903

(52)%
223%
100%
266%

Total non-operating income (expense), net . . . . . . . . . . . .

$ 12,995

$(32,953)

$ 45,948

139%

Interest expense increased $15.3 million primarily due to significant financing expense resulting from a
previously announced patent license agreement and additional interest on the 2027 Notes that were issued during
second quarter 2022. Additionally, we recognized a $4.0 million reduction to interest expense due to a change in
estimate of our Technicolor Patent Acquisition Long-Term Debt resulting from updated estimated cash outflows
owed under the arrangement. For more information regarding this arrangement, refer to Note 10, “Obligations,”
to the Notes to Consolidated Financial Statements included below in Part II, Item 8 of this Form 10-K.

The $32.2 million increase in interest and investment income was due to increased short-term investments

made by the Company and market conditions driving higher yields from the short-term investments.

In 2022, we recognized a $11.2 million loss on extinguishment of long-term debt related to the partial
repurchase of the 2024 Notes, as described further in Note 10, “Obligations” within the Notes to the
Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.

The change in Other was primarily due to fair value adjustments of our investments and pension obligation
resulting in $12.1 million of net gains in 2023, compared to $2.4 million of net losses in 2022 and due to a
foreign currency translation net gain arising from euro translation of our foreign subsidiaries of $1.0 million in
2023, compared to $3.9 million foreign currency translation net loss in 2022.

Income Taxes

In 2023, based on the statutory federal tax rate net of discrete federal and state taxes, our effective tax rate is
10.0%, as compared to an effective tax of 21.7% in 2022. In both periods, the effective tax rate was impacted by
losses in certain jurisdictions where the Company presently has recorded a valuation allowance against the
related tax benefit. In addition, there was a reduction to the effective rate in 2023, of 4.2%, due to a partial
release of valuation allowance in France due to higher projected income resulting from recently signed
agreements, including with Samsung Electronics. Excluding the impact of valuation allowance, our effective tax
rate would have been 12.4% and 19.3% in 2023 and 2022, respectively.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E
of the Exchange Act. Such statements include certain information in “Part I, Item 1. Business” and “Part II,

2023 Annual Report

52

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other
information regarding our current beliefs, plans and expectations, including, without limitation, the matters set
forth below. Words such as “believe,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,”
“goal,” “could,” “would,” “should,” “if,” “may,” “might,” “future,” “target,” “trend,” “seek to,” “will continue,”
“predict,” “likely,” “in the event,” variations of any such words or similar expressions contained herein are
intended to identify such forward-looking statements. Forward-looking statements are made on the basis of
management’s current views and assumptions and are not guarantees of future performance. Although the
forward-looking statements in this Form 10-K 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 concerning our business, results of operations and financial condition are inherently subject to risks
and uncertainties. We caution readers that actual results and outcomes could differ materially from those
expressed in or anticipated by such forward-looking statements due to a variety of factors, including those set
forth below:

• unanticipated delays, difficulties or accelerations in the execution of patent license agreements;

• the resolution of current

including any awards or judgments relating to such
proceedings, additional or related legal proceedings, including appeals, changes in the schedules or costs
associated with such proceedings or adverse rulings;

legal proceedings,

• our ability to leverage our strategic relationships and secure new patent license agreements on acceptable

terms;

• our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets;

• our ability to expand our revenue opportunities by entering into licensing arrangements with video

streaming and other cloud-based service providers;

• our ability to enter into partnerships with leading inventors and research organizations and identify and

acquire technology and patent portfolios that align with our roadmap;

• our ability to commercialize our technologies and enter into customer agreements;

• the failure of the markets for our current or new technologies to materialize to the extent or at the rate that

we expect;

• our continued ability to develop new technologies and secure new patents,
unexpected delays or difficulties related to the development of our technologies;

including the risk of

• risks associated with our capital allocation strategies,

including risks associated with our planned

dividend payments and share repurchases;

• changes in our interpretations of, and assumptions and calculations with respect to the impact on us of,

the 2017 Tax Cuts and Jobs Act, as well as further guidance that may be issued regarding such act;

• risks related to the potential impact of new accounting standards on our financial position, results of

operations or cash flows;

• failure to accurately forecast the impact of our restructuring activities on our financial statements and our

business;

• the timing and impact of potential administrative and legislative matters;

• changes or inaccuracies in market projections;

• our ability to obtain liquidity through debt and equity financings;

• the potential effects that macroeconomic uncertainty could have on our financial position, results of

operations and cash flows;

• impacts from acts of terrorism, war or political or civil unrest, or any responses thereto, in the United

States or elsewhere;

53

2023 Annual Report

• changes in our business strategy;

• changes or inaccuracies in our expectations with respect to royalty payments by our customers; and

• risks related to our assumptions and application of relevant accounting standards, including with respect

to revenue recognition.

You should carefully consider these factors as well as the risks and uncertainties outlined in greater detail in
Part I, Item 1A, of this Form 10-K before making any investment decision with respect to our common stock.
These factors, individually or in the aggregate, may cause our actual results to differ materially from our
expected and historical results. You should understand that it is not possible to predict or identify all such factors.
In addition, you should not place undue reliance on the forward-looking statements contained herein, which are
made only as of the date of this Form 10-K. We undertake no obligation to revise or update publicly any forward-
looking statement for any reason, except as otherwise required by law.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Cash, cash equivalents, restricted cash and short-term investments

The primary objectives of our investment activities are to preserve principal and maintain liquidity while at
the same time capturing a market rate of return. To achieve these objectives, we maintain our portfolio of cash,
cash equivalents, restricted cash and short-term and long-term investments in a variety of securities, including
government obligations, corporate bonds and commercial paper.

Interest Rate Risk — We invest our cash in a number of diversified high quality investment-grade fixed and
floating rate securities with a fair value of $1.0 billion as of December 31, 2023. Our exposure to interest rate
risks is not significant due to the short average maturity, quality and diversification of our holdings. We do not
hold any derivative, derivative commodity instruments or other similar financial instruments in our investment
portfolio. The risk associated with fluctuating interest rates is generally limited to our investment portfolio. We
believe that a hypothetical 10% change in period-end interest rates would not have a significant impact on our
results of operations or cash flows.

The following table provides information about our interest-bearing securities that are sensitive to changes
in interest rates as of December 31, 2023. The table presents principal cash flows, weighted-average yield at cost
and contractual maturity dates. Additionally, we have assumed that these securities are similar enough within the
specified categories to aggregate these securities for presentation purposes.

Interest Rate Sensitivity
Principal Amount by Expected Maturity
Average Interest Rates
(in thousands)

2024

2025

2026

2027

2028

Thereafter

Total

Money market and demand

accounts . . . . . . . . . . . . . . . .
Short-term investments . . . . . . .
Average interest rate . . . . . . . . .

$430,707
$489,752

—
$39,133

—
$52,649

—
—

5.1%

4.7%

4.6% —%

—
—
—%

—
—
—%

$430,707
$581,535

5.0%

Cash and cash equivalents and available-for-sale securities are recorded at fair value.

Bank Liquidity Risk — As of December 31, 2023, we had approximately $430.7 million in operating
accounts that are held with domestic and international financial institutions. The majority of these balances are
held with domestic financial institutions. While we monitor daily cash balances in our operating accounts and
adjust the cash balances as appropriate, these cash balances could be lost or become inaccessible if the
underlying financial institutions fail or if they are unable to meet the liquidity requirements of their depositors.
We have not incurred any losses and have had full access to our operating accounts to date.

2023 Annual Report

54

Foreign Currency Exchange Rate Risk — We are exposed to limited risk from fluctuations in currencies,
which might change over time as our business practices evolve, that could impact our operating results, liquidity
and financial condition. We operate and invest globally. Adverse movements in currency exchange rates might
negatively affect our business due to a number of situations. Currently, our international licensing agreements are
typically made in U.S. dollars and are generally not subject to foreign currency exchange rate risk. We do not
engage in foreign exchange hedging transactions at this time.

Between 2014 and 2023, we paid approximately $138.1 million in foreign taxes to foreign governments that
have tax treaties with the U.S., for which we have claimed foreign tax credits against our U.S. tax obligations,
and for which the tax treaty procedures are still open. It is possible that as a result of tax treaty procedures, the
U.S. government may reach an agreement with the related foreign governments that will result in a partial refund
of foreign taxes paid with a related reduction in our foreign tax credits. Due to foreign currency fluctuations, any
such agreement could result in foreign currency gain or loss. If the matter had been resolved as of December 31,
2023, we would have recognized a loss up to $13.8 million based on exchange rates and prior competent
authority resolutions.

Investment Risk — We are exposed to market risk as it relates to changes in the market value of our short-
term and long-term investments in addition to the liquidity and creditworthiness of the underlying issuers of our
investments. We hold a diversified investment portfolio, which includes, fixed and floating-rate, investment-
grade marketable securities, mortgage and asset-backed securities and U.S. government and other securities. The
instruments included in our portfolio meet high credit quality standards, as specified in our investment policy
guidelines. This policy also limits our amount of credit exposure to any one issue, issuer and type of instrument.
Given that the guidelines of our investment policy prohibit us from investing in anything but highly rated
instruments, our investments are not subject to significant fluctuations in fair value due to the volatility of the
credit markets and prevailing interest rates for such securities. Our marketable securities, consisting of
government obligations, corporate bonds and commercial paper, are primarily classified as available-for-sale
with a fair value of $581.5 million as of December 31, 2023.

Equity Risk — We are exposed to changes in the market-traded price of our common stock as it influences
the calculation of earnings per share. In connection with the offerings of the 2024 and 2027 Notes, we entered
into convertible note hedge transactions with option counterparties. We also sold warrants to the option
counterparties. These transactions have been accounted for as an adjustment to our shareholders’ equity. The
convertible note hedge transactions are expected to reduce the potential equity dilution upon conversion of the
2024 and 2027 Notes. The warrants along with any shares issuable upon conversion of the 2024 and 2027 Notes
will have a dilutive effect on our earnings per share to the extent that the average market price of our common
stock for a given reporting period exceeds the applicable strike price or conversion price of the warrants or
convertible 2024 and 2027 Notes.

55

2023 Annual Report

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

PAGE
NUMBER

CONSOLIDATED FINANCIAL STATEMENTS:

Report of Independent Registered Public Accounting Firm (PCAOB ID 238) . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets as of December 31, 2023 and 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 . . . . . .
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023,

2022 and 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2023, 2022 and
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57
60
61

62

63
64
65

SCHEDULES:
Schedule II — Valuation and Qualifying Accounts as of and for the years ended December 31, 2023,

2022 and 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110

All other schedules are omitted because they are either not required or applicable or equivalent information

has been included in the financial statements and notes thereto.

2023 Annual Report

56

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of InterDigital, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of InterDigital, Inc. and its subsidiaries (the
“Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of
comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended
December 31, 2023, including the related notes and financial statement schedule listed in the accompanying
index (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s
internal control over financial reporting as of December 31, 2023, based on criteria established in Internal
Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting
principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control—Integrated Framework (2013) issued by the COSO.

Changes in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which

it accounts for convertible instruments in 2021.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting
appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial
statements and on the Company’s internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement, whether due to error or fraud, and whether effective internal control over
financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of
material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.

57

2023 Annual Report

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the
consolidated financial statements that were communicated or required to be communicated to the audit
committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements
and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical
audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matters below, providing separate opinions on the critical
audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Determination of Standalone Selling Prices of Identified Performance Obligations in
Dynamic Fixed-Fee License Agreements Entered Into During The Year

As described in Notes 2 and 3 to the consolidated financial statements, dynamic fixed-fee license
agreements include fixed royalty payments that fulfill the licensee’s obligations to the Company under a patent
license agreement for a specified time period or for the term of the agreement. Total recurring revenues and
catch-up revenues were $408.4 million and $141.2 million, respectively, for the year ended December 31, 2023,
of which a portion relates to dynamic fixed-fee agreements entered into during the year. As disclosed by
management, the process for determining the value of the standalone selling prices of identified performance
judgment when
obligations in dynamic fixed-fee license agreements requires the exercise of significant
evaluating the valuation methods and assumptions, including the assumed royalty rates, projected sales volumes,
discount rate, identification of comparable market transactions which are not directly observable and other
relevant factors.”

The principal considerations for our determination that performing procedures relating to the determination
of standalone selling prices of identified performance obligations in dynamic fixed-fee license agreements
entered into during the year is a critical audit matter are (i) the significant judgment by management when
determining the value of standalone selling prices of identified performance obligations in dynamic fixed-fee
license agreements and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures
and evaluating management’s significant assumptions related to assumed royalty rates and projected sales
volumes.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. These procedures included testing the

2023 Annual Report

58

effectiveness of controls relating to the revenue recognition process, including controls over the determination of
standalone selling prices of identified performance obligations in dynamic fixed-fee license agreements. These
procedures also included, among others, for a sample of dynamic fixed-fee license agreements (i) reading
agreements entered into during the year; (ii) testing management’s process for determining the value of
standalone selling prices of identified performance obligations; (iii) evaluating the appropriateness of the
valuation methods used; (iv) testing the completeness and accuracy of data used by management in the valuation
methods; and (v) evaluating the reasonableness of management’s significant assumptions related to assumed
royalty rates and projected sales volumes. Evaluating the reasonableness of management’s significant
assumptions related to assumed royalty rates and projected sales volumes involved considering consistency with
historical sales data.

Revenue Recognition – Determination of Transaction Price in Certain Arrangements with Variable
Consideration

As described in Notes 2 and 3 to the consolidated financial statements, for certain patent

license
arrangements or other contractual arrangements, the amount of consideration that the Company will receive is
uncertain. In such cases, management estimates and recognizes licensing revenues only when the Company has a
contract, as defined in the revenue recognition guidance. Such estimates are only recognized to the extent it is
probable that a significant reversal of cumulative revenues recognized will not occur. Total recurring revenues
and catch-up revenues were $408.4 million and $141.2 million, respectively, for the year ended December 31,
2023, of which a portion relates to certain arrangements with variable consideration. Management analyzes the
risk of a significant revenue reversal considering both the likelihood and magnitude of the reversal and, if
necessary, constrains the amount of estimated revenues in order to mitigate this risk, which may result in
recognizing revenues less than amounts management expects the Company is most likely to receive. As disclosed
by management, these estimates may require significant judgment.

The principal considerations for our determination that performing procedures relating to the determination
of transaction price in certain arrangements with variable consideration is a critical audit matter are (i) the
significant judgment by management when determining the transaction price and (ii) a high degree of auditor
judgment, subjectivity and effort
in performing procedures and evaluating management’s analysis of the
probability that a significant reversal of cumulative revenues recognized will not occur.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. These procedures included testing the
effectiveness of controls relating to the revenue recognition process, including controls over the determination of
transaction price in arrangements where the amount of consideration that the Company will receive is uncertain.
These procedures also included, among others (i) reading certain arrangements applicable for the current year;
(ii) testing management’s process for determining the transaction price in such arrangements; (iii) evaluating the
appropriateness of management’s analysis used in determining the transaction price; (iv) testing the completeness
and accuracy of the data used by management in the analysis; and (v) evaluating the reasonableness of
management’s significant assumptions and judgments in determining the transaction price. Evaluating the
reasonableness of management’s significant assumptions and judgments involved considering management’s
past experience in such arrangements, status of ongoing discussions with the customer, and advice obtained,
including obtaining and evaluating the letters of audit inquiry, from in-house and external legal counsel.

/s/ PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
February 15, 2024

We have served as the Company’s auditor since 2002.

59

2023 Annual Report

INTERDIGITAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

ASSETS
CURRENT ASSETS:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPERTY AND EQUIPMENT, NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PATENTS, NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DEFERRED TAX ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER NON-CURRENT ASSETS, NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:

Current portion of long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation and related expenses . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LONG-TERM DEFERRED REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER LONG-TERM LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY:

Preferred stock, $0.10 par value, 14,399 shares authorized, 0 shares issued

and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Common stock, $0.01 par value, 100,000 shares authorized, 69,507 and

71,923 shares issued and 25,580 and 29,668 shares outstanding . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Treasury stock, 43,927 and 42,255 shares of common held at cost . . . . . . . . .
Total InterDigital, Inc. shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY . . . . . . . . . . . . . . .

DECEMBER 31,
2023

DECEMBER 31,
2022

$ 437,076
569,280
117,292
43,976
1,167,624
11,566
313,001
128,967
149,656
603,190
$1,770,814

$ 578,752
7,846
32,665
153,597
10,226
98,042
881,128
29,019
223,866
55,252
1,189,265

$ 693,479
508,298
53,182
89,716
1,344,675
11,338
353,999
94,373
95,720
555,430
$1,900,105

$

—
9,997
38,400
189,059
10,384
23,506
271,346
607,066
237,580
53,600
1,169,592

—

—

694
742,981
1,462,070
(647)
2,205,098
1,623,549
581,549
—
581,549
$1,770,814

719
717,102
1,492,046
(916)
2,208,951
1,484,056
724,895
5,618
730,513
$1,900,105

The accompanying notes are an integral part of these statements.

2023 Annual Report

60

INTERDIGITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

FOR THE YEAR ENDED DECEMBER 31,

2023

2022

2021

REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $549,588
OPERATING EXPENSES:

Research and portfolio development . . . . . . . . . . . . . . . . . . . . . . . . . . .
Licensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195,285
79,397
53,291
—

Total Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

327,973

$457,794

$425,409

185,202
71,419
47,377
3,280

307,278

200,484
64,625
61,217
27,877

354,203

Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

221,615

150,516

71,206

INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(44,817)

(29,496)

OTHER INCOME (EXPENSE), NET . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INCOME TAX PROVISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,812
234,610
(23,557)

(3,457)
117,563
(25,502)

(25,225)

11,575
57,556
(15,368)

NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $211,053

$ 92,061

$ 42,188

Net loss attributable to noncontrolling interest . . . . . . . . . . . . . . . . . . .

(3,016)

(1,632)

(13,107)

NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC.

. . . . . . . $214,069

$ 93,693

$ 55,295

NET INCOME PER COMMON SHARE — BASIC . . . . . . . . . . . . . . . . $

7.97

$

3.11

$

1.80

WEIGHTED AVERAGE NUMBER OF COMMON SHARES

OUTSTANDING — BASIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,860

30,106

30,764

NET INCOME PER COMMON SHARE — DILUTED . . . . . . . . . . . . . $

7.62

$

3.07

$

1.77

WEIGHTED AVERAGE NUMBER OF COMMON SHARES

OUTSTANDING — DILUTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,102

30,485

31,253

CASH DIVIDENDS DECLARED PER COMMON SHARE . . . . . . . . . $

1.50

$

1.40

$

1.40

The accompanying notes are an integral part of these statements.

61

2023 Annual Report

INTERDIGITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain (loss) on investments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . .

$211,053
269

$92,061
(345)

$ 42,188
(387)

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$211,322

$91,716

$ 41,801

Comprehensive loss attributable to noncontrolling interest . . . . . . . . . . . . . . . . .

(3,016)

(1,632)

(13,107)

Total comprehensive income attributable to InterDigital, Inc. . . . . . . . . . . . . . . .

$214,338

$93,348

$ 54,908

For the Year Ended December 31,

2023

2022

2021

The accompanying notes are an integral part of these statements.

2023 Annual Report

62

INTERDIGITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands, except per share data)

Common Stock Additional
Paid-In
Capital
Shares Amount

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Treasury Stock

Shares Amount

Non-Controlling
Interest

Total
Shareholders’
Equity

BALANCE, DECEMBER 31, 2020 . . 71,389

$714

$738,481 $1,413,969

$(184)

40,573 $(1,379,611)

$ 23,197

$ 796,566

Adjustment related to the adoption of

ASU 2020-06 . . . . . . . . . . . . . . . . . . .

Net income attributable to InterDigital,

Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net loss attributable to noncontrolling

interest . . . . . . . . . . . . . . . . . . . . . . . .

Proceeds from and increases in

noncontrolling interests . . . . . . . . . . .
Noncontrolling interest distribution . . . .
Net change in unrealized loss on short-

term investments . . . . . . . . . . . . . . . .
Dividends declared ($1.40 per share) . . .
Exercise of common stock options . . . . .
Issuance of common stock, net
. . . . . . .
Amortization of unearned
compensation . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . .

—

—

—

—
—

—
—
157
174

—
—

—

—

—

—
—

—
—
1
2

—
—

(55,349)

15,587

—

—

—
—

—
734
7,949
(6,952)

28,736
—

55,295

—

—
—

—
(43,746)
—
—

—
—

—

—

—

—
—

(387)
—
—
—

—
—

—

—

—

—
—

—
—
—
—

—

—

—

—
—

—
—
—
—

—
458

—
(30,000)

—

—

(39,762)

55,295

(13,107)

(13,107)

100
(2,512)

—
—
—
—

—
—

100
(2,512)

(387)
(43,012)
7,950
(6,950)

28,736
(30,000)

BALANCE, DECEMBER 31, 2021 . . 71,720

$717

$713,599 $1,441,105

$(571)

41,031 $(1,409,611)

$ 7,678

$ 752,917

Net income attributable to InterDigital,

Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net loss attributable to noncontrolling

interest . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interest distribution . . . .
Non-controlling interest

contributions . . . . . . . . . . . . . . . . . . .

Net change in unrealized loss on short-

term investments . . . . . . . . . . . . . . . .
Dividends declared ($1.40 per share) . . .
Exercise of common stock options . . . . .
Issuance of common stock, net
. . . . . . .
Amortization of unearned

compensation . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . .
Net convertible note hedge transactions,
net of tax . . . . . . . . . . . . . . . . . . . . . .
Net warrant transactions . . . . . . . . . . . . .

—

—
—

—

—
—
24
179

—
—

—
—

—

—
—

—

—
—
—
2

—
—

—
—

—

—
—

—

—
803
1,226
(6,259)

22,127
—

(54,257)
39,863

93,693

—
—

—

—
(42,752)
—
—

—
—

—
—

—

—
—

—

(345)
—
—
—

—
—

—
—

—

—
—

—

—
—
—
—

—

—
—

—

—
—
—
—

—
1,224

—
(74,445)

—
—

—
—

—

93,693

(1,632)
(1,928)

1,500

—
—
—
—

—
—

—
—

(1,632)
(1,928)

1,500

(345)
(41,949)
1,226
(6,257)

22,127
(74,445)

(54,257)
39,863

BALANCE, DECEMBER 31, 2022 . . 71,923

$719

$717,102 $1,492,046

$(916)

42,255 $(1,484,056)

$ 5,618

$ 730,513

Net income attributable to InterDigital,

Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net loss attributable to noncontrolling

interest . . . . . . . . . . . . . . . . . . . . . . . .
Deconsolidation of Convida . . . . . . . . . .
Non-controlling interest

contributions . . . . . . . . . . . . . . . . . . .

Net change in unrealized loss on short-

term investments . . . . . . . . . . . . . . . .
Dividends declared ($1.50 per share) . . .
Exercise of common stock options . . . . .
Issuance of common stock, net
. . . . . . .
Amortization of unearned

—

—
—

—

—
—
72
251

—

—
—

—

—
—
—
2

—

—
—

—

214,069

—
—

—

—
1,395
1,252
(12,509)

—
(40,691)
—
—

compensation . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . .

—
(2,739)

—
(27)

35,741

—
— (203,354)

—

—
—

—

269
—
—
—

—
—

—

—
—

—

—
—
—
—

—

—
—

—

—
—
—
—

—
1,672

—
(139,493)

BALANCE, DECEMBER 31, 2023 . . 69,507

$694

$742,981 $1,462,070

$(647)

43,927 $(1,623,549)

$

—

214,069

(3,016)
(4,352)

1,750

—
—
—
—

—
—

—

(3,016)
(4,352)

1,750

269
(39,296)
1,252
(12,507)

35,741
(342,874)

$ 581,549

The accompanying notes are an integral part of these statements

63

2023 Annual Report

INTERDIGITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

FOR THE YEAR ENDED
DECEMBER 31,

2023

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash interest income (expense), net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash change in fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment of debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in assets:

$ 211,053

$ 92,061

$ 42,188

77,792
(18,601)
(10,130)
(49,176)
(34,665)
35,741
—
2,500
415

78,571
1,645
1,686
85,403
18,518
22,127
11,190
2,427
—

78,193
6,867
(7,649)
(16,868)
(7,503)
28,736
—
13,228
—

Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(64,110)
866

(22,069)
(13,453)

(15,103)
(9,894)

(Decrease) Increase in liabilities:

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation and other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,513)
64,561

6,868
1,065

(1,803)
20,000

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

213,733

286,039

130,392

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized patent costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(836,370)
797,703
(4,268)
(40,358)
—
(1,877)

(532,724)
260,771
(3,156)
(39,597)
—
—

(527,800)
744,353
(2,511)
(33,416)
(2,350)
1,363

Net cash (used in) provided by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(85,170)

(314,706)

179,639

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of convertible senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of convertible bond hedge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from bond hedge unwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for warrant unwind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-controlling interest contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-controlling interest distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes withheld upon restricted stock unit vestings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

460,000
—
(80,500)
—
—
43,700
— (282,499)
11,851
—
(3,837)
—
(9,829)
(100)
(74,445)
(339,704)
1,226
1,252
1,500
1,750
—
—
(6,257)
(12,507)
(42,306)
(39,454)

Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(388,763)

18,604

—
—
—
—
—
—
—
(30,000)
7,950
100
(2,512)
(6,950)
(43,058)

(74,470)

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED

CASH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD . . . . . .

(260,200)
703,161

(10,063)
713,224

235,561
477,663

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD . . . . . . . . . . . . .

$ 442,961

$ 703,161

$ 713,224

Refer to Note 1, “Background and Basis of Presentation,” for additional supplemental cash flow information. Additionally, refer to

Note 5, “Cash, Cash Equivalents, Restricted Cash and Marketable Securities” for a reconciliation to the consolidated balance sheets.

The accompanying notes are an integral part of these statements.

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64

INTERDIGITAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2023

1. 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
immersive experiences in a broad range of communications and
technologies that enable connected,
entertainment products and services. We license our innovations worldwide to companies providing such
products and services, including makers of wireless communications devices, consumer electronics, 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, with a
significant AI research effort that intersects 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 the 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 revenues 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.

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Supplemental Cash Flow Information

The following table presents additional supplemental cash flow information for

the year ended

December 31, 2023, 2022 and 2021 (in thousands):

SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, including foreign withholding taxes . . . . . .
Non-cash investing and financing activities:

Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . .
Accrued taxes on the repurchase of common stock . . . . . .
Non-cash acquisition of patents . . . . . . . . . . . . . . . . . . . . .
Non-cash distribution of patents . . . . . . . . . . . . . . . . . . . .
Right-of-use assets obtained in exchange of operating

FOR THE YEAR ENDED
DECEMBER 31,

2023

2022

2021

$18,623
59,202

$13,429
6,805

$ 8,000
23,091

10,226
—
3,170
—
—

10,384
100
—
30,100
1,928

10,741
—
—
—
—

lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93

6,644

739

Accrued capitalized patent costs and property and

equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

670

4,026

2,021

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING
GUIDANCE

Foreign Currency Translation

The functional currency of substantially all of the Company’s wholly-owned subsidiaries is the U.S. dollar.
Certain subsidiaries have monetary assets and liabilities that are denominated in a currency that is different than
the functional currency. The gains and losses resulting from this remeasurement and translation of monetary
assets denominated in a currency that is different than the functional currency are reflected in the determination
of net income.

Cash, Cash Equivalents, Restricted Cash and Marketable Securities

We classify all highly liquid investment securities with original maturities of three months or less at date of
purchase as cash equivalents. Cash that is held for a specific purpose and therefore not available to the Company
for immediate or general business use is classified as restricted cash. Our investments are comprised of mutual
and exchange traded funds, commercial paper, United States and municipal government obligations and
corporate securities. Management determines the appropriate classification of our investments at the time of
acquisition and re-evaluates such determination at each balance sheet date.

As of December 31, 2023 and 2022, the majority of our marketable securities have been classified as
available-for-sale and are carried at fair value, with unrealized gains and losses reported net-of-tax as a separate
component of shareholders’ equity. Substantially all of our investments are investment grade government and
corporate debt securities that have maturities of less than three years, and we have both the ability and intent to
hold the investments until maturity.

Other-than-Temporary Impairments

We review our investment portfolio during each reporting period to determine whether there are identified
events or circumstances that would indicate there is a decline in the fair value that is considered to be other-than-
temporary. For non-public investments, if there are no identified events or circumstances that would have a
significant adverse effect on the fair value of the investment, then the fair value is not estimated. If an investment
is deemed to have experienced an other-than-temporary decline below its cost basis, we reduce the carrying

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66

amount of the investment to its quoted or estimated fair value, as applicable, and establish a new cost basis for
the investment. We charge the impairment to the “Other income (expense), net” line of our consolidated
statements of income.

Intangible Assets

Patents

We capitalize external costs, such as filing fees and associated attorney fees, incurred to obtain issued
patents and patent
license rights. We expense costs associated with maintaining and defending patents
subsequent to their issuance in the period incurred. We amortize capitalized patent costs for internally generated
patents on a straight-line basis over 10 years, which represents the estimated useful lives of the patents. The ten-
year estimated useful life for internally generated patents is based on our assessment of such factors as: the
integrated nature of the portfolios being licensed, the overall makeup of the portfolio over time, and the length of
license agreements for such patents. The estimated useful lives of acquired patents and patent rights, however,
have been and will continue to be based on a separate analysis related to each acquisition and may differ from the
estimated useful lives of internally generated patents. The average estimated useful life of acquired patents is 9.8
years. We assess the potential impairment to all capitalized net patent costs when events or changes in
circumstances indicate that the carrying amount of our patent portfolio may not be recoverable.

Goodwill

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition
and the fair value of the net tangible and identified intangible assets acquired under a business combination. We
review impairment of goodwill annually on the first day of the fourth quarter or if circumstances indicate a
triggering event has occurred. We first assess qualitative factors to determine whether it is more likely than not
that the fair value of our one reporting unit is less than its carrying amount as a basis for determining whether a
quantitative goodwill impairment test is necessary. If we conclude it is more likely than not that the fair value of
the reporting unit exceeds its carrying amount, we need not perform the quantitative assessment.

If based on the qualitative assessment we believe it is more likely than not that the fair value of the reporting
unit is less than its carrying value, a quantitative assessment test is required to be performed. This assessment
requires us to compare the fair value of our reporting unit to its carrying value including allocated goodwill. We
determine the fair value of our reporting units generally using a combination of the income and market
approaches. The income approach is estimated through the discounted cash flow method based on assumptions
about future conditions such as future revenue growth rates, new product and technology introductions, gross
margins, operating expenses, discount rates, future economic and market conditions, and other assumptions. The
market approach estimates the fair value of our equity by utilizing the market comparable method which is based
on revenue multiples from comparable companies in similar lines of business. If the carrying value of our
reporting unit exceeds the reporting unit’s fair value, a goodwill impairment charge will be recorded for the
difference up to the carrying value of goodwill.

The carrying value of goodwill was $22.4 million as of December 31, 2023 and December 31, 2022, which
was included within “Other non-current assets, net” in the consolidated balance sheets. No impairments were
recorded during 2023, 2022 or 2021 as a result of our annual goodwill impairment assessment.

Property and Equipment

Property and equipment are stated at cost, less depreciation, amortization and impairments. Depreciation
and amortization of property and equipment are provided using the straight-line method. The estimated useful
lives for computer equipment, computer software, engineering and test equipment and furniture and fixtures are
generally three to five years. Leasehold improvements are amortized over the lesser of their estimated useful

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2023 Annual Report

lives or their respective lease terms, which are generally five to ten years. Buildings are being depreciated over
twenty-five years. Expenditures for major improvements and betterments are capitalized, while minor repairs and
maintenance are charged to expense as incurred. Upon the retirement or disposition of property and equipment,
the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded.

Leases

We determine if an arrangement is a lease at inception. Operating lease right-of-use assets represent our
right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at
commencement date, except short-term leases with an original term of 12 months or less, based on the present
value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally
use an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a
similar term of the lease payments at commencement date. The operating lease right-of-use assets also includes
any lease payments made and excludes lease incentives. Lease expense is recognized over the expected term on a
straight-line basis. Leases with a lease term of 12 months or less are accounted for using the practical expedient
which allows for straight-line rent expense over the remaining term of the lease.

Internal-Use Software Costs

We capitalize costs associated with software developed for internal use that are incurred during the software
development stage. Such costs are limited to expenses incurred after management authorizes and commits to a
computer software project, believes that it is more likely than not that the project will be completed, the software
will be used to perform the intended function with an estimated service life of two years or more, and the
completion of conceptual formulation, design and testing of possible software project alternatives (the
preliminary design stage). Costs incurred after final acceptance testing has been successfully completed are
expensed. Capitalized computer software costs are amortized over their estimated useful life of three years.

All computer software costs capitalized to date relate to the purchase, development and implementation of

engineering, accounting and other enterprise software.

Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment when factors indicate that the carrying value of an asset may
not be recoverable. When factors indicate that such assets should be evaluated for possible impairment, we
review whether we will be able to realize our long-lived assets by analyzing the projected undiscounted cash
flows in measuring whether the asset is recoverable.

Revenue Recognition

We derive the vast majority of our revenue from patent licensing. The timing and amount of revenue
recognized from each licensee depend upon a variety of factors, including the specific terms of each agreement
and the nature of the deliverables and obligations. Such agreements are often complex and include multiple
performance obligations. These agreements can include, without limitation, performance obligations related to
the settlement of past patent infringement liabilities, patent and/or know-how licensing royalties on covered
products sold by licensees, access to a portfolio of technology as it exists at a point in time, and access to a
portfolio of technology at a point in time along with promises to provide any technology updates to the portfolio
during the term.

In accordance with US GAAP, we use a five-step model to achieve the core underlying principle that an
entity should recognize revenue to depict the transfer of goods or services to customers at an amount that the
entity expects to be entitled to in exchange for those goods or services. These steps include (1) identifying the

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68

contract with the customer, (2) identifying the performance obligations, (3) determining the transaction price,
(4) allocating the transaction price to the performance obligations, and (5) recognizing revenue as the entity
satisfies the performance obligation(s). Additionally, we have elected to utilize certain practical expedients in the
application of ASC 606. In evaluating the presence of a significant financing component in our agreements, we
utilize the practical expedient to exclude any contracts wherein the gap between payment by our customers and
the delivery of our performance obligation is less than one year. We have also elected to utilize the practical
expedient related to costs of obtaining a contract where an entity may recognize the incremental costs of
obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise
would have recognized is one year or less. Timing of revenue recognition may differ significantly from the
timing of invoicing to customers. Contract assets are included in accounts receivable and represent unbilled
amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds
the amount billed, and right to payment is subject to the underlying contractual terms. Contract assets are
classified as long-term assets if the payments are expected to be received more than one year from the reporting
date. Contract assets due within less than twelve months of the balance sheet date are included within accounts
receivable in our consolidated balance sheets. Contract assets due more than twelve months after the balance
sheet date are included within other non-current assets.

For certain patent license agreements or other contractual arrangements, the amount of consideration that we
will receive is uncertain. In such cases, we estimate and recognize licensing revenues only when we have a
contract, as defined in the revenue recognition guidance. Such estimates are only recognized to the extent it is
probable that a significant reversal of cumulative revenues recognized will not occur. We analyze the risk of a
significant revenue reversal considering both the likelihood and magnitude of the reversal and, if necessary,
constrain the amount of estimated revenues in order to mitigate this risk, which may result in recognizing
revenues less than amounts we expect we are most likely to receive. These aforementioned estimates may require
significant judgment.

Patent License Agreements

Upon signing a patent license agreement, we provide the licensee permission to use our patented inventions
in specific applications. We account for patent license agreements in accordance with the guidance indicated
above.

Certain patent license agreements contain revenue from non-financial sources in the form of patents
received from the customer. Under our patent license agreements, we typically receive one or a combination of
the following forms of payment as consideration for permitting our licensees to use our patented inventions in
their applications and products.

Consideration for Past Patent Royalties

Consideration related to a licensee’s product sales from prior periods may result from a negotiated
agreement with a licensee that utilized our patented inventions prior to signing a patent license agreement with us
or from the resolution of a disagreement or arbitration with a licensee over the specific terms of an existing
license agreement. We may also receive consideration for past patent royalties in connection with the settlement
of patent litigation where there was no prior patent license agreement. In each of these cases, we record the
consideration as revenue as prescribed by the five-step model.

Fixed-Fee Agreements

Fixed-fee license agreements include fixed, non-refundable royalty payments that fulfill the licensee’s
obligations to us under a patent license agreement for a specified time period or for the term of the agreement for
specified products, under certain patents or patent claims, for sales in certain countries, or a combination thereof -
in each case for a specified time period (including for the life of the patents licensed under the agreement).

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2023 Annual Report

Dynamic fixed-fee license agreements contain a single performance obligation that represents ongoing
access to a portfolio of technology over the license term, since our promise to transfer to the licensee access
to the portfolio as it exists at inception of the license, along with promises to provide any technology
updates to the portfolio during the term, are not separately identifiable. Upon entering a new agreement, we
allocate the transaction price to the performance obligations delivered at signing (e.g. our existing patent
portfolio) and future performance obligations (e.g. the technology updates). We use a time-based input
method of progress to determine the timing of revenue recognition, and as such we recognize the future
deliverables on a straight-line basis over the term of the agreement. We utilize the straight-line method as
we believe that it best depicts efforts expended to develop and transfer updates to the customer evenly
throughout the term of the agreement.

Static fixed-fee license agreements are fixed-price contracts that generally do not include updates to
technology we create after the inception of the license agreement or in which the customer does not stand to
substantively benefit from those updates during the term. Although we have few static fixed-fee license
agreements, we generally satisfy our performance obligations under such agreements at contract signing,
and, as such, revenue is recognized at that time.

Variable Agreements

Upon entering a new variable patent license agreement, the licensee typically agrees to pay royalties or
license fees on licensed products sold during the term of the agreement. We utilize the sales- or usage- based
royalty exception for these agreements and recognize revenues during the contract term when the underlying sale
or usage occurs. Our licensees under variable agreements provide us with quarterly royalty reports that
summarize their sales of covered products and their related royalty obligations to us. We typically receive these
royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, we are
required to estimate revenues and recognize sales-based royalties on such licensed products in the period in
which the associated sales occur, considering all relevant information (historical, current and forecasted) that is
reasonably available to us. Estimating licensees’ quarterly royalties prior to receiving the royalty reports requires
us to make assumptions and judgments related to forecasted trends and growth rates used to estimate our
licensees’ sales, which could have an impact on the amount of revenue we report on a quarterly basis. As a result
of recognizing revenues in the period in which the licensees’ sales occur using estimates, adjustments to revenues
are required in subsequent periods to reflect changes in estimates as new information becomes available,
primarily resulting from actual amounts reported by our licensees.

Accounts Receivable

Accounts receivable is presented net of allowance for doubtful accounts. Our accounts receivable consists
mainly of trade receivables derived from fixed-fee license arrangements with contractual payment terms. The
remaining material amounts of our accounts receivable are from variable patent license agreements, which
primarily are paid on a quarterly basis. The provision for doubtful accounts reflects the current estimate of credit
losses expected to be incurred over the life of the financial asset, based on historical experience, current
conditions and reasonable forecasts of future economic conditions. Further, we evaluate the collectability of our
accounts receivable and if there is doubt that we will collect the full amount, we will record a reserve specific to
that customer’s receivable balance. There was no provision for doubtful accounts as of December 31, 2023 or
2022.

Investments in Other Entities

We may make strategic investments in companies that have developed or are developing technologies that
are complementary to our business. We made an accounting policy election for a measurement alternative for our
equity investments that do not have readily determinable fair values, specifically related to our strategic
investments in other entities. Under the alternative, our strategic investments in other entities without readily

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70

determinable fair values are measured at cost, less any impairment, plus or minus changes resulting from
observable price changes in orderly transactions for an identical or similar investment of the same issuer, if any.
On a quarterly basis, we monitor items such as our investment’s financial position and liquidity, performance
targets, business plans, and cost trends to assess whether there are any triggering events or indicators present that
would be indicative of an impairment, or any other observable price changes as indicated above. We do not
adjust our investment balance when the investee reports profit or loss.

Additionally, other investments may be accounted for under the equity method of accounting. Under this
method, we initially record our investment in the stock of an investee at cost, and adjust the carrying amount of
the investment to recognize our share of the earnings or losses of the investee after the date of acquisition. The
amount of the adjustment is included in the determination of net income, and such amount reflects adjustments
similar to those made in preparing consolidated statements including adjustments to eliminate intercompany
gains and losses, and to amortize, if appropriate, any difference between our cost and underlying equity in net
assets of the investee at the date of investment. The investment is also adjusted to reflect our share of changes in
the investee’s capital. Dividends received from an investee reduce the carrying amount of the investment. When
there are a series of operating losses by the investee or when other factors indicate that a decrease in value of the
investment has occurred which is other than temporary, we recognize an impairment equal to the difference
between the fair value and the carrying amount of our investment.

The carrying value of our investments in other entities is included within “Other non-current assets, net” on
our consolidated balance sheets. The carrying value of our investments in other entities as of December 31, 2023
and 2022 was $31.9 million and $19.6 million, respectively, the majority of which are accounted for under the
measurement alternative for equity investments described above.

Collaborative Arrangements

We record the elements of our collaboration agreements that represent

joint operating activities in
accordance with ASC 808, Collaborative Arrangements (“ASC 808”). Accordingly,
the elements of our
collaboration agreements that represent activities in which both parties are active participants, and to which both
parties are exposed to the significant risks and rewards that are dependent on the commercial success of the
activities, are recorded as collaborative arrangements. Generally, the classification of a transaction under a
collaborative arrangement is determined based on the nature and contractual terms of the arrangement along with
the nature of the operations of the participants. For transactions that are deemed to be a collaborative
arrangement under ASC 808, costs incurred and revenues generated on sales to third parties will be reported in
our consolidated statement of operations on a gross basis if the Company is deemed to be the principal in the
transaction, or on a net basis if the Company is instead deemed to be the agent in the transaction, consistent with
the guidance in ASC 606-10-55-36, Revenue From Contracts with Customers—Principal Agent Considerations.

Deferred Charges

Direct costs of obtaining a contract or fulfilling a contract in a transaction that results in the deferral of
revenue may be either expensed as incurred or capitalized, depending on certain criteria. We made a policy
election to utilize the practical expedient related to costs of obtaining a contract where an entity may recognize
the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset
that the entity otherwise would have recognized is one year or less. If the amortization period is greater than one
year, we capitalize direct costs incurred for the acquisition or fulfillment of a contract through the date of signing
if they are directly related to a particular revenue arrangement and are expected to be recovered. The costs are
amortized on a straight-line basis over the life of the patent license agreement.

