Executive Summary

Q2 2025 revenue was $85.7M, GAAP diluted EPS $0.15 and non-GAAP diluted EPS $0.25; adjusted EBITDA was $45.7M, with cash from operations of $23.1M .
Versus Wall Street consensus, EPS was modestly above ($0.25 vs $0.2435) while revenue was below ($85.7M vs $88.5M); 4 estimates for each metric. Bolded for significance: EPS beat, revenue miss*.
Management reiterated FY2025 revenue guidance ($390–$430M) and lowered both GAAP and non-GAAP OpEx ranges; GAAP net income and adjusted EBITDA ranges were raised, and diluted share count guidance trimmed .
Strategic/catalyst updates: five Q2 deals including new customers in semis and e-commerce, an OTT renewal, continued debt paydown ($11.1M) and the unveiling of RapidCool direct-to-chip liquid cooling for AI semiconductors . CEO emphasized multiple paths to reach the high-end of guidance even if the large semiconductor deal slips, supporting the near-term narrative .

What Went Well and What Went Wrong

What Went Well

New customer momentum: three of five Q2 deals were with new customers (STMicroelectronics; two e-commerce including Warby Parker), plus an OTT renewal; non-pay TV recurring revenue up 28% YoY .
Operating discipline and deleveraging: interest expense fell sequentially; effective interest rate ~7.8% and $11.1M term loan principal paid down, surpassing $300M repayments since separation .
Technology narrative: RapidCool introduced; “lowers thermal resistance by 70%… manage heat at three times today’s current power densities,” positioning Adeia in AI data center cooling over the mid/long term .

What Went Wrong

Sequential revenue and profitability compression: revenue fell to $85.7M from $87.7M in Q1; GAAP operating income declined to $16.4M; litigation expense rose due to Disney case .
Revenue missed consensus and recurring impact of back-half weighted deal timing created near-term optics headwinds; management reiterated guidance but acknowledged timing uncertainty *.
Pay TV headwinds persist; while non-pay TV recurring grew 28% YoY, aggregate recurring growth must offset pay TV declines to sustain trajectory .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$119.2	$87.7	$85.7
GAAP Diluted EPS ($)	$0.32	$0.10	$0.15
Non-GAAP Diluted EPS ($)	$0.47	$0.26	$0.25
Operating Income ($USD Millions)	$57.5	$22.8	$16.4
GAAP Net Income ($USD Millions)	$36.0	$11.8	$16.7
Adjusted EBITDA ($USD Millions)	$80.3	$47.3	$45.7
Operating Margin (%)	48.2% (calc. from )	26.1% (calc. from )	19.1% (calc. from )
Adjusted EBITDA Margin (%)	67.4% (calc. from )	53.9% (calc. from )	53%
Cash from Operations ($USD Millions)	$107.5	$57.1	$23.1
Term Loan Balance ($USD Millions)	$487.1	$470.0	$458.9

Notes: Margins calculated using reported revenue and operating income/adjusted EBITDA; Q2 EBITDA margin also disclosed by CFO .

KPIs (Balance Sheet and Cash)

KPI	Q4 2024	Q1 2025	Q2 2025
Cash & Marketable Securities ($USD Millions)	$110.4	$116.5	$116.5
Effective Interest Rate (%)	N/A	N/A	7.8%
Dividends ($ per share; paid/declared)	$0.05 (paid Dec. 18, 2024)	$0.05 (paid Mar. 31, 2025; declared Jun. 17)	$0.05 (paid Jun. 17; declared Sep. 16)

Segment breakdown: The company does not disclose segment revenue in the release; management noted recurring revenue growth outside pay TV of 28% YoY .

