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    ADEA
    Earnings call· Jun 2026(Q2 FY26)

    Adeia Q2 FY26 earnings call ADEA

    Aug 3, 2026 Source

    Executive summary

    Adeia Q2 FY26 — Long-Term Revenue Target Raised to $600M on Strong Semiconductor Momentum

    Adeia delivered Q2 FY26 results in line with expectations, driven by strong non-Pay-TV recurring revenue growth and significant momentum in its semiconductor business, leading to an increased long-term revenue target. The company continues to execute its capital allocation strategy while navigating short-term litigation uncertainties in its Pay-TV segment, with a robust pipeline supporting its full-year objectives.

    Highlights

    7

    • Q2 revenue of $96.1 million was in line with expectations.

    • Adjusted EBITDA margin reached 58.7% for the quarter.

    • Generated $54.6 million in cash from operations.

    • Non-Pay-TV recurring revenue grew an impressive 54% year-over-year.

    • Long-term annual revenue target raised to $600 million from $500 million, reflecting strong business trajectory.

    • Long-term semiconductor opportunity raised to $200 million annually from $100 million.

    • Closed 6 license agreements and added a record 12 new customers in the quarter.

    Concerns

    3

    • Timing of litigation resolution is difficult to predict and could impact short-term results.

    • Litigation expense was $5.3 million in Q2.

    • Pay-TV segment faces known secular headwinds.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2026 revenue
    $395M to $435M
    high materiality
    High
    Full-year 2026 operating expenses
    $184M to $192M
    medium materiality
    High
    Full-year 2026 interest expense
    $34M to $36M
    medium materiality
    High
    Full-year 2026 other income
    $5.5M to $6.5M
    low materiality
    High
    Full-year 2026 adjusted EBITDA margin
    ~55%
    high materiality
    High
    Full-year 2026 non-GAAP tax rate
    21%
    medium materiality
    High
    Full-year 2026 capital expenditures
    ~$2M
    low materiality
    High
    Long-term annual revenue target
    $600M
    high materiality
    High
    Long-term annual semiconductor opportunity
    $200M
    high materiality
    High
    Long-term annual media business growth objective
    $400M
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Semiconductor
    Semiconductor revenue for Q2, with year-to-date revenue of $48 million, showing strong growth towards the long-term target, significantly up from FY25.
    YTD revenue: $48MFY25 revenue: ~$26M
    		$14.8M———
    Non-Pay-TV Recurring Revenue
    Impressive year-over-year growth in non-Pay-TV recurring revenue, continuing a multi-quarter trend and now nearly double the size of Pay-TV recurring revenue.
    		—54%——

    Operational metrics

    25
    Adjusted EBITDA
    $56.4M
    Q2 FY26
    Cash and investments balance
    $137.1M
    Q2 FY26 end
    License agreements closed
    6
    Q2 FY26
    Renewal rate
    >90%
    current
    Patent assets
    14,250+up ~4% QoQ
    Q2 FY26 end
    Patent assets growth since separation
    ~5,000
    since separation

    Vast majority generated organically.

    IP portfolio acquisitions
    $9.5M
    Q2 FY26
    Operating expenses
    $40.2Mdown $2.7M (6%) QoQ
    Q2 FY26

    Primarily due to lower litigation and personnel-related costs.

    Litigation expense
    $5.3Mdown $639K (11%) QoQ
    Q2 FY26

    Primarily driven by lower spending on AMD due to prior quarter resolution, partially offset by new matters.

    Interest expense
    $8Mdown $511K QoQ
    Q2 FY26

    Primarily due to debt repayments and lower favorable interest rates.

    Effective interest rate
    7.1%
    Q2 FY26

    Includes amortization of debt issuance costs.

    Other income
    $1.7M
    Q2 FY26

    Primarily related to interest earned on cash and investment portfolio and interest income on revenue agreements.

    Depreciation expense
    $480K
    Q2 FY26
    Non-GAAP income tax rate
    21%
    Q2 FY26

    Consists primarily of federal and state domestic taxes as well as Korean withholding taxes.

    Debt principal payments
    $6.1M
    Q2 FY26
    Term loan balance
    $392.6M
    Q2 FY26 end
    Shares repurchased
    353,000
    Q2 FY26
    Share repurchase amount
    $10M
    Q2 FY26
    Remaining share repurchase authorization
    $140M
    current

    Under current stock repurchase program.

    Dividend per share
    $0.05
    Q2 FY26

    Cash dividend paid.

    Dividend per share (next)
    $0.05
    Q3 FY26

    Board approved payment.

    Cash balance (full year target)
    $100M
    FY26 end

    Typical target for year-end cash.

    Advanced packaging CapEx (industry)
    $125B
    near term

    Planned spend by leading foundries, memory companies, and OSATs for advanced packaging, including hybrid bonding.

    Samsung bonding tools ordered
    50
    current

    Reports indicate Samsung has ordered 50 bonding tools.

    E-commerce business size target
    ~10%
    long term

    Believed to grow to a size similar to the consumer electronics business.

    Industry KPIs

    5
    MetricValueDetails
    Capacity CAPEX$2MUSD
    Revenue growth$96.1MUSD
    Customer account count12customers
    Gross retention renewal rate>90%%
    Operating FCF margin rule of 4058.7%%

    Deals & partnerships

    9
    GoogleMultiyear renewal for access to media portfolio, including YouTube TV.multiyear

    Google has been a customer for approximately 15 years. YouTube TV is a significant player in the Pay-TV market with strong subscriber growth.

    RPXSeminal multiyear license agreement for media portfolio, including 10 participating member companies.multiyear

    Includes 10 participating member companies across digital commerce ecosystem (apparel, beauty, online marketplaces, delivery networks, enterprise tech platforms). Covers approximately 10,900 patent assets.