For example, from time to time, we use sales agents to assist us in our licensing and/or patent sale activities.
In such cases, we may pay a commission. The commission rate varies from agreement
to agreement.
Commissions are normally paid shortly after our receipt of cash payments associated with the patent license or

71

2023 Annual Report

patent sale agreements. We defer recognition of commission expense and amortize these expenses in proportion
to our recognition of the related revenue. Commission expense is included within the “Licensing” line of our
consolidated statements of income and was immaterial for the years presented. There were $0.1 million and
$0.7 million of new direct contract costs in 2023 and 2022, respectively, and no new direct contract costs
incurred during 2021.

Incremental direct costs incurred related to a debt financing transaction may be capitalized. In connection
with our offering of the 2027 Notes and 2024 Notes, defined and discussed in detail within Note 10,
“Obligations”, we incurred directly related costs. The debt issuance costs of the debt were capitalized as deferred
financing costs and recorded as a direct reduction of the debt. These costs are being amortized over the term of
the debt using the effective interest method and are included within the “Interest expense” line of our
consolidated statements of income. The Company incurred $9.9 million of new debt issuances costs in 2022 in
conjunction with the issuance of the 2027 Notes and no new debt issuance costs were incurred in 2023 or 2021.
Deferred financing expense was $2.3 million, $2.0 million and $1.6 million in 2023, 2022 and 2021, respectively.
The balance of unamortized deferred financing costs as of December 31, 2023 and 2022 was $7.4 million and
$9.8 million, respectively.

Research and Innovation Expenses

Research and innovation expenditures are expensed in the period incurred, except certain software
development costs that are capitalized between the point in time that technological feasibility of the software is
established and when the product is available for general release to customers. We did not have any capitalized
software costs related to research and development in any period presented. Research and Innovation expenses
are included within “Research and portfolio development” expenses in the consolidated statements of income.

Compensation Programs

We use a variety of compensation programs to attract, retain and motivate our employees, and to align
employee compensation more closely with company performance. These programs include, but are not limited
to, short-term incentives tied to performance goals, cash awards to inventors for filed patent applications and
patent issuances, and long-term incentives in the form of stock option awards, time-based restricted stock unit
(“RSU”) awards, performance-based RSU awards and cash awards, noting equity awards are granted pursuant to
the terms and conditions of our Equity Plans (as defined in Note 13, “Compensation Plans and Programs”). Our
long-term incentives, including equity awards, typically include annual equity and cash award grants with three
to five year vesting periods; as a result, in any one year, we are typically accounting for at least three active
cycles.

We account for compensation costs associated with share-based compensation based on the fair value of the
instruments issued. The estimated value of stock options includes assumptions around expected life, stock
volatility and dividends. For stock options considered to be “plain vanilla” options, the Company estimates the
expected term based on the simplified method as prescribed by Staff Accounting Bulletin Topic 14. The
simplified method was used because the Company does not believe it has sufficient historical exercise data to
provide a reasonable basis for the expected term of its grants. In all periods, our policy has been to set the value
of RSUs awards equal to the value of our underlying common stock on the date of measurement. For grants with
graded vesting, we amortize the associated unrecognized compensation cost using an accelerated method. For
grants that cliff vest, we amortize the associated unrecognized compensation cost on a straight-line basis over
their vesting term. For awards containing performance conditions, we recognize compensation expense ratably
over the vesting period when it is probable that the stated performance targets will be achieved and record
cumulative adjustments in the period in which estimates change.

In the event of canceled awards, we adjust compensation expense recognized to date as they occur. Tax
windfalls and shortfalls related to the tax effects of employee share-based compensation are included in our tax

2023 Annual Report

72

provision. On the consolidated statements of cash flows, tax windfalls and shortfalls related to employee share-
based compensation awards are included within operating activities and cash paid to tax authorities for shares
withheld are included within financing activities. The inclusion of windfalls and shortfalls in the tax provision
could increase our earnings volatility between periods. Tax windfalls and shortfalls related to share-based
compensation was windfalls of $3.1 million and $0.8 million for the years ended 2023 and 2021, respectively,
and shortfalls for the year ended 2022 of $0.4 million, respectively.

Restructuring

Restructuring activities include, but are not limited to, costs associated with termination benefits such as
severance costs and retention bonuses, contract termination costs, and other costs associated with an exit or
disposal activity. The termination benefits included within restructuring activities are recognized in accordance
with either ASC 420, Exit or Disposal Cost Obligations (“ASC 420”) or ASC 712, Compensation –
Nonretirement Postemployment Benefits (“ASC 712”), as applicable. Liabilities are recognized in accordance
with ASC 420 when management commits to a plan of termination, the employees to be terminated are
identified, the terms of the benefit arrangement are established, it was determined that either changes to the plan
or withdrawal are unlikely, and the arrangements were communicated to employees. Liabilities that fall under
ASC 712 are recognized when the liability was determined to be probable of being paid and reasonably
estimable. The current liabilities are recorded within “Other accrued expenses” and long-term liabilities are
included in “Other long-term liabilities” in the consolidated balance sheets. The restructuring expenses are
included in “Restructuring activities” in the consolidated statements of income.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets
and liabilities are recognized for the estimated future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in
effect for the year in which those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statement of income in
the period in which the change was enacted. A valuation allowance is recorded to reduce the carrying amounts of
deferred tax assets if management has determined that it is more likely than not that such assets will not be
realized.

In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of
uncertainties in the application of complex tax laws. We are subject to examinations by the U.S. IRS and other
taxing jurisdictions on various tax matters, including challenges to various positions we assert in our filings. In
the event that the IRS or another taxing jurisdiction levies an assessment in the future, it is possible the
assessment could have a material adverse effect on our consolidated financial condition or results of operations.

The financial statement recognition of the benefit for an uncertain tax position is dependent upon the benefit
being more likely than not to be sustainable upon audit by the applicable tax authority. If this threshold is met,
the tax benefit is then measured and recognized at the largest amount that is greater than 50 percent likely of
being realized upon ultimate settlement. In the event that the IRS or another taxing jurisdiction levies an
assessment in the future, it is possible the assessment could have a material adverse effect on our consolidated
financial condition or results of operations.

Treasury Stock

We record the repurchase of our shares of common stock at cost based on the settlement date of the
transaction. These shares are classified as treasury stock, which is a reduction to shareholders’ equity. Treasury
shares are included in authorized and issued shares, but excluded from outstanding shares. If the Treasury shares
are retired, the excess of the par value is included with retained earnings.

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2023 Annual Report

In August 2022, the Inflation Reduction Act was enacted in the United States, which included, among other
items, a 1% excise tax on certain net stock repurchases after December 31, 2022. This excise tax on our share
repurchases is recorded as a component of stockholders’ equity, as treasury stock, or retained earnings if retired.

New Accounting Guidance

Accounting Standards Update: Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures”. The amendments in the ASU require disclosures to include significant
segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of
other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the
CODM when deciding how to allocate resources. ASU 2023-07 is effective for fiscal years beginning after
December 15, 2023, with early adoption allowed. We are currently evaluating the impact of adoption on our
financial disclosures.

Accounting Standards Update: Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to
Income Tax Disclosures”. The amendments in the ASU enhance income tax disclosures, primarily through
standardization, disaggregation of rate reconciliation categories, and income taxes paid by jurisdiction.
ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption allowed. We
are currently evaluating the impact of adoption on our financial disclosures.

Accounting Standards Update: Simplifying the Accounting for Convertible Instruments

In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):
Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The
amendments in this ASU are intended to simplify accounting for convertible debt instruments and convertible
preferred stock by removing certain accounting models which separate the embedded conversion features from
the host contract. ASU 2020-06 also amends certain guidance in ASC 260 on the computation of earnings per
share for convertible instruments and contracts on an entity’s own equity. ASU 2020-06 is effective for fiscal
years beginning after December 15, 2021, including interim periods within those fiscal years, and early adoption
was permitted for fiscal years beginning after December 15, 2020. The ASU permits the use of either the
modified retrospective or fully retrospective methods of transition. We elected to early adopt this standard on a
modified retrospective approach as of January 1, 2021, which resulted in a $10.4 million, $50.2 million, and
$15.6 million increase to net deferred tax assets, long-term debt and retained earnings, respectively, and a
$55.4 million decrease to additional paid-in capital. This $50.2 million increase to long-term debt, net was
comprised of $51.6 million of unamortized interest discount partially offset by a net increase of $1.4 million in
unamortized debt issuance costs following the reversal of the initially established equity component of deferred
financing costs. This was due to the standard no longer requiring bifurcation of the embedded conversion feature
from the host contract on the 2024 Notes, as defined in Note 9, “Obligations”. This adoption also reduced non-
cash interest expense starting in 2021 due to the removal of the accretion of the debt discount on the 2024 Notes.
In addition, the adoption requires the use of the if-converted method of calculating diluted earnings per share
rather than the treasury stock method for convertible instruments and requires the inclusion of the potential effect
of shares settled in cash or shares in the diluted earnings per share calculation.

2023 Annual Report

74

3. REVENUE RECOGNITION

Disaggregated Revenue

The following table presents the disaggregation of our revenue for the year ended December 31, 2023, 2022,

and 2021 (in thousands):

Recurring revenues:

For the Year Ended December 31,

2023

2022

2021

Smartphone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CE, IoT/Auto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Catch-up revenues a

Total recurring revenues . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$347,124
59,858
1,410

408,392
141,196

$351,064
51,717
1,107

403,888
53,906

$315,098
31,721
4,881

351,700
73,709

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$549,588

$457,794

$425,409

a. Catch-up revenues are comprised of past patent royalties and revenues from static fixed-fee agreements.

During the year ended December 31, 2023, we recognized $188.9 million of revenue that had been included
in deferred revenue as of the beginning of the period. As of December 31, 2023, we had contract assets of
$94.6 million included within “Accounts receivable, net” in the consolidated balance sheet. As of December 31,
2022, we had contract assets of $32.9 million and $2.5 million included within “Accounts receivable, net” and
“Other non-current assets, net” in the consolidated balance sheet, respectively.

Contracted Revenue

Based on Dynamic Fixed-Fee Agreements as of December 31, 2023, we expect to recognize the following

amounts of revenue over the term of such contracts (in thousands):

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter

Revenue (a)

$ 310,236
297,270
227,892
225,294
213,257
259,439

$1,533,388

(a) This table includes estimated revenue related to our Samsung arbitration. In accordance with ASC 606,
these estimates are limited to the amount of revenue we expect to recognize only to the extent it is probable
that a subsequent change in the estimate would not result in a significant revenue reversal.

4. GEOGRAPHIC / CUSTOMER CONCENTRATION

The Company’s chief operating decision maker assesses company-wide performance and allocates resources
based on consolidated financial information. As such, we have one reportable segment. During 2023, 2022 and
2021, the majority of our revenue was derived from a limited number of licensees based outside of the United
States, primarily in Asia. Substantially all of these revenues were paid in U.S. dollars and were not subject to any
substantial foreign exchange transaction risk. The table below lists the countries of the headquarters of our

75

2023 Annual Report

licensees and customers and the total revenue derived from each country or region for the periods indicated (in
thousands):

For the Year Ended December 31,

2023

2022

2021

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$186,251
258,737
82,235
10,678
9,368
2,319

$219,744
103,922
90,018
21,946
11,621
10,543

$169,044
118,197
86,677
24,689
11,040
15,762

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$549,588

$457,794

$425,409

During 2023, 2022 and 2021, the following licensees or customers accounted for 10% or more of total

revenues:

Customer A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27%
24%
14%
11%
<10%

—%
30%
17%
13%
<10%

—%
28%
18%
14%
10%

For the Year Ended December 31,

2023

2022

2021

As of December 31, 2023, and 2022, we held $324.6 million and $365.3 million of our property, equipment
and patents, net of accumulated depreciation and amortization, respectively, of which 91% of the total was within
the United States in each of the years presented. As of December 31, 2023 and 2022, we held $29.3 million and
$27.2 million of property, equipment and patents, net of accumulated depreciation and amortization, collectively,
in Canada and Europe.

5. CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash as of December 31, 2023 and 2022 consisted of the following (in

thousands):

Money market and demand accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate bonds, asset backed and other securities . . . . . . . . . . . . . . . . . . . . .

$430,707
5,728
—
6,526

$643,825
26,741
15,707
16,888

Total cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . .

$442,961

$703,161

December 31,

2023

2022

2023 Annual Report

76

The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of

December 31, 2023 and 2022 within the consolidated balance sheets (in thousands):

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash included within prepaid and other current assets . . . . . . . . . . .

$437,076
5,885

$693,479
9,682

Total cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . .

$442,961

$703,161

December 31,

2023

2022

Marketable Securities

As of December 31, 2023 and 2022, the majority of our marketable securities are classified as available-for-
sale and are carried at fair value, with unrealized gains and losses reported net-of-tax as a separate component of
shareholders’ equity. Substantially all of our investments are investment-grade government and corporate debt
securities that have maturities of less than two years, and we have both the ability and intent to hold the
investments until maturity. We recorded no other-than-temporary impairments during 2023, 2022 or 2021. The
gross realized gains and losses on sales of marketable securities were not significant during the years ended
December 31, 2023, 2022 and 2021.

Marketable securities as of December 31, 2023 and 2022 consisted of the following (in thousands):

December 31, 2023

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Cost

Fair Value

Available-for-sale securities

Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. government securities . . . . . . . . . . . . . . . . . . . . .
Corporate bonds, asset backed and other securities . .

$174,872
257,150
149,729

Total available-for-sale securities . . . . . . . . . . . .

$581,751

$141
75
92

$308

$ (22)
(375)
(128)

$174,991
256,850
149,693

$(525)

$581,534

Reported in:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . .

Total marketable securities . . . . . . . . . . . . . . . . .

$ 12,254
569,280

$581,534

December 31, 2022
Gross
Gross
Unrealized
Unrealized
Losses
Gains

Cost

Fair Value

Available-for-sale securities

Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. government securities . . . . . . . . . . . . . . . . . . . . .
Corporate bonds, asset backed and other securities . .

$210,146
244,174
113,921

Total available-for-sale securities . . . . . . . . . . . .

$568,241

$30
19
33

$82

$(220)
(353)
(116)

$209,956
243,840
113,838

$(689)

$567,634

Reported in:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . .

Total marketable securities . . . . . . . . . . . . . . . . .

$ 59,336
508,298

$567,634

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2023 Annual Report

As of December 31, 2023 and 2022, $489.8 million and $557.7 million, respectively, of our short-term
investments had contractual maturities within one year. The remaining portions of our short-term investments
had contractual maturities within one to three years.

6. CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL ASSETS AND

FINANCIAL LIABILITIES

Concentration of Credit Risk and Fair Value of Financial Instruments

Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash
equivalents, short-term investments and accounts receivable. We primarily place our cash equivalents and short-
term investments in highly rated financial instruments and in United States government instruments.

Our accounts receivable are derived principally from patent license and technology solutions agreements.
As of December 31, 2023, four licensees comprised 84%, and as of December 31, 2022 four licensees comprised
76%, of our accounts receivable balance. We perform ongoing credit evaluations of our licensees, who generally
include large, multinational, wireless telecommunications equipment manufacturers. We believe that the book
values of our financial instruments approximate their fair values.

Fair Value Measurements

We use various valuation techniques and assumptions when measuring the fair value of our assets and
liabilities. We utilize market data or assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. This
guidance established a hierarchy that prioritizes fair value measurements based on the types of input used for the
various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy
are described below:

Level 1 Inputs — Level 1 includes financial instruments for which quoted market prices for identical
instruments are available in active markets.

Level 2 Inputs — Level 2 includes financial instruments for which there are inputs other than quoted prices
included within Level 1 that are observable for the instrument such as quoted prices for similar instruments
in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or
infrequent transactions (less active markets) or model-driven valuations in which significant inputs are
observable or can be derived principally from, or corroborated by, observable market data, including market
interest rate curves, referenced credit spreads and pre-payment rates.

Level 3 Inputs — Level 3 includes financial instruments for which fair value is derived from valuation
techniques including pricing models and discounted cash flow models in which one or more significant
inputs are unobservable,
including the company’s own assumptions. The pricing models incorporate
transaction details such as contractual terms, maturity and, in certain instances, timing and amount of future
cash flows, as well as assumptions related to liquidity and credit valuation adjustments of marketplace
participants.

Our assessment of the significance of a particular input to the fair value measurement requires judgment and
may affect the valuation of financial assets and financial liabilities and their placement within the fair value
hierarchy. We use quoted market prices for similar assets to estimate the fair value of our Level 2 investments.

2023 Annual Report

78

Recurring Fair Value Measurements

Our financial assets are included within short-term investments on our consolidated balance sheets, unless
otherwise indicated. Our financial assets and liabilities that are accounted for at fair value on a recurring basis are
presented in the tables below as of December 31, 2023 and December 31, 2022 (in thousands):

Fair Value as of December 31, 2023

Level 1

Level 2

Level 3

Total

Assets:
Money market and demand accounts (a)
. . . . . . . . . .
Commercial paper (b) . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. government securities (c)
. . . . . . . . . . . . . . . . . .
Corporate bonds, asset backed and other

$

$430,707
—
—

— $— $ 430,707
174,991
256,850

—
—

174,991
256,850

securities (d)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

149,693

—

149,693

$430,707

$581,534

$— $1,012,241

Fair Value as of December 31, 2022

Level 1

Level 2

Level 3

Total

Assets:
Money market and demand accounts (a)
. . . . . . . . . .
Commercial paper (b) . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. government securities . . . . . . . . . . . . . . . . . . . .
Corporate bonds and asset backed securities . . . . . .

$

$643,825
—
—
—

— $— $ 643,825
209,956
243,840
113,838

—
—
—

209,956
243,840
113,838

$643,825

$567,634

$— $1,211,459

Included within cash and cash equivalents.

(a)
(b) As of December 31, 2023 and 2022, $5.7 million and $26.7 million of commercial paper was included

within cash and cash equivalents, respectively.

(c) As of December 31, 2023 and 2022, $0.0 million and $15.7 million of U.S. government securities was

included within cash and cash equivalents, respectively.

(d) As of December 31, 2023and 2022, $6.5 million and $16.9 million of corporate bonds, asset backed and

other securities was included within cash and cash equivalents, respectively.

Fair Value of Debt

Senior Convertible Notes

The principal amount, carrying value and related estimated fair value of the Company’s senior convertible
debt reported in the consolidated balance sheets as of December 31, 2023 and December 31, 2022 was as follows
(in thousands). The aggregate fair value of the principal amount of the senior convertible debt is a Level 2 fair
value measurement.

December 31, 2023

December 31, 2022

Principal
Amount

Carrying
Value

Fair
Value

Principal
Amount

Carrying
Value

Fair
Value

2027 Senior Convertible
Notes . . . . . . . . . . . . .
2024 Senior Convertible
Notes . . . . . . . . . . . . .

$460,000

$452,830

$677,230

$460,000

$451,062

$441,485

$126,174

$125,922

$171,130

$126,174

$125,342

$119,941

79

2023 Annual Report

Technicolor Patent Acquisition Long-term Debt

As more fully disclosed in Note 10, “Obligations,” we recognized long-term debt in conjunction with the
acquisitions of the patent
licensing business and research and innovation unit of Technicolor SA (the
“Technicolor Patent Acquisition”). The carrying value and related estimated fair value of the Technicolor Patent
Acquisition long-term debt reported in the consolidated balance sheet as of December 31, 2023 and
December 31, 2022 was as follows (in thousands). The aggregate fair value of the Technicolor Patent Acquisition
long-term debt is a Level 3 fair value measurement.

Technicolor Patent Acquisition Long-Term Debt . . . . . .

$29,019

$28,859

$30,662

$28,048

December 31, 2023

December 31, 2022

Carrying
Value

Fair
Value

Carrying
Value

Fair
Value

Non-recurring Fair Value Measurements

Investments in Other Entities

As disclosed in Note 2, “Summary of Significant Accounting Policies and New Accounting Guidance”, we
made an accounting policy election to utilize a measurement alternative for equity investments that do not have
readily determinable fair values, which applies to our long-term strategic investments in other entities. Under the
alternative, our long-term strategic investments in other entities that do not have readily determinable fair values
are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in
orderly transactions for an identical or similar investment of the same issuer. Any adjustments to the carrying
value of those investments are considered non-recurring fair value measurements.

During years ended December 31, 2023 and 2021, we recognized net gains of $10.4 million and
$7.6 million, respectively, and during year ended 2022 we recognized a net loss of $1.3 million resulting from
observable price changes of our long-term strategic investments, which were included within “Other income
(expense), net” in the consolidated statement of income. Certain of our investments in other entities may be
seeking additional financing in the next twelve months or potential exit strategies. We will continue to review
and monitor our investments in other entities for any indications of an increase in fair value or impairment.

During 2023, we deconsolidated Convida Wireless as described further in Note 19, “Variable Interest
Entities”. Upon deconsolidation on October 1, 2023, we recorded our investment in Convida at fair value
utilizing the income approach. Our investment in Convida Wireless is accounted for as an equity method
investment in accordance with ASC 323 “Investments – Equity Method and Joint Ventures” and included within
“Other non-current assets, net” in the consolidated balance sheet.

Patents

During 2023, we incurred an impairment of $2.5 million on Convida’s sale of a portion of its patent
portfolio, which was included within “Research and portfolio development” expenses in the consolidated
statement of income. We determined the fair value based upon evaluation of market conditions.

During 2021, we recognized a $13.2 million impairment, resulting from our restructuring activities as
described in Note 20, “Restructuring Activities”, which was included within “Restructuring activities” expenses
in the consolidated statement of income.

Also during 2021, we renewed our multi-year, worldwide, non-exclusive patent license agreement with
Sony and a portion of the future consideration for the agreement was in the form of patents. These patents
transferred during 2022 and we have determined the estimated fair value of the patents for determining the

2023 Annual Report

80

transaction price for revenue recognition purposes, which was estimated to be $30.1 million utilizing the income
and market approach. The value will be amortized as a non-cash expense over the patents’ estimated useful lives.

We estimated the fair value of the patents in these transactions using one of, or a combination of, an analysis
of comparable market transactions (the market approach), a discounted cash flow analysis (the income approach)
and/or by quantifying the amount of money required to replace the future service capability of the assets (the cost
approach). For the market approach,
transactions were most
comparable to the transaction. For the income approach, the inputs and assumptions used to develop these
estimates were based on a market participant perspective and included estimates of projected royalties, discount
rates, economic lives and income tax rates, among others. For the cost approach, we utilized the historical cost of
assets of similar technologies to determine the estimated replacement cost, including research, development,
testing and patent application fees.

judgment was applied as to which market

7.

PROPERTY AND EQUIPMENT

Property and equipment, net is comprised of the following (in thousands):

December 31,

2023

2022

Computer equipment and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Engineering and test equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 15,990
14,802
3,517
1,061
506

$ 15,144
12,636
3,517
1,317
670

Property and equipment, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,876
(24,310)

33,284
(21,946)

Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 11,566

$ 11,338

Depreciation expense was $4.1 million, $4.9 million and $5.6 million in 2023, 2022 and 2021, respectively.

8.

PATENTS AND GOODWILL

Patents

As of December 31, 2023 and 2022, patents consisted of the following (in thousands, except for useful life

data):

Weighted average estimated useful life (years)
. . . . . . . . . . . . . . . . . . . . .
Gross patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.0
$1,040,912
(727,911)

10.0
$1,018,957
(664,958)

Patents, net

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 313,001

$ 353,999

December 31,

2023

2022

Amortization expense related to capitalized patent costs was $73.1 million, $73.4 million and $71.5 million
in 2023, 2022 and 2021, respectively. These amounts are recorded within the “Research and portfolio
development” expense line of our consolidated statements of income.

81

2023 Annual Report

The estimated aggregate amortization expense for the next five years related to our patents balance as of

December 31, 2023 is as follows (in thousands):

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$63,925
60,171
52,056
47,292
27,690

Goodwill

The following table shows the change in the carrying amount of our goodwill balance from December 31,

2021 to December 31, 2023, all of which is allocated to our one reportable segment (in thousands):

Goodwill balance as of December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Goodwill balance as of December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,421
—

$22,421
—

Goodwill balance as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,421

9. OTHER ASSETS AND LIABILITIES

The amounts included in “Prepaid and other current assets” in the consolidated balance sheet as of

December 31, 2023 and 2022 were as follows (in thousands):

Tax receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patents held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2023

2022

$19,835
9,353
5,885
—
8,903

$64,117
9,044
9,682
4,000
2,873

Total Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$43,976

$89,716

The amounts included in “Other non-current assets, net” in the consolidated balance sheet as of

December 31, 2023 and 2022 were as follows (in thousands):

Tax receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 76,740
31,895
22,421
15,746
2,854

$29,370
19,593
22,421
18,034
6,302

Total Other non-current assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$149,656

$95,720

December 31,

2023

2022

2023 Annual Report

82

The amounts included in “Other accrued expenses” in the consolidated balance sheet as of December 31,

2023 and 2022 were as follows (in thousands):

Customer deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$76,100
10,338
11,604

$ —
12,230
11,276

Total Other accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$98,042

$23,506

December 31,

2023

2022

The amounts included in “Other long-term liabilities” in the consolidated balance sheet as of December 31,

2023 and 2022 were as follows (in thousands):

Deferred compensation liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$18,413
17,385
19,454

$14,078
19,923
19,599

Total Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$55,252

$53,600

December 31,

2023

2022

10. OBLIGATIONS

Long-term debt obligations, excluding the long-term debt resulting from the Technicolor Patent Acquisition,

are comprised of the following (in thousands):

3.50% Senior Convertible Notes due 2027 . . . . . . . . . . . . . . . . . . . . . . . .
2.00% Senior Convertible Notes due 2024 . . . . . . . . . . . . . . . . . . . . . . . .
Less: Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net carrying amount of the Convertible Notes . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .

Less: Current portion of long-term debt

December 31,
2023

December 31,
2022

$ 460,000
126,174
(7,422)

578,752
(578,752)

$460,000
126,174
(9,770)

576,404
—

Long-term net carrying amount of the Convertible Notes . . . . . . . . . . . . .

$

—

$576,404

There were no finance leases as of December 31, 2023 or December 31, 2022.

Maturities of principal of the long-term debt obligations of the Company as of December 31, 2023,

excluding the long-term debt resulting from the Technicolor Patent Acquisition, are as follows (in thousands):

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$126,174
—
—
460,000
—

$586,174

The 3.50% Senior Convertible Notes due 2027 (the “2027 Notes”) are convertible during the calendar
quarter ending March 31, 2024 and therefore are classified as “Current portion of long-term debt” as of
December 31, 2023 in our consolidated balance sheet. The current conversion rate of the Notes is 12.9041 shares

83

2023 Annual Report

of our Common Stock per $1,000 principal amount of the 2027 Notes. Upon the conversion of any 2027 Notes,
we will pay cash up to the aggregate principal amount of the 2027 Notes to be converted, and will pay cash,
shares of our Common Stock or a combination of cash and shares of its Common Stock for any conversion
obligation in excess of the aggregate principal amount being converted, if any, at the Company’s election, as set
forth in the Indenture governing the 2027 Notes.

2027 Notes, and Related Note Hedge and Warrant Transactions

On May 27, 2022 we issued $460.0 million in aggregate principal amount of the 2027 Notes. The net
proceeds from the issuance of the 2027 Notes, after deducting the initial purchasers’ transaction fees and offering
expenses, were approximately $450.0 million. The 2027 Notes bear interest at a rate of 3.50% per year, payable
in cash on June 1 and December 1 of each year, commencing on December 1, 2022, and mature on June 1, 2027,
unless earlier redeemed, converted or repurchased.

The 2027 Notes will be convertible into cash up to the aggregate principal amount of the notes to be
converted and in respect of the remainder, if any, of the Company’s obligation in excess of the aggregate
principal amount of the notes being converted, pay or deliver, as the case may be, cash, shares of the Company’s
common stock or a combination thereof, at the Company’s election, at an initial conversion rate of 12.9041
shares of Common Stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price
of approximately $77.49 per share). The conversion rate, and thus the conversion price, may be adjusted under
certain circumstances, including in connection with conversions made following fundamental changes and under
other circumstances as set forth in the indenture governing the 2027 Notes.

Prior to 5:00 p.m., New York City time, on the business day immediately preceding March 1, 2027, the
notes will be convertible only under the following circumstances: (1) on any date during any calendar quarter
(and only during such calendar quarter) beginning after September 30, 2022 if the closing sale price of the
Common Stock was more than 130% of the applicable conversion price on each applicable trading day for at
least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading days ending on the
last trading day of the immediately preceding calendar quarter; (2) if the Company distributes to all or
substantially all holders of the Common Stock any rights, options or warrants (other than in connection with a
stockholder rights plan prior to separation of such rights from the shares of the Common Stock) entitling them to
purchase, for a period of 45 calendar days or less from the issuance date for such distribution, shares of Common
Stock at a price per share less than the average closing sale price for the ten consecutive trading day period
ending on, and including, the trading day immediately preceding the declaration date for such distribution; (3) if
the Company distributes to all or substantially all holders of the Common Stock any cash or other assets, debt
securities or rights to purchase the Company’s securities (other than pursuant to a rights plan), which distribution
has a per share value exceeding 10% of the closing sale price of the Common Stock on the trading day
immediately preceding the declaration date for such distribution; (4) if the Company engages in certain corporate
transactions as described in the indenture governing the 2027 Notes; (5) if the Company calls the notes for
redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding
the redemption date; (6) during a specified period if a fundamental change (as defined in the indenture governing
the 2027 Notes) occurs; or (7) during the five consecutive business day period following any five consecutive
trading day period in which the trading price for the notes for each day during such five trading day period was
less than 98% of the closing sale price of the Common Stock multiplied by the applicable conversion rate on
each such trading day. Commencing on March 1, 2027, the notes will be convertible in multiples of $1,000
principal amount, at any time prior to 5:00 p.m., New York City time, on the second scheduled trading day
immediately preceding the maturity date of the notes.

The Company may not redeem the notes prior to June 5, 2025. The Company may redeem for cash all or
any portion of the notes, at the Company’s option, on or after June 5, 2025, if the last reported sale price of the
Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether
or not consecutive), including the trading day immediately preceding the date on which the Company provides

2023 Annual Report

84

notice of redemption, during any 30 consecutive trading day period ending on and including the trading day
preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of
the principal amount of the notes to be redeemed, plus any accrued and unpaid interest to, but excluding the
redemption date.

If a fundamental change (as defined in the indenture governing the 2027 Notes) occurs, holders may require
the Company to purchase all or a portion of their Notes for cash at a repurchase price equal to 100% of the
principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the
fundamental change repurchase date.

The 2027 Notes are the Company’s senior unsecured obligations and rank equally in right of payment with
any of the Company’s current and any future senior unsecured indebtedness, including its 2.00% senior
convertible notes due 2024 (the “2024 Notes” and together with the 2027 Notes, the “Convertible Notes”). The
2027 Notes are effectively subordinated to all of the Company’s future secured indebtedness to the extent of the
value of the related collateral, and the 2027 Notes are structurally subordinated to indebtedness and other
liabilities, including trade payables, of the Company’s subsidiaries.

On May 24 and May 25, 2022, in connection with the offering of the 2027 Notes, we entered into
convertible note hedge transactions (collectively, the “2027 Note Hedge Transactions”) that cover, subject to
customary anti-dilution adjustments, approximately 5.9 million shares of common stock, in the aggregate, at a
strike price that initially corresponds to the initial conversion price of the 2027 Notes, subject to adjustment, and
are exercisable upon any conversion of the 2027 Notes. The aggregate cost of the 2027 Note Hedge Transactions
was $80.5 million.

Also on May 24 and May 25, 2022, we also entered into privately negotiated warrant transactions
(collectively, the “2027 Warrant Transactions” and, together with the 2027 Note Hedge Transactions, the “2027
Call Spread Transactions”), whereby we sold warrants to acquire, subject to customary anti-dilution adjustments,
approximately 5.9 million shares of common stock at a weighted average strike price of $106.35 per share,
subject to adjustment. As consideration for the 2027 Warrant Transactions, we received aggregate proceeds of
$43.7 million. The net cost of the 2027 Call Spread Transactions was $36.8 million, which was funded out of the
net proceeds from the offering of the 2027 Notes.

Accounting Treatment of the 2027 Notes and Related Convertible Note Hedge and Warrant Transactions

The 2027 Call Spread Transactions were classified as equity and the 2027 Notes were classified as long-

term debt. The effective interest rate is approximately 4.02%.

In connection with the above-noted transactions, the Company incurred approximately $9.9 million of
directly related costs, which were capitalized as deferred financing costs and as a reduction of long-term debt.
These costs are being amortized as interest expense over the term of the debt using the effective interest method.

2024 Senior Convertible Notes, and Related Note Hedge and Warrant Transactions

On June 3, 2019 we issued $400.0 million in aggregate principal amount of 2.00% Senior Convertible Notes
due 2024 (the “2024 Notes”). The net proceeds from the issuance of the 2024 Notes, after deducting the initial
purchasers’ transaction fees and offering expenses, were approximately $391.6 million. The 2024 Notes bear
interest at a rate of 2.00% per year, payable in cash on June 1 and December 1 of each year, commencing on
December 1, 2019, and mature on June 1, 2024, unless earlier converted or repurchased.

The 2024 Notes were initially convertible into cash, shares of our common stock or a combination thereof,
at our election, at an initial conversion rate of 12.3018 shares of common stock per $1,000 principal amount of
2024 Notes (which is equivalent to an initial conversion price of approximately $81.29 per share), as adjusted

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2023 Annual Report

pursuant to the terms of the indenture governing the 2024 Notes (the “Indenture”). The conversion rate of the
2024 Notes, and thus the conversion price, may be adjusted in certain circumstances, including in connection
with a conversion of the 2024 Notes made following certain fundamental changes and under other circumstances
set forth in the Indenture. As of December 31, 2020, we made the irrevocable election to settle all conversions of
the 2024 Notes through combination settlements of cash and shares of common stock, with a specified dollar
amount of $1,000 per $1,000 principal amount of 2024 Notes and any remaining amounts in shares of common
stock.

Prior to 5:00 p.m., New York City time, on the business day immediately preceding March 1, 2024, the
2024 Notes will be convertible only under certain circumstances as set forth in the Indenture, including on any
date during any calendar quarter (and only during such calendar quarter) beginning after September 30, 2019 if
the closing sale price of the common stock was more than 130% of the applicable conversion price
(approximately $105.68 based on the current conversion price of the 2024 Notes) on each applicable trading day
for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading days ending
on the last trading day of the immediately preceding calendar quarter.

Commencing on March 1, 2024, the 2024 Notes will be convertible at any time prior to 5:00 p.m., New
York City time, on the second scheduled trading day immediately preceding the maturity date of the 2024 Notes.

The Company may not redeem the 2024 Notes prior to their maturity date.

If a fundamental change (as defined in the Indenture) occurs, holders may require the Company to purchase
all or a portion of their 2024 Notes for cash at a repurchase price equal to 100% of the principal amount of the
2024 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change
repurchase date. The 2024 Notes are our senior unsecured obligations and rank equally in right of payment with
any of our current and any future senior unsecured indebtedness. The 2024 Notes are effectively subordinated to
all of our future secured indebtedness to the extent of the value of the related collateral, and the 2024 Notes are
structurally subordinated to indebtedness and other liabilities, including trade payables, of our subsidiaries.

On May 29 and May 31, 2019, in connection with the offering of the 2024 Notes, we entered into
convertible note hedge transactions (collectively, the “2024 Note Hedge Transactions”) that cover, subject to
customary anti-dilution adjustments, approximately 4.9 million shares of common stock, in the aggregate, at a
strike price that initially corresponds to the initial conversion price of the 2024 Notes, subject to adjustment, and
are exercisable upon any conversion of the 2024 Notes. The aggregate cost of the 2024 Note Hedge Transactions
was $72.0 million.

On May 29 and May 31, 2019, we also entered into privately negotiated warrant transactions (collectively,
the “2024 Warrant Transactions” and, together with the 2024 Note Hedge Transactions, the “2024 Call Spread
Transactions”), whereby we sold warrants to acquire, subject
to customary anti-dilution adjustments,
approximately 4.9 million shares of common stock at an initial strike price of $109.43 per share, subject to
adjustment. As consideration for the 2024 Warrant Transactions, we received aggregate proceeds of $47.6
million. The net cost of the 2024 Call Spread Transactions was $24.4 million.

The net proceeds from the issuance of the 2024 Notes, after deducting fees and offering expenses, were used
for the following: (i) $232.7 million was used to repurchase $221.1 million in aggregate principal amount of the
1.50% Senior Convertible Notes that were due 2020 in privately negotiated transactions concurrently with the
offering of the 2024 Notes, (ii) $19.6 million was used to repurchase shares of common stock at $62.53 per share,
the closing price of the stock on May 29, 2019; and (iii) $24.4 million, in addition to the proceeds from the 2024
Warrant Transactions discussed above, was used to fund the cost of the 2024 Call Spread Transactions.

In 2022, the Company repurchased $273.8 million in aggregate principal amount of the 2024 Notes in
privately negotiated transactions concurrently with the offering of the 2027 Notes. We specifically negotiated the

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86

repurchase of the 2024 Notes with investors who concurrently purchased the 2027 Notes, such that their purchase
of the 2027 Notes funded our repurchase of the 2024 Notes. As a result of the partial repurchase of the 2024
Notes, $126.2 million in aggregate principal amount of the 2024 Notes remained outstanding as of December 31,
2022. Additionally, in connection with the partial repurchase of the 2024 Notes, the Company entered into partial
unwind agreements that amend the terms of the 2024 Note Hedge Transactions to reduce the number of options
corresponding to the principal amount of the repurchased 2024 Notes. The unwind agreements also reduce the
number of warrants exercisable under the 2024 Warrant Transactions. As a result of the partial unwind
transactions, approximately 1.6 million shares of common stock in the aggregate were covered under each of the
2024 Note Hedge Transactions and the 2024 Warrant Transactions as of December 31, 2022. As of December 31,
2022, the warrants under the 2024 Warrant Transactions had a strike price of approximately $109.43 per share, as
adjusted. Proceeds received from the unwind of the 2024 Note Hedge Transactions were $11.9 million, and
consideration paid for the unwind of the 2024 Warrant Transactions was $3.8 million, resulting in net proceeds
received of $8.0 million for the combined unwind transactions.

Because the concurrent redemption of the 2024 Notes and a portion of issuance of the 2027 Notes were
executed with the same investors, we evaluated the transaction as a debt restructuring, on a creditor by creditor
basis. The accounting conclusion was based on whether the exchange was a contemporaneous exchange of cash
between the same debtor and creditor in connection with the issuance of a new debt obligation and satisfaction of
an existing debt obligation by the debtor and if it was determined to have substantially different terms. All
creditors involved in the repurchase transaction also purchased 2027 Notes in approximately the same or greater
amount as the 2024 Notes principal repurchased. Additionally, the repurchase of the 2024 Notes and issuance of
the 2027 Notes were deemed to have substantially different terms on the basis that the fair value of the
conversion feature increased by more than 10% of the carrying value of the 2024 Notes, and therefore, the
repurchase of the 2024 Notes was accounted for as a debt extinguishment. We recognized a $11.2 million loss on
extinguishment of debt during 2022 in connection with this repurchase, which is included within “Other
(expense) income, net” in the consolidated statement of income. The loss on extinguishment represents the
difference between the fair value of consideration paid to reacquire the 2024 Notes and the carrying amount of
the debt, including any unamortized debt issuance costs attributable to the 2024 Notes redeemed. The remaining
unamortized debt issuance costs of $1.2 million will continue to be amortized throughout the remaining life of
the 2024 Notes.

The following table presents the amount of interest cost recognized for the years ended December 31, 2023,

2022 and 2021 related to the contractual interest coupon and the amortization of financing costs (in thousands):

For the Year Ended December 31,

2027
Notes

2023

2024
Notes

Total

2027
Notes

2022

2024
Notes

2021

2024
Notes

Total

Contractual coupon interest . . .
Amortization of financing costs

$16,100
1,768

$2,523
580

$18,623
2,348

$ 9,526
990

$4,760
1,018

$14,286
2,008

$8,000
1,627

Total . . . . . . . . . . . . . . . . . . . . .

$17,868

$3,103

$20,971

$10,516

$5,778

$16,294

$9,627

Madison Arrangement

In conjunction with the Technicolor Patent Acquisition, we assumed Technicolor’s rights and obligations
under the Madison Arrangement, which commenced in 2015. The Madison Arrangement falls under the scope of
ASC 808, Collaborative Arrangements.

Under the Madison Arrangement, Technicolor and Sony combined portions of their respective digital TV
(“DTV”) and computer display monitor (“CDM”) patent portfolios and created a combined licensing opportunity
to DTV and CDM manufacturers. Per an Agency and Management Services Agreement (“AMSA”) entered into
upon the creation of the Madison Arrangement, Technicolor was initially appointed as sole licensing agent of the

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2023 Annual Report

arrangement, and InterDigital has now assumed that role. As licensing agent, we are responsible for making
decisions regarding the prosecution and maintenance of the combined patent portfolio and the licensing and
enforcement of the combined patent portfolio in the field of use of DTVs and CDMs on an exclusive basis during
the term of the AMSA in exchange for an agent fee.

We were deemed to be the principal in this collaborative arrangement under ASC 808, and, as such, in
accordance with ASC 606-10-55-36, Revenue From Contracts with Customers—Principal Agent Considerations,
we record revenues generated on sales to third parties and costs incurred on a gross basis in the consolidated
statements of income. Therefore, we recognize all royalties from customers as revenue and payments to Sony for
its royalty share as operating expenses within the consolidated statements of income. Cost reimbursements for
expenses incurred resulting from fulfilling the duties of the licensing agent are recorded as contra expenses.
During the years ended December 31, 2023, 2022, and 2021, gross revenues recorded related to the Madison
Arrangement were $12.3 million, $14.5 million, and $26.1 million, respectively. Net operating expenses related
to the Madison Arrangement during the years ended December 31, 2023, 2022, and 2021 were $6.2 million,
$7.9 million and $18.9 million, including $3.3 million, $5.3 million, and $11.9 million related to revenue sharing,
respectively, and are reflected primarily within “Licensing” expenses in the consolidated statement of income.

