EX-99.1 2 adea-ex99_1.htm EX-99.1 EX-99.1

 

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

img89383942_0.jpg 

 

ADEIA ANNOUNCES FIRST QUARTER 2024 FINANCIAL RESULTS

 

Paid down $40 million of debt in the first quarter and nearly $200 million since separation

Generated over $67 million in cash from operations in the first quarter

SAN JOSE, Calif. – May 6, 2024 – Adeia Inc. (Nasdaq: ADEA) (the “Company” or “Adeia”) today announced financial results for the first quarter ended March 31, 2024.

“The results of our first quarter demonstrate the strength of our business model and continued execution as we generated over $67 million in cash from operations,” said Paul E. Davis, chief executive officer of Adeia. “Our first quarter was very active as we closed deals with ten customers across a diverse mix of end markets and geographies. We further expanded our patent portfolios both through strategic acquisitions and R&D investments focused on emerging trends such as generative AI and the challenges of Moore’s Law facing the semiconductor industry. Additionally, we remain on-track to achieving our strategic objectives for the year as we made significant progress on key customer engagements in markets that will drive future growth, including in OTT, adjacent media markets, and in our semiconductor business.”

First Quarter Financial Highlights

Revenue was $83.4 million as compared to $86.9 million in the fourth quarter of 2023
GAAP diluted earnings per share (EPS) was $0.01 and non-GAAP diluted EPS was $0.25
GAAP net income was $0.9 million and adjusted EBITDA was $50.0 million
Cash flows from operations was $67.2 million
Paid down $40.1 million on our term loan

Business Highlights

Signed 10 agreements with a broad mix of customers in Pay-TV, OTT, semiconductor and consumer electronics in the United States, Europe, Japan and South Korea
Paramount, a leading multi-brand OTT provider, signed a multi-year renewal for access to our media portfolio
Altimedia, a user experience (UX) platform provider in South Korea, signed a multi-year renewal for access to our media portfolio
Magenta Telekom, a new Pay-TV customer in Austria, signed a long-term agreement for access to our media portfolio
Astound Broadband, a new Pay-TV and broadband customer in the United States, signed a long-term agreement for access to our media portfolio

Capital Allocation

During the quarter, the Company made $40.1 million in principal payments towards its term loan, bringing the outstanding balance to $561.1 million as of March 31, 2024.

On March 26, 2024, the Company distributed $5.4 million to stockholders of record on March 12, 2024, for a quarterly cash dividend of $0.05 per share of common stock.

On April 25, 2024, the Board of Directors declared a dividend of $0.05 per share of common stock, payable on June 18, 2024, to stockholders of record on May 28, 2024.

 


 

 

Financial Outlook

The Company reiterates its full year 2024 outlook as follows:

Category
(in millions, except for tax rate)

 

2024
GAAP Outlook

 

2024
Non-GAAP Outlook

Revenue

 

$380.0 − 420.0

 

$380.0 − 420.0

Operating expenses(1)

 

$254.0 − 268.0

 

$150.0 − 160.0

Interest expense

 

$54.0 − 57.0

 

$54.0 − 57.0

Other income

 

$5.0 − 6.0

 

$5.0 − 6.0

Tax rate

 

15% − 30%

 

23%

Net income(2)

 

$65.4 − 70.7

 

$139.4 − 160.9

Adjusted EBITDA(2)

 

N/A

 

$232.5 − 262.5

Diluted shares outstanding

 

114.0 − 115.0

 

114.0 − 115.0

(1) See tables for reconciliation of GAAP to non-GAAP operating expenses

(2) See tables for reconciliation of GAAP net income to (i) non-GAAP net income and (ii) adjusted earnings before interest expense, income taxes, depreciation and amortization (adjusted EBITDA)

Conference Call Information

The Company will hold its first quarter 2024 earnings conference call at 2:00 PM Pacific Time (5:00 PM Eastern Time) on Monday, May 6, 2024. To access the call in the U.S., please dial +1 (888) 660-6411, and for international callers, dial +1 (929) 203-0849. All participants should dial in 15 minutes prior to the start of the conference call. The Company also suggests utilizing the webcast link to access the live call and the replay at Q1 2024 Earnings Call Webcast.

