Amazon agreed in July to license InterDigital's wireless and video-coding patents across its devices and services, including Prime Video, resolving all pending litigation between the two. Because the deal covers years of past use, InterDigital — a 460-person Wilmington, Delaware licensing company whose patents cover 2G through 5G cellular, Wi-Fi and the HEVC and AVC video codecs — recognised $103.7m of catch-up revenue in a single quarter, taking June-quarter revenue to $260.2m against guidance of $139-143m. Streaming and cloud customers contributed roughly $110m of that. The company then raised 2026 guidance to $775-845m, up $85m at the midpoint.

The catch is in the fine print: the final value of the Amazon licence will be fixed by binding arbitration expected to take 18 to 24 months, with the booked figure a conservative accounting estimate.

What the reported numbers say

Strip the headline beat and the income statement is contracting. June-quarter revenue fell 13.4% year on year, operating income 32.2% and net income 35.6%; operating margin was 53.5% against 68.3%. That is not one quarter — December-quarter revenue fell 37.4%, full-year 2025 revenue of $834.0m was down 4.0%, and consensus models $796.4m in 2026 and $754.3m in 2027 before a rebound to $963m in 2028.

Against that, the recurring floor is rising: annualised recurring revenue reached a record $625.7m, up 13%, toward a stated target of more than $1bn by 2030, a bridge that depends on streaming and cloud royalties growing from roughly $60m to over $300m. Enforcement is doing the work: InterDigital won a second Unified Patent Court injunction against Disney in July over an HEVC encoding patent, covering 11 EU countries, after a fifth German injunction in February. Verdict A: INCONCLUSIVE — recurring royalties are growing, reported profits are falling, and the difference is timing.

Valuation is less ambiguous. Forward price-to-earnings of 40.4x sits above the trailing 30.0x, an inversion that only occurs when earnings are expected to decline. Enterprise value to EBITDA of 19.6x compares with roughly 12x recorded on this desk in May, on an $9.07bn market capitalisation against $6bn then. Jefferies' raised target of $340 sits below the current $351.43. Verdict B: CONTRADICTS — the re-rating has outrun the arbitration.

Adeia grew and the stock did not

Adeia, a 150-person San Jose licensor of media patents to pay-television and streaming distributors and of semiconductor patents covering hybrid bonding — the technique for stacking chip wafers directly — grew revenue 12.1% to $96.1m at a 58.7% adjusted EBITDA margin. Semiconductor revenue reached $48m year to date against roughly $26m for all of 2025; non-pay-television recurring revenue rose 54% and now nearly doubles the shrinking pay-TV base. Management lifted the long-term revenue target to $600m from $500m and the semiconductor piece to $200m from $100m, added a record 12 customers including a multi-year Google renewal, and sued fuboTV in Delaware on 1 July over four media patents. The shares are down 9.8% over three months. Verdict A: CONTRADICTS.

Qualifications matter. Management conceded it is tracking the low end of $395-435m guidance; consensus has 2026 revenue falling 3.1%. Chief executive succession is unresolved, with an announcement targeted for the December quarter. And the foundational hybrid-bonding patents Adeia inherited from Ziptronix have expired — one in 2020, one on 4 May 2026 — leaving roughly 1,100 untested continuation patents as the forward moat, just as the technology goes mainstream and with TSMC and Intel still unlicensed.

On 19.7x forward earnings against 24.9x trailing, 13.1x EV/EBITDA and a 5.85% free-cash-flow yield, at $28.11 versus a $32 median analyst target and a $37 average, Verdict B: POSSIBLE DISLOCATION, discounted by the guidance and governance overhangs.

The tape

InterDigital did not drift higher. It gapped 16.2% on 30 July, earnings day, on nearly double normal volume, and still sits 11.4% below its 52-week high with its 50-day average below its 200-day. Adeia jumped 12.3% the session after its own print and gave all of it back within six sessions.

The setup

Where it stands — InterDigital's beat rests on one-time back royalties still subject to arbitration; Adeia's growing chip-royalty business has not moved its stock.

Would confirm — InterDigital's annualised recurring revenue clearing $650m without catch-up help; Adeia semiconductor revenue exceeding $60m year to date at the September quarter.

Would invalidate — Adeia landing 2026 revenue at or below the $395m guidance floor, or InterDigital's arbitration valuing Amazon below the booked $103.7m.

Watch next — Adeia's chief executive announcement, targeted for the December quarter; both companies report September-quarter results in late October.

Valuation — InterDigital 30.0x trailing and 40.4x forward earnings, 19.6x EV/EBITDA versus roughly 12x in May; Adeia 24.9x trailing, 19.7x forward.