Long-term debt

An affiliate of CPPIB Credit Investments Inc. (“CPPIB Credit”), a wholly owned subsidiary of Canada
Pension Plan Investment Board, is a third-party investor in the Madison Arrangement. CPPIB Credit has made
certain payments to Technicolor and Sony and has agreed to contribute cash to fund certain capital reserve
obligations under the arrangement
in exchange for a percentage of future revenues, specifically through
September 11, 2030 in regard to the Technicolor patents.

Upon our assumption of Technicolor’s rights and obligations under the Madison Arrangement, our
relationship with CPPIB Credit met the criteria in ASC 470-10-25, Sales of Future Revenues or Various Other
Measures of Income (“ASC 470”), which relates to cash received from an investor in exchange for a specified
percentage or amount of revenue or other measure of income of a particular product line, business segment,
trademark, patent, or contractual right for a defined period. Under this guidance, we recognized the fair value of
our contingent obligation to CPPIB Credit, as of the acquisition date, as long-term debt in our consolidated
balance sheet. This initial fair value measurement was based on the perspective of a market participant and
includes significant unobservable inputs which are classified as Level 3 inputs within the fair value hierarchy.
The fair value of the long-term debt as of December 31, 2023 is disclosed within Note 6, “Concentration of
Credit Risk and Fair Value of Financial Assets and Financial Liabilities”. Our repayment obligations are
contingent upon future royalty revenues generated from the Madison Arrangement and there are no minimum or
maximum payments under the arrangement.

Under ASC 470, amounts recorded as debt shall be amortized under the interest method. At each reporting
period, we review the discounted expected future cash flows over the life of the obligation. The Company made
an accounting policy election to utilize the catch-up method when there is a change in the estimated future cash
flows, whereby we will adjust the carrying amount of the debt to the present value of the revised estimated future
cash flows, discounted at the original effective interest rate, with a corresponding adjustment recognized as
interest expense within “Interest expense” in the consolidated statements of income. The effective interest rate as
of the acquisition date was approximately 14.5%. This rate represents the discount rate that equates the estimated
future cash flows with the fair value of the debt as of the acquisition date, and is used to compute the amount of
interest to be recognized each period based on the estimated life of the future revenue streams. During the year
ended December 31, 2023, we recognized a $1.6 million net reduction of interest expense within “Interest
expense” in the consolidated statements of income due to a change in estimate resulting from updated estimated
cash outflows owed under the arrangement. During the years ended December 31, 2022 and 2021, we recognized
$3.6 million, and $2.9 million, respectively, of interest expense related to this debt which is included within
“Interest expense” in the consolidated statements of income. Any future payments made to CPPIB Credit, or

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88

additional proceeds received from CPPIB Credit, will decrease or increase the long-term debt balance
accordingly.

Restricted cash

Under the Madison Arrangement, the parties reserve cash in bank accounts to fund our activities to manage
the portfolios. These accounts are custodial accounts for which the funds are restricted for this purpose. As of
December 31, 2023 and 2022, the Company had $5.9 million and $9.7 million, respectively, of restricted cash
included within the consolidated balance sheet attributable to the Madison Arrangement. Refer to Note 5, “Cash,
Cash Equivalents, Restricted Cash and Marketable Securities”, for a reconciliation of cash, cash equivalents, and
restricted cash within the consolidated balance sheets.

Technicolor Contingent Consideration

As part of the Technicolor Acquisitions, we entered into a revenue-sharing arrangement with Technicolor
that created a contingent consideration liability, which is accounted for under ASC 450—Contingencies under the
asset acquisition framework when the liability is deemed probable and estimable. Under the revenue-sharing
arrangement, Technicolor receives 42.5% of future cash receipts from new licensing efforts from the Madison
Arrangement only, subject to certain conditions and hurdles. As of December 31, 2023 and 2022, the contingent
consideration liability from the revenue-sharing arrangement was deemed not probable and is therefore not
reflected within the consolidated financial statements.

11. COMMITMENTS

Minimum future payments for accounts payable and other purchase commitments, excluding commenced

long-term operating leases for office space, as of December 31, 2023 were as follows (in thousands):

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$11,518
192
175
181
186
490

Refer to Note 10, “Obligations,” for details of the Company’s long-term debt obligations and the revenue-
sharing arrangement with Technicolor resulting from the Technicolor Acquisitions. Refer to Note 17, “Leases,”
for maturities of the Company’s operating lease liabilities as of December 31, 2023.

Defined Benefit Plans

In connection with the Technicolor Acquisitions, we assumed certain defined benefit plans which are
accounted for in accordance with ASC 715—Compensation—Retirement Benefits. These plans include a
retirement lump sum indemnity plan and jubilee plan, both of which provide benefit payments to employees
based upon years of service and compensation levels. As part of the Company’s announced restructuring plan, as
discussed below in Note 20, “Restructuring Activities”, the number of employees under the Company’s plan was
significantly reduced. The Company revalued the projected benefit obligation and recognized a $2.3 million gain
on curtailment during 2021, which was included within “Other income (expense), net” in the consolidated
statement of income.

As of December 31, 2023 and 2022, the combined accumulated projected benefit obligation related to these
plans totaled $4.9 million and $3.4 million, respectively. Service cost and interest cost for the combined plans
totaled less than $0.5 million in each of the years ended December 31, 2023, 2022 and 2021. The weighted

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2023 Annual Report

average discount rate and assumed salary increase rate for these plans were 3.3% and 3.0%, respectively. These
plans are not required to be funded and were not funded as of December 31, 2023.

Expected future benefit payments under these plans as of December 31, 2023 were as follows (in

thousands):

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027-2031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 399
93
109
305
262
3,136

12. LITIGATION AND LEGAL PROCEEDINGS

ARBITRATIONS AND COURT PROCEEDINGS

Lenovo

UK Proceedings

On August 27, 2019, the Company and certain of its subsidiaries filed a claim in the UK High Court against
Lenovo Group Limited and certain of its subsidiaries. The claim, as amended, alleges infringement of five of the
Company’s patents relating to 3G and/or 4G/LTE standards: European Patent (UK) Nos. 2,363,008; 2,421,318;
2,485,558; 2,557,714; and 3,355,537. The Company sought, among other relief, injunctive relief to prevent further
infringement of the asserted patents or, in the alternative, a determination of the terms of a FRAND license.

On July 29, 2021, the UK High Court issued its decision regarding the first technical trial finding European
Patent (UK) No. 2,485,558 valid, infringed, and essential to Release 8 of LTE. Lenovo appealed this decision,
and on January 19, 2023, the UK Court of Appeal upheld the UK High Court’s findings that Lenovo is infringing
on InterDigital’s valid and essential patent. On January 6, 2022, the UK High Court issued its decision regarding
the second technical trial finding European Patent (UK) No. 3,355,537 invalid, but essential and infringed but for
the finding of invalidity. The Company appealed this decision as legally erroneous, and on February 9, 2023, the
UK Court of Appeal allowed the appeal, finding that Lenovo is infringing on InterDigital’s valid and essential
patent. On January 31, 2023, the UK High Court issued its decision regarding the third technical trial finding
European Patent (UK) No. 2,421,318 valid, essential, and infringed. On March 7, 2023, the UK High Court
issued an order staying all deadlines with respect to the fourth and fifth technical trials. On March 16, 2023, the
UK High Court issued its order regarding judgement in the trial to determine how much Lenovo must pay for a
license to the Company’s portfolio of cellular assets, awarding the Company a lump sum of $138.7 million for
such license through December 31, 2023. On June 27, 2023, the court issued an order awarding the Company an
additional $46.2 million, thus increasing the total award to $184.9 million, which was paid on July 11, 2023. The
court also found that the Company should pay a portion of Lenovo’s costs and granted both parties permission to
appeal on certain grounds. Both parties filed Appellant’s Notices and the appeals were docketed on July 31,
2023. On September 19, 2023, the Court of Appeal granted the Company permission to appeal on all its
requested grounds. The appeal is scheduled to be heard on June 10, 2024.

On September 24, 2023, Lenovo filed a new claim in the UK High Court against the Company. The claim
alleges invalidity of two of the Company’s patents relating to 4G/LTE standards: European Patent (UK) Nos.
2,557,714 and 2,557,715. Lenovo sought, among other relief, a declaration that the patents at issue are invalid,
not essential, and not infringed, revocation of the patents at issue, and a declaration that, upon expiration of the
current license in 2023, Lenovo is licensed under terms to be determined by the UK High Court through 2028 or,
in the alternative, a determination of the terms of a FRAND license. On October 19, 2023, Lenovo filed a request
for an order that the Company indicate whether it is prepared to give an unconditional undertaking to enter into a

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90

global license on terms set by the UK Court, or failing that, a declaration that the Defendants are unwilling
licensors; a hearing was held on December 12, 2023 where Lenovo agreed to stay its application. On
November 22, 2023, the Company filed a jurisdiction challenge; a hearing on the jurisdiction challenge is to take
place around April 24, 2024. On November 28, 2023, Lenovo filed an application seeking an expedited FRAND
trial and an interim license until a FRAND decision is issued in the UK. A hearing on the interim license was set
for after February 26, 2024, and a hearing on Lenovo’s request for an expedited FRAND trial will take place
after the interim license and jurisdiction challenge issues are resolved.

District of Delaware Patent Proceedings

On August 28, 2019, the Company and certain of its subsidiaries filed a complaint in the United States
District Court for the District of Delaware (the “Delaware District Court”) against Lenovo Holding Company,
Inc. and certain of its subsidiaries alleging that Lenovo infringes eight of the Company’s U.S. patents-U.S. Patent
Nos. 8,085,665; 8,199,726; 8,427,954; 8,619,747; 8,675,612; 8,797,873; 9,203,580; and 9,456,449-by making,
using, offering for sale, and/or selling Lenovo wireless devices with 3G and/or 4G LTE capabilities. As relief,
InterDigital is seeking: (a) a declaration that the Company is not in breach of its relevant FRAND commitments
with respect to Lenovo; (b) to the extent Lenovo does not agree to negotiate a worldwide patent license, does not
agree to enter into binding international arbitration to set the terms of a FRAND license, and does not agree to be
bound by the terms to be set by the UK High Court in the separately filed UK proceedings described above, an
injunction prohibiting Lenovo from continued infringement; (c) damages, including enhanced damages for
willful infringement and supplemental damages; and (d) attorneys’ fees and costs.

On September 16, 2020, the Delaware District Court entered a schedule for the case, setting a patent jury
trial. On March 8, 2021, the Delaware District Court held a claim construction hearing, and the court issued its
order on May 10, 2021, construing various disputed terms. On March 24, 2021, the Delaware District Court
consolidated the antitrust proceeding discussed below with this patent proceeding. On April 25, 2022, the parties
filed a stipulation to stay only the claims relating to U.S. Patent No. 8,199,726. The stipulation was granted. On
January 13, 2023, Lenovo filed a motion to sever and stay the Company’s patent infringement claims, requesting
that its Sherman Act and breach of FRAND claims proceed to trial. On June 30, 2023, the parties submitted an
update to the Court requesting that the entire case be stayed, and on July 18, 2023, the court ordered that the case
be stayed pending resolution of all appeals in the UK proceedings.

District of Delaware Antitrust Proceedings

On April 9, 2020, Lenovo (United States) Inc. and Motorola Mobility LLC filed a complaint in the
Delaware District Court against the Company and certain of its subsidiaries. The complaint alleges that the
Company defendants have violated Sections 1 and 2 of the Sherman Act in connection with, among other things,
their licensing of 3G and 4G standards essential patents (“SEPs”). The complaint further alleges that the
Company defendants have violated their commitment to the ETSI with respect to the licensing of 3G and 4G
SEPs on FRAND terms and conditions. The complaint seeks, among other things (i) rulings that the Company
defendants have violated Sections 1 and 2 of the Sherman Act and are liable for breach of their ETSI FRAND
commitments, (ii) a judgment that the plaintiffs are entitled to a license with respect to the Company’s 3G and
4G SEPs on FRAND terms and conditions, and (iii) injunctions against any demand for allegedly excessive
royalties or enforcement of the Company defendants’ 3G and 4G U.S. SEPs against the plaintiffs or their
customers via patent infringement proceedings.

On June 22, 2020, the Company filed a motion to dismiss Lenovo’s Sherman Act claims with prejudice, and
to dismiss Lenovo’s breach of contract claim with leave to re-file as a counterclaim in the Company’s legal
proceeding against Lenovo in the Delaware District Court discussed above.

On March 24, 2021, the Delaware District Court ruled on the Company’s motion to dismiss. The Delaware
District Court dismissed the Sherman Act Section 1 claim without prejudice, denied the motion to dismiss the

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2023 Annual Report

Sherman Act Section 2 claim, and consolidated the Section 2 and breach of contract claims with Company’s
Delaware patent proceeding discussed above. Accordingly, these claims have been stayed pending resolution of
all appeals in the UK proceedings.

International Trade Commission and Companion District Court Proceedings

On September 1, 2023, the Company and certain of its subsidiaries filed a complaint in the United States
International Trade Commission (the “International Trade Commission”) against Lenovo Group Ltd. and certain
of its subsidiaries alleging that Lenovo infringes five of the Company’s U.S. patents (U.S. Patent Nos.
10,250,877, 8,674,859, 9,674,556, 9,173,054, and 8,737,933) by making, using, offering for sale, and/or selling
certain electronic devices, including smartphones, computers, tablet computers, and components thereof that
infringe certain claims of the asserted patents. As relief, the Company is seeking: (a) a limited exclusion order
against Lenovo barring from entry into the United States all of Lenovo’s products that infringe the asserted
patents; (b) cease and desist orders prohibiting Lenovo from importing, selling, offering for sale, marketing,
advertising, and distributing, infringing products; and (c) a bond during the 60-day Presidential review period.
On October 5, 2023, the International Trade Commission instituted the requested investigation. The hearing has
been scheduled for June 26 – July 2, 2024. The Initial Determination is expected to be issued by November 21,
2024, and the Final Determination is expected to be issued by March 21, 2025.

On September 1, 2023, the Company and certain of its subsidiaries filed a complaint in the United States
District Court for the Eastern District of North Carolina (the “North Carolina District Court”) against Lenovo
Group Ltd. and certain of its subsidiaries alleging that Lenovo infringes five of the Company’s U.S. patents (U.S.
Patent Nos. 10,250,877, 8,674,859, 9,674,556, 9,173,054, and 8,737,933) by making, using, offering for sale,
and/or selling Lenovo smartphones, computers (including both laptop and desktop), and tablet computers that
utilize the Company’s patented technology. As relief, the Company is seeking: (a) a finding that Lenovo is liable
for infringement of the asserted patents; (b) an injunction against further infringement; (c) damages, including
enhanced damages for willful infringement and supplemental damages; and (d) costs. Lenovo filed its answer
and counterclaims and motion to dismiss a portion of the complaint on October 10, 2023, which remains
pending. On October 31, 2023, the Company filed its answer to Lenovo’s counterclaims, an amended complaint,
as well as a motion to dismiss certain of Lenovo’s counterclaims, which is pending.

China Proceedings

On April 10, 2020, Lenovo (Beijing) Ltd. and certain of its affiliates filed a complaint against the Company
and certain of its subsidiaries in the Beijing Intellectual Property Court (the “Beijing IP Court”) seeking a
determination of the FRAND royalty rates payable for the Company’s Chinese 3G, 4G and 5G SEPs. On
February 20, 2021, the Company filed an application challenging the jurisdiction of the Beijing IP Court to take
up Lenovo’s complaint. On November 15, 2021, the Beijing IP Court denied the jurisdictional challenge, and the
Company filed an appeal with the Supreme People’s Court of the People’s Republic of China (the “SPC”) on
December 14, 2021. That appeal was denied by the SPC on September 5, 2022, and the case was sent back to the
Beijing IP Court. On November 9, 2022, the Company filed a petition to stay the case. On June 12, 2023, the
Beijing IP Court decided not to dismiss or stay the case. On December 5, 2023, Lenovo filed a request to
withdraw the proceedings, and on December 29, 2023, the Beijing IP Court granted Lenovo’s request.

On November 26, 2021, the Company was informed that Lenovo had purportedly filed an additional
complaint against the Company in the Wuhan Intermediate People’s Court (the “Wuhan Court”) seeking a
determination of a global FRAND royalty rate for the period from 2024 to 2029 for the Company’s 3G, 4G, and
5G SEPs. On April 16, 2022, the Company filed an application challenging, among other things, process of
service and the jurisdiction of the Wuhan Court. The application was denied on August 7, 2023. The Company
filed an appeal before the SPC on September 4, 2023. On December 19, 2023, Lenovo filed a request to
withdraw the proceedings, and on January 15, 2024, the Beijing IP Court granted Lenovo’s request.

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92

Germany Proceedings

On March 25, 2022, March 28, 2022, and April 6, 2022, the Company and certain of its subsidiaries filed
patent infringement claims in the Munich and Mannheim Regional Courts against Lenovo and certain of its
affiliates, alleging infringement of European Patent Nos. 2,449,782; 2,452,498; 3,624,447 and 3,267,684 relating
to HEVC standards. The Company sought, among other relief, injunctive relief to prevent further infringement of
the asserted patents. On September 21, 2023, the parties entered into a patent license agreement regarding the
Company’s HEVC portfolio. On October 4, 2023, the Company filed motions to withdraw the litigations
involving European Patent Nos. 2,449,782; 2,452,498; 3,624,447 and 3,267,684; the litigations were withdrawn
on October 9, 2023. On September 22, 2023, the Company filed a complaint with the Munich Regional Court
against Lenovo and certain of its affiliates, alleging infringement of European Patent No. 2,127,420, relating to
cellular 4G/LTE and/or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent
further infringement of the asserted patents. A hearing regarding European Patent No. 2,127,420 is scheduled for
March 21, 2024.

Oppo, OnePlus and realme

UK Proceedings

On December 20, 2021, the Company filed a patent infringement claim in the UK High Court against
Guangdong Oppo Mobile Telecommunications Corp., Ltd. (“Oppo”) and certain of its affiliates, OnePlus
and realme Mobile
Technology (Shenzhen) Co., Ltd.
Telecommunications (Shenzhen) Co., Ltd. (“realme”) and certain of its affiliates, alleging infringement of
European Patent (UK) Nos. 2,127,420; 2,421,318; 2,485,558; and 3,355,537 relating to cellular 3G, 4G/LTE or
5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of
the asserted patents.

and certain of

(“OnePlus”)

affiliates,

its

On March 24, 2023, the parties agreed to stay all technical trials on the basis that European Patent
No. 2,485,558 is valid and essential based on the result of Technical Trial A in the Lenovo UK proceedings. The
FRAND trial to determine the royalties to be paid under the license with Oppo is scheduled to commence on
March 1, 2024.

India Proceedings

On December 20, 2021 and December 22, 2021, the Company and certain of its subsidiaries filed patent
infringement claims in the Delhi High Court in New Delhi, India against Oppo and certain of its affiliates,
OnePlus and certain of its affiliates, and realme Mobile Telecommunication (India) Private Limited, alleging
infringement of Indian Patent Nos. 262910, 295912, 313036, 320182, 319673, 242248, 299448, and 308108
relating to cellular 3G, 4G/LTE, and/or 5G, and HEVC standards. The Company is seeking, among other relief,
injunctive relief to prevent further infringement of the asserted patents.

Germany Proceedings

On December 20, 2021, a subsidiary of the Company filed three patent infringement claims, two in the
Munich Regional Court and one in the Mannheim Regional Court, against Oppo and certain of its affiliates,
OnePlus and certain of its affiliates, and realme and certain of its affiliates, alleging infringement of European
Patent Nos. 2,485,558; 2,127,420; and 2,421,318 relating to cellular 3G, 4G/LTE and/or 5G standards. The
Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.
The Munich Regional Court held a hearing on March 2, 2023 regarding European Patent No. 2,127,420, and a
second hearing was held on November 23, 2023. On December 21, 2023, the Munich Regional Court issued a
decision finding infringement and issuing an injunction against Oppo. Oppo filed an appeal of this decision on
January 22, 2024, which is pending. On March 10, 2023, the Munich Regional Court entered a stay of the
proceedings regarding European Patent No. 2,485,558. On November 30, 2023, the Munich Regional Court
entered a stay of proceedings regarding European Patent No. 2,421,318.

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2023 Annual Report

China Proceedings

On January 19, 2022, the Company was informed that Oppo had purportedly filed a complaint against the
Company in the Guangzhou Intellectual Property Court (the “Guangzhou IP Court”) seeking a determination of a
global FRAND royalty rate for the Company’s 3G, 4G, 5G, 802.11 and HEVC SEPs. On May 20, 2022, the
Company filed an application challenging, among other things, process of service and the jurisdiction of the
Guangzhou IP Court. On January 12, 2023, the Guangzhou IP Court denied the application. On February 28,
2023,
to the decision. The Supreme People’s Court denied the appeal on
September 7, 2023. An initial evidentiary hearing was held on October 13, 2023.

the Company filed an appeal

Spain Proceedings

On March 1, 2022, a subsidiary of the Company filed patent infringement claims in the Barcelona
Commercial Courts against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme and
certain of its affiliates. The Company filed its amended complaint on April 25, 2022, alleging infringement of
European Patent Nos. 3,355,537; 2,485,558; 2,421,318; and 2,557,715 relating to cellular 3G, 4G/LTE and/or 5G
standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the
asserted patents. Oppo filed its reply, invalidity counterclaims, and defenses on July 31. 2023. The Company
filed its response to Oppo’s counterclaims on December 20, 2023.

Samsung

The Company reached an agreement with Samsung Electronics Co. Ltd. (“Samsung”) to enter into binding
arbitration to determine the final terms of a renewed patent license agreement to certain of the Company’s
patents, which will be effective from January 1, 2023. The Company and Samsung have also agreed not to
initiate certain claims against the other during the arbitration. On March 31, 2023, the Company filed a request
for arbitration with the International Chamber of Commerce.

On July 21, 2023, the International Chamber of Commerce confirmed the full tribunal for the arbitration.

The hearing has been scheduled for Summer of 2024 with an expected resolution in late 2024.

Tesla

On December 5, 2023, Tesla and certain of its subsidiaries filed a claim in the UK High Court against the
Company and Avanci. The claim alleges invalidity of three of the Company’s patents relating to 5G standards:
European Patent (UK) Nos. 3,718,369, 3,566,413, and 3,455,985. Tesla sought, among other relief, a declaration
that the patents at issue are invalid, not essential, and not infringed, revocation of the patents at issue, a
declaration that the terms of the Avanci 5G Connected Vehicle platform license are not FRAND, and a
determination of FRAND terms for a license between Tesla and Avanci covering its Avanci’s 5G Connected
Vehicle platform.

Other

We are party to certain other disputes and legal actions in the ordinary course of business, including
arbitrations and legal proceedings with licensees regarding the terms of their agreements and the negotiation
thereof. We do not currently believe that these matters, even if adversely adjudicated or settled, would have a
material adverse effect on our financial condition, results of operations or cash flows. None of the preceding
matters have met the requirements for accrual or disclosure of a potential range as of December 31, 2023, except
as noted above.

2023 Annual Report

94

13. COMPENSATION PLANS AND PROGRAMS

Compensation Programs

We use a variety of compensation programs to attract, retain and motivate our employees, and to more
closely align employee compensation with company performance. These programs include, but are not limited
to, short-term incentive awards tied to performance goals, cash awards to inventors for filed patent applications
and patent issuances, and long-term incentives in the form of stock option awards, time-based RSU awards,
performance-based RSU awards and cash awards.

Our long-term incentives typically include annual time-based RSU grants or cash awards with a three-year
vesting period, as well as annual performance-based RSU grants or cash awards with a three to five-year
performance period; as a result, in any one year, we are typically accounting for at least three active cycles.
Additionally, from time to time, executive officers are awarded long term incentives or new hire grants that may
include time-based RSUs, performance-based RSUs or options. We issue new shares of our common stock to
satisfy our obligations under the share-based components of these programs. However, our Board of Directors
has the right to authorize the issuance of treasury shares to satisfy such obligations in the future.

Equity Incentive Plans

On June 14, 2017, our shareholders adopted and approved the 2017 Equity Incentive Plan (the “2017 Plan”),
under which officers, employees, non-employee directors and consultants can receive share-based awards such as
RSUs, restricted stock and stock options as well as other stock or cash awards. The plan was amended in order to
reserve an additional 1.8 million shares of our common stock for issuance under the 2017 Plan. Such amendment
was adopted and approved by our shareholders on June 2, 2021.

From June 2009 through June 14, 2017, we granted equity awards pursuant to our 2009 Stock Incentive Plan
(the “2009 Plan,” and, together with the 2017 Plan, the “Equity Plans”), which was adopted and approved by our
shareholders on June 4, 2009, and the material terms of which were re-approved on June 12, 2014. Upon the
adoption of the 2017 Plan, the 2009 Plan was terminated and all shares remaining available for grant under the
2009 Plan were canceled. The number of shares available for issuance under the 2017 Plan, as amended, is equal
to 4.2 million shares plus any shares subject to awards granted under the 2009 Plan that, on or after June 14,
2017, expire or otherwise terminate without having been exercised in full, or that are forfeited to or repurchased
by us.

RSUs and Restricted Stock

We may issue RSUs to officers, employees, non-employee directors and consultants. Any cancellations of
unvested RSUs granted under the Equity Plans will increase the number of shares remaining available for grant
under the 2017 Plan. Time-based RSUs vest over periods generally ranging from 1 to 3 years from the date of the
grant. Performance-based RSUs generally have a vesting period between 3 and 5 years. Milestone performance-
based RSUs may vest at any time, upon achievement of the milestone goal, during the performance period, which
is typically 5 years.

As of December 31, 2023, we had unrecognized compensation cost related to share-based awards of
$27.8 million, at current performance accrual rates. For time-based grants with graded vesting, we expect to
amortize the associated unrecognized compensation cost using an accelerated method. For time-based grants that
cliff vest, we expect to amortize the associated unrecognized compensation cost as of December 31, 2023, on a
straight-line basis generally over the remaining vesting period.

Vesting of performance-based RSU awards is subject to attainment of specific goals established by the
Human Capital Committee of the Board of Directors. Depending upon performance achievement against these
goals, the number of shares that vest can be anywhere from 0 to 3 times the target number of shares.

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2023 Annual Report

Information with respect to current RSU activity is summarized as follows (in thousands, except per share

amounts):

Number of
Unvested
RSUs

Weighted
Average Per Share
Grant Date
Fair Value

Balance at December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,180
535
(197)
(410)

1,108

$53.36
73.80
55.07
54.95

$62.34

*

These numbers include fewer than 0.1 million RSUs credited on unvested RSU awards as dividend
equivalents. Dividend equivalents accrue with respect to unvested RSUs when and as cash dividends are
paid on the Company’s common stock, and vest if and when the underlying RSUs vest. Granted amounts
include performance-based RSU awards at their maximum potential payout.

During 2023, 2022 and 2021, we granted approximately 0.5 million, 0.7 million and 0.5 million RSUs under
the Equity Plans, respectively, with weighted-average per share grant date fair values of $73.80, $55.15 and
$68.44, respectively, assuming target payout for the performance-based awards. The total vest date fair value of
the RSUs that vested in 2023, 2022 and 2021 was $31.0 million, $25.3 million and $22.6 million, respectively.
The weighted average per share grant date fair value of the awards that vested in 2023, 2022 and 2021 was
$54.95, $67.29 and $62.44, respectively.

Other Equity Grants

We grant equity awards to non-management Board members and may grant equity awards to certain

consultants.

Stock Options

The 2009 Plan allowed, and the 2017 Plan allows, for the granting of incentive and non-qualified stock
options, as well as other securities. The administrator of the Equity Plans, the Human Capital Committee of the
Board of Directors, determines the number of options to be granted, subject to certain limitations set forth in the
2017 Plan. We grant stock options to a limited number of the employee base annually as part of our long-term
incentive programs, which have generally vested over three years. During the year ended December 31, 2018,
performance-based options were granted for the first time. The number of performance-based options which vest,
if at all, is anywhere from 0 to 3 times the target number of options subject to the attainment of performance
goals measured either during or at the end of the performance period. Performance-based options typically have a
vesting period between three and five years. Milestone performance options may vest at any time, upon
achievement of the milestone goal, during the performance period, which is typically 5 years.

Under the terms of the Equity Plans, the exercise price per share of each option, other than in the event of
options granted in connection with a merger or other acquisition, cannot be less than 100% of the fair market
value of a share of common stock on the date of grant. Options granted under the Equity Plans are generally
exercisable for a period of between 7 to 10 years from the date of grant and may vest on the grant date, another
specified date, over a period of time and/or dependent upon the attainment of specified performance goals. We
also have less than 0.1 million options outstanding under a prior stock plan that do not expire.

The fair value for option awards is computed using the Black-Scholes pricing model, whose inputs and
assumptions are determined as of the date of grant and which require considerable judgment. Expected volatility
was based upon a combination of implied and historic volatilities. The weighted-average grant date fair value per

2023 Annual Report

96

option award granted during the years ended December 31, 2023, 2022 and 2021 was $24.41, $20.28, and
$23.04, respectively, based upon the assumptions included in the table below:

Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the Year Ended December 31,

2023

7.5
32.8%
3.6%
1.9%

2022

8.0
36.3%
2.2%
2.3%

2021

7.7
35.7%
1.3%
1.9%

Information with respect to current year stock option activity is summarized as follows (in thousands, except

per share amounts):

Balance at December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

646
125
—
(72)

699

$60.08
72.90
—
17.38

$66.79

Outstanding
Options

Weighted
Average Exercise
Price

* Granted amounts include performance-based option awards at their maximum potential payout.

The weighted average remaining contractual

life of our outstanding options was 8.6 years as of
December 31, 2023. Options with an indefinite contractual life, which were granted between 1983 and 1986
under a prior stock plan, were assigned an original life in excess of 50 years for purposes of calculating the
weighted average remaining contractual life. The majority of these options have an exercise price between $9.00
and $11.63.

The total intrinsic value of our outstanding options as of December 31, 2023 was $29.2 million. Of the
0.7 million outstanding options as of December 31, 2023, 0.3 million were exercisable with a weighted-average
exercise price of $61.33. Options exercisable as of December 31, 2023, had total intrinsic value of $12.9 million
and a weighted average remaining contractual life of 9.4 years. The total intrinsic value of stock options
exercised during the years ended December 31, 2023, 2022 and 2021 was $5.4 million, $0.3 million and
$3.6 million, respectively. In 2023, we recorded cash received from the exercise of options of $1.3 million. Upon
option exercise, we issued new shares of stock.

As of December 31, 2023, we had unrecognized compensation cost on our unvested stock options of
$2.5 million, at current performance accrual rates. As of December 31, 2023 and 2022, we had approximately
0.7 million and 0.1 million options outstanding, respectively, that had exercise prices less than the fair market
value of our stock at the respective balance sheet date. These options would have generated cash proceeds to the
Company of $46.7 million and $1.1 million, respectively, if they had been fully exercised on those dates.

Defined Contribution Plans

We have a 401(k) plan (“Savings Plan”) wherein employees can elect to defer compensation within federal
limits. We match a portion of employee contributions. Our 401(k) contribution expense was approximately
$1.1 million, $1.2 million and $1.3 million for 2023, 2022 and 2021, respectively. Additionally, the company
contributed $0.3 million, $0.2 million and $3.4 million in 2023, 2022 and 2021, respectively, to other defined
contribution plans, including InterDigital’s Deferred Compensation Plan (“Deferred Plan”).

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2023 Annual Report

Under the Deferred Plan, eligible US employees may make tax-deferred contributions that cannot be made
under the 401(k) Plan due to Internal Revenue Service limitations. We match 50% of a participant’s
contributions up to 6% of the participant’s applicable compensation. From time to time InterDigital makes
discretionary company contributions to the Deferred Plan on behalf of a participant. The company contributed
$0.1 million and $3.0 million to the Deferred Plan in 2023 and 2021, respectively. No such contributions were
made in 2022.

14. TAXES

Our domestic/foreign pre-tax income consists of the following components for 2023, 2022 and 2021 (in

thousands):

For the Year Ended December 31,

2023

2022

2021

Pre-Tax Income by Jurisdiction
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$242,780
(8,170)

$129,072
(11,509)

$ 77,943
(20,387)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$234,610

$117,563

$ 57,556

Our income tax provision consists of the following components for 2023, 2022 and 2021 (in thousands):

Current
Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign source withholding tax . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred
Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign source withholding tax . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the Year Ended December 31,

2023

2022

2021

$ 45,816
(229)
12,444

58,031

$

657
931
5,754

7,342

$

(291)
797
22,415

22,921

(41,922)
615
(9,759)
16,592

(17,022)
527
—
34,655

(43,250)
792
—
34,905

(34,474)

18,160

(7,553)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 23,557

$ 25,502

$ 15,368

2023 Annual Report

98

The deferred tax assets and liabilities were comprised of the following components at December 31, 2023

and 2022 (in thousands):

Net operating losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization and depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credit carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,

2023

2022

$ 112,634
48,590
21,213
21,101
16,093
8,434
6,649
3,339
23
—

$ 114,975
3,457
9,423
19,608
24,029
10,542
4,803
3,402
27,212
2,504

Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

238,076
(104,830)

219,955
(122,218)

Net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

133,246

Right of use asset
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,610)
(1,697)

(4,307)

97,737

(3,464)
—

(3,464)

Net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 128,939

$ 94,273

The following is a reconciliation of income taxes at the federal statutory rate with income taxes recorded by

the Company for the years ended December 31, 2023, 2022 and 2021:

Tax at U.S. statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible officers’ compensation . . . . . . . . . . . . . . . . . . . . . . .
Other permanent differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-creditable withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign derived intangible income deduction . . . . . . . . . . . . . . . . . .
Change in valuation allowance (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of rates different than statutory . . . . . . . . . . . . . . . . . . . . . . . .
Research and development tax credits . . . . . . . . . . . . . . . . . . . . . . . .
Uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amended return benefit (a)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the Year Ended December 31,

2023

21.0
1.4
0.8
0.2
0.1
(7.1)
(2.2)
(1.3)
(0.8)
(0.6)
(0.4)
—
(1.1)

10.0

2022

21.0
1.5
1.2
1.1
0.4
(5.3)
2.4
0.3
(0.1)
(1.7)
1.5
—
(0.6)

21.7

2021

21.0
8.4
1.9
2.6
4.4
(14.7)
10.3
(1.2)
(2.2)
(1.3)
5.5
(7.7)
—

27.0

(a)

(b)

In 2021, a net discrete benefit of was recorded that primarily related to an amendment of prior year returns
to utilize a tax asset generated in the current year.
In 2023, the Company recorded a partial release of the valuation allowance it has in France due to income
projected driven by recently signed agreements.

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2023 Annual Report

Valuation Allowances and Net Operating Losses

We establish a valuation allowance for any portion of our deferred tax assets for which management
believes it is more likely than not that we will be unable to utilize the assets to offset future taxes. Given the
binary nature of our business, at this time we believe it is more likely than not that the majority of our state net
operating losses and net operating losses in certain subsidiaries in France, as well as our non-wholly owned
subsidiaries in the United States and United Kingdom will not be utilized; therefore we have maintained a near
full valuation allowance against our state, French and United Kingdom net operating losses as of December 31,
2023. We also maintain a valuation allowance against certain temporary differences other than the net operating
losses in these jurisdictions.

At December 31, 2023, we had $8.6 million in U.S net operating loss carryforwards, which can be
indefinitely carried forward, as well as non-U.S. net operating loss carryforwards amounting to $120.7 million
which can be indefinitely carried forward under French statutes. In addition, we had U.S. state net operating loss
carryforwards of $1.5 billion, of which $63.0 million can be indefinitely carried forward, while the remaining
$1.5 billion will expire in varying amounts from 2023 to 2042.

The Company recognizes deferred tax balances related to the undistributed earnings of subsidiaries when it
expects that it will recover those undistributed earnings in a taxable manner, such as through receipt of dividends
or sale of the investments. On December 31, 2023, the Company does not have distributable earnings in foreign
subsidiaries that would be subject to deferred taxes.

Uncertain Income Tax Positions

As of December 31, 2023, 2022 and 2021, we had $14.4 million, $16.1 million and $15.7 million,
respectively, of unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate.
The total amount of unrecognized tax benefits could change within the next twelve months for a number of
reasons including audit settlements,
tax examination activities and the recognition and measurement
considerations under this guidance.

During 2023, we reduced the reserve previously established for the amended returns by $0.7 million for the
benefit available in the current year had it not been included on the amended returns and reduced the reserve
previously recorded for foreign withholding taxes by $1.1 million due to favorable guidance from the taxing
authorities in the United States.

During 2022, we established reserves of $1.1 million related to uncertainty arising from our ability to credit
foreign withholding taxes in jurisdictions without a tax treaty with the United States. We also reduced the reserve
previously established for the amended returns by $1.0 million for the benefit available in the current year had it
not been included on the amended returns.

During 2021, after finalizing our amended return position we increased the reserve established in 2020 by
$12.8 million. We also reversed reserves of $1.1 million previously established on 2017 research and
development and manufacturing deduction credits as a result of the lapsing of stature of limitations for that tax
year.

2023 Annual Report

100

The following is a roll forward of our total gross unrecognized tax benefits, which if reversed would impact

the effective tax rate, for the fiscal years 2023 through 2021 (in thousands):

Balance as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax positions related to current year:

December 31,

2023

2022

2021

$16,052

$15,694

$ 3,803

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91

1,264

46

Tax positions related to prior years:

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapses in statues of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
(1,758)
—

45
(951)
—

12,831
(4)
(982)

Balance as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$14,385

$16,052

$15,694

Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense.

The Company and its subsidiaries are subject to United States federal income tax, foreign income and
withholding taxes and income taxes from multiple state jurisdictions. Our federal income tax returns for 2006 to
the present, with the exception of 2011 and 2012, are currently open and will not close until the respective
statutes of limitations have expired. The 2014, 2015 and 2018-2020 Federal income tax returns are currently
under audit by the IRS. The statutes of limitations generally expire three years following the filing of the return
or in some cases three years following the utilization or expiration of net operating loss carry forwards. The
statute of limitations applicable to our open federal returns will expire at the end of 2026. The Company is
subject to French corporate income tax on certain subsidiaries. The statute of limitations applicable to our open
French returns will expire in 2026. Excluding the Korea Competent Authority Proceeding and the Finland
Competent Authority Proceeding described in the section below, specific tax treaty procedures remain open for
certain jurisdictions for 2014 to the present. Many of our subsidiaries have filed state income tax returns on a
separate company basis. To the extent these subsidiaries have unexpired net operating losses, their related state
income tax returns remain open. These returns have been open for varying periods, some exceeding ten years.
The total amount of state net operating losses is $1.5 billion.

Foreign Taxes

We pay foreign source withholding taxes on patent license royalties when applicable. We apply foreign
source withholding tax payments against our United States federal income tax obligations to the extent we have
foreign source income to support these credits. In 2023, 2022 and 2021, we paid $12.0 million, $5.5 million and
$21.7 million in foreign source withholding taxes, respectively, and applied these payments as credits against our
United States federal tax obligation.

Between 2014 and 2023, we paid approximately $138.1 million in foreign taxes to foreign governments that
have tax treaties with the U.S., for which we have claimed foreign tax credits against our U.S. tax obligations,
and for which the tax treaty procedures are still open. It is possible that as a result of tax treaty procedures, the
U.S. government may reach an agreement with the related foreign governments that will result in a partial refund
of foreign taxes paid with a related reduction in our foreign tax credits. Due to foreign currency fluctuations, any
such agreement could result in foreign currency gain or loss.

On November 8, 2019, the Company received notification that its request for competent authority pertaining
to Article 25 (Mutual Agreement Procedure) of the United States-Republic of Finland Income Tax Convention
had been reviewed by the IRS and an agreement has been reached (the “Finland Competent Authority
Proceeding”). As a result of this agreement, the Company does not anticipate any tax consequences.

101

2023 Annual Report

15. NET INCOME PER SHARE

Basic Earnings Per Share (“EPS”) is calculated by dividing net income available to common shareholders
by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if options or other securities with features that could result in the issuance of common
stock were exercised or converted to common stock. The following table reconciles the numerator and the
denominator of the basic and diluted net income per share computation (in thousands, except for per share data):

Net income applicable to common shareholders . . . . . . . . . . . . . . .
Weighted-average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of stock options, RSUs, convertible securities and

For the Year Ended December 31,

2023

2022

2021

$214,069

$93,693

$55,295

26,860

30,106

30,764

warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,242

379

489

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,102

30,485

31,253

Earnings Per Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of stock options, RSUs, convertible securities and

$

7.97

$

3.11

$

1.80

warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(0.35)

(0.04)

(0.03)

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

7.62

$

3.07

$

1.77

Certain shares of common stock issuable upon the exercise or conversion of certain securities have been
excluded from our computation of earnings per share because the strike price or conversion rate, as applicable, of
such securities was greater than the average market price of our common stock for the years ended December 31,
2023, 2022 and 2021, as applicable, and, as a result, the effect of such exercise or conversion would have been
anti-dilutive. Set forth below are the securities and the weighted average number of shares of common stock
underlying such securities that were excluded from our computation of earnings per share for the periods
presented (in thousands):

Restricted stock units and stock options . . . . . . . . . . . . . . . . . . . . . . .
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the Year Ended December 31,

2023

106
7,488

7,594

2022

504
6,444

6,948

2021

322
4,921

5,243

16. EQUITY TRANSACTIONS

Repurchase of Common Stock

In June 2014, our Board of Directors authorized a $300.0 million share repurchase program (the “Share
Repurchase Program”). Subsequently our Board of Directors authorized five $100.0 million increases to the
program, respectively, and an additional $333.0 million in December 2022 and an additional $235.0 million in
December 2023, bringing the total amount of the Share Repurchase Program to approximately $1.4 billion. The
Company may repurchase shares under the Share Repurchase Program through open market purchases, pre-
arranged trading plans or privately negotiated purchases.

2023 Annual Report

102

The table below sets forth the total number of shares repurchased and the dollar value of shares repurchased
under the Share Repurchase Program (in thousands). As of December 31, 2023, there was approximately $296.3
million remaining under the Share Repurchase Program authorization.

2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Share Repurchase
Program

# of
Shares

4,411
1,224
458
6
2,962
1,478
107
1,304
1,836
3,554
17,340

Value

$ 339,704
74,445
30,000
349
196,269
110,505
7,693
64,685
96,410
152,625
$1,072,685

In 2023, we commenced a modified “Dutch auction” tender offer (the “Tender Offer”), which resulted in the
repurchase of 2.7 million shares of our common stock at a price of $72.98 per share, for an aggregate cost of
$199.9 million, excluding fees, expenses and excise tax relating to the Tender Offer.