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on information available to the Company as of the date hereof, as well as the Company’s current expectations, assumptions, estimates and projections that involve risks and uncertainties. In this context, forward-looking statements often address expected future business, financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “target,” similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond the Company’s control, and are not guarantees of future results. Forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: the Company’s ability to implement its business strategy; the Company’s ability to enter into new and renewal license agreements with customers on favorable terms; the Company’s ability to retain and hire key personnel; uncertainty as to the long-term value of the Company’s common stock; legislative, regulatory and economic developments affecting the Company’s business; general economic and market developments and conditions; the Company’s ability to grow and expand its patent portfolios; changes in technology and development of new technology in the industries in which in which the Company operates; the evolving legal, regulatory and tax regimes under which the Company operates; unforeseen liabilities and expenses; risks associated with the Company’s indebtedness; the Company’s ability to achieve the intended benefits of, and its ability to recognize the anticipated tax treatment of, the spin-off of its product business; unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, natural disasters and future outbreaks or pandemics, each of which may have an adverse impact on the Company’s business, results of operations, and financial condition. These risks, as well as other risks associated with the Company’s business, are more fully discussed in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”), including the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. While the list of factors presented here is, and the list of factors presented in the Company’s filings with the SEC are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

Causes of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations, liquidity or trading price of common stock. The Company does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

 


 

 

About Adeia Inc.

Adeia is a leading R&D and intellectual property (IP) licensing company that accelerates the adoption of innovative technologies in the media and semiconductor industries. Adeia’s fundamental innovations underpin technology solutions that are shaping and elevating the future of digital entertainment and electronics. Adeia’s IP portfolios power the connected devices that touch the lives of millions of people around the world every day as they live, work and play. For more, please visit www.adeia.com.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company’s earnings release contains non-GAAP financial measures adjusted, where applicable, for either one-time or ongoing non-cash acquired intangibles amortization charges, costs related to actual or planned business combinations including transaction fees, integration costs, severance, facility closures, and retention bonuses, separation costs, all forms of stock-based compensation, loss on debt extinguishment, expensed debt refinancing costs, impairment of intangible assets, impact of certain foreign currency adjustments, discontinued operations and related tax effects. In addition, adjusted EBITDA adjusts for recurring charges of interest expense, income taxes, depreciation and amortization. Management believes that the non-GAAP measures used in this release provide investors with important perspectives on the Company’s ongoing business and financial performance and are helpful to provide investors with an understanding of our core operating results reflecting our normal business operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Our use of non-GAAP financial measures has certain limitations in that the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as adjusted EBITDA, non-GAAP operating expenses, non-GAAP net income and non-GAAP diluted earnings per share (EPS) do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached hereto. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. All financial data is presented on a GAAP basis except where the Company indicates its presentation is on a non-GAAP basis.

Set forth below are reconciliations of the Company’s reported and forecasted GAAP to non-GAAP financial metrics.

Investor Contact:

Chris Chaney

Vice President, Investor Relations

IR@adeia.com

– Tables Follow –

SOURCE: ADEIA INC.

ADEA

 


 

 

 


 

 

 

 

 

 

ADEIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended

 

 

 

March 31,
2024

 

 

March 31,
2023

 

Revenue

 

$

83,405

 

 

$

117,307

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

13,925

 

 

 

13,011

 

Selling, general and administrative

 

 

24,029

 

 

 

22,862

 

Amortization expense

 

 

23,157

 

 

 

23,689

 

Litigation expense

 

 

2,930

 

 

 

2,622

 

Total operating expenses

 

 

64,041

 

 

 

62,184

 

Operating income

 

 

19,364

 

 

 

55,123

 

Interest expense

 

 

(14,175

)

 

 

(15,938

)

Other income and expense, net

 

 

1,400

 

 

 

1,620

 

Income before income taxes

 

 

6,589

 

 

 

40,805

 

Provision for income taxes

 

 

5,690

 

 

 

11,784

 

Net income

 

$

899

 

 

$

29,021

 

Net income per share:

 

 

 

 

 

 

Basic

 

$

0.01

 

 

$

0.27

 

Diluted

 

$

0.01

 

 

$

0.26

 

Weighted average number of shares used in per share calculations:

 

 

 

 

 

 

Basic

 

 

107,765

 

 

 

105,585

 

Diluted

 

 

112,977

 

 

 

113,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

ADEIA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

58,024

 

 

$

54,560

 

Marketable securities

 

 

30,963

 

 

 

29,012

 

Accounts receivable, net

 

 

26,842

 

 

 

39,651

 

Unbilled contracts receivable

 

 

82,267

 

 

 

74,919

 

Other current assets

 

 

8,025

 

 

 

7,700

 

Total current assets

 

 

206,121

 

 

 

205,842

 

Long-term unbilled contracts receivable

 

 

65,100

 

 

 

73,843

 

Property and equipment, net

 

 

6,784

 

 

 

6,971

 

Operating lease right-of-use assets

 

 

9,425

 

 

 

9,484

 

Intangible assets, net

 

 

330,991

 

 

 

347,172

 

Goodwill

 

 

313,660

 

 

 

313,660

 

Long-term income tax receivable

 

 

116,359

 

 

 

120,338

 

Other long-term assets

 

 

30,900

 

 

 

28,246

 

Total assets

 

$

1,079,340

 

 

$

1,105,556

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

4,855

 

 

$

9,623

 