Guidance Changes

Metric	Period	Previous Guidance (Q1 2025)	Current Guidance (Q2 2025)	Change
Revenue ($USD Millions)	FY2025	$390–$430	$390–$430	Maintained
GAAP Operating Expenses ($USD Millions)	FY2025	$263–$275	$261–$271	Lowered
Non-GAAP Operating Expenses ($USD Millions)	FY2025	$166–$174	$160–$166	Lowered
Interest Expense ($USD Millions)	FY2025	$41–$43	$40–$42	Lowered
Other Income ($USD Millions)	FY2025	$4.0–$4.5	$5.5–$6.5	Raised
GAAP Tax Rate (%)	FY2025	15–30%	10–30%	Lowered range low-end
Non-GAAP Tax Rate (%)	FY2025	23%	23%	Maintained
GAAP Net Income ($USD Millions)	FY2025	$76.5–$81.6	$85.1–$86.5	Raised
Non-GAAP Net Income ($USD Millions)	FY2025	$144.0–$167.5	$150.5–$175.9	Raised
Adjusted EBITDA ($USD Millions)	FY2025	$226.3–$258.3	$232.1–$266.1	Raised
Diluted Shares Outstanding (Millions)	FY2025	113–114	112–113	Lowered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/technology initiatives	Focus on hybrid bonding; tech transfer to new semi customer . Q1: continued innovation, R&D driving future adoption .	Introduced RapidCool; 70% lower thermal resistance; targets AI server semis; prototypes with partners .	Strengthening tech narrative; mid/long-term growth driver
Deal momentum & customer diversification	Q4: 10 deals, 4 new customers incl. Amazon, Canon; renewals with Roku, Sharp . Q1: 10 deals, 4 new in social, OTT, semis; pay TV renewals .	5 deals: STMicro; OTT renewal; Warby Parker + another e-commerce; pay TV renewal; 3 new customers .	Sustained, skewing toward growth verticals
Recurring revenue mix	Q1 commentary on stability; lumpiness due to billing structures .	Non-pay TV recurring +28% YoY; high renewal rate >90%; aggregate recurring stable despite pay TV declines .	Improving ex-pay TV; pay TV headwind persists
Litigation & OpEx discipline	Q4 OpEx lower; term loan repriced -50 bps .	Litigation expense up QoQ from Disney case; OpEx prudence lowers FY ranges; expect litigation to decrease modestly in H2 .	Near-term pressure, easing expected H2
Macro/timing of deals	Q1 noted cautious spending, back-half weighted environment .	Increased engagement; multiple shots on goal to hit high-end even if large semi deal slips timing .	Back-half weighted; optionality improved
Capital allocation	Q4: $50M debt paydown; $20M repurchases; dividend . Q1: $17.1M paydown; $10M repurchases; dividend .	$11.1M paydown; dividend; cash generation continues .	Continued deleveraging + shareholder returns

Management Commentary

CEO on revenue paths: “We now have multiple paths to achieve our revenue goals… even if we need to take a different strategic direction with the semiconductor customer” .
RapidCool positioning: “Bonds the silicon cold plate directly to the semiconductor… lowers thermal resistance by 70%… manage heat in semiconductors running at three times today’s current power densities” .
Growth markets: “Our strategy of targeting new customers in growth markets is producing results… non pay TV recurring revenue was up an impressive 28%” .
CFO on profitability and cash: “Adjusted EBITDA… $45.7M reflecting an adjusted EBITDA margin of 53%… ended the quarter with $116.5M in cash, cash equivalents, and marketable securities… cash from operations of $23.1M” .
FY guidance detail: “OpEx $160–$166M (non-GAAP); interest expense $40–$42M; other income $5.5–$6.5M; adjusted EBITDA margin ~60%; non-GAAP tax rate ~23%; capex ~$1M” .

Q&A Highlights

OTT renewal structure: “In line with prior agreement” (no structural changes) .
Recurring vs nonrecurring and mix: Large portion of Q2 revenue was recurring; new customer deals’ revenue impact more pronounced in future periods .
Large semiconductor deal timing: Goal remains to close in 2025, but company prepared for alternative paths; multiple avenues to reach high-end of guidance .
RapidCool commercialization: Early stage with strong prototype results; targeted initially at data centers; potential applicability beyond data centers longer term .
Spending discipline: SG&A tightened; R&D to see modest growth to support innovation if revenue visibility improves .

Estimates Context

Metric	Q2 2025 Consensus	Q2 2025 Actual	Surprise
Revenue ($USD)	$88,480,250*	$85,735,000	Miss*
Primary EPS ($)	$0.2435*	$0.25	Beat*
Primary EPS - # of Estimates	4*	—	—
Revenue - # of Estimates	4*	—	—

Values retrieved from S&P Global.*

Implications: EPS slightly above consensus suggests effective cost control and lower interest expense; revenue below consensus reflects deal timing and pay TV headwinds, reinforcing back-half weighted guidance *.

Key Takeaways for Investors

Near-term: Expect back-half weighted revenue with multiple avenues to reach the high-end of FY2025 guidance; Q3/Q4 deal timing is the key stock driver .
Profitability: Adjusted EBITDA margin run-rate improved in guidance to ~60%; litigation expense expected to decline modestly in H2, supporting margins .
Balance sheet: Continued deleveraging with $11.1M Q2 paydown and >$300M since separation; lower effective interest rate (7.8%) enhances earnings power .
Growth vectors: RapidCool and hybrid bonding expand Adeia’s AI/semi narrative; new semiconductor and e-commerce customers validate portfolio reach .
Mix: Non-pay TV recurring up 28% YoY, offsetting legacy pay TV declines; watch for additional OTT, CE, social media, and e-commerce signings to sustain mix shift .
Estimates: EPS beat and revenue miss in Q2 suggest modest upward revisions to EPS but cautious revenue trajectories pending deal closures*.
Trading lens: Catalysts include closing the large semi deal or alternative sizable agreements, further OpEx discipline, and visible traction for RapidCool; downside risks include litigation and pay TV erosion .

Appendices (Source Tables)

Q2 2025 Condensed Statements of Income, Balance Sheet, Cash Flow, and GAAP-to-non-GAAP reconciliations are provided in the company’s Q2 8-K press release .
Q1 2025 and Q4 2024 results and guidance baselines referenced from respective 8-Ks .

Adeia Inc. (ADEA)·Q2 2025 Earnings Summary