Dividends

Cash dividends on outstanding common stock declared in 2023 and 2022 were as follows (in thousands,

except per share data):

2023
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2022
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Per
Share

$0.35
0.35
0.40
0.40
$1.50

$0.35
0.35
0.35
0.35
$1.40

Total

$ 9,449
9,273
10,348
10,226
$39,296

$10,803
10,380
10,382
10,384
$41,949

Cumulative
by Fiscal
Year

$ 9,449
18,722
29,070
39,296

$10,803
21,183
31,565
41,949

We announced an increase to the quarterly cash dividend from $0.35 to $0.40 per share, beginning with the
dividend paid in fourth quarter 2023. We currently expect to continue to pay comparable dividends in the future;
however, continued payment of cash dividends and changes in the Company’s dividend policy will depend on the
Company’s earnings, financial condition, capital resources and capital requirements, alternative uses of capital,
restrictions imposed by any existing debt, economic conditions and other factors considered relevant by our
Board of Directors.

103

2023 Annual Report

17. LEASES

The Company enters into operating leases primarily for real estate to support research and development
(“R&D”) sites and general office space in North America, with additional locations in Europe, China, and
Canada. The Company does not currently have any finance leases. Certain of our leases include options to extend
the lease at our discretion at the end of the lease term, or terminate the lease early subject to certain conditions
and penalties. We do not include any renewal options in our lease terms for calculating our lease liabilities, as the
renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise
these options.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease
based on the specific facts and circumstances present. Operating lease liabilities and their corresponding right-of-
use assets are recorded based on the present value of lease payments over the expected lease term. The interest
rate implicit in lease contracts is typically not readily determinable, and, as such, the Company utilizes its
incremental borrowing rate as the discount rate based on information available on the lease commencement date.
Our incremental borrowing rate represents the rate we would incur to borrow on a collateralized basis over a
similar term for an amount equal to the lease payments in a similar economic environment. The table below
includes the balances of operating lease right-of-use assets and operating lease liabilities as of December 31,
2023 and 2022 (in thousands):

Balance Sheet Classification

December 31,
2023

December 31,
2022

Assets
Operating lease right-of-use assets, net . . . . . . . . . . . . Other non-current assets, net

Total Lease Assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities
Operating lease liabilities — Current
Operating lease liabilities — Noncurrent

. . . . . . . . . . . . . Other accrued expenses

. . . . . . . . . . Other long-term liabilities

Total Lease Liabilities . . . . . . . . . . . . . . . . . . . . . . . .

$15,746

$18,034

15,746

18,034

2,879
17,385

3,167
19,923

$20,264

$23,090

The components of lease costs which were included within operating expenses in our consolidated statement

of income were as follows (in thousands):

For the Year
Ended
December 31,

2023

2022

2021

Operating lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term lease cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variable lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,821
388
1,316

$6,243
343
1,522

$5,188
442
1,625

For the years ended December 31, 2023 and 2022, sublease income was insignificant. Cash paid for
amounts included in the measurement of operating lease liabilities for the year ended December 31, 2023 and
2022 was $4.4 million and $5.2 million, respectively, and was included in net cash provided by operating
activities in our consolidated statement of cash flows. As of December 31, 2023, the weighted average remaining
operating lease term was 6.1 years and the weighted average discount rate used to determine the operating lease
liabilities was 6.2%. As of December 31, 2023, we have entered into one lease that has not yet commenced, with
commencement expected in first quarter 2024.

2023 Annual Report

104

The maturities of our operating lease liabilities as of December 31, 2023, excluding short-term leases with

terms less than 12 months, were as follows (in thousands):

Maturity of Operating Lease Liabilities

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,027
4,189
4,005
3,868
3,290
4,938

Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Imputed interest

24,317
(4,053)

Present value of lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,264

18. OTHER INCOME (EXPENSE), NET

The amounts included in “Other income (expense), net” in the consolidated statements of income for the

year ended December 31, 2023, 2022 and 2021 were as follows (in thousands):

Interest and investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment of long-term debt . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$46,628
—
11,184

$ 14,452
(11,190)
(6,719)

$ 1,690
—
9,885

Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$57,812

$ (3,457)

$11,575

For the Year Ended December 31,

2023

2022

2021

Interest and investment income increased to $46.6 million for the year ended December 31, 2023 primarily
due to increased short-term investments made by the Company and market conditions driving higher yields on
our short-term investments, as compared to both the years ended December 31, 2022 and 2021. Refer to Note 10,
“Obligations,” for further information on the $11.2 million loss on extinguishment of long-term debt recognized
during the year ended December 31, 2022.

The change in Other was primarily due to fair value adjustments of our investments and pension obligation
resulting in $12.1 million and $11.4 million of net gains in 2023 and 2021, respectively, and $2.4 million of net
losses in 2022. Additionally, the change in Other was driven by foreign currency translation a net gain arising
from euro translation of our foreign subsidiaries of $1.0 million in 2023, compared to net losses of $3.9 million
and $3.0 million in 2022 and 2021, respectively.

19. VARIABLE INTEREST ENTITIES

As further discussed below, we were the primary beneficiary of three variable interest entities, of which two
ceased operations in 2021 and one was deconsolidated during 2023. As of December 31, 2023, there were no
combined book values of the assets and liabilities associated with these variable interest entities included in our
consolidated balance sheet. As of December 31, 2022, the combined book values of the assets and liabilities
associated with these variable interest entities included in our consolidated balance sheet were $17.5 million and
$1.8 million, respectively. Assets included $4.4 million of cash and cash equivalents, $4.0 million of accounts
receivable and prepaid assets, and $9.1 million of patents, net.

105

2023 Annual Report

Convida Wireless

Convida Wireless was launched in 2013 and most recently renewed in 2021 to combine Sony’s consumer
electronics expertise with our pioneering IoT expertise to drive IoT communications and connectivity. Based on
the terms of the agreement, the parties will contribute funding and resources for additional research and platform
development, which we performed.

Convida Wireless is a variable interest entity. Based on our provision of research and platform development
services to Convida Wireless, we determined that we were the primary beneficiary for accounting purposes and
consolidated Convida Wireless through September 30, 2023. In October 2023, Convida Wireless appointed a
President and Chief Licensing Officer who is responsible for directing the operating activities of Convida,
including research and platform development services. Accordingly, we deconsolidated Convida Wireless during
fourth quarter 2023.

For the years ended December 31, 2023, 2022 and 2021, we have allocated $3.0 million, $1.6
million and $10.8 million, respectively, of Convida Wireless’ net loss to noncontrolling interests held by other
parties. During 2021, we recognized a $13.2 million impairment on the patents within the Convida portfolio,
resulting from our restructuring activities as described in Note 20, “Restructuring Activities”, which is included
within “Restructuring activities” expenses in the consolidated statement of income.

Chordant

On January 31, 2019, we launched the Company’s Chordant™ business as a standalone company. Chordant
is a variable interest entity and we have determined that we were the primary beneficiary for accounting purposes
and consolidated Chordant. For the year ended 2021, we allocated approximately $2.3 million of Chordant’s net
loss to noncontrolling interests held by other parties. Chordant ceased operations in 2021.

Signal Trust for Wireless Innovation

During 2013, we announced the establishment of the Signal Trust for Wireless Innovation (the “Trust”), the
goal of which was to monetize a patent portfolio primarily related to 3G and LTE cellular infrastructure. During
fourth quarter 2021, the Trust was fully dissolved and all remaining assets were transferred to us as majority
beneficiary.

The Trust was accounted for as a variable interest entity. Based on the terms of the trust agreement, we
determined that we were the primary beneficiary for accounting purposes and included the Trust in our
consolidated financial statements up to the date of dissolution.

20. RESTRUCTURING ACTIVITIES

During second quarter 2021, the Company began the process of a strategic review and undertook certain

actions in order to increase focus on core technologies and markets.

On June 10, 2021, the Company announced that, as a result of a strategic review of its research and
innovation priorities, it commenced the process of a collective economic layoff in which it proposed a reduction
in force of its research and innovation unit. All notices of termination have been issued to the impacted
employees. This action resulted in a reduction of employees under the benefit plans, and as a result the Company
recognized a $2.3 million curtailment gain during 2021. This curtailment gain was included within “Other
income (expense), net” in the consolidated statement of income.

During June 2021, Chordant began the process of ceasing operations. The Company implemented a

reduction in workforce action in second quarter 2021.

2023 Annual Report

106

Additionally, in June 2021, a non-controlled subsidiary that we consolidate for financial statement purposes
approved a plan to sell certain patents. The proceeds from the sale of these patents contributed to funding
Convida’s operations. These assets were evaluated as a separate asset group and reclassified as assets held for
sale. Upon the reclassification, the patents to be sold are recorded at fair value, which resulted in the Company
recognizing a $13.2 million impairment in 2021. We determined the fair value based upon evaluation of market
conditions.

In October 2021, we expanded our restructuring efforts to include general and administrative functions
largely centered in the U.S., which resulted in a further reduction in force as well as cuts to our non-labor
expenses. These employees were provided notification of termination during fourth quarter 2021.

As part of the Company’s ongoing evaluation of its flexible work policy and the impact of returning to the
office, the Company evaluated its current office space footprint and its expected needs going forward. As the
result of this evaluation, during 2022, we recognized a $2.4 million impairment, comprised of $0.4 million of
property and equipment and $2.0 million of right of use assets, related to the abandonment of portions of three of
our leased properties, which was included within “Restructuring activities” in the consolidated statement of
income.

The restructuring charges associated with the above activities totaling $3.3 million and $27.9 million in
2022 and 2021, respectively, are presented net of any reimbursement arrangements and include $0.5 million and
$1.7 million, respectively, of outside services and other associated costs related to non-recurring consultant and
legal fees.

During 2023, we did not recognize any restructuring expenses and the Company considers the plan to be

complete. We do not anticipate further restructuring charges.

As of December 31, 2023 and 2022, the Company’s restructuring liability was $0.1 million and $4.5 million
and was included in “Other accrued expenses” on our consolidated balance sheet. The following table presents
the change in our restructuring liability during the period (in thousands):

Balance as of December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrual
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 18,281
852
(13,761)
(877)

Balance as of December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrual
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,495

—
(4,475)
112

Balance as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

132

The restructuring expenses included in “Restructuring activities” in the consolidated statements of income

for the years ending December 31, 2023, 2022, and 2021 were as follows (in thousands):

Asset impairment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Severance and other benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outside services and other associated costs . . . . . . . . . . . . . . . . . . . . . . . .
Reimbursement arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$— $2,427
305
—
548
—
—
—

$13,228
22,616
1,671
(9,638)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$— $3,280

$27,877

For the Year Ended
December 31,

2023

2022

2021

107

2023 Annual Report

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

Item 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and its Chief Financial Officer, with the assistance of other
members of management, have evaluated the effectiveness of our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2023. Based on that evaluation,
the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and
procedures were effective to ensure that the information required to be disclosed by us in the reports that we file
or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms and to ensure that the information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

Management

is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America. Internal control over financial
reporting includes those policies and procedures that:

•

•

•

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with accounting principles generally accepted in the United States
of America, and that receipts and expenditures of the company are being made only in accordance with
authorization of management and directors of the company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use
or disposition of the company’s assets that could have a material effect on the consolidated financial
statements.

Management, including the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness
of internal control over financial reporting as of December 31, 2023. Management based this assessment on
criteria for effective internal control over financial reporting described in “Internal Control — Integrated
Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based
on this assessment, management determined that, as of December 31, 2023, the Company maintained effective
internal control over financial reporting.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has
been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in
their report that appears under Part II, Item 8, of this Form 10-K.

2023 Annual Report

108

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during fourth quarter 2023 that have

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. OTHER INFORMATION.

During fourth quarter 2023, the following Section 16 officers adopted, modified or terminated “Rule 10b5-1

trading arrangements” (as defined in Item 408 of Regulation S-K of the Exchange Act):

Name

Title

Action

Date

Trading
Arrangement

Rule
10b5-1

Non-Rule
10b5-1

Maximum
Shares to
be Sold

Expiration Date

Richard J. Brezski

Chief Financial
Officer

Adopt November 22, 2023 X

11,302 November 29, 2024

Item 9C. DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required by this item is incorporated by reference to the information following the captions
“Election of Directors,” “EXECUTIVE OFFICERS,” “Delinquent Section 16(a) Reports,” “Code of Ethics,”
“Nominating and Corporate Governance Committee” and “Audit Committee” in the definitive proxy statement to
be filed pursuant to Regulation 14A in connection with our 2024 annual meeting of shareholders not later than
120 days after the end of the fiscal year covered by this Annual Report on Form 10-K (the “Proxy Statement”).

Item 11. EXECUTIVE COMPENSATION.

The information required by this item is incorporated by reference to the information following the captions

“EXECUTIVE COMPENSATION” and “DIRECTOR COMPENSATION” in the Proxy Statement.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

RELATED STOCKHOLDER MATTERS.

The information required by this item is incorporated by reference to the information following the captions
“EQUITY COMPENSATION PLAN INFORMATION” and “SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT” in the Proxy Statement.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE.

The information required by this item is incorporated by reference to the information following the captions
“CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS” and “Director Independence” in the Proxy
Statement.

109

2023 Annual Report

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required by this item is incorporated by reference to the information following the captions
“Fees of Independent Registered Public Accounting Firm” and “Audit Committee Pre-Approval Policy for Audit
and Non-Audit Services of Independent Registered Public Accounting Firm” in the Proxy Statement.

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as a part of this Form 10-K:

(1) Financial Statements.

The information required by this item begins on Page 61.

(2) Financial Statement Schedules.

The following financial statement schedule of InterDigital is included herewith and should be read in

conjunction with the Financial Statements included in this Item 15.

Valuation and Qualifying Accounts

Balance Beginning
of Period

Increase/
(Decrease)

Reversal of
Valuation
Allowance

Balance End
of Period

2023 valuation allowance for deferred tax

assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$122,217

$ (7,628)(a)

$(9,759)

$104,830

2022 valuation allowance for deferred tax

assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$151,522

$(29,305)(b)

$ —

$122,217

2021 valuation allowance for deferred tax

assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 reserve for uncollectible accounts . . . . . . . . .
2022 reserve for uncollectible accounts . . . . . . . . .
2021 reserve for uncollectible accounts . . . . . . . . .

$144,367
—
$
322
$
—
$

$ 7,155 (c)
$
$
$

—
—
322

$ —
$ —
$ (322)
$ —

$151,522
—
$
—
$
322
$

(a) The decrease was primarily related to the decrease in Pennsylvania state tax rate. There was a partial release
of valuation allowance against deferred tax assets in France due to higher projected income resulting from
recently signed agreements.

(b) The decrease was primarily related to the decrease in Pennsylvania state tax rate.

(c) The increase was primarily necessary to maintain a full, or near full, valuation allowance against our state
deferred tax assets and deferred tax assets for certain subsidiaries in France as well as a non-wholly owned
subsidiary in the United States and the United Kingdom.

2023 Annual Report

110

(3) Exhibits.

See Item 15(b) below.

(b)

Exhibit
Number

Exhibit Description

*3.1

*3.2

*4.1

*4.2

*4.3

*4.4

*4.5

*4.6

†*10.1

†*10.2

†*10.3

†*10.4

†*10.5

†*10.6

†*10.7

†*10.8

Amended and Restated Articles of Incorporation of InterDigital (Exhibit 3.1 to InterDigital’s
Current Report on Form 8-K filed on June 7, 2011).

Amended and Restated Bylaws of InterDigital (Exhibit 3.1 to InterDigital’s Current Report on
Form 8-K filed on July 15, 2022).

Specimen Stock Certificate of InterDigital (Exhibit 4.3 to InterDigital’s Quarterly Report on
Form 10-Q filed on April 28, 2011).

Description of InterDigital’s Securities (Exhibit 4.2 to InterDigital’s Annual Report on
Form 10-K for the year ended December 31, 2020).

Indenture, dated June 3, 2019, between InterDigital and The Bank of New York Mellon Trust
Company, N.A., as trustee (Exhibit 4.1 to InterDigital’s Current Report on Form 8-K filed on
June 3, 2019).

Indenture, dated May 27, 2022, between InterDigital, Inc. and The Bank of New York Mellon
Trust Company, N.A., as trustee (Exhibit 4.1 to InterDigital’s Form 8-K filed on May 27,
2022).

Form of 2.00% Senior Convertible Note due 2024 (included in Exhibit 4.1 to InterDigital’s
Current Report on Form 8-K filed on June 3, 2019).

Form of 3.50% Senior Convertible Note due 2027 (included in Exhibit 4.1 to InterDigital’s
Current Report on Form 8-K filed on May 27, 2022).

Benefit Plans

Non-Qualified Stock Option Plan, as amended (Exhibit 10.4 to InterDigital’s Annual Report
on Form 10-K for the year ended December 31, 1991).

Amendment to Non-Qualified Stock Option Plan (Exhibit 10.31 to InterDigital’s Quarterly
Report on Form 10-Q filed on August 14, 2000).

Amendment to Non-Qualified Stock Option Plan, effective October 24, 2001 (Exhibit 10.6 to
InterDigital’s Annual Report on Form 10-K for the year ended December 31, 2001).

2009 Stock Incentive Plan (Exhibit 99.1 to InterDigital’s Registration Statement on Form S-8
filed on June 4, 2009 (File No. 333-159743)).

Amendment to 2009 Stock Incentive Plan, effective as of June 12, 2013 (Exhibit 10.1 to
InterDigital’s Quarterly Report on Form 10-Q filed on July 26, 2013).

2015 Amendment to 2009 Stock Incentive Plan, effective as of June 11, 2015 (Exhibit 10.1 to
InterDigital’s Quarterly Report on Form 10-Q filed on July 30, 2015).

2009 Stock Incentive Plan, Term Sheet and Standard Terms and Conditions for Stock Options
(Exhibit 10.5 to InterDigital’s Current Report on Form 8-K filed on January 28, 2013).

2009 Stock Incentive Plan, Term Sheet and Standard Terms and Conditions for Time-Based
Restricted Stock Units (Exhibit 10.3 to InterDigital’s Quarterly Report on Form 10-Q filed on
April 29, 2015).

111

2023 Annual Report

Exhibit
Number

†*10.9

†*10.10

†*10.11

†*10.12

†*10.13

†*10.14

†*10.15

†*10.16

†*10.17

†*10.18

†*10.19

†*10.20

†*10.21

†*10.22

†*10.23

†*10.24

†*10.25

Exhibit Description

2009 Stock Incentive Plan, Term Sheet and Standard Terms and Conditions for Performance-
Based Restricted Stock Units (Exhibit 10.4 to InterDigital’s Quarterly Report on Form 10-Q
filed on April 29, 2015).

2009 Stock Incentive Plan, Term Sheet and Standard Terms and Conditions for Stock Options
(Exhibit 10.5 to InterDigital’s Quarterly Report on Form 10-Q filed on April 29, 2015).

2009 Stock Incentive Plan, Term Sheet for Restricted Stock Units (Non-Employee Directors)
(Exhibit 10.3 to InterDigital’s Quarterly Report on Form 10-Q filed on July 26, 2013).

2009 Stock Incentive Plan, Standard Terms and Conditions for Restricted Stock Units (Non-
Employee Directors) (Exhibit 10.4 to InterDigital’s Quarterly Report on Form 10-Q filed on
July 26, 2013).

2017 Equity Incentive Plan (Exhibit 10.1 to InterDigital’s Registration Statement on
Form S-8 filed on June 15, 2017 (File No. 333-218755)).

2017 Equity Incentive Plan, Form of Agreement for Time-Based Restricted Stock Unit
Awards (Exhibit 10.2 to InterDigital’s Current Report on Form 8-K filed on June 16, 2017).

2017 Equity Incentive Plan, Form of Agreement for Performance-Based Restricted Stock Unit
Awards (Exhibit 10.3 to InterDigital’s Current Report on Form 8-K filed on June 16, 2017).

2017 Equity Incentive Plan, Form of Agreement for Option Awards (Exhibit 10.4 to
InterDigital’s Current Report on Form 8-K filed on June 16, 2017).

2017 Equity Incentive Plan, Form of Agreement for Restricted Stock Unit Awards to Non-
Employee Directors (Exhibit 10.18 to InterDigital’s Annual Report on Form 10-K for the year
ended December 31, 2017).

Compensation Program for Non-Management Directors (as amended March 2017)
(Exhibit 10.1 to InterDigital’s Current Report on Form 8-K filed on April 3, 2017).

Compensation Program for Non-Management Directors (as amended June 2019)
(Exhibit 10.20 to InterDigital’s Annual Report on Form 10-K for the year ended
December 31, 2019).

Deferred Compensation Plan (Exhibit 10.1 to InterDigital’s Current Report on Form 8-K filed
on June 18, 2013).

2017 Equity Incentive Plan, Form of Term Sheet for 2018 Performance-Based Restricted
Stock Unit Awards (Exhibit 10.1 to InterDigital, Inc.’s Current Report on Form 8-K filed on
July 9, 2018).

2017 Equity Incentive Plan, Form of Term Sheet for 2018 Performance-Based Stock Option
Awards (Exhibit 10.2 to InterDigital, Inc.’s Current Report on Form 8-K filed on July 9,
2018).

2017 Equity Incentive Plan, Form of Agreement for Time-Based Restricted Stock Unit
Awards (revised October 2018) (Exhibit 10.3 to InterDigital’s Quarterly Report on
Form 10-Q filed on November 1, 2018).

2017 Equity Incentive Plan, Form of Agreement for Performance-Based Restricted Stock Unit
Awards (revised October 2018) (Exhibit 10.4 to InterDigital’s Quarterly Report on
Form 10-Q filed on November 1, 2018).

2017 Equity Incentive Plan, Form of Agreement for Stock Option Awards (revised
October 2018) (Exhibit 10.5 to InterDigital’s Quarterly Report on Form 10-Q filed on
November 1, 2018).

2023 Annual Report

112

Exhibit
Number

†*10.26

10.27

10.28

10.29

†10.30

Exhibit Description

InterDigital Inc. Executive Severance and Change in Control Policy (Exhibit 10.6 to
InterDigital’s Quarterly Report on Form 10-Q filed on November 1, 2018).

Amended Compensation Program for Non-Management Directors

Amended and Restated Stock Ownership Guidelines for Directors and Executive Officers

Amended and Restated Deferred Compensation Plan

Employment-Related Agreements

Form of Indemnity Agreement between InterDigital and certain of its directors and executive
officers (Exhibit 10.27 to InterDigital’s Annual Report on Form 10-K for the year ended
December 31, 2021).

†*#10.31

Executive Agreement between InterDigital International, LLC and Eeva Hakoranta, dated
June 2, 2020 (Exhibit 10.28 to InterDigital’s Annual Report on Form 10-K for the year ended
December 31, 2021).

†*10.32

†*10.33

†*10.34

Offer Letter Between InterDigital and Liren Chen dated March 13, 2021 (Exhibit 10.2 to
InterDigital’s Quarterly Report on Form 10-Q filed on May 6, 2021).

Retirement & Transition Agreement and Release, dated March 16, 2021, by and between
InterDigital and William J. Merritt, (Exhibit 10.1 to InterDigital’s Quarterly Report on
Form 10-Q filed on May 6, 2021).

Retirement & Transition Agreement and Release, dated October 19, 2021, by and between
InterDigital and Richard L. Gulino (Exhibit 10.31 to InterDigital’s Annual Report on
Form 10-K for the year ended December 31, 2021).

†*#10.35

Offer Letter between InterDigital, Inc. and Rajesh Pankaj dated June 16, 2022 (Exhibit 10.5 to
InterDigital’s Quarterly Report on Form 10-Q filed on August 4, 2022).

Other Material Contracts

*10.36

*10.37

*10.38

*10.39

Form of Convertible Note Hedge Transaction Confirmation (Exhibit 10.2 to InterDigital’s
Current Report on Form 8-K filed on June 3, 2019).

Form of Warrant Transaction Confirmation (Exhibit 10.3 to InterDigital’s Current Report on
Form 8-K filed on June 3, 2019).

Form of Convertible Note Hedge Transaction Confirmation (Exhibit 10.2 to InterDigital’s
Current Report on Form 8-K filed on May 27, 2022).

Form of Warrant Transaction Confirmation (Exhibit 10.3 to InterDigital’s Current Report on
Form 8-K filed on May 27, 2022).

*10.40

Form of Unwind Agreement (Exhibit 10.4 to InterDigital’s Form 8-K filed on May 27, 2022).

21

23.1

31.1

31.2

Subsidiaries of InterDigital.

Consent of PricewaterhouseCoopers LLP.

Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended.

Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended.

32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.

113

2023 Annual Report

Exhibit
Number

32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.

Exhibit Description

97

Amended and Restated Clawback Policy

101.INS

XBRL Instance Document—The instance document does not appear in the Interactive Data
File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*

Incorporated by reference to the previous filing indicated.

† Management contract or compensatory plan or arrangement.

#

+

Certain personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6)
under Regulation S-K.

This exhibit will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such exhibit will not be
deemed to be incorporated by reference into any filing under the Securities Act or Securities Exchange Act,
except to the extent that InterDigital, Inc. specifically incorporates it by reference.

Item 16. FORM 10-K SUMMARY.

None.

2023 Annual Report

114

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant

has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Date: February 15, 2024

INTERDIGITAL, INC.

By: /s/ Liren Chen
Liren Chen
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by

the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: February 15, 2024

Date: February 15, 2024

Date: February 15, 2024

Date: February 15, 2024

Date: February 15, 2024

Date: February 15, 2024

Date: February 15, 2024

Date: February 15, 2024

Date: February 15, 2024

Date: February 15, 2024

/s/ S. Douglas Hutcheson

S. Douglas Hutcheson, Chairman of the Board of
Directors

/s/ Derek Aberle
Derek Aberle, Director

/s/ Samir Armaly

Samir Armaly, Director

/s/

Joan H. Gillman

Joan H. Gillman, Director

/s/

John A. Kritzmacher

John A. Kritzmacher, Director

/s/ Pierre-Yves Lesaicherre

Pierre-Yves Lesaicherre, Director

/s/

John D. Markley, Jr.

John D. Markley, Jr., Director

/s/
Jean F. Rankin
Jean F. Rankin, Director

/s/ Liren Chen

Liren Chen, Director, President and Chief Executive
Officer
(Principal Executive Officer)

/s/ Richard J. Brezski

Richard J. Brezski, Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Officer)

115

2023 Annual Report

[THIS PAGE INTENTIONALLY LEFT BLANK]

InterDigital, Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 5, 2024

TO THE SHAREHOLDERS OF INTERDIGITAL, INC.:

We are pleased to invite you to attend our 2024 annual meeting of shareholders, which will be held on Wednesday,
June 5, 2024, at 2:00 PM Eastern Time. This year’s annual meeting will be held as a virtual meeting. You will be able to
attend and participate in the annual meeting online via a live webcast by visiting www.virtualshareholdermeeting.com/
IDCC2024. In addition to voting by submitting your proxy prior to the annual meeting, you also will be able to vote your
shares electronically during the annual meeting. Further details regarding the virtual meeting are included in the
accompanying proxy statement. At the annual meeting, the holders of our outstanding common stock will act on the following
matters:

1.

Election of the nine director nominees named in the proxy statement, each for a term of one year;

2. Advisory resolution to approve executive compensation;

3. Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public

accounting firm for the year ending December 31, 2024; and

4.

Such other business as may properly come before the annual meeting.

We are pleased to be using the Securities and Exchange Commission rules that allow companies to furnish proxy
materials to their shareholders primarily over the Internet. We believe that this process expedites shareholders’ receipt of the
proxy materials, lowers the costs of the annual meeting and helps to conserve natural resources. We also believe that hosting a
virtual meeting enables participation by more of our shareholders in our annual meeting while lowering the cost of conducting
the meeting. Shareholders attending the virtual meeting will be afforded substantially the same rights and opportunities to
participate as they would at an in-person meeting. On or about April 23, 2024, we began mailing our shareholders a Notice of
Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our 2024 proxy statement and
2023 annual report, and how to vote online. The Notice also includes instructions on how to request a paper copy of the proxy
materials, including the notice of annual meeting, 2024 proxy statement, 2023 annual report and proxy card.

All holders of record of shares of our common stock (Nasdaq: IDCC) at the close of business on April 10, 2024 are

entitled to vote at the annual meeting and at any postponements or adjournments of the annual meeting. Your vote is
important. Regardless of whether you plan to attend the annual meeting, please cast your vote as instructed in the Notice as
promptly as possible. Alternatively, if you wish to receive paper copies of your proxy materials, including the proxy card,
please follow the instructions in the Notice. Once you receive paper copies of your proxy materials, please complete, sign,
date and promptly return the proxy card in the postage-prepaid return envelope provided, or follow the instructions set forth
on the proxy card to vote your shares over the Internet or by telephone. Your prompt response is necessary to ensure that your
shares are represented at the annual meeting. Voting by Internet, telephone or mail will not affect your right to vote at the
annual meeting if you decide to attend the virtual meeting through www.virtualshareholdermeeting.com/IDCC2024. If you
are a shareholder who holds stock in a brokerage account (a “street name” holder), you will receive instructions from the
holder of record, which you must follow in order for your shares to be voted. Certain of these institutions offer Internet and
telephone voting.

IF YOU PLAN TO ATTEND THE ANNUAL MEETING:

The annual meeting will be held as a virtual meeting and begin promptly at 2:00 PM Eastern Time. In order to attend

and participate in the annual meeting, you will need to visit www.virtualshareholdermeeting.com/IDCC2024 and follow
the instructions that are included in the Notice, on your proxy card or in the voting instructions accompanying your proxy
materials. You will also need the 16-digit control number provided therein. Online check-in will begin at 1:30 PM Eastern
Time. Please allow sufficient time to complete the online check-in process.

By Order of the Board of Directors,

April 23, 2024
Wilmington, Delaware

JOSHUA D. SCHMIDT

Chief Legal Officer and Corporate Secretary

TABLE OF CONTENTS

Page

3
INTERNET AVAILABILITY OF PROXY MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
ABOUT THE ANNUAL MEETING AND VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
GOVERNANCE OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Director Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Board Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Board Oversight of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Environmental, Social and Governance Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Board Structure and Committee Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Board Self-Evaluation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Communications with the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16
Communications About Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
2023 Director Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
PROPOSALS TO BE VOTED ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Advisory Resolution to Approve Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Ratification of Appointment of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . .
28
REPORT OF THE AUDIT COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44
Human Capital Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47
Grants of Plan Based Awards in 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
Outstanding Equity Awards at 2023 Fiscal Year End . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
Option Exercises and Stock Vested in 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
Nonqualified Deferred Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54
Potential Payments upon Termination or Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Pay Versus Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
Chief Executive Officer Pay Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
EQUITY COMPENSATION PLAN INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . .
69
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70
DELINQUENT SECTION 16(A) REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
Shareholder Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
Proxy Solicitation Costs and Potential Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72
Annual Report on Form 10-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

2

INTERDIGITAL, INC.
200 Bellevue Parkway, Suite 300
Wilmington, Delaware 19809-3727

PROXY STATEMENT

This proxy statement contains information relating to our annual meeting of shareholders to be held on

Wednesday, June 5, 2024, at 2:00 PM Eastern Time, and at any postponements or adjournments thereof. This
year’s annual meeting of shareholders will be held as a virtual meeting. Shareholders attending the virtual
meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting.
You will be able to attend and participate in the annual meeting online via a live webcast by visiting
www.virtualshareholdermeeting.com/IDCC2024. In addition to voting by submitting your proxy prior to the
annual meeting, you also will be able to vote your shares electronically during the annual meeting. Your proxy
for the annual meeting is being solicited by our Board of Directors (the “Board”).

INTERNET AVAILABILITY OF PROXY MATERIALS

As permitted by Securities and Exchange Commission (“SEC”) rules, we are making this proxy statement
and our annual report available to our shareholders primarily via the Internet, rather than mailing printed copies
of these materials to each shareholder. We believe that this process will expedite shareholders’ receipt of the
proxy materials, lower the costs of the annual meeting and help to conserve natural resources. On or about
April 23, 2024, we began mailing to each shareholder (other than those who previously requested electronic
delivery of all materials or previously elected to receive delivery of a paper copy of the proxy materials) a Notice
of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access and review the
proxy materials, including our proxy statement and our annual report, on the Internet and how to access an
electronic proxy card to vote on the Internet or by telephone. The Notice also contains instructions on how to
receive a paper copy of the proxy materials. If you receive the Notice by mail, you will not receive a printed copy
of the proxy materials unless you request one. If you receive the Notice by mail and would like to receive a
printed copy of our proxy materials, please follow the instructions included in the Notice.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders
to be Held on June 5, 2024:
The Notice of Meeting and Proxy Statement and 2023 Annual Report are available at
http://ir.interdigital.com/FinancialDocs.

ABOUT THE ANNUAL MEETING AND VOTING

What is the purpose of the annual meeting?

At our annual meeting, shareholders will act upon the matters outlined in the Notice provided with this
proxy statement, including the election of directors, the advisory resolution to approve executive compensation,
the ratification of the appointment of our independent registered public accounting firm, and such other business
as may properly come before the annual meeting.

Who may attend the annual meeting?

You are entitled to participate in the annual meeting only if you were a shareholder of record as of the close

of business on April 10, 2024 or if you hold a valid proxy for the annual meeting. As noted above, this year’s
annual meeting will be held as a virtual meeting that you may attend online via a live webcast by visiting

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www.virtualshareholdermeeting.com/IDCC2024. Shareholders attending the virtual meeting will be afforded the
same rights and opportunities to participate as they would at an in-person meeting.

In order to attend and participate in the annual meeting, you will need to visit

www.virtualshareholdermeeting.com/IDCC2024 and follow the instructions that are included in the Notice, on
your proxy card or in the instructions accompanying your proxy materials. You will be required to complete an
online check-in process, for which you will need the 16-digit control number provided on your Notice, your
proxy card or the instructions accompanying your proxy materials. If you do not have your control number, you
will not be able to join the annual meeting, vote at the annual meeting or ask questions. Online check-in will
begin at 1:30 PM Eastern Time, and the annual meeting will begin promptly at 2:00 PM Eastern Time. Please
allow sufficient time to complete the online check-in process.

Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock

ownership and how to obtain any information you may need, are posted at www.virtualshareholdermeeting.com/
IDCC2024.

Who is entitled to vote at the annual meeting?

Only shareholders of record at the close of business on April 10, 2024, the record date, are entitled to
receive notice of, and to vote at, the annual meeting. If you were a shareholder on that date, you will be entitled
to vote all of the shares of common stock that you held on that date at the annual meeting, or any postponements
or adjournments of the annual meeting. There were 25,366,746 shares of our common stock outstanding on the
record date.

What are the voting rights of the holders of the company’s common stock?

Each share of our common stock outstanding on the record date will be entitled to one vote on each director

nominee and one vote on each other matter considered at the annual meeting.

What constitutes a quorum?

A quorum is the minimum number of our shares of common stock that must be represented at a duly called

meeting, which includes participation by electronic means such as a live webcast, or by proxy in order to conduct
business legally at such meeting. For the annual meeting, the presence, live at the meeting or by proxy, of the
holders of a majority of the shares entitled to vote will be considered a quorum. If you are a registered
shareholder, voting by Internet or telephone or, if you requested a paper copy of the proxy materials, by mail, or
attendance at the annual meeting, will cause you to be counted in the determination of a quorum. If you are a
street name shareholder, your broker or other nominee will vote your shares pursuant to your instructions, and
such shares will count in the determination of a quorum. If you do not provide any specific voting instructions to
your broker or other nominee, your shares will still count for purposes of attaining a quorum, so long as you
provide voting instructions for at least one matter or your broker or other nominee votes with respect to a matter
for which they do not require your instructions, such as the ratification of the appointment of our independent
registered public accounting firm.

How do I vote?

If you are a registered shareholder, you may vote by Internet or telephone by following the instructions in

the Notice. If you requested a paper copy of the proxy materials, you also may submit your proxy by mail by
following the instructions included with your proxy card. The deadline for submitting your proxy by Internet or
telephone is 11:59 PM Eastern Time on June 4, 2024. The designated proxy will vote according to your
instructions. If you attend the live webcast of the annual meeting you also will be able to vote your shares
electronically at the meeting up until the time the polls are closed.

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If you are a street name holder, your broker or nominee firm is the legal, registered owner of the shares, and
it may provide you with a Notice. Follow the instructions on the Notice to access our proxy materials and vote or
to request a paper or email copy of our proxy materials. If you receive these materials in paper form, the
materials include a voting instruction card so that you can instruct your broker or nominee how to vote your
shares. Please check your Notice or voting instruction card or contact your broker or other nominee to determine
whether you will be able to deliver your voting instructions by Internet or telephone in advance of the meeting
and whether, if you attend the live webcast of the annual meeting, you will be able to vote your shares
electronically at the meeting up until the time the polls are closed.

If you own shares through a retirement or savings plan or other similar plan, you may submit your voting
instructions by Internet, telephone or mail by following the instructions included with your voting instruction
card. The deadline for submitting your voting instructions by Internet or telephone is 11:59 PM Eastern Time on
May 30, 2024. The trustee or administrator of the plan will vote according to your instructions and the rules of
the plan.

If you sign and submit your proxy without specifying how you would like your shares voted, your shares
will be voted in accordance with the Board’s recommendations specified below under “What are the Board’s
recommendations?” and in accordance with the discretion of the proxy holders with respect to any other matters
that may be voted upon at the annual meeting.

Even if you plan to attend the annual meeting, we recommend that you also submit your proxy card or vote

by Internet or telephone by the applicable deadline so that your vote will be counted if you later decide not to
attend the meeting.

Can I change my vote after I return my proxy or voting instruction card?

If you are a registered shareholder, you may revoke or change your vote at any time before the proxy is

voted by filing with our Corporate Secretary either a written notice of revocation or a duly executed proxy
bearing a later date. If you attend the live webcast of the annual meeting you may revoke your proxy or change
your proxy vote by voting electronically at the meeting. Your attendance at the annual meeting will not by itself
revoke a previously granted proxy.

If your shares are held in street name or you hold shares through a retirement or savings plan or other
similar plan, please check your voting instruction card or contact your broker, nominee, trustee or administrator
to determine whether you will be able to revoke or change your vote.

Will my vote be confidential?

It is our policy to maintain the confidentiality of proxy cards, ballots and voting tabulations that identify

individual shareholders except as might be necessary to meet any applicable legal requirements and, in the case
of any contested proxy solicitation, as might be necessary to allow proper parties to verify proxies presented by
any person and the results of the voting.

What are the Board’s recommendations?

The Board recommends that you vote:

• For election of each of the director nominees named in this proxy statement (see Proposal 1);

• For the advisory resolution to approve executive compensation (see Proposal 2); and

• For ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered

public accounting firm for the year ending December 31, 2024 (see Proposal 3).

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What vote is required to approve each proposal?

Election of directors. We have adopted majority voting in uncontested director elections. Accordingly,
under our articles of incorporation and bylaws, director nominees must receive the affirmative vote of a majority
of the votes cast in order to be elected. A majority of the votes cast means that the number of votes cast “for” a
director nominee must exceed the number of votes cast “against” that nominee. Abstentions, while included for
purposes of attaining a quorum, will have no effect on the outcome of director elections. Under Pennsylvania law
and our articles of incorporation and bylaws, an incumbent director who does not receive the votes required to be
re-elected remains in office until his or her successor is elected and qualified, thereby continuing as a “holdover”
director. Under the director resignation policy in our corporate governance principles, a director who is not
re-elected must tender his or her resignation to the Nominating and Corporate Governance Committee of the
Board, which will make a recommendation to the Board as to whether or not the resignation offer should be
accepted. In deciding whether to accept the resignation offer, the Board will consider the recommendation of the
Nominating and Corporate Governance Committee as well as any additional information and factors that the
Board believes to be relevant. The Board will act on the Nominating and Corporate Governance Committee’s
recommendation within ninety (90) days following certification of the election results.

Advisory resolution to approve executive compensation. The affirmative vote of a majority of the votes cast

is required for approval. Because the vote is advisory, it will not be binding on the Board or the company.
Abstentions, while included for purposes of attaining a quorum, will have no effect on the outcome of the
proposal.

Ratification of the appointment of PricewaterhouseCoopers LLP. The affirmative vote of a majority of the
votes cast is required for ratification. Abstentions, while included for purposes of attaining a quorum, will have
no effect on the outcome of the proposal. Ratification of the appointment of our independent registered public
accounting firm is not legally required. The Board asks shareholders to ratify the appointment as a matter of good
corporate governance. If shareholders do not ratify the appointment, the Audit Committee of the Board will
consider whether it is appropriate to select another independent registered public accounting firm in future years.

What is a “broker non-vote”?

If you hold your shares in street name through a broker or other nominee, your broker or nominee may not

be permitted to exercise voting discretion with respect to non-routine matters if you do not provide voting
instructions. “Broker non-votes” are shares held in street name by a broker or nominee that is present or
represented by proxy at a shareholders meeting to vote, but for which the beneficial owner has not provided the
record holder with instructions on how to vote on a non-routine matter. For the annual meeting, if you do not
provide specific voting instructions, your broker or nominee may not exercise voting discretion with respect to
Proposal 1, the election of directors or Proposal 2, the advisory vote on executive compensation. If you do not
provide specific voting instructions, your broker or nominee may exercise voting discretion with respect to
Proposal 3, the ratification of the appointment of the company’s independent registered public accounting firm.
Therefore, we do not expect any broker non-votes to occur for Proposal 3, but broker-non-votes may occur for
Proposals 1 and 2. Broker non-votes will be counted for the purposes of calculating whether a quorum is present
at the annual meeting but will have no effect on the outcome of the vote.

How do I ask questions at the annual meeting?

We have designed the virtual annual meeting to provide substantially the same opportunities to participate
as shareholders would have at an in-person meeting. The virtual annual meeting format allows shareholders to
communicate with the company during the annual meeting so they can ask questions of our management and
Board, as appropriate. If you wish to submit a question during the annual meeting, you may do so by logging into
the virtual meeting platform at www.virtualshareholdermeeting.com/IDCC2024, typing your question into the
“Ask a Question” field and clicking “Submit.”

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We reserve the right to exclude questions regarding topics that are not pertinent to meeting matters or

company business or are inappropriate. If we receive substantially similar questions, we may group such
questions together and provide a single response to avoid repetition. Any questions that are appropriate and
pertinent to the annual meeting will be answered in the live Q&A session during the annual meeting, subject to
time constraints. Any such questions that cannot be answered during the annual meeting due to time constraints
will be posted and answered on our Investor Relations website, http://ir.interdigital.com, as soon as practicable
after the annual meeting.

Additional information regarding the ability of shareholders to ask questions during the annual meeting,
related rules of conduct, and other materials for the annual meeting will be available during the annual meeting at
www.virtualshareholdermeeting.com/IDCC2024.