Accrued liabilities

 

 

13,842

 

 

 

19,138

 

Current portion of long-term debt, net

 

 

36,926

 

 

 

66,145

 

Deferred revenue

 

 

36,981

 

 

 

7,132

 

Total current liabilities

 

 

92,604

 

 

 

102,038

 

Deferred revenue, less current portion

 

 

16,535

 

 

 

17,672

 

Long-term debt, net

 

 

509,406

 

 

 

519,550

 

Noncurrent operating lease liabilities

 

 

9,693

 

 

 

9,730

 

Long-term income tax payable

 

 

82,167

 

 

 

81,834

 

Other long-term liabilities

 

 

18,984

 

 

 

18,110

 

Total liabilities

 

 

729,389

 

 

 

748,934

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

122

 

 

 

121

 

Additional paid-in capital

 

 

635,552

 

 

 

635,331

 

Treasury stock at cost

 

 

(230,226

)

 

 

(222,497

)

Accumulated other comprehensive loss

 

 

(71

)

 

 

(8

)

Accumulated deficit

 

 

(55,426

)

 

 

(56,325

)

Total stockholders’ equity

 

 

349,951

 

 

 

356,622

 

Total liabilities and equity

 

$

1,079,340

 

 

$

1,105,556

 

 

 


 

 

 

 

ADEIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Three Months Ended

 

 

 

March 31,
2024

 

 

March 31,
2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

899

 

 

$

29,021

 

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

 

 

Depreciation of property and equipment

 

 

520

 

 

 

384

 

Amortization of intangible assets

 

 

23,157

 

 

 

23,689

 

Stock-based compensation expense

 

 

5,145

 

 

 

3,640

 

Deferred income tax

 

 

(3,048

)

 

 

2,373

 

Amortization of debt issuance costs

 

 

762

 

 

 

1,170

 

Other

 

 

(298

)

 

 

600

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

12,812

 

 

 

20,951

 

Unbilled contracts receivable

 

 

1,395

 

 

 

(27,612

)

Other assets

 

 

4,107

 

 

 

4,592

 

Accounts payable

 

 

(2,808

)

 

 

(4,468

)

Accrued and other liabilities

 

 

(4,126

)

 

 

(1,821

)

Deferred revenue

 

 

28,712

 

 

 

10,833

 

Net cash from operating activities

 

 

67,229

 

 

 

63,352

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(793

)

 

 

(390

)

Purchases of intangible assets

 

 

(8,476

)

 

 

 

Purchases of short-term investments

 

 

(11,169

)

 

 

 

Proceeds from maturities of investments

 

 

9,450

 

 

 

 

Net cash from investing activities

 

 

(10,988

)

 

 

(390

)

Cash flows from financing activities:

 

 

 

 

 

 

Dividends paid

 

 

(5,420

)

 

 

(5,314

)

Repayment of debt

 

 

(40,125

)

 

 

(83,625

)

Proceeds from employee stock purchase program and exercise of stock options

 

 

497

 

 

 

411

 

Repurchases of common stock for tax withholdings on equity awards

 

 

(7,729

)

 

 

(6,560

)

Net cash from financing activities

 

 

(52,777

)

 

 

(95,088

)

Net increase (decrease) in cash and cash equivalents

 

 

3,464

 

 

 

(32,126

)

Cash and cash equivalents at beginning of period

 

 

54,560

 

 

 

114,555

 

Cash and cash equivalents at end of period

 

$

58,024

 

 

$

82,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

ADEIA INC.

GAAP TO NON-GAAP RECONCILIATIONS

(in thousands, except per share amounts)

(unaudited)

Net income

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,
2024

 

 

March 31,
2023

 

GAAP net income

 

$

899

 

 

$

29,021

 

 

 

 

 

 

 

 

Adjustments to GAAP net income:

 

 

 

 

 

 

Stock-based compensation expense:

 

 

 

 

 

 

Research and development

 

 

809

 

 

 

594

 

Selling, general and administrative

 

 

4,336

 

 

 

3,046

 

Amortization expense

 

 

23,157

 

 

 

23,689

 

Separation and other related costs recorded in selling, general and administrative (1)

 

 

1,824

 

 

 

3,002

 

Total operating expenses adjustments

 

 

30,126

 

 

 

30,331

 

Other income and expense, net

 

 

 

 

 

(302

)

Non-GAAP tax adjustment (2)

 

 

(2,754

)

 

 

(4,508

)

Non-GAAP net income

 

$

28,271

 

 

$

54,542

 

 

 

 

 

 

 

 

Diluted income per share

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,
2024

 

 

March 31,
2023

 

GAAP diluted income per share

 

$

0.01

 

 

$

0.26

 

 

 

 

 

 

 

 

Adjustments to GAAP diluted income per share:

 

 

 

 

 

 

