Executive Summary

Adeia delivered record post-separation revenue of $119.2M, adjusted EBITDA of $80.3M, and operating cash flow of $107.5M in Q4, driven by 10 executed licenses (4 new) across OTT, consumer electronics, Pay-TV, e-commerce, and semiconductors .
Non-GAAP diluted EPS was $0.47 and GAAP diluted EPS was $0.32; Q4 performance was materially stronger versus Q3 on revenue (+38% q/q) and EBITDA (+57% q/q) amid strong deal momentum and upfront payments .
FY25 guidance introduced: Revenue $390–$430M, non-GAAP OpEx $166–$174M, interest expense $41–$43M, non-GAAP net income $144.0–$167.5M, adjusted EBITDA $226.3–$258.3, tax rate ~23% non-GAAP .
Capital allocation was a catalyst: $50M term loan repayment in Q4 (debt balance $487.1M), $20M share repurchases (~1.4M shares), dividend maintained at $0.05; term loan repriced in January 2025 (-50 bps) to SOFR+250 bps .

What Went Well and What Went Wrong

What Went Well

New strategic wins: Multiyear licenses with Amazon (top-3 OTT) and Canon; new e-commerce customer; renewals with Roku and Sharp, reinforcing CE leadership and expanding OTT footprint .
Record financial execution: Q4 revenue $119.2M, adjusted EBITDA $80.3M, non-GAAP operating margin 67%, operating cash flow $107.5M; accelerated $50M debt repayment and $20M buyback .
Portfolio and pipeline expansion: Patent portfolio grew ~12% YoY to 12k+ assets, with inorganic additions focused on OTT and broadband; recurring revenue increased 18% YoY in non-Pay-TV verticals .

Quoted management highlight: “Our record post-separation revenue and operating cash flows, and our best-in-class operating margin of 67%, were driven by our strong deal momentum in the fourth quarter.” – CEO Paul Davis .

What Went Wrong

Litigation costs rising: Q4 litigation expense climbed due to Disney filings and Canadian Pay-TV cases; management expects litigation expense to approximately double in FY25 .
Quarterly volatility highlighted: Large, complex deals and timing can cause fluctuations intra-year; the sizable semiconductor agreement slipped from 2024 and remains outstanding for 2025 .
FY2024 revenue contracted modestly YoY to $376.0M (from $388.8M), reflecting Pay-TV declines partially offset by OTT and CE growth .

Financial Results

Quarterly Trajectory (GAAP unless noted)

Metric	Q1 2024	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$83.4	$87.4	$86.1	$119.2
GAAP Diluted EPS ($)	$0.01	$0.07	$0.17	$0.32
Non-GAAP Diluted EPS ($)	$0.25	$0.28	$0.27	$0.47
Adjusted EBITDA ($USD Millions)	$50.0	$52.8	$51.3	$80.3
Non-GAAP Operating Margin (%)	59% (implied presentation)	~60%	~60%	67%
Cash from Operations ($USD Millions)	$67.2	$23.5	$14.3	$107.5

Notes: Q4 revenue and EBITDA reflect strong license execution and advanced customer payments; margin percentages per company materials as labeled non-GAAP .

Year-over-Year Q4 Comparison

Metric	Q4 2023	Q4 2024
Revenue ($USD Millions)	$86.9	$119.2
GAAP Diluted EPS ($)	$0.11	$0.32
Non-GAAP Diluted EPS ($)	$0.27	$0.47
Adjusted EBITDA ($USD Millions)	$54.1	$80.3

FY Results

Metric	FY 2023	FY 2024
Revenue ($USD Millions)	$388.8	$376.0
GAAP Diluted EPS ($)	$0.60	$0.57
Non-GAAP Diluted EPS ($)	$1.39	$1.26
Adjusted EBITDA ($USD Millions)	$262.3	$234.3
Cash from Operations ($USD Millions)	$152.8	$212.5

Vertical Execution KPIs

KPI	Q4 2024
Total deals signed	10
New deals	4 (Amazon, Canon, luxury e-commerce, 1 semiconductor tech transfer)
Renewals	Roku, Sharp; 3 Pay-TV operators; 1 international OTT provider
Debt repayment	$50.0M (term loan balance $487.1M at 12/31/24)
Share repurchases	$20.0M (~1.4M shares)
Dividend	$0.05/share (paid 12/18/24; declared for 3/31/25)

Guidance Changes

FY2025 Guidance Introduced (Q4 release)

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	FY2025	N/A	$390–$430	N/A
GAAP OpEx ($M)	FY2025	N/A	$263–$275	N/A
Non-GAAP OpEx ($M)	FY2025	N/A	$166–$174	N/A
Interest Expense ($M)	FY2025	N/A	$41–$43	N/A
Other Income ($M)	FY2025	N/A	$4.0–$4.5	N/A
Tax Rate (%)	FY2025	N/A	GAAP 15–30; Non-GAAP ~23	N/A
GAAP Net Income ($M)	FY2025	N/A	$76.5–$81.6	N/A
Non-GAAP Net Income ($M)	FY2025	N/A	$144.0–$167.5	N/A
Adjusted EBITDA ($M)	FY2025	N/A	$226.3–$258.3	N/A
Diluted Shares (M)	FY2025	N/A	113–114	N/A
Dividend	Q1 2025	N/A	$0.05/share declared (pay 3/31/25)	N/A