How do I access technical support during the annual meeting?

If you encounter any difficulties accessing the virtual annual meeting during the check-in or meeting time,

please call the technical support number that will be posted on the virtual meeting login page for assistance.
Technical support will be available beginning approximately 15 minutes prior to the start of the annual meeting
through its conclusion. Additional information regarding matters addressing technical and logistical issues,
including technical support during the annual meeting, will be available at www.virtualshareholdermeeting.com/
IDCC2024. The virtual annual meeting platform is fully supported across browsers (Edge, Firefox, Chrome, and
Safari) and devices (desktops, laptops, tablets, and smartphones) running the most updated version of applicable
software and plugins. You should ensure that you have a strong internet connection if you intend to attend and/or
participate in the annual meeting.

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GOVERNANCE OF THE COMPANY

Where can I find information about the governance of the company?

The company has adopted corporate governance principles that, along with the charters of each of the Board

committees, provide the framework for the governance of the company. The Nominating and Corporate
Governance Committee is responsible for annually reviewing the principles and recommending any proposed
changes to the Board for approval. A copy of our corporate governance principles is posted on our website at
http://ir.interdigital.com under the IR menu heading “ESG – Governance,” along with the charters of each of our
Board committees and other information about our governance practices. We will provide to any person without
charge a copy of any of these documents upon written request to our Corporate Secretary at our principal
executive offices: InterDigital, Inc., 200 Bellevue Parkway, Suite 300, Wilmington, Delaware 19809-3727.

Code of Ethics

Does the company have a code of ethics?

We have adopted a Code of Ethics that applies to all directors, officers, employees and consultants, including

our principal executive, financial and accounting officers or persons performing similar functions. The Audit
Committee is responsible for annually reviewing the Code of Ethics and recommending any proposed changes to
the Board for approval. A copy of our Code of Ethics is available on the company’s website at
http://ir.interdigital.com under the IR menu heading “ESG – Governance – Governance Documents.” We intend to
disclose future amendments to certain provisions of the Code of Ethics, or any waiver of such provisions granted to
executive officers and directors, on the website within four business days following the date of such amendment or
waiver. We will provide to any person without charge a copy of our Code of Ethics upon written request to our
Corporate Secretary at InterDigital, Inc., 200 Bellevue Parkway, Suite 300, Wilmington, Delaware 19809-3727.

Director Independence

Which directors are considered independent, and how does the Board determine their independence?

Each year, prior to the annual meeting of shareholders, the Board reviews and assesses the independence of

its directors and makes a determination as to the independence of each director. During this review, the Board
considers transactions and relationships between each director or any member of his or her immediate family and
our company and its subsidiaries and affiliates. As a result of these reviews, the Board affirmatively determined
that each of Mses. Joan H. Gillman and Jean F. Rankin, Messrs. Derek K. Aberle, Samir Armaly, S. Douglas
Hutcheson, John A. Kritzmacher and John D. Markley, Jr. and Dr. Pierre-Yves Lesaicherre are “independent”
under applicable SEC rules and listing standards of the Nasdaq Stock Market.

Board Leadership

Who is the Chairman of the Board, and are the positions of Chairman of the Board and Chief Executive
Officer separated?

Mr. Hutcheson, who is an independent director, has served as Chairman of the Board since June 2015. The

Board has a general policy that the positions of Chairman of the Board and Chief Executive Officer should be
held by separate persons as an aid in the Board’s oversight of management. This policy is affirmed in the Board’s
published corporate governance principles, which mandate that the Chairman of the Board be an independent
director. The Board believes that this leadership structure is appropriate for the company at this time because of
the advantages of having an independent chairman for matters such as communications and relations between the
Board and the Chief Executive Officer and other senior management, reaching consensus on company strategies
and policies, and facilitating robust Board, committee and Chief Executive Officer evaluation processes. The

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Board periodically reviews its leadership structure to determine whether it is appropriate given the specific
characteristics and circumstances of the company.

Board Oversight of Risk

What is the Board’s role in risk oversight?

The Board is responsible for overseeing the major risks facing the company and the company’s enterprise
risk management (“ERM”) efforts. The Board has delegated to the Audit Committee primary responsibility for
overseeing and monitoring these efforts. Under its charter, the Audit Committee is responsible for discussing
with management and the company’s independent registered public accounting firm significant risks and
exposures relating to the company’s quarterly and annual financial statements and assessing management’s steps
to mitigate them, and for reviewing corporate insurance coverage and other risk management programs,
including those related to cybersecurity, information and technology security and data privacy related risks. At
least quarterly, the Audit Committee receives presentations and reports directly from the company’s Chief Legal
Officer, who leads the company’s day-to-day ERM efforts. The Audit Committee briefs the Board on the
company’s ERM activities as part of its regular reports to the Board on the activities of the committee, and the
Chief Legal Officer also periodically delivers presentations and reports to the full Board as appropriate.

Environmental, Social and Governance Matters

Our Nominating and Corporate Governance Committee has primary oversight over environmental, social
and governance (“ESG”) matters, which it exercises in conjunction with the other committees of the Board. In
addition, our Chief Financial Officer oversees a committee of senior executives that steers the process of setting
purpose, strategies, policies and goals related to economic, environmental and social topics. We are committed to
sustainable business principles, to thinking long-term and to making strategic decisions that adhere to our
mission and values.

In 2023, we continued our efforts to improve our company-wide ESG performance. This included furthering

our efforts to track and reduce our carbon footprint. We were able to increase our renewable energy footprint to
52% of our data center consumption from 43% in 2022. Globally, 31% of our total energy consumption came
from renewable sources in 2023. We also committed to relocating our office in London and reassigning certain
employees in New York to our new Melville office to reduce our overall global office CO2 emissions from our
commuting workforce. As part of these efforts, we opened our new “green” office space at our largest facility in
Rennes, France in the second quarter of 2023. This new facility is BREEAM certified for sustainability, allowing
us to reduce our annual energy consumption in Rennes by 50%, exceeding the estimated goal of 25% reduction
with this new office.

We have also made a commitment to Board diversity, as described further in “Board Structure and Committee

Membership—Nominating and Corporate Governance Committee” below. Further, we believe that maintaining a
diverse, equitable and inclusive workforce is critical to our ability to succeed in the global marketplace. In recent years
we have invested in our talent acquisition, talent development, and succession planning efforts as a means to diversify
our workforce. We have continually provided historically underrepresented and female leaders the opportunity to
attend targeted world-class external development programs that speak to the unique experiences these employees can
face in the workplace while investing in their continued growth both personally and professionally. In addition, core
principles of our culture of inclusion are reflected in the all-employee training programs we offer on our policies
against harassment and discrimination of any kind. In 2022 we launched our Diversity, Equity & Inclusion (“DEI”)
taskforce, an employee-led team focused on supporting the execution of InterDigital’s DEI strategy.

We maintain a Sustainability webpage at https://ir.interdigital.com/esg/overview/ and intend to regularly
communicate our goals and progress on various ESG matters. The information on our sustainability website is
not incorporated by reference into, and does not form part of, this proxy statement.

9

Board Structure and Committee Membership

What is the size of the Board, and how often are directors elected?

The Board currently has nine directors. All directors are subject to election for one-year terms at each

annual meeting of shareholders.

How often did the Board meet during 2023?

The Board met five times during 2023. Each director is expected to attend each meeting of the Board and
those committees on which he or she serves. Each director attended at least 75% of the aggregate of all Board
meetings and meetings of committees on which the director served during 2023. We typically schedule one of the
meetings of the Board on the day immediately preceding or following our annual meeting of shareholders, and it
is the policy of the Board that directors are expected to attend our annual meeting of shareholders absent unusual
circumstances. All nine of our directors attended the 2023 annual meeting of shareholders.

What are the roles of the primary Board committees?

The Board has standing Audit, Human Capital (formerly Compensation), Finance, and Nominating and
Corporate Governance Committees. The Board also forms additional standing or ad hoc committees from time to
time. Each of the Audit, Human Capital, and Nominating and Corporate Governance Committees is composed
entirely of independent directors, as determined by the Board in accordance with applicable SEC rules and listing
standards of the Nasdaq Stock Market. Mr. Chen does not serve on any of the committees but generally attends
each committee meeting. Each of the Board committees operates under a written charter that has been approved
by the Board. The following table provides information about the current membership of the committees and the
number of meetings each committee held in 2023.

Name

Audit
Committee

Human
Capital
Committee

Nominating
and
Corporate
Governance
Committee

Finance
Committee

Samir Armaly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derek K. Aberle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joan H. Gillman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. Douglas Hutcheson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John A. Kritzmacher
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pierre-Yves Lesaicherre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John D. Markley, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jean F. Rankin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

X

X

Chair
X

Number of Meetings in 2023 . . . . . . . . . . . . . . . . . . . . . . . . . .

8

X

X

X
Chair

5

X

X

Chair
X

4

X
Chair
X

X

4

Audit Committee

The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to the company’s

corporate accounting, financial reporting practices, audits of its financial statements and compliance with
applicable requirements regarding the maintenance of accurate books and records. Among other things, the
committee:

• Reviews the company’s annual and quarterly financial statements and discusses them with

management and the company’s independent registered public accounting firm;

• Appoints, compensates, retains, evaluates, oversees the work of (including resolution of disagreements
between management and the company’s independent registered public accounting firm regarding

10

financial reporting) and, if deemed appropriate, replaces the company’s independent registered public
accounting firm;

• Reviews and discusses the company’s practices with respect to risk assessment and risk management,

including but not limited to the specific risks associated with the matters set forth for Audit Committee
oversight in the committee’s charter, and discusses with management and the company’s independent
registered public accounting firm significant risks and exposures and assesses management’s steps to
minimize them;

• Receives from the company’s independent registered public accounting firm reports required by
applicable SEC rules and professional standards, including reviewing and discussing with the
company’s independent registered public accounting firm the matters required to be discussed under
applicable requirements of the Public Company Accounting Oversight Board and the SEC;

• Reviews the adequacy and effectiveness of the company’s system of internal control over financial

reporting and disclosure controls and procedures;

• Reviews and approves, at least annually, the management, scope, plans, budget, staffing and relevant

processes and programs of the company’s internal audit function;

• Establishes and oversees procedures for receiving and handling reports of potential misconduct,

including violations of law or the company’s Code of Ethics and complaints received by the company
regarding accounting, internal accounting controls, auditing or federal securities law matters and the
confidential, anonymous submission by the company’s employees of concerns regarding questionable
accounting, auditing or federal securities law matters;

• Oversees the company’s other compliance policies and programs, including the implementation and

effectiveness of the company’s Code of Ethics;

• Oversees the company’s compliance with data privacy rules and regulations;

• Oversees and reviews the Company’s cybersecurity, information and technology security and data

privacy frameworks, policies, programs, opportunities, and risk profile; and the Company’s business
continuity and disaster recovery plans and capabilities and the effectiveness of the Company’s
escalation procedures;

• Oversees and monitors the company’s ERM efforts; and

• Reviews and provides guidance to the Board with respect to tax planning, corporate insurance coverage

and implementation of new or revised accounting or auditing standards or regulatory changes.

All of the Audit Committee members are financially literate. The Board has determined that three of its
members (Messrs. Hutcheson, Kritzmacher and Markley), including one of the current members of the Audit
Committee (Mr. Kritzmacher), qualify as “audit committee financial experts” within the meaning of applicable
SEC regulations and thereby meet the “financial sophistication” requirements of the Nasdaq listing rules.
Mr. Kritzmacher acquired his expertise primarily through his prior experience as a chief financial officer of a
publicly traded company.

Human Capital Committee

The Human Capital Committee assists the Board in discharging its responsibilities relating to the

compensation of the Chief Executive Officer and other executive officers, develops, reviews and approves the
principles guiding the company’s compensation policies, oversees the company’s compensation-related policies
and programs and the level of awards to employees, and assists the Board and the Chairman of the Board in
succession planning. Among other things, the committee:

• Reviews and approves the corporate goals and objectives relevant to the compensation of the

company’s Chief Executive Officer and other executive officers, evaluates their performance in light of

11

such goals and objectives and, based on its evaluations and appropriate recommendations, reviews and
approves the compensation of the Chief Executive Officer and other executive officers, including
approving the grant of equity awards, each on an annual basis;

• Assists the Board in developing and evaluating potential candidates for executive positions and

oversees and annually reviews the development of executive succession plans;

• Reviews and discusses with management the Compensation Discussion and Analysis required by SEC

rules, recommends to the Board whether the Compensation Discussion and Analysis should be
included in the company’s annual report and proxy statement and oversees the preparation of the
Human Capital Committee report required by SEC rules for inclusion in the company’s annual report
and proxy statement;

• Assesses the results of the company’s most recent advisory vote on executive compensation, and

considers and recommends to the Board the frequency of the company’s advisory vote on executive
compensation;

• Reviews periodically compensation for non-employee directors of the company and recommends

changes to the Board as appropriate;

• Reviews and approves compensation packages for new executive officers and severance packages for

executive officers whose employment terminates with the company;

• Reviews and makes recommendations to the Board with respect to the adoption or amendment of

incentive and other equity-based compensation plans;

• Administers the company’s equity incentive plans;

• Reviews periodically, revises as appropriate, and monitors compliance by directors and executive

officers with, the company’s stock ownership guidelines;

• Assists the Board in its oversight of the company’s policies and strategies relating to culture and human
capital management, including diversity, equity and inclusion and talent management; reviews and
discusses with management the company’s disclosure of such activities in its annual report and proxy
statement;

• Reviews and considers compensation policies and/or practices as they relate to risk management

practices and/or incentives that enhance risk-taking, as the committee determines to be appropriate;

• Establishes, oversees the implementation of and periodically reviews policies concerning the

recoupment of incentive compensation for executive officers and senior management, and makes
determinations thereunder as appropriate; and

•

Is directly responsible for the appointment, compensation and oversight of the work of any consultants
and other advisors retained by the committee, and assesses the independence of any consultants and
other advisors (whether retained by the committee or management) that provide advice to the
committee in accordance with the listing standards of the Nasdaq Stock Market and applicable law.

The Human Capital Committee may delegate authority to the committee chair or a sub-committee, as the
committee may deem appropriate, subject to such ratification by the committee as the committee may direct. The
Human Capital Committee also may delegate to one or more officers of the company the authority to make
grants of stock options or other supplemental awards at specified levels, under specified circumstances, to
eligible employees who are not executive officers of the company, subject to reporting to and such ratification by
the committee as the committee may direct.

Human Capital Committee Interlocks and Insider Participation

Ms. Rankin and Messrs. Aberle, Hutcheson and Markley served on the Human Capital Committee during all

of 2023. No director serving on the Human Capital Committee during any part of 2023 was, at any time either

12

during or before such fiscal year, an officer or employee of the company or any of its subsidiaries. In addition,
none of the company’s executive officers has served as a member of a board of directors or a compensation
committee, or other committee serving an equivalent function, of any other entity, one of whose executive
officers served as a member of the company’s Board or Human Capital Committee.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee assists the Board in identifying qualified individuals

to become Board and committee members, considers matters of corporate governance and assists the Board in
evaluating the Board’s effectiveness. Among other things, the committee:

• Develops and recommends to the Board criteria for Board membership (including issues of character,
integrity, judgement, diversity, independence, skills, education, business acumen, business experience,
understanding of the company’s business and the like);

•

Identifies, reviews the qualifications of, and recruits candidates for election to the Board and to fill
vacancies or new positions on the Board;

• Assesses the contributions of incumbent directors in determining whether to recommend them for

re-election to the Board;

• Reviews candidates recommended by the company’s shareholders for election to the Board;

• Assesses the independence of directors, director nominees and director candidates under applicable
standards, including any heightened independence requirements applicable to Audit and Human
Capital Committee members, and recommends independence determinations to the Board;

• Reviews annually the company’s corporate governance principles and recommends changes to the

Board as appropriate;

• Assists the Board in ensuring proper attention and effective response to shareholder concerns regarding

corporate governance;

• Assists and generally advises the Board on ESG matters (except as may be specifically retained by the

Board or delegated to other Board committees), including overseeing the Company’s ESG strategy, and
related goals and policies, and periodically reviews with management the Company’s progress towards
the achievement of such strategy and goals, and reviews and discusses with management the
Company’s material ESG disclosures, in each case in coordination with the other committees of the
Board and, as appropriate, makes recommendations on such matters to the full Board;

• Reviews and makes recommendations to the Board with respect to the Board’s and each committee’s

size, structure, composition and functions;

• Oversees the process for evaluating the Board and its committees; and

•

Periodically reviews the Board’s leadership structure and recommends changes to the Board as
appropriate.

The committee will consider director candidates recommended by our shareholders. Shareholders
recommending candidates for consideration by the Nominating and Corporate Governance Committee should
send their recommendations to our Corporate Secretary at InterDigital, Inc., 200 Bellevue Parkway, Suite 300,
Wilmington, Delaware 19809-3727. The recommendation must include the candidate’s name, biographical data
and qualifications and a written statement from the candidate of his or her consent to be named as a candidate
and, if nominated and elected, to serve as a director. The committee may ask candidates for additional
information as part of the process of assessing a shareholder-recommended director candidate. The committee
evaluates director candidates recommended by shareholders based on the same criteria used to evaluate
candidates from other sources.

13

We are committed to having at least two diverse directors, including at least one who self-identifies as
female and at least one who self-identifies as either LGBTQ+ or part of a historically underrepresented group.
The Board currently includes four diverse directors, including two who self-identify as female and two who self-
identify as part of a historically underrepresented group. As described in our corporate governance principles,
with respect to diversity, the Nominating and Corporate Governance Committee may consider such factors as
gender, race, ethnicity, differences of perspective, professional background, experience at policy-making levels
in business, finance and technology and other areas, education, skill and other individual qualities and attributes
that are relevant to the company’s global activities and contribute to Board heterogeneity. The selection criteria
for director candidates also include the following:

• Each director should be an individual of the highest personal and professional ethics, integrity and

values.

• Each director should be committed to representing the long-term interests of the company’s

shareholders and demonstrate a commitment to long-term service on the Board.

• Each director should have an inquisitive and objective perspective, practical wisdom and mature judgment.

The company is committed to ensuring that other existing and future anticipated commitments of its
directors do not materially interfere with his or her service as a director. Accordingly, our corporate governance
principles prohibit any director from serving on the boards of more than four other public companies, unless such
director is an executive officer of a public company, and in such cases, such director may not serve on the boards
of more than two other public companies. In addition, prior to accepting service on the board of any other
company, a director must notify the Board’s Chairman and the Nominating and Corporate Governance
Committee, and service on the board or a committee of any other organization should be consistent with the
company’s conflict of interest policies.

The Nominating and Corporate Governance Committee periodically evaluates the composition of the Board
to assess the skills and experience that are currently represented on the Board, as well as the skills and experience
that the Board will find valuable in the future. This evaluation of the Board’s composition enables the Board to
update the skills and experience it seeks in the Board as a whole, and in individual directors, as the company’s
needs evolve and change over time and to assess the effectiveness of efforts at pursuing diversity. See “Proposals
to be Voted On – Election of Directors (Proposal 1)” for a summary of the qualifications, experience and other
relevant attributes of the directors nominated for election at this year’s annual meeting.

The Nominating and Corporate Governance Committee has previously retained and may in the future retain

a search firm to help identify director prospects, perform candidate outreach, assist in reference checks, and
provide other related services. The recruiting process typically involves either the search firm or a member of the
Nominating and Corporate Governance Committee contacting a prospect to gauge his or her interest and
availability. A candidate will then meet with several members of the Board, including our Chief Executive
Officer. At the same time, the Nominating and Corporate Governance Committee or other Board members, as
appropriate, and the search firm will contact references for the prospect. A background check is completed before
the Board approves any final recommendation from the committee to appoint a candidate to the Board.

Finance Committee

The primary role of the Finance Committee is to monitor and provide guidance to the company’s

management team and recommend actions to the Board with respect to certain investment and financial policies
and strategies and the capital structure of the company, and to approve certain investment and divestment
activities of the company and funding for certain affiliated entities of the company. Among its specific duties and
responsibilities, the committee:

• Reviews and provides guidance to the Board with respect to:

•

the company’s capital structure, including the issuance of debt, equity or other securities;

14

•

•

•

•

shareholder distributions, including share repurchases and dividends;

cash management investment policies;

foreign currency investment policies; and

on a periodic basis, the integrity of the company’s financial models;

• Approves minority investments in other companies by the company;

• Approves divestments of minority equity interests in other companies by the company; and

• Approves the establishment of non-core operating businesses as entities partially owned by the

company, including approval of contributions to such entities and the ownership structure of such
entities.

The committee may delegate authority to the committee chair or a sub-committee, as the committee may

deem appropriate, subject to such ratification by the committee as the committee may direct.

Board Self-Evaluation Process

How does the Board evaluate its effectiveness?

The Nominating and Corporate Governance Committee establishes and oversees the annual self-assessment

process that the Board uses to evaluate its effectiveness and identify opportunities for improvement. Each
director is asked to provide an assessment of the Board’s effectiveness in several areas, including information
and planning, content and conduct of meetings, and accountability. Once the responses are compiled, the
Nominating and Corporate Governance Committee, in conjunction with the Board’s Chairman, identifies specific
areas of improvement for the following year. The assessment also asks each director their opinion of the Board’s
progress in these identified areas.

Communications with the Board

How can shareholders communicate with the Board?

Shareholders and other parties interested in communicating directly with any individual director, including
the Chairman, the Board as a whole, or the non-employee directors as a group may do so by writing to Investor
Relations, InterDigital, Inc., 200 Bellevue Parkway, Suite 300, Wilmington, Delaware 19809-3727, or by sending
an email to InvestorRelations@InterDigital.com. Each communication should set forth (i) the name and address
of the shareholder as it appears on the company’s books, and, if the company’s common stock is held by a
nominee, the name and address of the beneficial owner of the company’s common stock, and (ii) the class and
number of shares of the company’s common stock that are owned of record by the record holder and beneficially
by the beneficial owner. Our Investor Relations department reviews all such correspondence and, in consultation
with appropriate directors and/or the company’s Legal department as necessary, generally screens
communications from shareholders to identify communications that (a) are solicitations for products and
services, (b) relate to matters of a personal nature not relevant for the company’s shareholders to act on or for the
Board to consider, or (c) are matters that are of a type that render them improper or irrelevant to the functioning
of the Board or the company. The Investor Relations department regularly forwards to the Board or specified
director(s) a summary of all relevant correspondence and copies of all correspondence that deal with the
functions of the Board or its committees or that otherwise require their attention. Directors may, at any time,
review a log of all correspondence we receive that is addressed to members of the Board and request copies of
any such correspondence.

15

Communications About Accounting Matters

How can individuals report concerns relating to accounting, internal control, auditing or federal securities
law matters?

Concerns relating to accounting, internal control, auditing or federal securities law matters may be
submitted by writing to our Corporate Secretary at InterDigital, Inc., 200 Bellevue Parkway, Suite 300,
Wilmington, Delaware 19809-3727. All correspondence will be brought to the attention of the chair of the Audit
Committee and handled in accordance with procedures established by the Audit Committee with respect to these
matters.

16

DIRECTOR COMPENSATION

How are directors compensated?

During 2023, our non-employee directors were paid annual cash retainers for their Board and committee

participation as follows:

Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Human Capital Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nominating and Corporate Governance Committee . . . . . . . . . . . . . . . . . . . . . .
Finance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chair

Member

$75,000*
$30,000
$20,000
$15,000
$15,000

$65,000*
$12,000
$10,000
$ 7,500
$ 7,500

*

The annual cash retainer paid to the Chairman of the Board is in addition to the annual cash retainer
paid to all non-employee Board members.

All cash retainers are generally paid quarterly in arrears and based upon service for a full year, and prorated

payments are made for service of less than a full year.

The compensation program is designed to compensate each non-employee director for participating in up to

ten Board meetings per year and up to ten meetings per year for each standing committee on which the
non-employee director serves. Additional compensation is paid to each non-employee director for participating in
meetings during the Board term (which runs from annual meeting date to annual meeting date) in excess of these
thresholds, as follows: $4,000 for each additional Board meeting and $1,000 for each additional committee
meeting.

In addition, non-employee directors are paid a per diem fee of $1,000 for attendance at or participation in

events, conferences or meetings, in their capacity as a director, at the request of the company’s senior
management, provided that such attendance or participation requires a significant time commitment and would
be considered outside of the director’s typical Board and/or committee duties. Any per diem fee payments are
subject to the approval of the Human Capital Committee.

For his or her service during the 2023-2024 Board term, each non-employee director received a restricted
stock unit (“RSU”) award in an amount approximately equal in value to $187,500 that vests in full one year from
the grant date. Upon his or her initial appointment to the Board, new non-employee directors receive a pro-rated
RSU award for his or her partial service during the then-current Board term, as well as an initial appointment
award of RSUs in an amount equal in value to $150,000 that vests in full one year from the grant date. The
number of RSUs granted is calculated using the closing stock price of the company’s common stock on the date
of grant. The vesting of RSU awards may be deferred. Except in certain limited circumstances, an election to
defer must be made in the calendar year preceding the year that the award is made. Unvested time-based RSUs
and deferred RSUs accrue dividend equivalents, which are paid in the form of additional shares of stock at the
time, and only to the extent, that the awards vest or at the end of the deferral period, as applicable.

To align the interests of non-employee directors and executives with those of our shareholders, the company

has adopted stock ownership guidelines. The stock ownership guidelines applicable to the non-employee
directors are set at a target of the lesser of (a) company stock valued at an amount equal to five times the annual
cash retainer for directors of $65,000 or (b) 6,000 shares/units of the company’s stock. Qualifying stock includes
shares of common stock and restricted stock. For purposes of calculating the value of company stock holdings,
each share or other qualifying stock unit is priced at a price per share/unit equal to the average closing stock price
of the company’s common stock for the 200 trading days leading up to and including the calculation date. The
200-day average closing stock price is calculated annually on the date of the company’s annual meeting of
shareholders. Any director who has not reached or fails to maintain the target ownership level must retain at least

17

50% of any after-tax shares derived from vested RSUs until the target ownership level is met. A director may not
make any disposition of shares that results in his or her holdings falling below the target ownership level without
the express approval of the Human Capital Committee. Directors have five years to reach their target ownership
level. As of March 31, 2024, all non-employee directors had either met their target ownership level or had more
time to do so, and all directors who had not yet met their target ownership level were in compliance with the
guidelines.

The company’s directors are also eligible to participate in the company’s nonqualified deferred

compensation plan by deferring receipt of their annual Board fees. None of the directors elected to defer any of
their 2023 Board fees. For more information about the deferred compensation plan, see “Executive
Compensation – Nonqualified Deferred Compensation.”

2023 Director Compensation Table

The following table sets forth the compensation paid to each person who served as a director of the

company in 2023 for their service in 2023. Directors who also serve as employees of the company do not receive
any additional compensation for their services as a director. For Mr. Chen’s 2023 compensation, see “Executive
Compensation – Summary Compensation Table.”

Name

Derek K. Aberle . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Samir Armaly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joan H. Gillman . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. Douglas Hutcheson . . . . . . . . . . . . . . . . . . . . . . . .
John A. Kritzmacher . . . . . . . . . . . . . . . . . . . . . . . . . .
Pierre-Yves Lesaicherre . . . . . . . . . . . . . . . . . . . . . . .
John D. Markley, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . .
Jean F. Rankin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fees Earned or
Paid in Cash
($)(1)

87,393
48,622
92,833
149,167
103,333
85,333
90,833
93,333

Stock
Awards
($)(2)

187,500
337,500
187,500
187,500
187,500
187,500
187,500
187,500

Total ($)

274,893
386,122
280,333
336,667
290,833
272,833
278,333
280,833

(1) Amounts reported represent the aggregate annual Board, Chairman of the Board, committee chair and

committee membership retainers earned by each non-employee director for their service in 2023, plus fees
earned for attendance at additional meetings during the Board term, if any, as described above.

(2) Amounts shown reflect the aggregate grant date fair value computed in accordance with Financial

Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 for RSU
awards granted pursuant to our compensation program for non-management directors in 2023. The
assumptions used in valuing these RSU awards are incorporated by reference to Notes 2 and 13 to our
audited financial statements included in our annual report on Form 10-K for the year ended December 31,
2023. The following table sets forth the grant date fair value of each RSU award granted to our
non-employee directors in 2023.

Name

Derek K. Aberle . . . . . . . . . . . . . . . . . . . . . . . . . .
Samir Armaly . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Joan H. Gillman . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. Douglas Hutcheson . . . . . . . . . . . . . . . . . . . . . .
John A. Kritzmacher . . . . . . . . . . . . . . . . . . . . . . .
Pierre-Yves Lesaicherre . . . . . . . . . . . . . . . . . . . .
John D. Markley, Jr.
. . . . . . . . . . . . . . . . . . . . . . .
Jean F. Rankin . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Grant Date

6/7/2023
6/7/2023
6/7/2023
6/7/2023
6/7/2023
6/7/2023
6/7/2023
6/7/2023
6/7/2023

18

Number of
Restricted
Stock Units
(a)

Grant Date
Fair Value of
Stock Awards
($)

2,162
2,162
1,730
2,162
2,162
2,162
2,162
2,162
2,162

187,500
187,500
150,000
187,500
187,500
187,500
187,500
187,500
187,500

As of December 31, 2023, each person who served as a non-employee director of the company in 2023 had
the following aggregate amounts of unvested RSU awards (excluding accrued dividend equivalents) outstanding.
None of our non-employee directors had any options outstanding as of December 31, 2023. This table does not
include RSUs that, as of December 31, 2023, had vested according to their vesting schedule, but had been
deferred.

Name

Outstanding
Restricted Stock
Units
(#)

Derek K. Aberle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Samir Armaly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joan H. Gillman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. Douglas Hutcheson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John A. Kritzmacher
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pierre-Yves Lesaicherre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John D. Markley, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jean F. Rankin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,162
3,892
2,162
2,162
2,162
2,162
2,162
2,162

19

PROPOSALS TO BE VOTED ON

Election of Directors
(Proposal 1)

Description

Which directors are nominated for election?

Mses. Joan H. Gillman and Jean F. Rankin, Messrs. Samir Armaly, Derek K. Aberle, Liren Chen,
S. Douglas Hutcheson, John A. Kritzmacher and John D. Markley, Jr. and Dr. Pierre-Yves Lesaicherre are
recommended by the Nominating and Corporate Governance Committee and nominated by the Board for
election at the 2024 annual meeting, each to serve a one-year term until our annual meeting in 2025 and until his
or her successor is elected and qualified.

Set forth below is biographical information about the nine nominees and other information about their skills

and qualifications that contribute to the effectiveness of the Board. All of the nominees’ current terms of office
expire at the 2024 annual meeting.

What are their backgrounds?

Derek Aberle, 54, has been a director of the company since September 2022. Mr. Aberle is Co-founder and

Executive Vice Chairman of Virewirx, Inc. (formerly XCOM Labs), a company focused on developing and
commercializing advanced wireless and XR technologies. Prior to that, from 2000 through 2018, Mr. Aberle
served in various senior executive roles at Qualcomm, including as President of Qualcomm from 2014 through
2018. Beginning in 2008, Mr. Aberle served as a member of Qualcomm’s executive committee, as Executive
Vice President and President of Qualcomm Technology Licensing from 2008 through 2011 and as Executive
Vice President and Group President from 2011 through 2014 where, among other things, he led Qualcomm’s
technology and IP licensing business, helping to significantly grow its global licensing business and negotiating
deals with its largest licensees. Mr. Aberle also served as Chief Executive Officer and director of Prospector
Capital Corp., a special purpose acquisition company, from its inception in 2020 through 2023. Prior to
Qualcomm, Mr. Aberle was an attorney with the international law firms Pillsbury Winthrop and Heller Ehrman.
Mr. Aberle also serves on the boards of directors of Virewirx, LeddarTech (LDTC) and EvoNexus. The Board
has concluded that Mr. Aberle should serve as a director of the company because of his years of experience in
patent licensing and his global business acumen and leadership.

Samir Armaly, 51, is currently a director and advisor to various technology companies. Mr. Armaly served

as President, IP of Adeia, Inc., a leading IP licensing business, from June 2020 to March 2022. From 2017 to
2020, he was a Strategic IP Advisor to the CEO and Board of Directors of TiVo Corporation. From 2001 to 2017,
Mr. Armaly held various senior management positions and ran the video IP licensing business of Gemstar – TV
Guide and its successor, Rovi Corporation. Previously, Mr. Armaly was an IP attorney in private practice
representing media and technology companies. He graduated from the University of Missouri Columbia with a
B.S. degree in Mechanical Engineering and received his J.D. degree from the University of California Berkeley.
The Board has concluded that Mr. Armaly should serve as a director of the company because he is a recognized
IP expert, having run one of the world’s largest patent licensing businesses, and has particular expertise in the
media and technology markets.

Lawrence (Liren) Chen, 53, has been a director of the company since April 2021, when he was also

appointed as our President and Chief Executive Officer. Mr. Chen joined InterDigital from Qualcomm where he
served since August 2019 as Senior Vice President, Global Head of IP, Legal Counsel. In that role, Mr. Chen was
responsible for overseeing Qualcomm’s world-wide intellectual property portfolio (patent, copyright, trademark
and open source) and led technology, business strategy, product management and global eco-system development
for Qualcomm Technology Licensing. In the 23 years preceding that, Mr. Chen served in various IP and

20

technology roles at Qualcomm, including as Senior Vice President of Engineering, Legal Counsel. He holds 28
granted patents in the U.S. and over 120 granted patents worldwide. Mr. Chen earned his bachelor’s degree in
Automation from Tsinghua University, Beijing; his M.S.E.E. from the University of Maine; his M.B.A. from San
Diego State University; and his J.D. degree from the University of San Diego.

Joan H. Gillman, 60, has been a director of the company since April 2017. From 2006 to 2016, Ms. Gillman

served as Executive Vice President of Time Warner Cable, Inc. (“Time Warner Cable”), as well as Chief
Operating Officer of Time Warner Cable Media and President of Time Warner Cable Media, LLC. Ms. Gillman
joined Time Warner Cable as Vice President of Interactive TV and Advanced Advertising in 2005. Prior to Time
Warner Cable, among other roles, she served as the President of Static2358, the interactive TV, games and
production subsidiary of OpenTV, and as Director, Business Development, of British Interactive Broadcasting,
the digital and interactive TV joint venture between BSkyB, BT, HSBC and Matsushita. Ms. Gillman began her
career working in public affairs, serving in various roles for a U.S. Senator, including as Legislative Director and
State Director. From October 2016 to February 2021, Ms. Gillman was a member of the board of directors of
Centrica plc, an international energy and services company based in the United Kingdom where she served on
the safety, health, environment, security, remunerations and ethics and nominating committees. In addition, since
November 2016, she has served on the board of directors of Airgain, Inc., a leading provider of embedded
antenna technologies used to enable high performance wireless networking, and she is currently a member of
such board’s audit committee, and chairs the nominating and corporate governance committee, as well as the
board of directors of Cumulus Media, which she joined in June 2018 and where she is a member of the
compensation and nominating committees. Since May 2018, she has also chaired the Jesuit Volunteer Corps and
is the Foundation Manager and Trustee of the David T. Langrock Foundation. The Board has concluded that
Ms. Gillman should serve as a director of the company because her more than 20 years of executive experience
in the media and communications industries and her knowledge of content development and distribution as well
as key areas like partnership, mergers and acquisitions and marketing make her a valuable resource and
strengthen the company’s knowledge of the companies and industries shaping its existing and future markets.

S. Douglas Hutcheson, 68, has been a director of the company since July 2014, and he assumed the role of
Chairman of the Board in June 2015. From 2019 to 2024, Mr. Hutcheson served as the Executive Chairman of
Kymeta Corporation, an electronically steerable terminal manufacturer and provider of services for global
connectivity. He also served as the co-CEO of Kymeta from 2021 to 2024. Since 2015, Mr. Hutcheson has served
as a senior advisor of Technology, Media and Telecom for Searchlight Capital, a global private investment firm.
From March 2014 through May 2017, Mr. Hutcheson served as Chief Executive Officer and a director of Laser,
Inc., a corporation created in connection with the acquisition of Leap Wireless International, Inc. (“Leap
Wireless”), a wireless communications carrier, by AT&T in March 2014. Prior to March 2014, Mr. Hutcheson
served as Chief Executive Officer of Leap Wireless and its operating subsidiary, Cricket Communications, for
nine years, where he was responsible for developing and implementing strategy, all operations, and the oversight
of all relationships and partnerships. Before serving as Chief Executive Officer, Mr. Hutcheson held other
executive positions at Leap Wireless, including President and Chief Financial Officer. Prior to joining Leap
Wireless, he was Vice President of Marketing in the wireless infrastructure division at Qualcomm for three years,
where he led multiple teams. He previously served on the boards of directors of Leap Wireless from 2005 to
2014 and Pitney Bowes from 2012 to 2023. The Board has concluded that Mr. Hutcheson should serve as a
director of the company because, with his significant operational and financial expertise as an experienced
former chief executive officer of a wireless communications company and his broad business background, which
includes strategic planning and product and business development and marketing, he brings valuable insight that
is needed to evolve and execute the company’s strategy. He also qualifies as an audit committee financial expert.

John A. Kritzmacher, 63, has been a director of the company since June 2009. From 2013 to 2021,

Mr. Kritzmacher served as Executive Vice President and Chief Financial Officer of John Wiley & Sons, Inc., a
global provider of research communications and education services. From October 2012 through February 2013,
Mr. Kritzmacher served as Senior Vice President Business Operations and Organizational Planning at WebMD
Health Corp., a leading provider of health information services, where Mr. Kritzmacher was responsible for

21

leading a major restructuring initiative. Previously, Mr. Kritzmacher served as Executive Vice President and
Chief Financial Officer of Global Crossing Limited, a global provider of IP-based telecommunications solutions,
from October 2008 to October 2011, when Global Crossing was acquired by Level 3 Communications, Inc. Prior
to that, Mr. Kritzmacher rose through a variety of positions with increasing responsibility, including Senior Vice
President and Corporate Controller, during his 10 years at Lucent Technologies Inc., a provider of
telecommunications systems and services, to become Chief Financial Officer in 2006. After playing a leading
role in the planning and execution of Lucent’s merger with Alcatel in 2006, Mr. Kritzmacher became Chief
Operating Officer of the Services Business Group at Alcatel-Lucent until joining Global Crossing in 2008.
Mr. Kritzmacher serves on the board of directors of Unisys and currently serves on the audit & finance and
security & risk committees of such board. The Board has concluded that Mr. Kritzmacher should serve as a
director of the company because he is a veteran of the telecommunications and high technology industries with
extensive operational and leadership experience and financial expertise. As such, Mr. Kritzmacher contributes
valuable advice and guidance, especially with respect to complex financial and accounting issues, and qualifies
as an audit committee financial expert.

Pierre-Yves Lesaicherre, 60, has been a director of the company since June 2021. Since June 2023,
Dr. Lesaicherre has been acting as the CEO and executive director of Finwave Semiconductor, Inc. Before that,
he was the President, Chief Executive Officer and Director of Nanometrics Incorporated from November 2017 to
October 2019. From January 2012 to February 2017, Dr. Lesaicherre was the CEO of Lumileds, an integrated
manufacturer of LED components and Automotive Lighting Lamps. Prior to that, he held senior executive
positions at NXP Semiconductors, from 2006 to 2012. Before NXP, Dr. Lesaicherre was with Philips
Semiconductors. Dr. Lesaicherre holds an MBA with a focus on international business and strategy from
INSEAD and has MS and Ph.D. degrees in Material Science from the National Polytechnic Institute of Grenoble.
The Board has concluded that Dr. Lesaicherre should serve as a director of the company because of his more than
20 years of experience working in high technology industries, including in France where we have substantial
operations.

John D. Markley, Jr., 58, has been a director of the company since November 2016. Since 2009,

Mr. Markley has served as Managing Partner of Bear Creek Capital Management, an investment firm focused on
the cloud computing, mobile and communications infrastructure sectors. In addition, since 2014, he has been a
Managing Partner of New Amsterdam Growth Capital, an investor in communications, media and technology
companies. From 1996 to 2009, he was a partner with Columbia Capital, a venture capital firm, where he served
in a number of capacities including partner, venture partner and portfolio company executive. Prior to Columbia
Capital, Mr. Markley served as a policy advisor at the Federal Communications Commission from 1994 to 1996,
where he and his team were instrumental in developing and launching the commercial spectrum auction process.
Mr. Markley has also been a director of Charter Communications, Inc., since 2009, currently serving as chair of
its nominating and corporate governance committee and as a member of its audit committee. He previously
served on the boards of directors of Millennial Media, Inc., from 2006 to 2014, and of BroadSoft, Inc., from 2002
until its acquisition by Cisco Systems, Inc. in February 2018. The Board has concluded that Mr. Markley should
serve as a director of the company based on his private equity and operating experience and his extensive
experience with communications, media and technology companies, which allow him to contribute guidance and
advice relating to the development and execution of the company’s strategy and analysis of potential business
opportunities. He also qualifies as an audit committee financial expert.

Jean F. Rankin, 65, has been a director of the company since June 2010. Ms. Rankin served as Executive

Vice President, General Counsel and Secretary at LSI Corporation, a leading provider of innovative silicon,
systems and software technologies for the global storage and networking markets, from 2007 to May 2014, when
LSI was acquired by Avago Technologies Limited. In this role, she served LSI and its board of directors as
Corporate Secretary, in addition to managing the company’s legal, intellectual property licensing and stock
administration organizations. Ms. Rankin joined LSI in 2007 as part of the merger with Agere Systems Inc.,
where she served as Executive Vice President, General Counsel and Secretary from 2000 to 2007. Prior to
joining Agere in 2000, Ms. Rankin was responsible for corporate governance and corporate center legal support

22

at Lucent, including mergers and acquisitions, securities laws, labor and employment, public relations, ERISA,
investor relations and treasury. She also supervised legal support for Lucent’s microelectronics business. The
Board has concluded that Ms. Rankin should serve as a director of the company because she has extensive
experience and expertise in matters involving intellectual property licensing, the company’s core business, and
her current and former roles as chief legal officer and corporate secretary at other publicly traded companies
enable her to contribute legal expertise and advice as to best practices in corporate governance.

Summary of Director Qualifications and Experience

The following table summarizes the key qualifications, skills, and experience most relevant to the decision

to nominate the above-listed candidates to serve on the Board. A mark indicates a specific area of focus or
expertise on which the Board relies most. The lack of a mark does not necessarily mean the director does not
possess that qualification or skill. Each director biography above describes each director’s qualifications and
relevant experience in more detail.