Stock-based compensation expense:

 

 

 

 

 

 

Research and development

 

 

0.01

 

 

0.00

 

Selling, general and administrative

 

 

0.04

 

 

 

0.03

 

Amortization expense

 

 

0.20

 

 

 

0.21

 

Separation and other related costs recorded in selling, general and administrative (1)

 

 

0.01

 

 

 

0.02

 

Total operating expenses adjustments

 

 

0.26

 

 

 

0.26

 

Other income and expense, net

 

0.00

 

 

0.00

 

Non-GAAP tax adjustment (2)

 

 

(0.02

)

 

 

(0.04

)

Non-GAAP diluted income per share

 

$

0.25

 

 

$

0.48

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, including fees for financial advisory and other professional services, and expenses incurred on a transitional basis under a contract shared with Xperi Inc.

(2) The provision for income taxes is adjusted to reflect the net direct and indirect income tax effects of the various non-GAAP pretax adjustments.

 


 

 

 

 

ADEIA INC.

GAAP NET INCOME TO

ADJUSTED EBITDA RECONCILIATION

(in thousands)

(unaudited)

 

 

Three Months Ended

 

 

 

March 31,
2024

 

 

March 31,
2023

 

GAAP net income

 

$

899

 

 

$

29,021

 

 

 

 

 

 

 

 

Adjustments to GAAP net income:

 

 

 

 

 

 

Stock-based compensation expense:

 

 

 

 

 

 

Research and development

 

 

809

 

 

 

594

 

Selling, general and administrative

 

 

4,336

 

 

 

3,046

 

Separation and other related costs recorded in selling, general and administrative (1)

 

 

1,824

 

 

 

3,002

 

Amortization expense

 

 

23,157

 

 

 

23,689

 

Depreciation expense

 

 

520

 

 

 

384

 

Interest expense

 

 

14,175

 

 

 

15,938

 

Other income and expense, net

 

 

(1,400

)

 

 

(1,620

)

Provision for income taxes

 

 

5,690

 

 

 

11,784

 

Adjusted EBITDA

 

$

50,010

 

 

$

85,838

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, including expenses incurred on a transitional basis under a contract shared with Xperi Inc.

 

ADEIA INC.

RECONCILIATION FOR GUIDANCE

ON OPERATING EXPENSES

(in millions)

(unaudited)

 

Year Ended

 

 

December 31, 2024

 

 

Low

 

 

High

 

GAAP operating expenses

$

254.0

 

 

$

268.0

 

Amortization expense

 

72.0

 

 

 

72.0

 

Stock-based compensation expense

 

24.0

 

 

 

26.0

 

Separation and related costs (1)

 

8.0

 

 

 

10.0

 

Total of non-GAAP adjustments

 

104.0

 

 

 

108.0

 

Non-GAAP operating expenses

$

150.0

 

 

$

160.0

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, including expenses incurred on a transitional basis under a contract shared with Xperi Inc.

 


 

 

 

 

ADEIA INC.

RECONCILIATION FOR GUIDANCE

ON NET INCOME

(in millions)

(unaudited)

 

Year Ended

 

 

December 31, 2024

 

 

Low

 

 

High

 

GAAP net income

$

65.4

 

 

$

70.7

 

Amortization expense

 

72.0

 

 

 

72.0

 

Stock-based compensation expense

 

24.0

 

 

 

26.0

 

Separation and related costs (1)

 

8.0

 

 

 

10.0

 

Total of non-GAAP operating expenses

 

104.0

 

 

 

108.0

 

Non-GAAP tax adjustment

 

(30.0

)

 

 

(17.8

)

Non-GAAP net income

$

139.4

 

 

$

160.9

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, including expenses incurred on a transitional basis under a contract shared with Xperi Inc.

 

 

ADEIA INC.

RECONCILIATION FOR GUIDANCE ON

ADJUSTED EBITDA

(in millions)

(unaudited)

 

Year Ended

 

 

December 31, 2024

 

 

Low

 

 

High

 

GAAP net income

$

65.4

 

 

$

70.7

 

Stock-based compensation expense

 

24.0

 

 

 

26.0

 

Separation and related costs (1)

 

8.0

 

 

 

10.0

 

Amortization expense

 

72.0

 

 

 

72.0

 

Depreciation expense

 

2.5

 

 

 

2.5

 

Interest expense

 

54.0

 

 

 

57.0

 

Other income

 

(5.0

)

 

 

(6.0

)

Income tax expense

 

11.6

 

 

 

30.3

 

Total of non-GAAP adjustments

 

167.1

 

 

 

191.8

 

Adjusted EBITDA

$

232.5

 

 

$

262.5

 

(1) Represents separation and related costs that were incurred subsequent to the separation on October 1, 2022, including expenses incurred on a transitional basis under a contract shared with Xperi Inc.