    L'OrealNew multiyear license agreement.multiyear

    L'Oreal is a leading cosmetics and personal care company.

    Leading provider of streaming documentary programmingNew multiyear license agreement.multiyear

    Specific counterparty not named.

    Leading European Pay-TV providerRenewal of license agreement.

    Specific counterparty not named.

    Consumer electronics manufacturer in JapanRenewal of license agreement.

    Specific counterparty not named.

    MicrosoftLicense agreement.

    Closed in the first half of 2026.

    AMDLicense agreement.

    Closed in the first half of 2026, building on momentum from prior agreement.

    DisneyLicense agreement, includes Hulu + Live TV.

    Agreement signed last year. Hulu + Live TV is one of the largest and fastest-growing virtual MVPD platforms.

    Risks & headwinds

    3
    Pay-TV industry headwindsOngoing

    Non-Pay-TV recurring revenue is now nearly double the size of Pay-TV recurring revenue.

    Mitigation: Diversification into non-Pay-TV segments (OTT, e-commerce, consumer electronics, social media) and continued investment in Pay-TV.

    Litigation timing and impactShort term

    Litigation expense was $5.3M in Q2 FY26. Timing of resolution is difficult to predict.

    Mitigation: Seeking business resolution through license agreements; confident in long-term trajectory despite short-term unpredictability.

    Deal timing for revenue goalsFY26

    Small volume, high dollar shop; range of outcomes for the year reflects this approach.

    Mitigation: Diversified and growing pipeline provides multiple paths to achieve revenue goals; opportunities moving out of 2026 provide a springboard for the following year.

    What to watch in Q3 FY26

    5

    Full-year 2026 revenue guidance achievement

    FY26
    Current$96.1M in Q2, $201M YTD (midpoint)
    Target$395M to $435M

    Why it matters

    The company is back-end loaded⚖️, and achieving the full-year target depends on closing significant deals in H2.

    As we look to the second half of the year, our pipeline remains strong across both media and semiconductors, and we are committed to achieving our full year objectives.

    Q&A highlights

    7

    Asked for the Q2 revenue mix between media and semis, and color on the broadening semi opportunity beyond AMD, including hyperscalers and AI inference.

    Keith stated semi revenue was $14.8 million in Q2 and $48 million year-to-date. Paul elaborated on hybrid bonding adoption across logic (Apple, Intel, Broadcom, NVIDIA by 2028) and memory (HBM, 3D NAND), noting hyperscalers are becoming semiconductor companies. He cited $125 billion in advanced packaging CapEx and Samsung ordering 50 bonding tools as evidence.

    “I mean it's really across the board that we're seeing hybrid bonding adoption. I noted some of it on my call with logic players really beyond AMD. AMD was ahead of the curve. As we mentioned before, they started shipping hybrid bonded logic devices in 2022. But now we're seeing it with Broadcom and Intel is ramping, even Apple has chips in production as well.”

    asked by Scott Searle · answered by Paul Davis

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Growth Beyond Pay-TV

    Adeia's non-Pay-TV recurring revenue grew an impressive 54% year-over-year in Q2, now nearly double the size of Pay-TV recurring revenue. This diversification strategy, initiated post-separation from Xperi, is yielding results across OTT, e-commerce, consumer electronics, and social media. The company plans to continue expanding into adjacent markets, building on consistent growth in this segment.

    02

    Semiconductor Market Expansion and Hybrid Bonding

    The long-term annual semiconductor opportunity has been raised to $200 million from $100 million, driven by rapid adoption of hybrid bonding in next-generation chip architectures for AI. This includes logic players like Apple, Intel, Broadcom, and NVIDIA (expected 2028), as well as memory (HBM and 3D NAND from SanDisk and Kioxia). The company notes significant CapEx build-out in advanced packaging, including Samsung ordering 50 bonding tools, as evidence of broad adoption.

    03

    E-commerce Momentum and RPX Deal

    A seminal multiyear license agreement with RPX, involving 10 participating member companies, highlights strong progress in e-commerce. This deal, driven by intelligent search, virtual shopping experiences, and consumer engagement technologies, is expected to grow the e-commerce business to a size similar to the consumer electronics business (approximately 10% of total revenue). Management believes this deal structure can be replicated for future growth.

    04

    IP Portfolio Development and Litigation Update

    Adeia's IP portfolio grew to over 14,250 patent assets, up approximately 4% quarter-over-quarter, with 6 tuck-in acquisitions for $9.5 million focused on media growth areas (e-commerce, OTT, imaging). The company filed patent infringement claims against Fubo, asserting 4 patents from its media portfolio, emphasizing a business resolution and clarifying that this matter is separate from the Disney agreement.

    05

    Capital Allocation Strategy and Financial Position

    Adeia continues to execute its four-pillar capital allocation strategy, which includes debt repayment ($6.1 million in Q2), share repurchases ($10 million for 353,000 shares), dividend payments ($0.05 per share), and tuck-in IP acquisitions ($9.5 million). The company ended the quarter with $137.1 million in cash, cash equivalents, and marketable securities, targeting $150 million in cash from operations for FY26 and a $100 million cash balance by year-end.

    06

    CEO Search and Business Continuity

    The Board's search process for a successor CEO is progressing well with a nationally recognized search firm, and an announcement is anticipated by Q4 2026. Interim CEO Paul Davis reassured stakeholders that it is business as usual at Adeia, with the same strategy, team, and goals, and he remains committed to driving the business towards its 2026 objectives.

    AI-generated summary of the company’s earnings call. Not investment advice.