Experience, expertise or attribute

Aberle Armaly Chen Gillman Hutcheson Kritzmacher Markley Rankin Lesaicherre

IPR/IP licensing / patent

acquisitions . . . . . . . . . . . .

Mobile industry . . . . . . . . . . .

OTT services/video . . . . . . . .

CEO (current/former)

. . . . . .

Finance / audit . . . . . . . . . . . .

Corporate strategy . . . . . . . . .

High tech investment . . . . . . .

Industry connections . . . . . . .

High-tech operations . . . . . . .

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Board Diversity Matrix (as of April 23, 2024)

Based upon responses received from each of our directors with respect to diversity, the Board is currently
comprised of individuals from the diverse backgrounds set forth in the table below. To see our Board Diversity
Matrix as of April 20, 2023, please see the proxy statement filed with the SEC on April 20, 2023.

Total Number of Directors

Part I: Gender Identity

9

Female Male Non-Binary

Did Not Disclose
Gender

Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

7

—

—

Part II: Demographic Background

Female Male Non-Binary

Did Not Disclose
Gender

African American or Black . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Alaskan Native or Native American . . . . . . . . . . . . . . . . . . . . . . . . . . —
Asian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Hispanic or Latinx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Native Hawaiian or Pacific Islander . . . . . . . . . . . . . . . . . . . . . . . . . . —
White . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Two or More Races or Ethnicities . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
LGBTQ+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Did Not Disclose Demographic Background . . . . . . . . . . . . . . . . . . . —

—
—
1
—
—
5
1
—
—

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

23

Vote Required and Board Recommendation

A director nominee receiving the affirmative vote of the majority of votes cast for him or her will be elected

to serve as a director for the next year and until his or her successor is elected and qualified. A majority of the
votes cast means that the number of votes cast “for” a director nominee must exceed the number of votes cast
“against” that nominee.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
EACH OF THE NOMINEES.

24

Advisory Resolution to Approve Executive Compensation
(Proposal 2)

Description

We are asking shareholders to vote on an advisory resolution to approve the company’s executive
compensation as reported in this proxy statement. As described below in the “Compensation Discussion and
Analysis” section of this proxy statement, the Human Capital Committee has structured our executive
compensation program in an effort to align management’s interests with those of its shareholders and to attract,
retain and motivate talented individuals who will drive the successful execution of the company’s strategic plan.
We motivate our executives primarily by “paying for performance,” or rewarding the accomplishment of
individual performance and corporate goals through the use of performance-based compensation. As discussed in
the “Compensation Discussion and Analysis” section of this proxy statement, the achievement of financial and
strategic corporate goals, as well as departmental and individual performance, determine the short-term and long-
term incentive compensation paid to our executives. Our executive compensation programs have a number of
features designed to promote these objectives.

We urge shareholders to read the “Compensation Discussion and Analysis” section of this proxy statement

below, which describes how our executive compensation policies and procedures operate and are designed to
achieve our compensation objectives, as well as the Summary Compensation Table and other related
compensation tables and narrative below, which provide detailed information on the compensation of our named
executive officers. The Human Capital Committee and the Board believe that the policies and procedures
articulated in the “Compensation Discussion and Analysis” section of this proxy statement are effective in
achieving our goals and that the compensation of our named executive officers reported in this proxy statement
reflects and supports these compensation policies and procedures.

The Board has adopted a policy providing for an annual advisory resolution to approve executive

compensation. In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and as a matter of good corporate governance, we are asking shareholders to approve the
following advisory resolution at the 2024 annual meeting of shareholders:

RESOLVED, that the shareholders of InterDigital, Inc. (the “company”) approve, on an advisory basis, the
compensation of the company’s named executive officers disclosed in the Compensation Discussion and
Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the
proxy statement for the company’s 2024 annual meeting of shareholders.

This advisory resolution, commonly referred to as a “say on pay” resolution, is non-binding on the Board.
Although non-binding, the Board and the Human Capital Committee will review and consider the voting results
when making future decisions regarding our executive compensation program. Unless the Board modifies its
policy on the frequency of future “say on pay” votes, the next “say on pay” vote will be held at the 2025 annual
meeting of shareholders.

Vote Required and Board Recommendation

The affirmative vote of the majority of votes cast is required to approve this advisory resolution.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
THE ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION.

25

Ratification of Appointment of
Independent Registered Public Accounting Firm
(Proposal 3)

Description

The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as the company’s independent

registered public accounting firm for the year ending December 31, 2024. PwC has served as the independent
registered public accounting firm of the company since 2002.

Although ratification of the appointment of PwC is not legally required, the Board is asking the shareholders

to ratify the appointment as a matter of good corporate governance. If the shareholders do not ratify the
appointment, the Audit Committee will consider whether it is appropriate to select another independent
registered public accounting firm in future years. Even if the shareholders ratify the appointment, the Audit
Committee in its discretion may select a different independent registered public accounting firm at any time
during the year if it determines that such a change would be in the best interests of the company and its
shareholders.

Representatives from PwC are expected to be present at the annual meeting, will have the opportunity to

make a statement if they so desire and are expected to be available to respond to appropriate questions.

Fees of Independent Registered Public Accounting Firm

Aggregate fees for professional services delivered by PwC for the fiscal years ended on December 31, 2023

and 2022 were as follows:

Type of Fees
Audit Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-Related Fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,242,700
—
141,600
2,900

$1,367,200

—
147,000
3,000

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,387,200

$1,517,200

2023

2022

(1) Audit Fees consist of the aggregate fees billed by PwC for the above fiscal years for professional services
rendered by PwC for the integrated audit of the company’s consolidated financial statements and the
company’s internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of
2002, for review of the company’s interim consolidated quarterly financial statements included in the
company’s quarterly reports on Form 10-Q and for services that are normally provided by PwC in
connection with regulatory filings or engagements for the above fiscal years. Such fees also include fees
billed by PwC in connection with its audit of the financial statements of Convida Wireless, LLC, the
company’s joint venture with Sony Corporation of America, several international statutory audits and, for
2022, fees billed by PwC in connection with the company’s convertible notes offering.

(2) Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the

performance of the audit and the review of our financial statements and which are not reported under “Audit
Fees.” There were no audit-related fees during the years ended December 31, 2023 or 2022.

(3) Tax Fees consist of the aggregate fees billed by PwC for the above fiscal years related to technical advice

pertaining to foreign and domestic tax matters.

(4) All Other Fees consist of the aggregate fees billed by PwC for the above fiscal years for certain accounting

research software tools licensed by the company from PwC.

26

Audit Committee Pre-Approval Policy for Audit and Non-Audit Services of Independent Registered Public
Accounting Firm

The Audit Committee has adopted a policy that requires the committee to pre-approve all audit and
non-audit services to be performed by the company’s independent registered public accounting firm. Unless a
service falls within a category of services that the Audit Committee already has pre-approved, an engagement to
provide the service requires specific pre-approval by the Audit Committee. Also, proposed services exceeding
pre-approved cost levels require specific pre-approval.

Consistent with the rules established by the SEC, proposed services to be provided by the company’s
independent registered public accounting firm are evaluated by grouping the services and associated fees under
one of the following four categories: Audit Services, Audit-Related Services, Tax Services and All Other Services.
All proposed services for the following year are discussed and pre-approved by the Audit Committee, generally
at a meeting or meetings that take place during the October through December time period. In order to render
approval, the Audit Committee has available for reference a schedule of services and fees approved by category
for the current year, and specific details of the proposed services are provided to the Audit Committee.

The Audit Committee has delegated pre-approval authority to its chair for cases where services must be

expedited. In cases where the Audit Committee chair pre-approves a service provided by the independent
registered public accounting firm, the chair is required to report the pre-approval decisions to the Audit
Committee at its next scheduled meeting. The company’s management periodically provides the Audit
Committee with reports of all pre-approved services and related fees by category incurred during the current
fiscal year, with forecasts of any additional services anticipated during the year.

All of the services performed by PwC related to fees disclosed above were pre-approved by the Audit

Committee.

Vote Required and Board Recommendation

The affirmative vote of the majority of votes cast at the annual meeting is required to ratify the appointment
of PwC as the company’s independent registered public accounting firm for the year ending December 31, 2024.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE YEAR ENDING DECEMBER 31, 2024.

27

REPORT OF THE AUDIT COMMITTEE

As more fully described in its charter, the Audit Committee oversees the company’s financial reporting
processes on behalf of the Board. In fulfilling our oversight responsibilities, the Audit Committee reviewed and
discussed with management the company’s audited consolidated financial statements for the year ended
December 31, 2023, including a discussion of the acceptability and appropriateness of significant accounting
principles and management’s assessment of the effectiveness of the company’s internal control over financial
reporting. Management represented to us that the company’s consolidated financial statements were prepared in
accordance with accounting principles generally accepted in the United States and considered appropriate in the
circumstances to present fairly the company’s financial position, results of operations and cash flows. The Audit
Committee also reviewed and discussed with PwC, the company’s independent registered public accounting firm,
the matters required to be discussed with the independent registered public accounting firm under applicable
requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.

The Audit Committee also received and reviewed the written disclosures and the letter from PwC required

by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee
concerning independence and discussed with PwC their independence.

Based on the reviews and discussions with management and the independent registered public accounting
firm referred to above, the Audit Committee recommended to the Board that the audited financial statements be
included in the company’s annual report on Form 10-K for the year ended December 31, 2023, and the Audit
Committee retained PwC as the company’s independent registered public accounting firm for the year ending
December 31, 2024.

AUDIT COMMITTEE:

John A. Kritzmacher, Chair
Samir Armaly
Joan H. Gillman
Pierre-Yves Lesaicherre

The foregoing Audit Committee report shall not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933, as amended or the Exchange Act and shall not otherwise be deemed filed under these
acts, except to the extent specifically incorporated by reference.

28

EXECUTIVE OFFICERS

Set forth below is certain information concerning our executive officers as of March 31, 2024:

Name

Age

Position

Liren Chen . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard J. Brezski . . . . . . . . . . . . . . . . . . . . . . . .
Eeva K. Hakoranta . . . . . . . . . . . . . . . . . . . . . . .
Rajesh Pankaj . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .
Joshua D. Schmidt

53
51
59
59
40

President and Chief Executive Officer
Chief Financial Officer and Treasurer
Chief Licensing Officer
Chief Technology Officer
Chief Legal Officer and Corporate Secretary

There are no family relationships among the individuals serving as our directors or executive officers. The

company’s executive officers are appointed to their respective offices to hold office until their successors are
duly appointed. Biographical information on Mr. Chen is discussed under the caption “Election of Directors”
above.

Richard J. Brezski is InterDigital’s Chief Financial Officer, responsible for overseeing the company’s
finance, accounting, audit, tax, treasury, and facilities functions, including the company’s internal and external
financial reporting and analysis. Mr. Brezski joined the company as Director and Controller in May 2003.
Mr. Brezski was promoted to Senior Director in July 2006 and in January 2007 was appointed Chief Accounting
Officer. In January 2009, Mr. Brezski was promoted to Vice President, Controller and Chief Accounting Officer,
and in March 2011 he was appointed to the additional post of Treasurer. In May 2012, he was appointed Chief
Financial Officer. Prior to joining InterDigital, Mr. Brezski served as an audit manager for PwC in its
technology, information, communications and entertainment practice, where he provided business advisory and
auditing services to product and service companies in the electronics, software and technology industries.
Mr. Brezski earned a Bachelor of Science in Accountancy from Villanova University and an Executive Master of
Business Administration from Hofstra University.

Eeva K. Hakoranta is InterDigital’s Chief Licensing Officer, responsible for overseeing the company’s
complete licensing portfolio and activities. Ms. Hakoranta joined InterDigital in 2020 and contributes more than
30 years of experience in the legal and licensing industry. Prior to joining InterDigital, Ms. Hakoranta served
more than 13 years at Nokia, most recently as Senior Vice President and Head of IP and Litigation, as well as
General Counsel for Nokia Technologies. Prior to leading Nokia’s IP activities, she was influential in building
the company’s patent licensing team and significantly growing its licensing revenue. Before Nokia,
Ms. Hakoranta served in private practice at Roschier Attorneys Ltd in Helsinki, Finland. Ms. Hakoranta holds an
LLM from the University of Helsinki.

Rajesh Pankaj is InterDigital’s Chief Technology Officer, responsible for leading the company’s technology

vision and strategy and advancing the company’s technology roadmaps. Dr. Pankaj joined InterDigital in July
2022 from Qualcomm where he oversaw research in 5G, 4G LTE, augmented reality and other technologies.
Prior to joining InterDigital, Dr. Pankaj served as the Senior Vice President, Engineering and Head of Corporate
R&D at Qualcomm, where he managed a global team of engineers focused on Artificial Intelligence, Edge
Computing and new technologies. During his 25 years at Qualcomm, he also served in a variety of other R&D
and engineering roles. Dr. Pankaj is an inventor or co-inventor on 230 patents worldwide. Dr. Pankaj holds a
PhD in Electrical Engineering and Computer Science from the Massachusetts Institute of Technology and a
Bachelor’s of Technology degree from the Indian Institute of Technology, Kanpur.

Joshua D. Schmidt is InterDigital’s Chief Legal Officer and Corporate Secretary, responsible for managing
the company’s legal functions. Mr. Schmidt joined InterDigital in 2015 and previously served as Vice President,
Deputy General Counsel, with responsibility for the company’s corporate, commercial, employment and
compliance functions, as well as the company’s ESG initiatives and was promoted to Chief Legal Officer and

29

Corporate Secretary in October 2021. Prior to that role, Mr. Schmidt served in a variety of roles within
InterDigital’s legal department, with primary responsibility for the company’s M&A, corporate governance, and
commercial contracting functions. Before joining InterDigital, Mr. Schmidt was an associate at Dechert LLP,
where he focused his practice on private and public company M&A, securities offerings, venture capital
transactions and joint ventures. Mr. Schmidt holds a Juris Doctor degree from Duke University School of Law
and a Bachelor of Science in Business Administration: Finance from the University of Pittsburgh.

30

Compensation Discussion and Analysis

EXECUTIVE COMPENSATION

This Compensation Discussion and Analysis (“CD&A”) covers all material elements of compensation
awarded to, earned by or paid to the company’s Named Executive Officers (“NEOs”) during 2023 and focuses on
the principles underlying the company’s executive compensation policies and decisions.

The CD&A discusses the compensation for the following individuals:

NEO

Position as of December 31, 2023

Liren Chen
Richard J. Brezski
Eeva K. Hakoranta
Rajesh Pankaj
Joshua D. Schmidt
Eric Cohen*

President and Chief Executive Officer (“CEO”)
Chief Financial Officer (“CFO”) and Treasurer
Chief Licensing Officer
Chief Technology Officer
Chief Legal Officer and Corporate Secretary
Former Chief Strategy and Growth Officer

* Mr. Cohen ceased to serve as an executive officer of the company effective July 21, 2023, and

remained as a special advisor with the company through September 15, 2023.

Executive Summary

2023 Business Highlights

Key financial and strategic achievements are highlighted below:

• Delivered strong financial performance.

• Total revenue increased 20% in 2023 over 2022 and smartphone revenue increased by 32%.

•

In 2023, 2022, and 2021, our total revenues were $549.6 million, $457.8 million, and
$425.4 million, respectively.

• Our recurring revenues in 2023, 2022, and 2021 were $408.4 million, $403.9 million, and

$351.7 million, respectively; smartphone recurring revenue was $347.1 million in 2023, and CE,
IoT/Auto recurring revenue was $59.9 million, an increase of 16% over 2022.

•

In 2023, 2022, and 2021, we recognized $141.2 million, $53.9 million, and $73.7 million,
respectively, of catch-up revenues.

• Adjusted EBITDA increased 36% in 2023 over 2022; in 2023, 2022, and 2021, our adjusted

EBITDA was $345.2 million, $254.5 million and $208 million, respectively.

• We returned $379 million of capital to our shareholders in 2023, with approximately
$339.7 million of shares repurchased, and increased our quarterly dividend by 14%.

•

Strengthened our patent portfolio. Increased first filings more than 77% in 2023; as of December 31,
2023, our patent portfolio consisted of more than 30,000 patents and patent applications worldwide.

• Recognized Research and Development. We were recognized for the second year in a row as one of
the top-100 most innovative companies in the world for our wireless and video innovation in Lexis
Nexis’s Innovation Momentum 2023: Global Top 100 report, and multiple of our engineers were
elected to leadership positions in standard development organizations.

31

2023 Compensation Decisions and Actions

The following are highlights of the key compensation decisions made by the Human Capital Committee for

2023:

•

Increases to Base Salaries. The base salaries of certain NEOs saw modest adjustments to ensure that
their base pay remained competitive. Please see “2023 Executive Compensation in Detail – Base
Salaries” below for details.

• Emphasized Corporate Performance in Short Term Incentive Program (“STIP”). The 2023 STIP
was designed such that baseline funding is based entirely on corporate performance, with individual
performance then used as a bonus modifier. These changes were implemented in response to
shareholder feedback.

• Paid STIP awards consistent with performance results. Our short-term incentives were paid according

to the STIP’s formulaic funding, with no discretionary adjustment. Please see “2023 Executive
Compensation in Detail – Short-Term Incentive Plan” below for details.

• Tied the majority of annual target compensation to long-term shareholder value creation.

Approximately 88% of target annual CEO compensation and, on average, 79% of target annual
compensation for our other NEOs, was performance-based delivered as a combination of goal-driven
annual cash incentives and equity.

• Provided a majority of our executives’ long-term incentives in performance-based equity. Two-thirds

of our CEO’s 2023 equity compensation was in the form of performance-based RSUs and
performance-based options. The weighting of our 2023 performance-based equity awards for our other
NEOs was increased to 50% in response to shareholder feedback. Please see “2023 Executive
Compensation in Detail – Long-Term Compensation Program” below for details.

• Determined payout results for 2019 and 2021 Long-Term Performance Grants under the Long-Term
Compensation Plan (“LTCP”). Achievement of the performance-based RSUs granted under the 2019
LTCP and the performance-based RSUs and options granted under the 2021 LTCP were earned and
vested based each plan’s formulaic funding.

Shareholder Engagement and Results from 2023 Shareholder Advisory Vote on Executive Compensation

At the 2023 annual meeting of shareholders, we held an advisory vote on executive compensation. In 2023,

we received shareholder support for our executive compensation programs with say on pay support of
approximately 98% after receiving approximately 64% in 2022. The Human Capital Committee considers the
results of the annual advisory vote on executive compensation as a strong data point in its compensation
decisions and as a result, expanded its efforts to obtain feedback in the fall of 2022 and spring of 2023, resulting
in changes to our compensation program that received approval in 2023.

The Human Capital Committee actively and directly seeks out feedback from shareholders regarding our

executive compensation program. Specifically, in both the spring and fall of 2023, the Chair of the Human
Capital Committee, our investor relations team, and as appropriate, members of senior management reached out
to 25 of our largest investors, which collectively own about two-thirds of our outstanding shares, and ultimately
engaged with certain of these investors to discuss and receive input, including about our executive compensation.

In addition, during fiscal year 2023, our investor relations team participated in six investor conferences and

three non-deal roadshow events and engaged with over 125 existing and prospective institutional investors to
keep an open dialog about our business and performance. Our investor relations team discusses with our
shareholders any subject they wish to raise, subject to the limitations of applicable securities law, including
financial activities, strategy, ESG and executive compensation.

32

Good Governance Practices and Policies

The Human Capital Committee and the company strive to maintain good governance practices and regularly

review and update such practices related to the compensation of our executives, including our NEOs. The
following table highlights the responsible practices we have implemented, as well as the practices we have
avoided, in order to best serve our shareholders’ long-term interests:

✓ We incorporate shareholder feedback into our

WHAT WE DO

compensation program design.

✓ We create a balanced compensation program
through a mix of fixed and variable short- and
long-term incentives.

WHAT WE DO NOT DO

✓ We cap payouts under our annual STIP to

È We do not have single-trigger payout provisions

individual employees, including our NEOs, at two
times target.

in our equity award agreements.

✓ We have double-trigger change in control payout

È We do not provide golden parachute tax

provisions (i.e., an executive must be terminated in
connection with a change in control in order to
receive any change in control benefits).

✓ We maintain a clawback policy that complies with
requirements of The Nasdaq Stock Market
(“Nasdaq”) and Section 10D and Rule 10D-1 of the
Securities Exchange Act of 1934, as amended
(“Exchange Act”) and provides for the recovery of
excess incentive compensation paid to our executive
officers in the event of certain accounting
restatements.

✓ We have robust target stock ownership levels for
our executive officers and directors, defining
qualifying stock to include only shares of common
stock held outright or indirectly through the 401(k)
plan.

gross-ups.

È We do not guarantee minimum STIP payouts.

È We do not provide excessive perquisites to

executives that other employees at or above the
senior director level do not receive.

È We do not permit the hedging of InterDigital
stock by any employee, including executives.

✓ We review compensation-related risk with an

È We do not pay out dividend equivalents on

outside independent compensation consultant on an
annual basis to ensure our plans do not create
incentives that would put the company at risk of a
material adverse effect.

unvested RSUs; accrued dividend equivalents
are paid out only if and to the extent that the
underlying RSU award vests.

What Guides Our Program

Compensation Objectives and Philosophy

The primary purpose of our executive compensation program is to attract, retain and motivate talented
individuals who will drive the successful execution of the company’s strategic plan. Specifically, we aim to:

•

•

attract talented leaders to serve as executives by setting total compensation levels and incentive
program targets at competitive levels for comparable roles in the marketplace;

retain our executives by providing a balanced mix of base salary and short and long-term incentive
compensation;

• motivate our executives by “paying for performance,” and rewarding individual performance and the

accomplishment of corporate goals, as determined by the Human Capital Committee, through
performance-based compensation; and

33

•

align the interests of executives and shareholders by rewarding our executives for increasing our stock
price over the long term and maximizing shareholder value with a substantial portion of total
compensation in the form of direct ownership in our company through long-term equity awards and
meaningful ownership guidelines.

Pay for Performance (Principal Elements of Pay)

Our executive compensation program is intended to hold our executives accountable for business results and

compensate them for strong corporate performance and value creation for our shareholders by rewarding
performance that meets or exceeds the goals established by the Human Capital Committee. Our NEOs’ 2023
compensation program was comprised of base salary, STIP and LTCP awards. Consistent with our compensation
philosophy, the actual compensation received by our NEOs will vary based on individual and corporate
performance measured against annual and long-term performance goals. Additionally, because a significant
percentage of our NEOs’ pay is comprised of equity awards, the value of their pay increases and decreases with
changes in our stock price. For 2023, approximately 88% of our CEO’s annual target compensation, and on
average, 79% of the target compensation of our other NEOs, was comprised of STIP and LTCP awards and thus
variable based on the company’s performance.

CEO
TARGET PAY MIX

OTHER NEOs
TARGET PAY MIX (AVERAGE)

Stock Options
25%

Base Salary
12%

Fixed
12%

Short-Term
Incentives
13%

Performance-Based
RSUs
32%

Base Salary
21%

Fixed
21%

Variable
88%

Variable
79%

Short-Term
Incentives
15%

Performance-Based
RSUs
25%

Time-Based 
RSUs
25%

Time-Based RSUs
32%

The Decision-Making Process

Role of the Human Capital Committee. The Human Capital Committee oversees our executive
compensation program and has final approval with respect to the composition, structure and amount of all
executive officer compensation, subject to Board review. The Human Capital Committee is comprised of at least
three independent members of the Board. Guided in the execution of its primary functions by the Board’s
philosophy that the interests of key leadership should be aligned with the long-term interests of the company and
its shareholders, the Human Capital Committee annually reviews and approves goals relevant to the
performance-based incentive compensation of the Chief Executive Officer and other executive officers. The
Human Capital Committee works very closely with management and the Human Capital Committee’s
independent consultant to examine the effectiveness of the company’s executive compensation program
throughout the year. Details of the Human Capital Committee’s authority and responsibilities are discussed
above under “Board Structure and Committee Membership—Human Capital Committee” and are specified in the
Human Capital Committee’s charter, which is available on our website at on the Investors section of our website
at http://ir.interdigital.com under the heading “Governance—Committee Charters”.

Role of Executives. As part of the annual performance and compensation review for executives other than
the Chief Executive Officer, the Human Capital Committee considers the Chief Executive Officer’s assessment
of the other executives’ departmental and individual performances, reviewing major individual accomplishments
and any other recommendations of the Chief Executive Officer regarding their compensation. The Chief

34

Executive Officer also reports to the Human Capital Committee on the company’s achievement of objectively
measurable goals established under performance-based incentive programs, based upon data provided by
management.

Role and Independence of Advisors. The Human Capital Committee has authority to retain independent
consultants and other experts to assist in carrying out its responsibilities. The Human Capital Committee selects
the consultant, negotiates the fees paid and manages the engagement. For 2023 and previous years, the Human
Capital Committee engaged Pearl Meyer, a national executive compensation consulting firm, to advise it and the
rest of the Board on matters including, but not limited to, trends in executive compensation, compensation peer
group composition, assessing total direct compensation of the executives as compared to the compensation peer
group, and short and long-term incentive plan design and compensation of the company’s executive officers.
Based on consideration of the factors as set forth in applicable SEC rules and listing standards of the Nasdaq
Stock Market, the Human Capital Committee has determined that Pearl Meyer has no conflicts of interest in
providing its services. In December 2023, the Human Capital Committee ended its engagement with Pearl Meyer
and engaged FW Cook, a national compensation consulting firm, as its new compensation consultant. Similarly,
as part of the engagement process with FW Cook, the Human Capital Committee determined that FW Cook has
no conflicts of interest in providing its services.

Factors Considered in Setting Compensation Amounts and Targets. In establishing compensation amounts
and incentive program targets for executives, the Human Capital Committee seeks to provide compensation that
is competitive in light of current market conditions and industry practices. Accordingly, the Human Capital
Committee annually reviews market data that is comprised of proxy-disclosed data from peer companies and
information from nationally recognized published surveys for high-technology companies, adjusted for size.

Consistent with its review practices, in the fall of 2022, Pearl Meyer assisted the Human Capital Committee

with its process of identifying peer group companies for 2023 compensation purposes. When choosing
compensation peers, we not only look for companies with similar revenue in the communications equipment
industry, but also companies for which licensing revenue is a significant component of their total revenue stream
(approximately 20% to 100% of total revenue) and that have a relatively similar profit margin and market
capitalization. We removed Inolavan Holdings, Inc. because it was acquired and taken private in 2021. No
additional companies were added.

The companies comprising the 2023 compensation peer group were as follows:

ADTRAN, Inc.
Aspen Technology, Inc.
Aviat Networks, Inc.
Comtech Telecommunications, Corp.
Digi International, Inc.
Dolby Laboratories, Inc.

Infinera Corporation
Inseego Corp.
Manhattan Associates, Inc.
Rambus, Inc.
Silicon Laboratories, Inc.
Synaptics Inc.

Universal Display Corp.
Universal Electronics, Inc.
Xperi, Inc.

Pearl Meyer conducted an executive compensation review using peer group and market data from nationally
recognized published surveys to provide the Human Capital Committee context on competitive compensation for
comparable executive positions. The data guides the Human Capital Committee in its efforts to set executive
compensation levels and program targets at competitive levels for comparable roles in the marketplace. The
Human Capital Committee uses the data to look for outliers or, in other words, to identify those executives whose
target compensation is substantially below or above the 50th percentile of the market data with the intention to
target between the 50th and 75th percentile. In addition, the Human Capital Committee takes into account other
factors, such as the importance of each executive officer’s role to the company, individual expertise, experience
and performance, retention concerns and relevant compensation trends in the marketplace, in making its final
compensation determinations.

35

2023 Executive Compensation in Detail

Base Salary

Base salary is the fixed element of an executive’s cash compensation, which the company pays to afford

each executive the baseline financial security necessary to focus on his or her day-to-day responsibilities. Base
salaries for the executives are set at competitive levels to attract and retain highly qualified and talented leaders.
The Human Capital Committee reviews and approves base salaries for the executives annually, however,
executive base salaries are not subject to automatic annual adjustments.

The Human Capital Committee reviews market data and base salaries of executive officers in the company’s

compensation peer group and considers the executive’s experience, scope of responsibility, importance to the
company and individual performance when setting base salary. Taking into account those factors, the salary
levels of Messrs. Chen and Cohen received modest increases while Messrs. Brezski and Schmidt and
Ms. Hakoranta received more substantial increases in order to ensure that their base salaries remained
competitive and represented the importance of their roles to the company. All salary adjustments were effective
March 1, 2023. No adjustment was made for Mr. Pankaj as the Human Capital Committee continued to believe
that his base salary was appropriate. Set forth below are the 2022 and 2023 base salaries for our NEOs:

NEO

2022

2023

% Increase

Liren Chen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard J. Brezski
Eeva K. Hakoranta(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rajesh Pankaj . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joshua D. Schmidt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric Cohen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$690,000
$402,500
$423,852
$490,000
$350,000
$408,408

$710,000
$440,000
$455,000
$490,000
$400,000
$425,000

3%
9%
7%

—
14%
4%

(1) Ms. Hakoranta receives her salary and other cash compensation in euros. Amounts were converted to

USD using an exchange rate for 2023 of 1.1056.

Short-Term Incentive Plan

The STIP annual incentive award is designed to provide a cash reward for the achievement of corporate
goals and individual accomplishments during each fiscal year. Individual STIP payouts are determined based on
performance against pre-determined strategic corporate goals and individual performance. In 2023, the Human
Capital Committee increased the CEO’s target bonus from 100% to 105% of base salary to better align with
trends in the market. No other changes were made to the target STIP levels. Bonuses are capped at 200% of
target for each executive.

NEO

Liren Chen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard J. Brezski
Eeva K. Hakoranta . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rajesh Pankaj . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joshua D. Schmidt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric Cohen(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2022 Target STIP Level
(% of Base Salary)

2023 Target STIP Level
(% of Base Salary)

100%
75%
75%
75%
NA
75%

105%
75%
75%
75%
60%
75%

(1) Mr. Cohen was not eligible to receive 2023 STIP because he was no longer employed at the time of

payout.

For 2023, in response to shareholder feedback, the Human Capital Committee changed the design of the
STIP to ensure that corporate performance is a greater factor in determining payout. Beginning in 2023, baseline

36

funding of the STIP is determined entirely on corporate goal achievement with individual performance as a
modifier. The STIP payout for 2023 was determined as follows:

Target STIP 
Amount

Corporate 
Achievement

(0%-200%)

Personal 
Performance 
Achievement 

(0%-200%)

STIP Payout

Corporate Performance Goals. For 2023, the corporate performance goals for the company’s executives

and the relative weights assigned to each were as follows with a maximum payout of 200% of target:

2023 STIP Corporate Performance Goals:

Performance
Measure
(relative weight)

Total Revenue
(60%)

Description

Goal/Objectives

Determination of Payout Level

Achieve specified
amount of
recognized revenue
as reported in our
financial
statements*

*excludes revenue
recognized related
to Samsung
arbitration

Minimum threshold set,
below which would yield 0%
achievement; threshold
achievement yields 50% of
target

Each $1 million above
threshold equals 0.5%
achievement up to target;
each $1 million achievement
above target equals 1%
achievement above target

Achievement based on % of
target filings

Target is estimated
recognized revenue as
reported in 2023 financial
statements

Threshold = $360M
Target = $460M

Patent filings – meet or
exceed specified number of
first patent filings

Target = 640 first patent
filings

Innovation
(30%)

Patent filings

Evolution
(10%)

Execute Human
Capital initiatives

Execute Human Capital
initiatives with focus on
Diversity, Equity and
Inclusion

Bonus element pays out if
specific, pre-defined strategic
accomplishments were
achieved

These corporate performance goals were structured to challenge and motivate executives and intended to
align the executive team around a key set of company performance objectives. The goals further our long-term
strategy to be a leading innovator, designer and developer of fundamental, horizontal technologies and to receive
fair compensation from the companies that implement our patented innovations in their products and services
across licensing programs. We want to grow our licensing revenue, grow and enhance our worldwide patent
portfolio and execute on human capital initiatives. Our goal is to foster an environment where employees feel
valued, respected and challenged in order to enable our workforce to continue to contribute to the company’s
growth and sustained success.

37

On February 1, 2024, the Chief Executive Officer reported to the Human Capital Committee on the final

achievement of the strategic corporate goals and provided his assessment with respect to individual named
executive officers’ performance for 2023. Actual achievement against each of these performance goals was
determined at the conclusion of the fiscal year. The table below contains details of the achievement of each of the
corporate strategic performance components of the STIP, along with the payout assigned to each component
according to its level of achievement.

Corporate Strategic Performance Goals: Outcomes

Goal
(Target metric weight)

Threshold
Payout

Target
Payout

Maximum
Payout*

Total Revenue (1) (60%)
*excludes revenue
recognized related to
Samsung arbitration

$360M
30%

$460M
60%

Innovation (30%)

0%

30%

Evolution (10%)

0%

10%

Achievement

Total Revenue of $471M

Each $1M above $460M is 1%
achievement

(achieved 111% of target)

Patent filings

(achieved 191% of target)

Developed and launch Human
Capital Initiatives

(100% achievement)

Component
Payout

67%

57%

10%

134%

Overall Corporate
Achievement

30%(2) 100%

Capped at
200%

134%

(1) Although no individual goal achievement is capped, the overall STIP payout is capped at 200%.
(2) Assumes threshold revenue has been achieved.

Personal Performance Component. The personal performance component of each NEO’s STIP award is
based on pre-established criteria and evaluated by the Human Capital Committee at the end of the year. For the
CEO, the Human Capital Committee considered the Board’s assessment of his performance, as reflected in the
assessment by the non-executive Chairman of the Board.

For 2023, Mr. Chen was further assessed on performance of the strategic corporate goals as his personal

achievement of the following:

Goal

Revenue/ Financial
Strength

Innovation

Evolution

Achievements

InterDigital continued to successfully execute on its strategy to increase revenue
above the target, which was set above 2022 actual total revenue. In fact, 2023
revenue grew 20% over 2022, with recurring revenue increased to a record level of
$408 million. Mr. Chen achieved continued revenue growth while maintaining cost
discipline, resulting in an 82% increase in non-GAAP earnings per share.

Mr. Chen’s continued emphasis on and support of innovation drove the record
increase of first filings by 77% in 2023.

Mr. Chen continued to support the evolution of the corporate culture, ensuring that
new executives were successfully integrated into the executive team, continued to
evolve the hybrid workplace and supported DE&I initiatives.

For the other NEOs, the Human Capital Committee reviewed the performance assessments provided by
Mr. Chen with respect to each executive’s individual performance and considered its own direct interactions with

38

each NEO as well. The Human Capital Committee included the impact on achievement of the strategic corporate
goals and how well such NEO’s department performed during the year with respect to the department’s goals/
primary projects. After completing the evaluations, the Human Capital Committee determined that the personal
performance achievement against objectives for each NEO employed by the Company at the end of 2023 was as
follows:

NEO

Personal Performance
Factor (0%-200%)

Liren Chen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard J. Brezski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eeva K. Hakoranta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rajesh Pankaj
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joshua Schmidt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100%
100%
100%
100%
100%

STIP Payout Calculation. Using the formula presented above, the payout for each executive was based on

both Corporate Achievement and Personal Performance. The following table lays out the calculations for each
NEO employed by the Company at the end of 2023:

NEO

2023 Base
Salary
($)

Target as
percentage
of base
salary

Target
bonus
($)

Corporate
Achievement

Personal
Performance

Overall
achievement
as % of
target

Actual
Bonus
($)

Liren Chen . . . . . . . . . . . . . .710,000
Richard J. Brezski . . . . . . . .440,000
Eeva K. Hakoranta(1) . . . . . .455,000
. . . . . . . . . . .490,000
Rajesh Pankaj
. . . . . . .400,000
Joshua D. Schmidt

105% 745,500
75% 330,000
75% 341,000
75% 367,500
60% 240,000

134%
134%
134%
134%
134%

100%
100%
100%
100%
100%

134% 998,970
134% 442,200
134% 457,000
134% 492,450
134% 321,600

(1) Ms. Hakoranta receives her salary and other cash compensation in euros. Amounts were converted to $USD

using an exchange rate for 2023 of 1.1056.

Long-Term Compensation Program

The LTCP is designed to align management’s interests with those of the company’s shareholders to
maximize the value of the company’s stock over the long term and to enhance retention efforts by incentivizing
executive officers to drive the company’s long-term strategic plan. It consists of three components:

Equity Vehicle

Performance-
based RSUs

Performance-
based stock
options

What it Does

Vesting Requirements

Aligns NEO and shareholder interests by
tying value to both business results and
future stock price.

Rewards for stock price appreciation and
achievement of underlying goals.

Achievement of specified performance goals
is required for vesting. For performance that
falls below threshold achievement, no equity
vests; vesting is generally capped at 200% of
target. Performance-based options’ exercise
term is 10 years.

Time-based
RSUs

Focuses our executives on long-term share
ownership and sustained value.

Three-year ratable vesting of shares.

2023 LTCP Grant

The Human Capital Committee determines annually the participation level and components of each
executive officer’s LTCP award, considering market data and internal pay equity between the company’s NEOs

39

and other executives to motivate and incentivize performance across the senior management team and encourage
collaboration and shared responsibility for executing the company’s strategic plan. In response to shareholder
feedback, for 2023, the mix between time-based RSUs and performance-based RSUs for the company’s NEOs
and other executives, other than the CEO, was adjusted to 50% performance-based RSUs and 50% time-based
RSUs. The Human Capital Committee approved LTCP awards granted on March 31, 2023, comprised of the
following equity vehicles:

NEO

Liren Chen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard J. Brezski . . . . . . . . . . . . . . . . . . . . . . . .
Eeva K. Hakoranta . . . . . . . . . . . . . . . . . . . . . . .
Rajesh Pankaj
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Joshua D. Schmidt . . . . . . . . . . . . . . . . . . . . . . . .
Eric Cohen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2023 LTCP Grant: Equity Mix

Performance-Based
RSUs

Performance Based
Stock Options

Time-Based
RSUs

33%
50%
50%
50%
50%
50%

34%
0%
0%
0%
0%
0%

33%
50%
50%
50%
50%
50%

The table below shows the target award values for the 2023 LTCP grant for each of the NEOs:

Performance-Based
RSUs ($) (1)

Performance-Based
Stock Options ($) (2)

Time-Based
RSUs ($) (1)

Total Value
($)

Liren Chen . . . . . . . . . . . . . . . . .
Richard J. Brezski . . . . . . . . . . . .
Eeva K. Hakoranta . . . . . . . . . . .
Rajesh Pankaj . . . . . . . . . . . . . . .
. . . . . . . . . . .
Joshua D. Schmidt
Eric Cohen . . . . . . . . . . . . . . . . .

1,500,000
750,000
750,000
750,000
500,000
550,000

1,500,000

—
—
—
—
—

1,500,000
750,000
750,000
750,000
500,000
550,000

4,500,000
1,500,000
1,500,000
1,500,000
1,000,000
1,100,000

(1) Award amounts for performance-based and time-based RSUs were determined based on the closing

price of InterDigital’s common stock on the date of grant.

(2)

Individual award amounts for options were calculated based on Black-Scholes values; additional
information can be found in footnote 5 to the Summary Compensation Table below.

2023 LTCP Time-based RSUs. Time-based RSUs granted to our NEOs in 2023 vest over three years, with
one-third of the RSUs vesting and being delivered on or about each of the first three anniversaries of the grant
date.

2023 LTCP Performance-Based RSUs and Options. The actual number of performance-based RSUs and

performance-based options (the “Performance Awards”) from the 2023 LTCP that may vest is based on the
achievement of pre-determined goal(s) set by the Human Capital Committee. The metric for the 2023 LTCP goal
is pro forma EBITDA, which measures overall profitability of the company.

The Performance Awards may vest at the end of the three-year performance period (January 1, 2023,
through December 31, 2025) based on specified threshold, target, and maximum levels of pro forma EBITDA
measured quarterly, on a trailing four quarter basis during years two and three of the performance period. The
highest trailing four quarters determines goal achievement. If the threshold level of achievement is not met, there
is no payout. Achievement of the threshold performance level will result in a 50% payout. Goal achievement for
performance that falls between the amounts established for threshold, target and maximum achievement above is
calculated using linear straight-line interpolation between the target achievement level and the actual
achievement level. The payout cannot exceed 200% of target.

40

Status of Prior LTCP Grants:

2019 LTCP Grant: The 2019 LTCP performance-based RSUs had a five-year performance period (January
1, 2019 through December 31, 2023). The performance goals associated with the 2019 LTCP performance-based
RSUs required a threshold achievement of $150 million pro forma EBITDA, defined for this grant as EBITDA
adjusted to eliminate stock based compensation, intellectual property enforcement costs and other non-recurring
and non-operating items after adjustments to bring revenue in line with Revenue Platform. If the pro forma
EBITDA threshold is met, Revenue Platform is measured to determine payout.

After reviewing the company’s achievement of the applicable goals as of December 31, 2023, the Human

Capital Committee determined that the company’s goal achievement for the 2019 cycle was below the threshold
required for the vesting of any portion of the performance-based RSU awards. As a result, all performance-based
RSUs granted under the 2019 LTCP were forfeited. The goals associated with the 2019 LTCP were as follows:

Revenue Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro forma EBITDA ($150 million threshold)

Threshold

Target

Maximum

$400M

$500M

$600M

2021 LTCP Grant: The 2021 LTCP performance-based awards are earned based upon the achievement of
pro forma EBITDA and Consumer Electronics Revenue Platform goals. Sixty percent of the target performance
awards were eligible to vest at the end of a three-year performance period (January 1, 2021, through
December 31, 2023) based on specified threshold, target, and maximum levels of pro forma EBITDA measured
quarterly during years two and three of the performance period, on a trailing four quarter basis. The highest
consecutive four quarters determines goal achievement. If the threshold level of achievement is not met, there is
no payout. The pro forma EBITDA goal associated with the 2021 LTCP was as follows:

Pro forma EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$150M

$225M $300M

Threshold

Target

Superior

The Chief Executive Officer reported to the Human Capital Committee that the four-quarter period with the
highest pro forma EBITDA during the measurement period was Q2 2022 through Q1 2023, in which period pro
forma EBITDA was $371.3 million. The Human Capital Committee determined that the company’s goal
achievement exceeded the superior performance goal and, as a result, 200% of the performance-based equity
allocated to the pro forma EBITDA goal vested in March 2024. Pro forma EBITDA is a non-GAAP financial
measure. See Appendix A for an explanation of how this metric is used and a detailed reconciliation to the most
directly comparable GAAP measure.