FY2024 Guidance Update (as of Q3 vs Q2)

Metric	Period	Previous Guidance (Q2)	Current Guidance (Q3)	Change
Revenue ($M)	FY2024	$380–$420	$370–$400	Lowered
GAAP OpEx ($M)	FY2024	$254–$268	$246–$254	Lowered
Non-GAAP OpEx ($M)	FY2024	$145–$155	$144–$148	Lowered
Interest Expense ($M)	FY2024	$52–$55	$52–$53	Lowered
Other Income ($M)	FY2024	$5–$6	$5.5–$6.0	Raised (narrowed higher)
Tax Rate (%)	FY2024	GAAP 15–30; Non-GAAP 23	GAAP 15–30; Non-GAAP 23	Maintained
GAAP Net Income ($M)	FY2024	$71.4–$75.6	$65.9–$69.3	Lowered
Non-GAAP Net Income ($M)	FY2024	$144.8–$166.3	$138.2–$157.9	Lowered
Adjusted EBITDA ($M)	FY2024	$237.5–$267.5	$228.0–$254.0	Lowered
Diluted Shares (M)	FY2024	113–114	113–114	Maintained
Dividend	Q4 2024	$0.05/share (declared 9/17 pay)	$0.05/share (pay 12/18; declared 10/23)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
OTT expansion	Renewals and pipeline progress; reiterated 2H deal expectations	Filed litigation vs Disney; pipeline expanding including luxury e-commerce	New multiyear license with Amazon; renewals with Roku; expanding adjacent markets (e-commerce, ad tech, gaming)	Accelerating
Semiconductor hybrid bonding	Hamamatsu license; industry adoption (HBM, chiplets) discussed	Continued ecosystem engagement; tech transfer agreements; industry validation	New tech transfer deal; logic/HBM outlook reiterated; aiming for longer-term $100M+ semi revenue	Building momentum
Litigation outlook	Lower spend in H1; timing variable	Initiated Disney litigation; expect variability	Litigation expense up; FY25 litigation to ~double with Disney and Canada Pay-TV cases	Increasing cost
Capital allocation	Repriced term loan, -61bps; balanced approach emerging	Buyback authorization lifted to $200M; continued deleveraging	$50M debt repayment, $20M buyback, dividend maintained; January repricing -50bps to SOFR+250	Shareholder-friendly, deleveraging
Recurring revenue mix	Baseline to increase with renewals and new licenses	Pipeline expanding across OTT and CE; stability emphasized	80% of FY25 revenue outlook driven by contract backlog; recurring revenue up 18% YoY ex-Pay-TV	Increasing visibility

Management Commentary

Strategic message: “Adding new customers is critical to sustaining long-term growth…a multiyear license agreement with Amazon…underscores our ability to deliver value and capitalize on the significant opportunity that exists in OTT.” – CEO Paul Davis .
Portfolio focus: “Our portfolios grew a combined 12%…balanced with double-digit growth in both our media and semiconductor portfolios…we acquired 5 portfolios…focused on OTT and broadband connectivity.” – CEO Paul Davis .
Financial discipline: “Approximately 80% of our revenue outlook is driven by the backlog of existing contract agreements…Operating expenses expected…$166M to $174M…litigation expense will approximately double…” – CFO Keith Jones .
Debt strategy: “Being sub-$500 million in debt is something that we take pride in…$20 million in interest expense reduction from 2023 to 2025.” – CFO Keith Jones .

Q&A Highlights

Guidance drivers and volatility: Management aims for midpoint execution, with lower-end reflecting patience for proper economics; high-end assumes Q4-like velocity continuation .
Semiconductor mega-deal timing: Large, complex deal slipped from 2024; remains a 2025 goal with ongoing engagement and confidence in IP value .
IP acquisitions pipeline: Sourced from public/private operators and brokers; targeted to fill portfolio gaps in OTT/broadband aligned to growth strategy .
Balance sheet targets: Comfortable carrying sub-$500M debt; focus on further interest expense reduction and allocating cash to reinvestment and returns .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to S&P Global request limits at the time of retrieval. As a result, comparisons versus consensus cannot be provided. If you would like, we can rerun estimates later to update this section with beat/miss analysis.

Key Takeaways for Investors

Q4 print was a material step-up with record revenue, margins, and cash generation, supported by new OTT and CE licenses; this strengthens near-term narrative and supports FY25 outlook continuity .
OTT licensing is a clear growth vector; Amazon win and Disney litigation create both monetization and potential headline catalysts as Adeia enforces IP across top OTT platforms .
Balance sheet de-risking continues: sub-$500M debt, repriced term loan, and interest savings; buybacks and dividends introduce multiple capital return levers .
Litigation spend will rise in FY25, temporarily pressuring OpEx; however, backlog-driven revenue (≈80%) underpins stability and reduces top-line risk .
Semiconductor licensing and tech transfer underpin mid- to long-term optionality (HBM, NAND, logic chiplets); closing the large semi deal would be a notable upside catalyst .
FY25 guide implies mid-to-high single-digit revenue growth with adjusted EBITDA margin ~59%; execution on new logos and renewals will be key to hitting the high end .
Near-term trading: momentum from Amazon win, buybacks, and repricing may support shares; watch for updates on Disney litigation progress and timing of the semiconductor agreement .

Adeia Inc. (ADEA)·Q4 2024 Earnings Summary