InterDigital soars as arbitration awards provide big revenue boost

Thanks to a $51.6M arbitration award related to past sales from contract manufacturer Pegatron, InterDigital's (IDCC +11.6%) Q3 revenue ($110.6M) and EPS ($0.64) were far above a consensus of $53.4M and $0.01.

Moreover, the 3G/4G IP owner expects to recognize ~$27M in past revenue in Q4 due to "the interplay between awards received under two separate customer arbitrations." InterDigital announced a favorable arbitration ruling in August.

InterDigital's per-unit royalty revenue rose 11% Y/Y in Q3 to $26.3M. However, its fixed-fee royalty revenue was halved to $16.9M due to the expiring of the 3G portion of a license deal with Samsung.

Earnings were boosted by a 19% Y/Y drop in patent administration/licensing spend (inc. legal expenses) to $36.8M. R&D spend fell 4% to $15.8M thanks to last year's restructuring.

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