The remaining portion of the Performance Awards granted under the 2021 LTCP cycle may vest based on
the performance metric of Consumer Electronics Revenue Platform. We structured 40% of the 2021 LTCP as a
set of milestones towards achieving our five-year goal for our Consumer Electronics Revenue Platform (such
awards, “Milestone Awards”). For each of the four milestones that is achieved, 25% of the executives’ target
Milestone Awards will vest. The Milestone Awards may vest at any time during the five-year performance period
(January 1, 2021, through December 31, 2025), to the extent that one or more of the milestones are achieved. The
Human Capital Committee determined that the second of these milestones was achieved in the third quarter of
2023, resulting in the vesting of 25% of target Milestone Awards in December 2023.

CEO New Hire Awards: The Human Capital Committee approved the award of performance-based RSUs
and performance-based options (“New Hire Awards”) as part of Mr. Chen’s New Hire equity awards in 2021.
The actual number of New Hire Awards that may vest is determined by the achievement of one of more of
diversified revenue platform goals. The diversified revenue platform goals measure achievement of specified
amounts of revenue platform using forecasted revenue for a twelve month look-forward period. Similar to the
2021 LTCP Milestone Awards, the New Hire Awards may vest at any time through December 31, 2025. The

41

Human Capital Committee determined that the fifth Milestone was achieved in the third quarter of 2023 which
drove a 60% payout of Mr. Chen’s New Hire Awards. One additional milestone remains eligible to vest. Total
payout on the New Hire Awards cannot exceed 300% of target.

Other Practices, Policies and Guidelines

Stock Ownership Guidelines

To align the interests of our executive officers with those of our shareholders, the company has established

stock ownership guidelines for its executive officers. The CEO’s target ownership level is the lesser of (i) the
amount of company stock with a value of at least five times his current annual base salary or (ii) 65,000 shares.
The company’s other executive officers are expected to own the lesser of (i) the amount of company stock with a
value of at least two times their current annual base salary or (ii) 12,500 shares.

In May 2023, in order to ensure that the guidelines were meaningful, the Human Capital Committee
amended the stock ownership guidelines to modify the definition of qualifying stock to include only shares of
common stock (held outright or shares held through the company’s 401(k) Plan (as defined below)) and restricted
stock. Unvested time-based RSUs, unearned performance-based RSUs and unexercised options do not count
towards ownership guidelines. For purposes of calculating the value of company stock holdings, each share is
priced at a price per share/unit equal to the average closing price of the company’s common stock for the 200
trading days leading up to and including the calculation date. The 200-day average closing price is calculated
annually on the date of the company’s annual meeting of shareholders.

Any executive who has not reached or fails to maintain his or her target ownership level must retain at least

50% of any after-tax shares derived from vested RSUs or exercised options until his or her level is met. An
executive may not make any disposition of shares that results in his or her holdings falling below the target level
without the express approval of the Human Capital Committee. As of December 31, 2023, all of our executive
officers were in compliance with the guidelines.

Clawback Policy

The company adopted a revised Clawback Policy, effective October 2, 2023, in compliance with applicable

rules of Nasdaq and Section 10D and Rule 10D-1 of the Exchange Act. The policy requires the company to
recover any incentive-based compensation from NEOs in the event of any accounting restatement as a result of
the company’s material non-compliance with financial reporting requirements, to the extent that the incentive-
based compensation exceeds the amount that the executive would have received based on the restated financial
statements. The policy allows recoupment from certain other executives of the company. The Board delegated
authority to the Human Capital Committee to oversee the policy’s administration.

Prohibition Against Hedging

The company’s insider trading policy prohibits directors, officers, employees and consultants of the

company from engaging in any hedging transactions involving company stock.

Savings and Protection and Nonqualified Deferred Compensation Plans

The company’s Savings and Protection Plan (“401(k) Plan”) is a tax-qualified retirement savings plan

pursuant to which employees, including NEOs, are able to contribute the lesser of 100% of their annual base
salary and bonus or the annual limit prescribed by the Internal Revenue Service (“IRS”) on a pre-tax basis. The
company provides a 50% matching contribution on the first 6% of an employee’s eligible earnings contributed to
the 401(k) Plan, up to the cap mandated by the IRS. The company offers this benefit to encourage employees to
save for retirement and to provide a tax-advantaged means for doing so.

42

As noted above, the IRS imposes limits on the amounts that an employee may contribute annually to a

401(k) Plan account. The company’s nonqualified deferred compensation plan (the “Deferred Compensation
Plan”) provides a select group of management and highly compensated employees, including the NEOs, with an
opportunity to defer up to 40% of their base salary and up to 100% of their STIP payment. For 2023, the
company matched up to 50% of the first 6% of the participant’s eligible deferrals, determined on a combined
plan basis taking into account deferred amounts under both the Deferred Compensation Plan and the 401(k) Plan.
Matching contributions are made once annually after the end of the year. Participants vest one-third in company
matching contributions after one year of service, two-thirds after two years of service and fully after three years
of service, a vesting schedule identical to the 401(k) Plan. For more information about the nonqualified deferred
compensation plan, see “Nonqualified Deferred Compensation.”

Severance Arrangements with NEOs

In October 2018, the company adopted the InterDigital, Inc. Executive Severance and Change in Control
Policy (the “Executive Severance Policy”), which had an initial term of three years and automatically renews for
additional successive one-year periods thereafter (unless the company provides notice of non-renewal at least 30
days before the expiration of the term (as extended by any renewal period)). The policy applies to all NEOs
except for Ms. Hakoranta, whose severance arrangements, in compliance with local law, are set forth in her
employment agreement. Among other things, the Executive Severance Policy provides severance payments and
benefits upon certain qualifying terminations of employment, including upon termination of the NEO’s
employment by the company without Cause, and provides for enhanced payments and benefits if such
termination occurs on or within one year after a Change in Control, each as defined in the Executive Severance
Policy. Ms. Hakoranta’s employment agreement provides similar payments and benefits. For more information
regarding the provisions governing these termination scenarios, please see “Potential Payments upon
Termination or Change in Control.”

Compensation-Related Risk Assessment

We have assessed our employee compensation policies and practices and determined that any risks arising
from our compensation policies and practices are not reasonably likely to have a material adverse effect on the
company. In reaching this conclusion, the Human Capital Committee considered all components of our
compensation program and assessed any associated risks. The Human Capital Committee also considered the
various strategies and measures employed by the company that mitigate such risk, including: (i) the overall
balance achieved through our use of a mix of cash and equity, annual and long-term incentives and time-and
performance-based compensation; (ii) our use of multi-year vesting periods for equity grants; (iii) limits on the
maximum goal achievement levels and overall payout amounts under STIP and LTCP awards; (iv) the
company’s adoption of, and adherence to, various compliance programs, including the Code of Ethics, a
clawback policy, a contract review and approval process and signature authority policy and a system of internal
controls and procedures; and (v) the oversight exercised by the Human Capital Committee over the performance
metrics and results under the STIP and the LTCP. In addition, our compensation programs are reviewed with the
Human Capital Committee’s compensation consultant on an annual basis to ensure plans do not create incentives
that would put the company at excessive risk. Most recently, FW Cook reviewed our compensation programs.
Based on the assessment described above, the Human Capital Committee concluded that any risks associated
with our compensation policies and practices were not reasonably likely to have a material adverse effect on the
company.

Accounting for Share-Based Compensation

We follow FASB ASC Topic 718 for our share-based compensation awards. FASB ASC Topic 718 requires

companies to measure the compensation expense for all share-based compensation awards made to employees
and directors, including stock options and RSUs, based on the grant date “fair value” of these awards. This
calculation is performed for accounting purposes and reported in the compensation tables below, even though our

43

NEOs may never realize any value from their awards. FASB ASC Topic 718 also requires companies to
recognize the compensation cost of their share-based compensation awards in their income statements over the
period that an executive officer is required to render services in exchange for the option or other award.

Human Capital Committee Report

The Human Capital Committee has reviewed and discussed the Compensation Discussion and Analysis

required by Item 402(b) of Regulation S-K with management and, based on its review and discussions, has
recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement
and the company’s Annual Report on Form 10-K.

HUMAN CAPITAL COMMITTEE:

Jean F. Rankin, Chair
Derek Aberle
S. Douglas Hutcheson
John D. Markley, Jr.

The foregoing Human Capital Committee report shall not be deemed to be incorporated by reference into

any filing under the Securities Act of 1933, as amended, or the Exchange Act and shall not otherwise be deemed
filed under these acts, except to the extent specifically incorporated by reference.

44

Summary Compensation Table

The following table contains information concerning compensation awarded to, earned by or paid to our
NEOs in the last three years (unless the NEO was not an executive officer of the company during such year). Our
NEOs consist of: (i) Liren Chen, our President and CEO; (ii) Richard J. Brezski, our CFO and Treasurer;
(iii) Eeva K. Hakoranta, our Chief Licensing Officer; (iv) Rajesh Pankaj, our Chief Technology Officer;
(v) Joshua D. Schmidt, our Chief Legal Officer and Corporate Secretary and (vi) Eric Cohen, former Chief
Strategy and Growth Officer who ceased to be an executive officer of the company effective July 31, 2023.
Additional information regarding the items reflected in each column follows the table.

Name and Principal Position

Year

Salary
($)(1)

Bonus
($)(2)

Stock
Awards
($)(3)(4)

Option
Awards
($)(5)

Non-Equity
Incentive Plan
Compensation
($)(6)

All Other
Compensation
($)(7)

Total
($)

Liren Chen (8)

President and Chief
Executive Officer

. . . . . . . . . . . . . 2023 706,000
2022 690,000
2021 504,231 1,000,000 5,219,984

2,250,000 750,000
500,000 1,650,025 550,000
—

Richard J. Brezski . . . . . . . . . . . 2023 433,221
2022 402,500
2021 402,500

Chief Financial Officer
and Treasurer

Eeva K. Hakoranta (8) . . . . . . . 2023 447,385
2022 423,852
2021 397,025

Chief Licensing Officer

1,125,000
880,019
660,000

1,125,000
880,019
510,022

Rajesh Pankaj . . . . . . . . . . . . . . 2023 490,000
2022 233,692

Chief Technology Officer

466,667 1,125,000
233,333 3,660,037

Joshua D. Schmidt

. . . . . . . . . . 2023 390,961

750,000

Chief Legal Officer and
Corporate Secretary

Eric Cohen . . . . . . . . . . . . . . . . 2023 307,577
2022 408,408
2021 401,982

Former Chief Strategy and
Growth Officer

825,000
880,019
660,006

—
—
—

—
—
—

—
—

—

—
—
—

998,970
1,380,000
948,750

68,190
54,762
3,151,873

4,773,160
4,824,787
10,824,836

442,200
603,750
384,891

457,000
594,564
401,525

492,450
735,000

321,600

34,604
27,117
26,121

1,535
1,535
998

31,055
69,292

2,035,025
1,913,386
1,473,512

2,038,535
1,864,255
1,339,547

2,605,172
4,931,354

11,177

1,473,738

—
612,612
390,540

479,659
30,088
28,538

1,612,236
1,931,127
1,481,066

(1) Base salary increases, as applicable, for 2023, 2022, and 2021, became effective on March 1, 2023,

March 1, 2022, and April 1, 2021. Amounts reported reflect the value of base salary earned by each NEO
during such years.

(2)

In connection with his hiring as CEO in April 2021, Mr. Chen received a sign-on cash bonus, the final third
was paid in 2022 and in connection with his hiring as CTO in 2022, Mr. Pankaj received the final portions
of his sign-on cash bonus in January and July 2023.

(3) Amounts reported reflect the aggregate grant date fair value computed in accordance with FASB ASC

Topic 718 for time-based RSU awards granted during the designated fiscal year. The assumptions used in
valuing these awards are incorporated by reference to Notes 2 and 13 to our audited financial statements
included in our annual report on Form 10-K for the year ended December 31, 2023. Under generally
accepted accounting principles, compensation expense with respect to stock awards granted to our
employees is generally equal to the grant date fair value of the awards and is recognized over the vesting
periods applicable to the awards.

(4) Amounts reported also reflect the value at the grant date of performance-based RSUs granted in such years
based upon the probable outcome of the performance conditions for such awards, consistent with the
estimate of aggregate compensation cost to be recognized over the service period determined as of the grant
date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions used in
valuing these awards are incorporated by reference to Notes 2 and 13 to our audited financial statements
included in our annual report on Form 10-K for the year ended December 31, 2023.

45

On March 31, 2023, the company granted performance-based RSU awards to its NEOs. As of that date,
consistent with the estimates determined as of the respective grant dates under FASB ASC Topic 718, the
probable outcome of the performance conditions for these grants was estimated at 50% achievement and as
a result, the grant date fair value was 50% of target grant value. The following table sets forth the grant date
fair value of the performance-based RSUs granted to the NEOs in 2023 assuming that the highest level of
performance conditions will be achieved and the grants vest at their maximum level of 200% of target:

NEO

Maximum Value
Performance-Based
RSU Awards 2023
LTCP ($)

Liren Chen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard J. Brezski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eeva K. Hakoranta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rajesh Pankaj
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joshua D. Schmidt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric Cohen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,000,000
1,500,000
1,500,000
1,500,000
1,000,000
1,100,000

(5) Amounts reported reflect the value recognized for financial reporting purposes in accordance with FASB

ASC Topic 718. During 2023, the company granted performance-based options to Mr. Chen, as part of the
2023 LTCP. As of the grant date, consistent with the estimates determined as of the respective grant dates
under FASB ASC Topic 718, the probable outcome of the performance conditions for these grants was
estimated at 50% achievement, and therefore the grant date fair value was 50% of the target grant value.

Assuming that the highest level of performance conditions will be achieved and the grant vests at its
maximum level of 200% of target, the grant date fair value of the performance-based stock options granted
to Mr. Chen in 2023 would be $3,000,000. The weighted-average assumptions underlying this valuation
under the Black-Scholes option pricing model are as follows: expected term of 7.48 years; volatility of
32.80%; a risk-free interest rate of 3.55%; and a dividend yield of 1.92%.

(6) Amounts reported include the value of payouts earned under the company’s 2023 STIP.

(7) The following table details each component of the “All Other Compensation” column in the Summary

Compensation Table for fiscal year 2023:

NEO

401(k) Plan
Matching
Contributions
($)(a)

Supplemental
LTD
($)(b)

Liren Chen . . . . . . . .
Richard J. Brezski . . .
Eeva K. Hakoranta . .
Rajesh Pankaj . . . . . .
Joshua D. Schmidt
. .
Eric Cohen . . . . . . . .

9,900
9,900

9,900
6,848

5,599
3,495
1,535
6,327
1,277
4,590

Deferred
Compensation
Plan Matching
Contributions
($)(c)

52,691
21,209

Relocation
Expense
($)(d)

Severance
($)(e)

PTO
Payout
($)(f)

Value Realized
on Pro-Rata
vesting of
RSUs
($)

24,728

111,563 54,122

302,537

Total
($)

68,190
34,604
1,535
31,055
11,177
479,659

(a) Amounts represent company matching contributions to all employees, including the NEOs, on 50% of

the first 6% of the employee’s eligible salary and annual bonus contributed to the 401(k) Plan, up to the
maximum amount permitted by the Internal Revenue Service.

(b) Amounts represent premium amounts paid by the company for supplemental executive long-term

disability insurance for the benefit of such NEO.

(c) Amounts represent company matching contributions made pursuant to the company’s nonqualified

deferred compensation plan for NEO contributions. For more information, see “Nonqualified Deferred
Compensation.”

46

(d) Amount represents a taxable reimbursement to compensate Mr. Pankaj for expenses related to his
relocation from California to Conshohocken, Pennsylvania. Amount includes $6,334 in additional
payment for tax assistance, eligible to all InterDigital employees who receive relocation benefits.

(e) Amount represents Severance payments pursuant to the InterDigital Executive Severance and Change
in Control Policy. For more information, see “Potential Payments upon Termination or Change in
Control.”

(f) Amount represents paid time off accrued but not taken, which, pursuant to company policy applicable

to all U.S. employees upon employment termination, was paid to Mr. Cohen.

(8) Ms. Hakoranta receives her salary and other cash compensation in euros. 2023 amounts were converted to

USD using an exchange rate of 1.1056.

Grants of Plan-Based Awards in 2023

The following table summarizes the grants of (i) cash awards under the STIP and (ii) options (OPT), time-
based RSU awards (TRSU) and performance-based RSU awards (PSU), each made to the NEOs during the year
ended December 31, 2023. Each of these types of awards is discussed in “Compensation Discussion and
Analysis” above.

Name

Type of
Award

Grant
Date

Threshold
($)

Target
($)

Maximum
($)

Threshold
(#)

Target
(#)

Maximum
(#)

Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards (1)

Estimated Future Payouts
Under Equity Incentive
Plan Awards (2)(3)

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)

Exercise
or Base
Price of
Option
Awards
($/Sh)

Liren Chen . . . . . . . . . . . STIP
OPT
3/31/2023
TRSU 3/31/2023
3/31/2023
PSU

Richard J. Brezski . . . . . . STIP

TRSU 3/31/2023
3/31/2023
PSU

Eeva K. Hakoranta(6) . . . STIP

TRSU 3/31/2023
3/31/2023
PSU

Rajesh Pankaj . . . . . . . . . STIP

TRSU 3/31/2023
3/31/2023
PSU

Joshua D. Schmidt

. . . . . STIP

TRSU 3/31/2023
3/31/2023
PSU

Eric Cohen . . . . . . . . . . . STIP

TRSU 3/31/2023
3/31/2023
PSU

0

0

0

0

0

0

745,500 1,491,000

330,000

660,000

341,250

682,500

367,500

735,000

240,000

480,000

318,750

637,500

31,340

62,680 125,360

72.90

10,186

20,371

40,742

5,145

10,289

20,578

5,145

10,289

20,578

5,145

10,289

20,578

3,430

6,859

13,718

3,773

7,545

15,090

20,371

10,289

10,289

10,289

6,859

7,545

Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(4)(5)

750,000
1,485,046
742,522

750,068
375,000

750,068
375,000

750,068
375,000

500,021
250,000

550,030
275,015

(1) Amounts reported represent the potential threshold, target and maximum STIP payouts depending on the

level of performance achieved under the STIP for fiscal 2023. Such amounts ranged from 0% (if threshold
not met for revenue goal) to 200% of the target payout, representing the maximum payout possible under
the STIP. For all NEOs, the actual amount earned for fiscal 2023, which is reported in the Summary
Compensation Table above, was based on the company’s achievement of the 2023 strategic corporate goals
established by the Human Capital Committee and individual performance of the NEO during 2023.

(2) Amounts reported represent the potential threshold, target and maximum number of PSUs the NEO could

earn, measured as of the grant date, pursuant to his or her PSU award for the 2023 LTCP. 100%

47

achievement of the performance goal associated with the award results in a 100% payout of the associated
target amounts. Goal achievement for performance that falls between the amounts established for threshold,
target and maximum achievement is calculated using straight-line interpolation between the target
achievement level and the actual achievement level, with a threshold payout of 50% of target and a
maximum payout of 200% of target.

(3) Amounts reported represent the potential threshold, target and maximum number of performance-based
stock options the NEO could earn, measured as of the grant date. 100% achievement of the performance
goal associated with the award results in a 100% vesting of the associated target number of options. Goal
achievement for performance that falls between the amounts established for threshold, target and maximum
achievement is calculated using straight-line interpolation between the target achievement level and the
actual achievement level, with a threshold vesting of 50% of target and a maximum vesting of 200% of
target.

(4) Grant date fair value of RSU awards is determined in accordance with FASB ASC Topic 718. The TRSU
awards granted in 2023 are scheduled to vest ratably over a three year period. Amounts reported for PSUs
are based upon the probable outcome of the performance conditions, consistent with the estimate of
aggregate compensation cost to be recognized over the service period determined as of the grant date under
FASB ASC Topic 718, excluding the effect of estimated forfeitures. As of the date of grant, the probable
outcome of the performance conditions for the PSUs granted pursuant to the 2023 LTCP was estimated at an
expected achievement of 50%, and, as a result, their grant date fair value was 50% of the target grant value.
See footnote 4 to the Summary Compensation Table above for the grant date fair value of the PSUs granted
to the NEOs in 2023 assuming that the highest level of performance conditions will be achieved and the
grants vest at their maximum level of 200% of target.

(5) Grant date fair value of option awards is determined in accordance with FASB ASC Topic 718. Amounts
reported reflect the value at the grant date of the performance-based stock options granted in 2023 based
upon the probable outcome of the performance conditions for such awards, consistent with the estimate of
aggregate compensation cost to be recognized over the service period determined as of the grant date under
FASB ASC Topic 718, excluding the effect of estimated forfeitures. As of the date of grant, the probable
outcome of the performance conditions for these performance-based options was estimated at an expected
achievement of 50%, and, as a result, their grant date fair value was 50% of the target grant value. See
footnote 5 to the Summary Compensation Table above for the grant date fair value of the performance-
based stock options granted to Mr. Chen in 2023 assuming that the highest level of performance conditions
will be achieved and the grants vest at their maximum level of 200% of target.

(6) Ms. Hakoranta receives her salary and other cash compensation in euros. Amounts were converted to USD

using an exchange rate of 1.1056.

48

Outstanding Equity Awards at 2023 Fiscal Year End

The following table sets forth information concerning outstanding option and stock awards of the NEOs as

of December 31, 2023.

Option Awards

Stock Awards

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(1)

11,060

211,141

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) (2)

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable

Option
Exercise
Price
($)

Option
Expiration
Date

39,709

73.15

4/15/31

90,488

73.15

4/15/31

27,120

62.19

3/15/32

31,340

72.90

3/31/33

Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)(5)

Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(6)

Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)(3)

Market
Value
of
Shares
or
Units of
Stock
That
Have Not
Vested
($)(4)

25,115 2,725,979

12,252 1,329,861

20,661 2,242,580

3,679

399,328

7,352

798,007

10,435 1,132,644

3,010

326,671

7,352

798,007

10,435 1,132,644

8,882

964,002

29,603 3,213,153

10,435 1,132,644

6,826
9,826

740,840
1,066,558

9,189

997,396

10,330

1,121,250

864
2,176

93,819
236,191

2,775

301,036

3,675

398,947

5,218

566,322

654

70,985

2,270

246,277

3,675

398,947

5,218

566,322

4,440

481,945

5,551

602,459

5,218

566,322

Name

Grant
Date

Liren Chen . . . . . 4/15/21
4/15/21
(new hire)
4/15/21
4/15/21(7)
4/15/21 (8)
3/15/2022
3/15/2022
3/15/2022(9)
3/31/2023
3/31/2023
3/31/2023 (10)

Richard J.

Brezski . . . . . . 3/15/19(11)
3/31/20(12)
3/31/21
3/31/21(7)
3/15/2022
3/15/2022 (9)
3/31/2023
3/31/2023 (10)

Eeva K.

Hakoranta . . . .

8/17/20(12)
3/31/21
3/31/21(7)
3/15/22
3/15/22(9)
3/31/2023
3/31/2023 (10)

Rajesh Pankaj . . . 8/15/22

8/15/22(9)
8/15/22
(new hire)
8/15/22
(new hire) (9)
3/31/2023
3/31/2023 (10)

49

Option Awards

Stock Awards

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(1)

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) (2)

Option
Exercise
Price
($)

Option
Expiration
Date

Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)(3)

Market
Value
of
Shares
or
Units of
Stock
That
Have Not
Vested
($)(4)

1,687

183,151

4,345

471,632

6,956

755,059

Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)(5)

Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(6)

56
127

6,104
13,825

1,149

124,658

2,172

235,759

3,478 377,53051

1,730

187,774

Name

Joshua D.
Schmidt

Grant
Date

. . . . . 3/15/19(11)
3/31/20(12)
3/31/2021
3/31/21(7)
3/15/2022
3/15/2022 (9)
3/31/2023
3/31/2023 (10)

Eric

Cohen (13) . . . 3/31/21(7)

(1) Amounts reported represent awards of performance-based options as part of Mr. Chen’s new hire

compensation package and annual LTCP grant which vested upon the achievement of specified
pre-approved milestones or goals.

(2)

Includes (a) threshold number of performance-based options granted for the 2021 LTCP, a portion of which
are eligible to vest on March 15, 2024, subject to the achievement of pre-approved goals established by the
Human Capital Committee, which determined achievement to be 120% of target; (b) number of
performance-based options granted for the 2021 LTCP which are eligible to vest upon the achievement of
the next specified pre-approved milestones, on the 15th of the month following certification by the Human
Capital Committee that the milestone goal was achieved, prior to December 31, 2025 (c) number of
performance-based new hire options that are eligible to vest upon achievement of the next specified
pre-approved milestone on the 15th of the month following certification by the Human Capital Committee
that the milestone goal was achieved, (d) threshold number of performance-based options granted for the
2022 LTCP, a portion of which are eligible to vest on March 15, 2025 or 2027, subject to the achievement
of pre-approved goals established by the Human Capital Committee and (d) threshold number of
performance-based options granted for the 2023 LTCP, a portion of which are eligible to vest on March 15,
2026, subject to achievement of pre-approved goals established by the Human Capital Committee.

(3) All awards granted are time-based RSUs granted under the LTCP or as part of Mr. Chen or Mr. Pankaj’s

new hire compensation packages and include outstanding dividend equivalents. All time-based RSUs vest
ratably, one third each year on the anniversary of grant date.

(4) Values reported were determined by multiplying the number of unvested time-based RSUs by $108.54, the

closing price of our common stock on December 31, 2023.

(5) Numbers reported represent the number of performance-based RSUs that would vest upon achievement of
threshold performance achievements or achievement of next specified pre-approved milestone pursuant to
awards of performance-based RSUs made under the LTCP or as part of Mr. Chen or Mr. Pankaj’s new hire
compensation packages and include dividend equivalents.

(6) Values reported were and determined by multiplying the reported number of unvested performance-based

RSUs by $108.54, the closing price of our common stock on December 31, 2023.

50

(7) Threshold number of performance-based RSUs granted for the 2021 LTCP, which are eligible to vest on
March 15, 2024, subject to the achievement of pre-approved goals established by the Human Capital
Committee; goal achievement determined to be 120% of target. Also includes number of performance-based
RSUs which are eligible to vest upon the achievement of the next specified pre-approved milestone, on the
15th of the month following certification by the Human Capital Committee that the milestone goal was
achieved, prior to December 31, 2025.

(8) Number of new hire performance-based RSUs that are eligible to vest upon achievement of the next

specified pre-approved milestone on the 15th of the month following certification by the Human Capital
Committee that the milestone goal was achieved.

(9) Number of performance-based RSUs granted for the 2022 LTCP eligible to vest at threshold. Eligible to
vest on March 15, 2025 or 2027, subject to the achievement of pre-approved goals established by the
Human Capital Committee measured as of December 31, 2024 or 2026.

(10) Number of performance-based RSUs granted for the 2023 LTCP eligible to vest at threshold. Eligible to

vest on March 15, 2026, subject to the achievement of pre-approved goals established by the Human Capital
Committee measured as of December 31, 2025.

(11) Performance-based RSUs granted for the 2019 LTCP that remain eligible to vest. A portion of the award
vested on March 15, 2022, based on the achievement of pre-approved goals established by the Human
Capital Committee; the remaining unvested portion remained eligible to vest on March 15, 2024, subject to
the achievement of the performance goals measured as of December 31, 2023; the Human Capital
Committee determined that the goal achievement was below threshold, therefore any outstanding
performance-based RSUs were forfeited.

(12) Performance-based RSUs granted for the 2020 LTCP eligible to vest upon the achievement of specified

pre-approved milestones, on the 15th of the month following certification by the Human Capital Committee
that the milestone goal was achieved, prior to December 31, 2024.

(13) Mr. Cohen forfeited his unvested RSUs in connection with his separation pursuant to the terms of the Award
Agreements. Pursuant to the terms of the Award Agreements, he remained eligible to receive a pro-rata
vesting of performance-based RSUs that were eligible to vest based on performance through the end of the
year of separation. Mr. Cohen remained eligible to vest in a pro-rata portion of his 2021 LTCP performance-
based RSUs.

Option Exercises and Stock Vested in 2023

The following table sets forth information, on an aggregated basis, concerning stock options exercised and

stock awards vested during 2023 for the NEOs.

Name

Liren Chen . . . . . . . . . . .
Richard J. Brezski . . . . . .
Eeva K. Hakoranta . . . . .
Rajesh Pankaj . . . . . . . . .
. . . . .
Joshua D. Schmidt
Eric Cohen . . . . . . . . . . .

Option Awards

Stock Awards

Number of Shares
Acquired on Exercise
(#)(1)

Value Realized on
Exercise
($)(2)

Number of Shares
Acquired on Vesting
(#)(3)

Value Realized on
Vesting
($)(4)

—
12,518
—
—
—
—

—
234,209
—
—
—
—

50,003
37,813
16,816
18,741
5,624
39,401

4,599,601
2,966,170
1,324,007
1,599,147
469,641
3,097,133

(1) Amounts reported represent the total number of shares underlying exercised options, before deductions for

tax withholdings and exercise price.

(2) Amounts reported represent the number of options exercised multiplied by the applicable market price less

the number of options exercised times the option exercise price.

51

(3)

Includes dividend equivalents accrued and paid out in additional shares of common stock upon the vesting
of the underlying awards.

(4) Amounts reported represent the number of shares vested multiplied by the closing price of our common

stock on the vesting date.

Nonqualified Deferred Compensation

In 2013, the company introduced a nonqualified deferred compensation plan to complement the 401(k) Plan.

The IRS imposes limits on the amounts that an employee may contribute annually to a 401(k) Plan account. The
deferred compensation plan provides the company’s directors and designated select group of highly compensated
employees, including the NEOs, with an opportunity to set aside additional compensation for their retirement.
Pursuant to the terms of the deferred compensation plan, each eligible employee may elect to defer base salary
and STIP payouts, and non-employee members of the Board may elect to defer Board fees, in each case, on a
pre-tax basis and up to a maximum amount selected annually by the Human Capital Committee.

An employee participant or director may allocate deferrals to one or more deemed investments under the
deferred compensation plan. The amount of earnings (or losses) that accrue to a participant’s account attributable
to deferrals depends on the performance of investment alternatives selected by the participant. The deemed
investment options are currently similar to those available under the 401(k) Plan. However, a participant’s
election of investment alternatives as measuring devices for determining the value of a participant’s account does
not represent actual ownership of, or any ownership rights in or to, the investments to which the investment
alternatives refer, nor is the company in any way bound or directed to make actual investments corresponding to
such deemed investments.

The company will not make any matching or discretionary contributions to the accounts of directors.
However, the company may, but is not required to, make matching or discretionary contributions in cash to the
accounts of employee participants. Any such company contributions are subject to a vesting schedule as
determined by the Human Capital Committee. The specific terms for each plan year, including eligible
compensation, minimum and maximum deferral amounts (by percentage of compensation) and matching terms,
are determined on an annual basis by the Human Capital Committee.

Employee participant and director account payment obligations are payable in cash on a date or dates

selected by the employee participant or director or upon certain specified events such as termination of
employment, death or disability, subject to change in certain specified circumstances. An employee participant or
director may elect to defer to a single lump-sum payment of his or her account, or may elect payments over time.

For the 2023 plan year, eligible employees could elect to defer from 1% to 40% of their base salary and
from 1% to 100% of their STIP. Matching contributions are determined on a combined plan basis taking into
account deferred amounts under both the 401(k) Plan and the deferred compensation plan. Deferral elections had
to be made by December 31, 2022. For 2023, a participant’s combined match for the 401(k) and deferred
compensation plan was 50% of the combined deferrals up to 6% of the participant’s eligible deferrals, and
matching contributions under the deferred compensation plan were deemed to be notionally invested in
investment alternatives elected by the NEO that are similar to those available to participants in the 401(k) Plan.
Matching contributions are made once annually after the end of the year. Matching contributions vest ratably
based on years of service of the participant over three years in one-third increments, with the first vesting
occurring after one year of service.

52

The following table sets forth the relevant NEO information regarding the deferred compensation plan for

2023.

Name

Executive
Contributions
in Last FY
($)(1)

Registrant
Contributions
in Last FY
($)(2)

Liren Chen . . . . . . . . . . . . . . . . . . . . . .
Richard J. Brezski . . . . . . . . . . . . . . . . .
Eeva K. Hakoranta . . . . . . . . . . . . . . . .
Rajesh Pankaj . . . . . . . . . . . . . . . . . . . .
Joshua D. Schmidt
. . . . . . . . . . . . . . . .
Eric Cohen . . . . . . . . . . . . . . . . . . . . . .

1,306,631
41,630
—
—
—
183,910

52,694
21,209
—
—
—

0

Aggregate
Earnings
in
Last FY
($)(3)

987,397
95,266
—
—
—
88,929

Aggregate
Withdrawals/
Distributions
($)

Aggregate Balance
at Last FYE
($)(4)

—
—
—
—
—
—

6,108,162
639,394
—
—
—
569,411

(1) Contributions include deferred 2023 salary amounts and deferred 2022 STIP amounts (corresponding to the
portion of the 2022 STIP amount paid in 2023). The payouts of the 2023 STIP were not made until 2024. As
a result, any deferrals of the 2023 STIP are not reflected in this column. For Messrs. Chen, Brezski and
Cohen, $282,554, $43,322, and $30,758, respectively, was included in the “Salary” column of the Summary
Compensation Table.

(2) For the 2023 plan year, the company matched deferrals up to 50% of the first 6% of the participant’s base
salary and annual bonus, determined on a combined plan basis taking into account amounts deferred under
both the 401(k) Plan and the deferred compensation plan during the 2023 calendar year. The amounts
disclosed in this column reflect matching contributions (made by the company in 2024) for 2023 NEO
deferral contributions. Amounts are included in the “All Other Compensation” column of the Summary
Compensation Table for fiscal year 2023.

(3) The company does not pay guaranteed, above-market or preferential earnings on deferred compensation.

Therefore, the amounts in this column are not included in the Summary Compensation Table. Balances
include earnings (losses) credited to the NEO’s account from notional investment alternatives elected by the
NEO from alternatives that are similar to those available to participants in the 401(k) Plan.

(4) Aggregate balance consists of employee contributions made in 2013 through 2023, company matching

contributions for 2013 through 2023 and notional investment earnings through 2023.

Set forth below are the amounts reported in the aggregate balance that were previously reported in the
“Salary,” “Non-Equity Incentive Plan Compensation” and “All Other Compensation” columns of the
Summary Compensation Table for fiscal years 2013 through 2022, in the aggregate:

Name

Liren Chen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard J. Brezski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eeva K. Hakoranta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rajesh Pankaj
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joshua D. Schmidt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric Cohen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Salary
($)

477,692
342,482
—
—
—
86,130

Non-Equity
Incentive Plan
Compensation
($)

All Other
Compensation
($)

916,880
19,500
—
—
—
161,560

3,004,237
104,388
—
—
—
56,479

The deferred compensation plan was implemented in 2013. Therefore, there are no amounts included that

were reported as compensation to any NEO prior to 2013.

53

Potential Payments upon Termination or Change in Control

InterDigital, Inc. Executive Severance and Change in Control Policy

As discussed above in “Compensation Discussion and Analysis,” our NEOs are eligible for benefits
pursuant to the Executive Severance Policy, which provides for severance pay and benefits, among other things,
in certain events of termination of employment, as described below.

Pursuant to the terms of the Executive Severance Policy, in the event of a termination other than for Cause,
death or disability, and provided the NEO executes a separation agreement in a form acceptable to the company
(which may include, among other things, a broad release of all claims against the company, a non-disparagement,
a non-solicitation and other standard restrictive covenant provisions) (a “Separation Agreement”), the NEO
would be entitled to receive: (i) severance in an amount equal to one and a half times base salary then in effect
(or, in the case of our Chief Executive Officer two times the sum of his base salary then in effect) paid over a
period of 18 months; (ii) health coverage on terms and conditions comparable to those most recently provided for
the period of one year (or, in the case of our Chief Executive Officer, 18 months) commencing upon the date of
termination; (iii) outplacement services in an amount not to exceed $10,000, paid by the company directly to the
entity providing such services and (iv) pro-rata vesting of outstanding equity awards pursuant to the terms of the
applicable award agreements.

If the company terminates an NEO other than for Cause or such NEO terminates employment with us for
Good Reason, in each case within one year (in the case of our Chief Executive Officer, two years) following a
Change in Control of the company and provided that he or she executes a Separation Agreement, pursuant to the
terms of the Executive Severance Policy, the NEO would be, entitled to (i) severance in an amount equal to two
times base salary then in effect (in the case of our Chief Executive Officer, two and one half times ) plus one
times the target bonus under the STIP then in effect and (ii) an amount equal to the cost of continued health
coverage on terms and conditions comparable to those most recently provided for the period of 24 months, in
each case, paid in a lump sum 60 days after date of termination. Termination for Good Reason means the NEO’s
resignation of employment with the company follows the occurrence of one or more of the following, in each
case without the NEO’s consent: (i) a material diminution in the NEO’s base salary or in the NEO’s target bonus
opportunity under the STIP as in effect for the year in which the termination occurs; (ii) a material diminution in
the NEO’s title, authority, duties or responsibilities; (iii) a material failure to comply with payment of the NEO’s
compensation; (iv) relocation of the NEO’s primary office more than 50 miles from the NEO’s current office; or
(v) any other action or inaction that constitutes a material breach by the company of the Executive Severance
Policy or the company’s NDAIA.

Under the Executive Severance Policy, Change in Control has the same meaning as set forth in the

company’s 2017 Equity Plan.

The following table summarizes the benefits that become payable to an NEO at, or following, retirement,

resignation, Change in Control, qualifying termination after Change in Control, termination with Cause,

54

resignation with Good Reason, and termination due to death or disability, including severance payments payable
pursuant to the Executive Severance Policy as well as the vesting of outstanding equity awards:

Resignation/
Retirement (1)

Resignation
for Good
Reason (2)

Severance/Cash (5)

NA

CEO and Chief
Licensing
Officer

NA

NA

18 mths
COBRA

NA

As elected by Employee

Death or
Disability

NA

Life
Insurance/
Disability

NA

Immediate
lump sum
payment

Change in
Control (CIC)

Qualified
Termination
following CIC
(4)

NA

per Executive
Severance Policy

NA

24 mths COBRA

Involuntary
Termination
w/o Cause (3)

per
Executive
Severance
Policy

CEO - 18 mths
COBRA
NEOs - 12 mths
COBRA

NA

NA

100% STIP

As elected by
Employee

Immediate
lump sum
payment

NA

Forfeit unvested awards

Pro-rata vesting

Forfeit unvested awards

Pro-rata vesting of
performance-based equity that
is in their last year of the
applicable performance period

Forfeit unvested awards

Forfeit unvested awards

Vest in full

Forfeit unvested awards

Pro-rata vesting of
performance-based equity that
is in the last year of the
applicable performance period

Awards must
be assumed
or substituted
by successor
or vest in full

Awards must
be assumed
or substituted
by successor
or vest in full

Vest in Full

CEO - vest at
greater of
target or
performance
for 2021 LTCP;
all other
outstanding
vest at target

Vest in full

Vest at greater
of target or
performance
if term
within 2
years of
Change in
Control

Life, health &

other benefits

STIP

Deferred

Compensation
Plan (6)

LTCP

Time-based
RSUs (7)

PSUs (8)

Performance-

based options (8)

CEO - New Hire
Equity Award

Time-based
RSUs

PSUs

Performance-

based options

Forfeit unvested awards

55

(1) The retirement of an NEO would trigger the distribution of such NEO’s deferred amounts under the deferred

compensation plan, if applicable, in accordance with his or her applicable distribution elections.

(2)

If Mr. Chen resigns for Good Reason (outside a Change in Control period), as defined in the Chen Offer
Letter, he is eligible for severance and benefits per the Executive Severance Policy and is also eligible for
accelerated vesting pursuant to the terms of his equity award agreements. Ms. Hakoranta, pursuant to the
terms of her employment agreement, is eligible for severance in the amount of 150% of base salary &
pro-rata portion of STIP if she resigns for Good Reason, as defined in the 2017 Equity Plan.

(3) Pursuant to the terms of the Chen Offer Letter and as applicable to the Executive Severance Policy, new hire

equity award agreements and 2021 LTCP equity agreements, Cause is defined as follows: (i) acts or
omissions constituting gross negligence, recklessness or willful misconduct with respect to Mr. Chen’s
obligations to the company, in each case which results in material harm to the business or reputation of the
company; (ii) willful and material breach of his Nondisclosure and Assignment of Ideas Agreement
(“NDAIA”); (iii) a conviction or entry of a plea of nolo contendere for fraud, misappropriation or
embezzlement, any felony, or any crime of moral turpitude; or (iv) the willful neglect of duties as
determined in the sole and exclusive discretion of the Board of Directors.

(4) Qualified Termination following Change in Control occurs if terminated without Cause or for Good Reason
within 24 months post Change in Control for Mr. Chen or within 12 months post Change in Control for
other NEOs. Under the Executive Severance Policy, Change in Control has the same meaning as set forth in
the company’s 2017 Equity Plan. Termination for Good Reason means the NEO’s resignation of
employment with the company follows the occurrence of one or more of the following, in each case without
the NEO’s consent: (i) a material diminution in the NEO’s base salary or in the NEO’s target bonus
opportunity under the STIP as in effect for the year in which the termination occurs; (ii) a material
diminution in the NEO’s title, authority, duties or responsibilities; (iii) a material failure to comply with
payment of the NEO’s compensation; (iv) relocation of the NEO’s primary office more than 50 miles from
the NEO’s current office; or (v) any other action or inaction that constitutes a material breach by the
company of the Executive Severance Policy or the company’s NDAIA.

(5) For a Qualified Termination of Mr. Chen after second anniversary of hire date, 200% of base salary and
18 months COBRA. For Ms. Hakoranta – if terminated for any reason other than summary dismissal,
including resignation for Good Reason, eligible for severance in the amount of 150% of base salary &
pro-rata portion of STIP. For other NEOs – per terms of Executive Severance Policy, 150% of base salary.

(6) See “Aggregate Balance at Last FYE” column in “Nonqualified Deferred Compensation Table” for amounts
payable for all NEOs. If an NEO’s employment terminates with the company for any reason, the NEO
would receive a distribution of deferred amounts under the deferred compensation plan, including the vested
portion of any company matching or discretionary contributions, in accordance with the NEO’s applicable
distribution elections. However, in the event of a termination due to death, the NEO would receive the
balance of deferred compensation account in a lump sum as soon as administratively practicable. In the
event the NEO is involuntarily terminated by the company for Cause, the NEO would receive the balance of
the deferred compensation account in a lump sum within 90 days of the date of termination. In the event of a
Change in Control, as defined by the deferred compensation plan, the NEO would receive a distribution of
the account balance in a lump sum as soon as administratively practicable, but in no event later than 30 days
from the effective date of the Change in Control.

(7)

If an NEO’s employment terminates due to death or disability or the NEO is terminated by the company
without Cause, the NEO would be entitled to pro-rata vesting of all time-based RSUs. The pro-rata portion of
each grant is determined by multiplying the total number of RSUs by a fraction equal to the number of days
during the period beginning on the grant date or most recent vest date and ending on the original vesting date
(“Restricted Period”) for which the NEO was employed by the total number of days during the Restricted
Period. In the event of a termination without Cause, the prorated vesting is conditioned upon the NEO’s
execution of a release of claims in favor of the company within 60 days following termination of employment.

56

(8)

If an NEO’s employment is terminated by the company without Cause or by reason of the NEO’s death or
disability during the last year of a Performance Period for performance-based RSUs or performance-based
options, the performance-based RSUs or options will vest as to a prorated portion (based on the number of
days the NEO was employed during the applicable performance period) of the number of RSUs or options
that would have otherwise vested according to actual performance during the performance period. In the
event of a termination without Cause, the prorated vesting is conditioned upon the NEO’s execution of a
release of claims in favor of the company within 60 days following termination of employment.

Post-Termination Obligations

Each of the NEOs is bound by certain confidentiality obligations, which extend indefinitely. In addition,

each of the NEOs is bound by certain covenants protecting our right, title and interest in and to certain
intellectual property that either has been or is being developed or created in whole or in part by the NEO.

Taxes

In the event that the payments made to an NEO upon termination constitute “parachute payments” pursuant

to Section 280G of the Code, the Executive Severance Policy provides that the payments will be either
(i) reduced to such lesser amount that would result in no amount being subject to excise tax or (ii) made in full,
whichever produces the larger after-tax net benefit to the NEO. The Executive Severance Policy does not provide
for an excise tax “gross-up.”

Payments upon Termination without Cause – Eric Cohen

Pursuant to the term of the Executive Severance Policy, as a result of Mr. Cohen’s separation from
InterDigital he was entitled to and did receive (i) severance in an amount equal to one and a half times his base
salary then in effect; (ii) health coverage on terms and conditions comparable to those most recently provided for
the period of one year; (iii) outplacement services and (iv) pro-rata vesting of outstanding equity awards pursuant
to the terms of the applicable award agreement. See “Summary Compensation Table”

Potential Payments upon Termination or Change in Control

The following table reflects the potential payments and benefits that would be provided to each NEO upon:

(i) Resignation or Retirement; (ii) resignation by Mr. Chen or Ms. Hakoranta for Good Reason unrelated to a
Change in Control; (iii) termination due to disability or death; (iv) termination without Cause; (vi) termination by
the company without Cause or by Mr. Chen within two years of a Change in Control or by an NEO for Good
Reason within one year of a change in control of the company; and (vii) Change in Control of the company
without a termination.

The amounts shown assume that the termination (or the Change in Control in the case of (vii)) was effective
as of December 31, 2023, and the price per share used to calculate the value of the company’s stock awards was
$108.54, the per share closing market price of our common stock on December 31, 2023. The amounts reflected
are estimates of the amounts that would have been paid to the NEOs upon their termination pursuant to existing
terms in place at December 31, 2023. In addition, note that the tables below do not take into account the cutback
provision described above under “Termination Scenarios — Taxes.” As a result, the actual amounts paid could

57

be lower than what is presented. The actual amounts to be paid can be determined only at the time the events
described above actually occur.

Voluntary
Termination /
Retirement

Resignation
for Good
Reason

Termination
w/o Cause

Death or
Disability

Change in
Control (w/o
Termination)

—
—

—
—
—

1,420,000(1)

1,420,000(1)

—

—

—
—

22,546(4)
2,074,091(7)
4,906,781(8)

22,546
2,074,091
4,906,781

$ 750,000/

20,000(5)

2,074,091
4,906,781

—
—

—
—
—

Change in
Control
(termination or
resignation for
Good Reason)

1,775,000(2)
745,500(3)

30,061(6)

2,074,091
16,374,709(9)

Lawrence Chen

Severance . . . . . . . . . . . . .
STIP . . . . . . . . . . . . . . . . .
Life, Health & Other

Benefits . . . . . . . . . . . . .
New Hire Equity . . . . . . . .
LTCP . . . . . . . . . . . . . . . .
Deferred Compensation

Plan . . . . . . . . . . . . . . . .

6,108,162(10) 6,108,162

6,108,162

6,108,162

6,108,162

Richard Brezski

Severance . . . . . . . . . . . . .
STIP . . . . . . . . . . . . . . . . .
Life, Health & Other

Benefits . . . . . . . . . . . . .
LTCP . . . . . . . . . . . . . . . .
Deferred Compensation

—
—

—
—

—
—

—
—

660,000(11)
—

—
—

25,191(13)
1,793,497(14)

660,000/

20,000(5)

1,793,497

—
—

—
—

880,000(12)
330,000(3)

50,382 (6)
5,558,827(15)

Plan . . . . . . . . . . . . . . . .

639,394(10)

639,394

639,394

639,394

639,394

Eeva K. Hakoranta

Severance . . . . . . . . . . . . .
STIP . . . . . . . . . . . . . . . . .
Life, Health & Other

Benefits . . . . . . . . . . . . .
LTCP . . . . . . . . . . . . . . . .
Deferred Compensation

Plan . . . . . . . . . . . . . . . .

Rajesh Pankaj

Severance . . . . . . . . . . . . .
STIP . . . . . . . . . . . . . . . . .
Life, Health & Other

Benefits . . . . . . . . . . . . .
LTCP . . . . . . . . . . . . . . . .
Deferred Compensation

Plan . . . . . . . . . . . . . . . .

Joshuah D. Schmidt

Severance . . . . . . . . . . . . .
STIP . . . . . . . . . . . . . . . . .
Life, Health & Other

Benefits . . . . . . . . . . . . .
LTCP . . . . . . . . . . . . . . . .

—
—

—
—

—

—
—

—
—

—

—
—

—
—

682,500
341,250(16)

682,500
341,250(16)

4,545(17)
961,294(14)

4,545
961,294

9,350(18)

961,294

—

—
—

—
—

—

—
—

—
—

—

735,000(11)
—

25,114(13)
1,949,235(14)

—

—

735,000/

20,000(5)

1,949,235

—

—

600,000(12)

8,361(13)
791,284(14)

600,000 /

20,000(5)

791,284

—
—

—

—

—
—

—

—

—
—

—
—

910,000
341,250(3)

9,090(19)
2,921,695(15)

—

980,000(12)
367,500(3)

50,229(6)
8,273,729(15)

—

800,000(12)
240,000(3)

16,723(6)
2,936,956(15)

(1) The amount represents a cash severance payment equal to 200% of the sum of Mr. Chen’s base salary in the
case of resignation for Good Reason or termination without Cause, per the Terms of the Chen Offer Letter.

(2) The amount represents a cash severance payment equal to two and one-half times the sum of Mr. Chen’s
base salary in case of termination within twenty-four months of a Change in Control per the terms of the
Chen Offer Letter.

(3) The amount represents the NEO’s STIP paid out at target for resignation for Good Reason or termination

without Cause within 12 months of a Change in Control (or in the case of Mr. Chen, 24 months).

58

(4) The amount represents the value of health coverage pursuant to COBRA for a period of 18 months after
termination on terms and conditions comparable to those most recently provided to Mr. Chen as of
December 31, 2023, pursuant to the Executive Severance Policy.

(5) The amount represents the payment prescribed under our basic term life insurance program calculated as
follows: 1.5 times base salary, up to a maximum of $750,000 and the monthly benefit that would become
payable to Mr. Chen under our executive long term disability plan in the event of his termination due to
disability on December 31, 2023, calculated as follows: 60% of his monthly earnings (i.e., pre-tax base
salary and annual bonus), up to $10,000, and a supplemental monthly payment of up to $10,000. Monthly
benefits would be payable until the earlier of (a) the date he ceases to be totally disabled or (b) his
65th birthday.

(6) The amount represents the value of health coverage pursuant to COBRA for a period of 24 months after
termination on terms and conditions comparable to those most recently provided to the NEO as of
December 31, 2023, pursuant to the Executive Severance Policy.

(7) The amount represents a full vesting of Mr. Chen’s time-based new hire equity awards, pro-rata vesting of

his new hire performance-based RSU and new hire options per the terms of the Chen Offer Letter and award
agreements. All RSU amounts include accrued dividend equivalents, which are paid out in the form of
additional shares of common stock at the time, and only to the extent, that the awards vest.

(8) The amount represents pro-rata vesting of Mr. Chen’s 2021, 2022 and 2023 LTCP Awards (time-based

RSUs, performance-based RSUs and performance-based options). Performance-based awards represented at
actual performance achievement as of December 31, 2023.

(9) The amount represents the vesting of Mr. Chen’s 2021, 2022 and 2023 LTCP Awards upon resignation for
Good Reason or termination without Cause within 24 months of a Change in Control. Performance-based
awards represented at actual performance achievement as of December 31, 2023.

(10) This amount represents the balance, at December 31, 2023, of the NEOs deferred compensation plan

account (including matching contributions), which is payable (a) upon retirement, disability or his voluntary
termination of employment with the company for any reason pursuant to the NEO’s deferral elections,
(b) upon death, in a lump sum as soon as administratively practicable following his death, (c) upon an
involuntary termination by the company, in a lump sum within 90 days of the date of termination and
(d) upon a Change in control, in a lump sum as soon as administratively practicable, but in no event later
than 30 days from the effective date of the Change in control.

(11) The amount represents cash payments under our Executive Severance Policy equal to 1.5 times an NEO’s

base salary.

(12) The amount represents cash payments under our Executive Severance Policy equal to two times an NEO’s

base salary.

(13) The amount represents the value of health coverage pursuant to COBRA for a period of 12 months after

termination on terms and conditions comparable to those most recently provided to NEO as of
December 31, 2023 pursuant to the Executive Severance Policy.

(14) This amount represents the value, at December 31, 2023, of the NEO’s outstanding performance-based

RSUs granted for the 2019 and 2021 LTCP cycles and time-based and performance-based RSUs granted for
the 2021, 2022 and 2023 LTCP cycles that would vest upon termination due to disability, death or
termination by the company without Cause. Pursuant to the terms of the awards, the NEO would forfeit
eligibility to receive any payout of performance-based RSUs granted for the 2020, 2022 and 2023 LTCP
since a termination on December 31, 2023, would not be in the final year of the applicable performance
periods. For time-based RSU awards, the amounts were prorated based on the portion of the vesting period
that would have transpired prior to cessation of employment. For the performance-based RSU award granted
for the 2019 and 2021 LTCP (the performance period for which ended December 31, 2023), the amount
reflects the actual payout of 0% of target for 2019 LTCP and 120% of target for the 2021 LTCP (based on

59

actual performance over the performance period) prorated based on the portion of the vesting period that
would have transpired prior to cessation of employment. All RSU amounts include accrued dividend
equivalents, which are paid out in the form of additional shares of common stock at the time, and only to the
extent, that the awards vest.

(15) This amount represents the value, at December 31, 2023, of the NEO’s unvested time-based RSUs and

performance-based RSUs awards granted for the 2019, 2020, 2021, 2022 and 2023 LTCPs that would vest
upon termination (by us without Cause or by the NEO for Good Reason) within one year following a
Change in Control. All performance-based RSU awards would be paid out at target. All RSU amounts
include accrued dividend equivalents, which are paid out in the form of additional shares of common stock
at the time, and only to the extent, that the awards vest.

(16) This amount represents the pro-rata STIP payment that would be paid out upon resignation for Good Reason

or termination without cause, pursuant to the terms of Ms. Hakoranta’s employment agreement.

(17) This amount represents the annual cost of business travel insurance, health insurance and statutory group

insurances which would be paid for 12 months upon termination without Cause or for 24 months upon
termination without Cause or resignation for Good Reason within 12 months after a Change in Control.

(18) This amount represents the statutory group life insurance benefit for which employees in Finland are

entitled.

60

Pay Versus Performance

In accordance with rules adopted by the SEC, we provide the following disclosure regarding executive
“Compensation Actually Paid” or “CAP” (as calculated in accordance with SEC rules) and certain Company
performance for the fiscal years listed below. You should refer to our Compensation Discussion & Analysis
(“CD&A”) in this proxy statement for a complete description of how executive compensation relates to Company
performance and how the Human Capital Committee makes its decisions.

Year-end value of $100
invested on 12/31/2019 in:

Summary
Compensation
Table Total
for Liren
Chen(1)
$

Summary
Compensation
Table Total
for William
Merritt(2)
$

Compensation
Actually Paid
to Liren
Chen(1)(3)(4)(5)
$

Compensation
Actually Paid
to William
Merritt(2)(3)(4)(5)
$

Year

Average
Summary
Compensation
Table Total
for Non-CEO
NEOs(6)
$

Average
Compensation
Actually Paid
to Non-CEO
NEOs(3)(4)(5)(6)
$

4,773,160
2023 . . .
2022 . . .
4,824,787
2021 . . . 10,824,838
0
2020 . . .

0
0
1,570,440
2,642,504

20,846,309
8,473,818
19,400,708
0

0
0
-711,223
3,740,057

1,951,371
2,660,110
1,426,410
1,218,153

4,854,811
3,432,926
2,407,305
1,067,958

NASDAQ
Telecommuni-
cations Total
Shareholder
Return
$

Net Income
(in millions)
$

Adjusted
EBITDA(7)
(in millions)
$

Revenue
(in millions)
$

107.36
95.61
127.87
122.04

214.1
93.7
55.3
44.8

309.4
254.5
208.0
155.3

549.6
457.8
425.4
359.0

IDCC
$

217.89
97.42
137.70
114.28

(1) Liren Chen became CEO of the Company on April 5, 2021.

(2) William Merritt served as CEO until his retirement on April 5, 2021.

(3) Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate Compensation Actually

Paid include:

2023

2022

Average
Non-CEO
NEOs

Liren
Chen

Average
Non-CEO
NEOs

Liren Chen

Total Compensation from Summary Compensation Table . . . . . . . . . . . . . . . . . . . . $ 4,773,160 $ 1,951,371 $ 4,824,787 $ 2,660,110
Adjustments for Pension

Adjustment Summary Compensation Table Pension . . . . . . . . . . . . . . . . . . . . . . . . . . $
Amount added for current year service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Amount added for prior service cost impacting current year . . . . . . . . . . . . . . . . . . . . $

Total Adjustments for Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments for Equity Awards

— $
— $
— $

— $

— $
— $
— $

— $

— $
— $
— $

— $

—
—
—

—

Adjustment for grant date values in the Summary Compensation Table . . . . . . . . . . . $ (3,000,000) $(1,389,000) $(2,200,025) $(1,575,024)
Year-end fair value of unvested awards granted in the current year . . . . . . . . . . . . . . . $ 3,746,424 $ 1,132,367 $ 5,249,160 $ 1,866,893
Year-over-year difference of year-end fair values for unvested awards granted in

prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,099,191 $ 2,496,989 $
21,016 $

Fair values at vest date for awards granted and vested in current year . . . . . . . . . . . . . $
Difference in fair values between prior year-end fair values and vest date fair values

— $

783,791 $
—

532,141

for awards granted in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,227,534 $
— $
— $

Forfeitures during current year equal to prior year-end fair value . . . . . . . . . . . . . . . . $
Dividends or dividend equivalents not otherwise included in total compensation . . . . $

642,967 $ (183,895) $
— $
— $

— $
— $

(51,194)
—
—

Total Adjustments for Equity Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,073,149 $ 2,903,440 $ 3,649,031 $

772,816

Compensation Actually Paid (as calculated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,846,309 $ 4,854,811 $ 8,473,818 $ 3,432,926

61

2021

William
Merritt

2020

Average
Non-CEO
NEOs

William
Merritt

Average
Non-CEO
NEOs

Liren Chen

Total Compensation from Summary Compensation Table . . . . . . . . . . . $10,824,838 $ 1,570,440 $1,426,410 $ 2,642,504 $1,218,153
Adjustments for Pension

Adjustment Summary Compensation Table Pension . . . . . . . . . . . . . . . . $
. . . . . . . . . . . . . . . . . . . . . . . $
Amount added for current year service cost
. . . . . . . . . . $
Amount added for prior service cost impacting current year

Total Adjustments for Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments for Equity Awards

Adjustment for grant date values in the Summary Compensation

— $
— $
— $

— $

— $
— $
— $

— $

— $
— $
— $

— $

— $
— $
— $

— $

—
—
—

—

Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (5,219,984) $
Year-end fair value of unvested awards granted in the current year . . . . . $ 7,850,314 $
Year-over-year difference of year-end fair values for unvested awards

— $ (637,515) $(1,083,348) $ (397,237)
— $ 907,588 $ 2,102,469 $ 558,750

granted in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Fair values at vest date for awards granted and vested in current year . . . $ 5,945,540 $
Difference in fair values between prior year-end fair values and vest date

— $(1,601,770) $ 623,362 $
— $
— $

611,174 $ (569,990)
681,993 $ 475,054

fair values for awards granted in prior years . . . . . . . . . . . . . . . . . . . . . $
Forfeitures during current year equal to prior year-end fair value . . . . . . . $
Dividends or dividend equivalents not otherwise included in total

— $ (679,893) $
— $
— $

87,459 $(1,214,735) $ (216,773)

— $

— $

compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $

— $

— $

— $

—

—

Total Adjustments for Equity Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,575,870 $(2,281,663) $ 980,895 $ 1,097,553 $ (150,195)

Compensation Actually Paid (as calculated) . . . . . . . . . . . . . . . . . . . . . . . $19,400,708 $ (711,223) $2,407,305 $ 3,740,057 $1,067,958

(4) The following summarizes the valuation assumptions used for stock option awards included as part of

Compensation Actually Paid:

• Expected life of each stock option is based on the “simplified method” using an average of the

remaining vest and remaining term, as of the vest/FYE date.

•

Strike price is based on each grant date closing price and asset price is based on each vest/FYE closing
price.

• Risk free rate is based on the Treasury Constant Maturity rate closest to the remaining expected life as

of the vest/FYE date.

• Historical volatility is based on daily price history for each expected life (years) prior to each vest/FYE

date. Closing prices provided by S&P Capital IQ are adjusted for dividends and splits.

• Represents annual dividend yield on each vest/FYE date.

(5) Assumptions used in the valuation of equity awards for purposes of calculating Compensation Actually Paid
were materially the same as at grant date, except for adjusting for expected performance of performance-
based RSUs at each measurement date.

(6) Non-CEO NEOs reflect the average Summary Compensation Table total compensation and average

Compensation Actually Paid for the following executives by year:

2023: Richard Brezski; Eric Cohen, Eeva Hakoranta; Rajesh Pankaj; Joshua Schmidt
2022: Richard Brezski; Eric Cohen; Eeva Hakoranta; Rajesh Pankaj
2021: Richard Brezski; Eric Cohen; Eeva Hakoranta; Henry Tirri
2020: Richard Brezski; Richard Gulino; Kai Öistämö

(7) Adjusted EBITDA is a non-GAAP financial measure. See Appendix A for an explanation of this metric and

a detailed reconciliation to the most directly comparable GAAP measure.

62

Most Important Performance Measures

In our assessment, the most important performance measures used to link CAP (as calculated in accordance
with the SEC rules) to Company performance are listed below. The role of each of these performance measures
in our executive compensation program is discussed in the CD&A.

• Adjusted EBIDTA

• Revenue

Descriptions of the Information Presented in the Pay Versus Performance Table

The illustrations below compare CAP (as calculated in accordance with the SEC rules) and the following

measures:

•

•

•

•

the Company’s cumulative TSR and the NASDAQ Telecommunications Index’s cumulative TSR;

the Company’s Net Income;

the Company’s Adjusted EBITDA; and

the Company’s Revenue.

CAP vs. TSR

 $25,000

 $20,000

 $15,000

 $10,000

)
s
0
0
0
$
(
n
o
i
t
a
s
n
e
p
m
o
C

 $5,000

 $-

 $25,000

 $20,000

 $15,000

 $10,000

)
s
0
0
0
$
(
n
o
i
t
a
s
n
e
p
m
o
C

 $5,000

 $-

T
o
t
a
l
S
h
a
r
e
h
o
l
d
e
r
R
e
t
u
r
n
o
n
$
1
0
0
I
n
v
e
s
t
e
d
a
t

B
e
g
i
n
n
i
n
g
o
f
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d

 $240.00

 $210.00

 $180.00

 $150.00

 $120.00

 $90.00

 $60.00

 $30.00

 $-

0202

1202

2202

3202

CEO Compensation Actually Paid

Average NEO Compensation Actually Paid

IDCC value of $100 Invested 12/31/19

NASDAQ Telecommunications value of $100 Invested 12/31/19

CAP vs. Net Income

$225

$200

$175

$150

$125

$100

$75

$50

$25

$0

N
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t

I
n
c
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m
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(
$
M

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l
.
)

0202

1202

2202

3202

CEO Compensation Actually Paid

Average NEO Compensation Actually Paid

Net Income ($Mil.)

63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAP vs. ADJUSTED EBITDA

0202

1202

2202

3202

CEO Compensation Actually Paid

Average NEO Compensation Actually Paid

ADJUSTED EBITDA ($Mil.)

CAP vs. Revenue

 $25,000

 $20,000

 $15,000

 $10,000

 $5,000

)
s
0
0
0
$
(
n
o
i
t
a
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C

 $-

)
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0
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$
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t
a
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p
m
o
C

 $25,000

 $20,000

 $15,000

 $10,000

 $5,000

 $-

0202

1202

2202

3202

CEO Compensation Actually Paid

Average NEO Compensation Actually Paid

Revenue ($Mil.)

A
D
J
U
S
T
E
D
E
B
I
T
D
A

(
$
M

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l
.
)

$300

$250

$200

$150

$100

$50

$0

 $600

 $500

 $400

 $300

 $200

R
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$
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 $100

 $-

64

 
 
 
 
 
 
Chief Executive Officer Pay Ratio

We believe our executive compensation program must be consistent and internally equitable to motivate our

employees to perform. The Human Capital Committee monitors the relationship between the pay of our
executive officers and the pay of our non-executive employees. The Human Capital Committee reviewed a
comparison of our Chief Executive Officer’s annual total compensation in fiscal year 2023 to that of the median
of all other employees for that same period.

Our Chief Executive Officer’s total 2023 compensation, as set forth in the Summary Compensation Table

above, was $4,773,160. A new median employee was identified in 2023. The median employee’s total 2023
compensation was approximately $170,724, making our Chief Executive Officer’s pay in 2023 approximately
28 times the pay of our median employee.

The pay ratio described above is a reasonable estimate calculated in a manner consistent with Item 402(u) of

Regulation S-K. The median employee was identified in by determining the compensation for each employee
using the following consistently applied compensation measures:

• Annual Salary for fiscal year;

• Annual incentive bonus target (i.e., STIP award); and

• Grant date fair value of equity awards (or long-term cash compensation award) granted during fiscal

year.

Our calculation includes all employees in the United States, Belgium, Canada, China, Finland, France and

United Kingdon, as of December 31, 2023. We applied U.S. exchange rates to the compensation elements paid in
non-U.S. dollars.

65

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes the company’s equity compensation plan information relating to the

common stock authorized for issuance under the company’s equity compensation plans as of December 31, 2023:

(a)
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights(1)

(b)
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights

(c)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(excluding securities
reflected in column (a))(2)

1,834,457

$66.79

1,430,842

—
1,834,457

—
$66.79

—

1,430,842

Plan Category

Equity compensation
plans approved by
InterDigital
shareholders . . . . . . . .

Equity compensation

plans not approved by
InterDigital
shareholders(3) . . . . . .
. . . . . . . . . . . . . . . .

Total

(1) Column (a) includes 661,032 shares of common stock underlying outstanding time-based RSU awards,

451,801 shares of common stock underlying outstanding performance-based RSU awards, 698,901 shares of
common stock underlying outstanding stock options, and 22,723 dividend equivalents credited in respect of
unvested RSU awards. For Mr. Chen’s new hire performance-based RSUs and performance-based stock
options, these amounts assume a maximum payout of 300% of target; all other performance-based RSUs
and performance-based stock options assume a maximum payout of 200% of target. Because there is no
exercise price associated with RSUs, these awards are not included in the weighted-average exercise price
calculation presented in column (b). Dividend equivalents are paid in shares of common stock at the time,
and only to the extent, that the related RSU awards vest.

(2) On June 17, 2017, the company’s shareholders adopted and approved the 2017 Equity Plan. On June 2,

2021, the company’s shareholders adopted and approved an amendment to the 2017 Equity Plan approving
an additional 1,780,000 shares available under the plan. The 2017 Equity Plan provides for grants of stock
options, stock appreciation rights, restricted stock, RSUs, performance units, performance shares and
incentive cash bonuses. Amounts reported relate to securities available for future issuance under the 2017
Equity Plan, as amended.

(3) The company does not have any awards outstanding or shares remaining available for grant under equity

compensation plans not approved by its shareholders.

66

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

How many shares of the company’s common stock do the directors, director nominees, executive officers and
certain significant shareholders own?

The following table sets forth information regarding the beneficial ownership of the 25,602,295 shares of our

common stock outstanding as of March 31, 2024, except as otherwise indicated below, by each person who is
known to us, based upon filings with the SEC, to beneficially own more than 5% of our common stock, as well as
by each director, each director nominee, each NEO and all directors and executive officers as of the date of this
proxy statement as a group. Except as otherwise indicated below and subject to the interests of spouses of the named
beneficial owners, each named beneficial owner has sole voting and sole investment power with respect to the stock
listed. None of the shares reported are currently pledged as security for any outstanding loan or indebtedness. If a
shareholder holds options or other securities that are exercisable or otherwise convertible into our common stock
within 60 days of March 31, 2024, pursuant to SEC rules, we treat the common stock underlying those securities as
beneficially owned by that shareholder, and as outstanding shares when we calculate that shareholder’s percentage
ownership of our common stock. However, pursuant to SEC rules, we do not consider that common stock to be
outstanding when we calculate the percentage ownership of any other shareholder. The table below excludes
dividends and dividend equivalent units that will be payable on April 24, 2024.

Name

Directors and Director Nominees:
Derek Aberle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Samir Armaly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joan H. Gillman(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
S. Douglas Hutcheson(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John A. Kritzmacher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pierre-Yves Lesaicherre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John D. Markley, Jr.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jean F. Rankin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Named Executive Officers:
Richard J. Brezski(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liren Chen(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric Cohen(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eeva K. Hakoranta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rajesh Pankaj . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Josh Schmidt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All directors, director nominees and executive officers as a group

Common Stock

Shares

Percent
of Class

5,729
3,892
2,341
8,398
19,584
4,103
6,777
27,478

90,431
404,390
12,521
11,439
8,766
9,219

*
*
*
*
*
*
*
*

*
1.6%
*
*
*
*

(13 persons)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

602,547

2.3%

Greater Than 5% Shareholders:
BlackRock, Inc.(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,390,364

17.2%

50 Hudson Yards

New York, New York 10001

The Vanguard Group(7)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,217,502

12.6%

100 Vanguard Boulevard

Malvern, Pennsylvania 19355

*

Represents less than 1% of our outstanding common stock.

(1) Does not include shares of common stock that have vested but have been deferred or dividend equivalents

that have accrued on vested but deferred shares.

(2)

Includes 1,969 shares of common stock beneficially owned by Mr. Brezski through participation in the
401(k) Plan, as of the most recently published account statement provided by the plan administrator.

67

(3)

Includes 290,559 shares of common stock that Mr. Chen has the right to acquire through the exercise of
stock options.

(4) Mr. Cohen was not an executive officer of the company as of March 31, 2024, but is an NEO for purposes

of this proxy statement.

(5)

Includes: 290,559 shares of common stock that all directors, director nominees and executive officers as a
group have the right to acquire through the exercise of stock options and 1,969 shares of common stock
beneficially owned by all directors, director nominees and executive officers as a group through
participation in the 401(k) Plan.

(6) As of December 31, 2023, based on information contained in the Schedule 13G/A filed on January 22, 2024

by BlackRock, Inc. With respect to the shares beneficially owned, BlackRock, Inc. reported that it has sole
voting power with respect to 4,358,711 shares and sole dispositive power with respect to 4,390,364 shares.

(7) As of December 31, 2023, based on information contained in the Schedule 13G/A filed on February 13,

2024 by The Vanguard Group. With respect to the shares beneficially owned, the Vanguard Group reported
that it has shared voting power with respect to 48,864 shares, sole dispositive power with respect to
3,139,952 shares and shared dispositive power with respect to 77,550 shares.

68

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Person Transaction Procedures

The company has a written statement of policy with respect to related person transactions that is

administered by the Audit Committee. Under the policy, a “Related Person Transaction” means any transaction,
arrangement or relationship (or any series of similar transactions, arrangements or relationships) between the
company (including any of its subsidiaries) and a Related Person, in which the related person had, has or will
have a direct or indirect interest. A “Related Person” includes any of our executive officers, directors or director
nominees, any shareholder owning in excess of 5% of our common stock, any immediate family member of any
of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is
employed as an executive officer or is a partner or principal or in a similar position or in which such person has a
5% or greater beneficial ownership interest. Related Person Transactions do not include certain transactions
involving only director or executive officer compensation, transactions where the Related Person receives
proportional benefits as a shareholder along with all other shareholders, transactions involving competitive bids,
transactions involving certain bank-related services or certain other immaterial transactions.

Pursuant to the policy, a Related Person Transaction may be consummated or may continue only if:

• The Audit Committee approves or ratifies the transaction in accordance with the terms of the policy; or

• The chair of the Audit Committee, pursuant to authority delegated to the chair by the Audit Committee,

pre-approves or ratifies the transaction and the amount involved in the transaction is less than
$100,000, provided that, for the Related Person Transaction to continue, it must be approved by the
Audit Committee at its next regularly scheduled meeting.

It is the company’s policy to enter into or ratify Related Person Transactions only when the Audit

Committee determines that the Related Person Transaction in question is in, or is not inconsistent with, the best
interests of the company, including but not limited to situations where the company may obtain products or
services of a nature, quantity or quality, or on other terms, that are not readily available from alternative sources
or where the company provides products or services to Related Persons on an arm’s length basis on terms
comparable to those provided to unrelated third parties or on terms comparable to those provided to employees
generally.

In determining whether to approve or ratify a Related Person Transaction, the committee takes into account,

among other factors it deems appropriate, whether the Related Person Transaction is on terms no less favorable
than terms generally available to an unaffiliated third party under the same or similar circumstances and the
extent of the Related Person’s interest in the transaction.

Transaction Involving Related Persons

Indemnification of Directors and Officers; Director Indemnity Agreements

We have Indemnification Agreements with certain of our directors and officers. Each Indemnification
Agreement provides, among other things, that the company will, to the extent permitted by applicable law,
indemnify each indemnitee if, by reason of such indemnitee’s status as a director or officer of the company, such
indemnitee was, is or is threatened to be made a party to any proceeding, whether of a civil, criminal,
arbitrational, administrative or investigative nature, against all expenses related thereto, including judgments,
fines, penalties, excise taxes, interest and amounts paid in settlement and incurred by such indemnitee in
connection with such proceeding, including attorneys’ fees). In addition, each of the Indemnification Agreements
provides for the advancement of expenses incurred by the indemnitee in connection with any proceeding covered
by the agreement, subject to certain exceptions. None of the Indemnification Agreements precludes any other
rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including but not
limited to, any rights arising under our governing documents, any agreement, board action or applicable law.

69

DELINQUENT SECTION 16(A) REPORTS

Except as set forth below, based solely upon a review of filings with the SEC furnished to us and written
representations that no other reports were required, we believe that, during and with respect to 2023, all of our
directors and officers timely filed all reports required by Section 16(a).

On June 21, 2023, Mr. Kritzmacher filed a late Form 4 reporting one acquisition in October 2022 of 49

shares of our common stock. Mr. Kritzmacher was unaware of the transaction at the time it occurred, as it was
executed by an investment advisor who had discretion to make individual investment decisions with respect to
Mr. Kritzmacher’s managed account.

70

OTHER MATTERS

How may shareholders make proposals or director nominations for the 2025 annual meeting?

Shareholders interested in submitting a proposal for inclusion in our proxy statement for the 2024 annual

meeting may do so by submitting the proposal in writing to our Corporate Secretary at InterDigital, Inc.,
200 Bellevue Parkway, Suite 300, Wilmington, DE 19809-3727. To be eligible for inclusion in our proxy
statement for the 2024 annual meeting, shareholder proposals must be received no later than December 24, 2024,
and they must comply with all applicable SEC requirements. The submission of a shareholder proposal does not
guarantee that it will be included in our proxy statement.

Our bylaws also establish an advance notice procedure with regard to nominations of persons for election to

the Board and shareholder proposals that are not submitted for inclusion in the proxy statement but that a
shareholder instead wishes to present directly at an annual meeting. Shareholder proposals and nominations may
not be brought before the 2025 annual meeting unless, among other things, the shareholder’s submission contains
certain information concerning the proposal or the nominee, as the case may be, and other information specified
in our bylaws, and we receive the shareholder’s submission no earlier than February 5, 2025, and no later than
March 7, 2025. However, if the date of our 2025 annual meeting is more than 30 days before or more than
60 days after the anniversary of our 2024 annual meeting, the submission and the required information must be
received by us no earlier than the 120th day prior to the 2025 annual meeting and no later than the later of the
90th day prior to the annual meeting or, if later, the 10th day following the day on which we first publicly
announce the date of the 2025 annual meeting. Proposals or nominations that do not comply with the advance
notice requirements in our bylaws will not be entertained at the 2025 annual meeting. A copy of the bylaws may
be obtained on our website at http://ir.interdigital.com under the IR menu heading “ESG – Governance –
Governance Documents,” or by writing to our Corporate Secretary at InterDigital, Inc., 200 Bellevue Parkway,
Suite 300, Wilmington, DE 19809-3727.

Who pays for the proxy solicitation costs?

We will bear the entire cost of proxy solicitation, including preparation, assembly, printing and mailing of

the Notice, this proxy statement, the proxy card and any additional materials furnished to shareholders. Copies of
proxy solicitation materials will be furnished to brokerage houses, fiduciaries and custodians holding shares in
their names that are beneficially owned by others to forward to such beneficial owners. In addition, we may
reimburse such persons for their cost of forwarding the solicitation materials to such beneficial owners. Our
directors, officers or regular employees may supplement solicitation of proxies by mail through the use of one or
more of the following methods: telephone, email, telegram, facsimile or personal solicitation. No additional
compensation will be paid for such services. For 2024, we have also engaged Alliance Advisors, LLC, a
professional proxy solicitation firm, to aid in the solicitation of proxies from certain brokers, bank nominees and
other institutional owners for an anticipated fee of not more than $12,000.

What is “householding” of proxy materials, and can it save the company money?

The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy delivery
requirements for proxy materials with respect to two or more shareholders sharing the same address by delivering
a single annual report and proxy statement to those shareholders. This process, which is commonly referred to as
“householding,” potentially provides extra convenience for shareholders and cost savings for companies.
Although we do not household for registered shareholders, a number of brokerage firms have instituted
householding for shares held in street name, delivering a single set of proxy materials to multiple shareholders
sharing an address unless contrary instructions have been received from the affected shareholders. Once you have
received notice from your broker that they will be householding materials to your address, householding will
continue until you are notified otherwise or until you revoke your consent. If, now or in the future, you no longer
wish to participate in householding and would prefer to receive a separate Notice or annual report and proxy

71

statement, please notify us by calling (302) 281-3600 or by sending a written request to our Corporate Secretary
at InterDigital, Inc., 200 Bellevue Parkway, Suite 300, Wilmington, DE 19809-3727, and we will promptly
deliver a separate copy of our Notice or annual report and proxy statement, as applicable. If you hold your shares
in street name and are receiving multiple copies of the Notice or annual report and proxy statement and wish to
receive only one, please notify your broker.

How can I receive the annual report?

We will provide to any shareholder, without charge, a copy of our 2023 annual report on Form 10-K

upon written request to our Corporate Secretary at InterDigital, Inc., 200 Bellevue Parkway, Suite 300,
Wilmington, DE 19809-3727. Our 2023 annual report and this proxy statement are also available online at
http://ir.interdigital.com/FinancialDocs.

Will there be any other business conducted at the annual meeting?

As of the date of this proxy statement, we know of no business that will be presented for consideration at the

annual meeting other than the items referred to in this proxy statement. If any other matter is properly brought
before the annual meeting for action by shareholders, proxies will be voted in accordance with the
recommendation of the Board or, in the absence of such a recommendation, in accordance with the judgment of
the proxy holder.

72

APPENDIX A

Adjusted EBITDA is a supplemental non-GAAP financial measure that InterDigital believes provide
investors with important insight into the company’s ongoing business performance. InterDigital defines Adjusted
EBITDA as net income attributable to InterDigital Inc. plus net loss attributable to non-controlling interest,
income tax (provision) benefit, other income (expense) & interest expense, depreciation and amortization, share-
based compensation, and other items. Other items include restructuring costs, impairment charges and other
non-recurring items. This non-GAAP financial measure may be calculated differently from, and therefore may
not be comparable to, similarly titled measures used by other companies. A detailed reconciliation of Adjusted
EBITDA to the most directly comparable GAAP financial measure is provided below.

Net income attributable to InterDigital, Inc.

. . . . . . . . . . . . . . . .
Net loss attributable to non-controlling interest . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net & interest expense . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Other items(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2023

2022

2021

$214,069
(3,016)
23,557
(12,995)
77,792
35,741
10,037

$ 93,693
(1,632)
25,502
32,953
78,571
22,127
3,280

$ 55,295
(13,107)
15,368
13,650
78,193
28,736
29,877

Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$345,185

$254,494

$208,012

(a) Other items in the above table includes: (1) $7.5 million net litigation fee reimbursement and a $2.5 million

impairment on the sale by our joint venture, Convida Wireless (“Convida”) of a portion of its patent
portfolio during 2023; (2) $3.3 million of restructuring costs during 2022; and (3) $27.9 million of
restructuring costs and $2.0 million of non-recurring personnel-related costs related to new employee
agreements during the 2021.

Pro Forma EBITDA is a supplemental non-GAAP financial measure that InterDigital uses for compensation

purposes as described in this proxy statement. InterDigital defines Pro Forma EBITDA as total revenues minus
operating expenses plus depreciation and amortization, intellectual property enforcement costs, and other items.
Other items include restructuring costs, impairment charges and other non-recurring items, as further described
below. This non-GAAP financial measure may be calculated differently from, and therefore may not be
comparable to, similarly titled measures used by other companies. A detailed reconciliation of Pro Forma
EBITDA to the most directly comparable GAAP financial measure is provided below.

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Total

Total Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . .
Intellectual property enforcement costs . . . . . . . . . . .
Other items(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$124,657
(74,757)
21,154
11,412
2,738

$114,764
(82,927)
18,713
10,906
—

$117,055
(78,461)
19,422
11,504
—

$202,373
(83,112)
19,526
13,853
2,500

$ 558,849
(319,257)
78,815
47,675
5,238

Pro Forma EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 85,204

$ 61,456

$ 69,520

$155,140

$ 371,320

(a) Other items in the above table includes: (1) $2.5 million impairment on the sale by our joint venture,

Convida Wireless (“Convida”) of a portion of its patent portfolio during the three months ended March 31,
2023; and (2) $2.7 million of restructuring costs during the three months ended June 30, 2022.

A-1

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BOARD OF DIRECTORS

EXECUTIVE OFFICERS

S. Douglas Hutcheson 
Chairman of the Board;  
Former Executive Chairman &  
Co-CEO of Kymeta Corporation

John A. Kritzmacher

Liren Chen

Former Executive Vice President 
and Chief Financial Officer, John 
Wiley & Sons, Inc.

President & Chief Executive Officer

Richard J. Brezski

EVP, Chief Financial Officer  
and Treasurer

Eeva K. Hakoranta

EVP, Chief Licensing Officer

Rajesh Pankaj

EVP, Chief Technology Officer

Joshua D. Schmidt

EVP, Chief Legal Officer  
and Corporate Secretary

Derek K. Aberle

Co-founder and Executive  
Vice Chairman of Virewirx, Inc.

Pierre-Yves Lesaicherre

CEO and Executive Director of 
Finwave Semiconductor, Inc.

Samir Armaly

Former President, IP of Adeia, Inc.

John D. Markley, Jr.

Managing Partner/Co-Founder,  
New Amsterdam Growth Capital

Liren Chen

President & Chief Executive Officer.

Jean F. Rankin

Joan H. Gillman

Former Executive Vice President, 
Time Warner Cable, Inc., and Chief 
Operating Officer, Time Warner 
Cable Media

Former Executive Vice President, 
General Counsel and Secretary,  
LSI Corporation

SHAREHOLDER INFORMATION

Annual Meeting of Shareholders

Transfer Agent

Investor Relations

Wednesday, June 5, 2024
2:00 PM Eastern Time
virtualshareholdermeeting.com/
IDCC2024

Common Stock Information

The primary market for 
InterDigital’s common stock is 
the Nasdaq Global Select Market. 
InterDigital trades under the  
ticker “IDCC.”

Shareholders with questions 
concerning stock certifications, 
shareholder records, account  
information, dividends, or 
stock transfers should contact 
InterDigital’s transfer agent:

Equiniti Trust Company, LLC
48 Wall Street, Floor 23
New York, NY 10005
equiniti.com/us

Independent Registered  
Public Account Firm

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania 

+1 302-300-1857
investor.relations@interdigital.com

Corporate Information is as  
of April 19, 2024. InterDigital 
is a registered trademark 
of InterDigital, Inc. All other 
trademarks, services marks, and/
or trade names appearing in this 
Annual Report are the property  
of their respective holders.

LOCATIONS

Corporate Headquarters

200 Bellevue Parkway
Suite 300
Wilmington, Delaware 19809
T: +1.302.281.3600

(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:50)(cid:73)(cid:178)(cid:70)(cid:72)(cid:3)(cid:47)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)
Brussels, Belgium
Los Altos, California
Montreal, Canada
Beijing, China
London, England
Espoo, Finland

Issy-les-Moulineaux, France
Cesson-Sévigné, France
Indianapolis, Indiana
Melville, New York
New York, New York
Conshohocken, Pennsylvania
Washington, D.C.

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InterDigital, Inc.

200 Bellevue Parkway
Suite 300
Wilmington, Delaware 19809
T: +1.302.281.3600

interdigital.com