InterDigital, Inc. (IDCC) Earnings Call Transcript & Summary

Good day, and welcome to the InterDigital, Inc. First Quarter 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Patrick Van de Wille. Please go ahead, sir.

Thanks very much. And thanks, everybody. Good morning, and welcome to InterDigital's First Quarter 2020 Earnings Conference Call. With me this morning are Bill Merritt, our President and CEO; Kai Oistamo, our COO; and Rich Brezski, our CFO. Consistent with last quarter's call, we'll offer some highlights about the quarter and the company and then open the call up for questions. Before we begin our remarks, I need to remind you that in this call, we'll make forward-looking statements regarding our current beliefs, plans and expectations; which are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward-looking statements. These risks and uncertainties include those set forth in our earnings release and our annual report on Form 10-K for the year ended December 31, 2019, and from time to time in our other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof and, except as required by law, we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. In addition, today's presentation may contain references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our fourth quarter 2019 financial metrics tracker, which can be accessed on our homepage, interdigital.com, by clicking on the link on the left side of the homepage that says Financial Metrics Tracker for Q1 2020. Finally, we're doing this call remotely. If for any reason there are issues on our end, I'd ask you to be patient. And we'll make sure we reconnect. With that taken care of, I'll turn the call over to Bill.

Thanks, Patrick. And good morning, everyone, and thank you for joining us on the call this morning. I appreciate it's a crazy time, and I hope you and your families are well and find your way through this difficult period. When we last spoke, I talked about how 2019 represented the culmination of a long and productive strategic journey for the company, one that landed us in an exciting new strategic position with a single powerful long-term R&D engine, fueling a strong and growing mobile device licensing business; a new consumer electronics licensing business; and also driving additional licensing opportunities in IoT and infrastructure. Equally excited was the fact that we could do all of that -- drive the business with revenue potential beyond $700 million -- while keeping our costs at 2017 levels, the cost level before we began this journey. This created incredible operating leverage for us as all added revenue was dropped to the bottom line net of taxes and, in some cases, a modest level of revenue sharing. We were thrilled with where we were. With all that done, 2020 represented our opportunity to execute and deliver that amazing value to shareholders. And that's what we're doing. We started the year completing some smaller deals around our mobile business and our new CE business. We also secured enough market information and negotiating history on the CE side to put a marker [ at a ] revenue for that business, $150 million in 3 to 5 years. We then secured our strong license renewal with Huawei last week, managing to navigate the choppy waters of the trade wars, the COVID crisis and the particular challenges facing Huawei. The deal followed the open publication of our royalty rates, which we posted on our website as part of the transparency project. We started with those rates and then applied our physical discounts for factors such as term, volume and special market considerations. It also reflected the challenges in Huawei's business that include both the COVID-19 pandemic and the specific governmental challenges. When we posted our rates, we expressed the cautious optimism that our effort at transparency, which was hailed by licensing media as a new level of transparency for the industry, would reduce discussions around license terms and expedite deals. We believe that Huawei's deal supports that initial optimism. The Huawei deal also was concluded with a minimal amount of litigation, saving us tens of millions of dollars as compared to prior agreements with Huawei. Indeed, I believe the deal reflected perfectly what our strategy was intended to do: increase the net value of license deals through some combination of higher rates, lower litigation costs and/or shorter timeframes to get to the final deal. It also frees the company to focus on additional opportunities, driving still more value. The deal also represented another opportunity for the company to demonstrate its fair and pragmatic approach to licensing. These are not easy times for companies, including Huawei. But we found a formula that worked and are thrilled to have them onboard again as a licensee. In fact, upon completing this license term, Huawei will have been licensed for a decade and will join the list of licensees who have been with us for at least 10 years. That list currently includes Apple, Sony, Sharp and Samsung, who in particular has been a licensee for almost 25 years. The length and stability of our license engagement speaks volumes to the continuing strength of our innovation, our fair and transparent approach to licensing, and the important role we played and continue to play across multiple generations of standards in video and wireless technology. Our job now is to continue executing on our plan. With both ZTE and Huawei licensed, we are focused on our remaining unlicensed companies, including Lenovo, Xiaomi, Oppo, Vivo and TCL. Together, these represent approximately one-third of the global handset volumes, with many of those sales outside China. Combined, we're confident that they will bring us from our current revenue platform of approximately $340 million to our goal of $500 million. We will also focus on our upcoming renewal with LG. Additionally, we're diligently at work, leading with our new CE customers, looking to drive even further success this year. In sum. When we executed the Technicolor acquisition, we had two intertwined goals. One was to drive revenue, and I've described our progress there. The second goal was on the expense side. And as Rich will describe later, our hard work has resulted in the achievement of that goal. So we're off to a very fine start this year. And we've done so in what is, as we all know, a very difficult and [ volatile ] environment. Luckily, our business is relatively immune to the adverse economic effects of the virus. As Rich will discuss in more detail, our revenue is almost entirely based on fixed price agreements. So we expect only minor revenue decline based upon the lower smartphone shipments that are expected over the next 2 years. Of course, those lower expected volumes did impact the Huawei license, as they should. But that impact was tempered by the fact that the deal was longer term, and the global volumes are expected to recover over the 5-year period of the deal. The crisis has also not materially impacted the ability of the company to function. We are continuing regular dialogue with our licensees, as many in Asia have been on lockdown for an extended period of time and have become accustomed to working over video and audio conference calls. We also preemptively contested our remote work environment prior to the crisis, taking the entire company remote for 3 days to verify our ability to work effectively in a solely virtual environment. Thus, when we shut our offices for real in mid-March, seeking to protect our workforce and also to prevent the spread of the virus, we were ready to operate in that environment. Additionally, many of our engineering projects already occurred across sites. For example, our Montreal team is collaborating with our [ Ren ] team. But engineers' familiarity with remote collaboration made the work move to work-from-home largely uneventful. To summarize. We have created the company we set out to create at the beginning of our strategic journey. We have integrated the assets successfully and quickly and are now executing on plan despite the current crisis. With that, let me turn it over to Kai for more information on licensing and R&D.

Thank you, Bill. It's been a very successful start for the year in both licensing and in our R&D efforts. Let me touch on both. Obviously, the headline is our successful renewal with Huawei, the fact that the deal was able to get done despite trade issues, travel restrictions and COVID-19 speaks volumes to the strength of our portfolio and our diligent licensing efforts; but also highlights Huawei's willingness to license. We feel that with the publication of our fair rates and our transparency around portfolio and licensing practices, as well as our standing offer of arbitration to resolve differences, we offer a perfect counterparty to a company that is willing to take a license. Hopefully, other Chinese companies will recognize that and follow the lead of Huawei and ZTE in concluding agreements. The agreement with Huawei is now the sixth license agreement that we've been able to conclude in the past 6 months. We've often spoken of our commitment to deliver on our revenue goals, and we are diligently doing that. On wireless side, those deals have included major brands, like ZTE, Huawei and [ Ruro ]. These are all important companies, and the licensees help to grow the revenue but also serve as a validation of our important contributions from the leading technology players. On consumer electronics side, our goal was to proceed with smaller agreements that would serve to validate our rates before moving to larger negotiations. And that's what we are doing. So I'm pleased to say we are executing on all fronts. On the research and development side. I can say that while COVID-19 has had a limited effect on our teams, as Bill described, the health crisis has nonetheless slowed the environment in which we operate. The international travel to standards meetings is obviously halted. Standards meetings are taking place by conference call, a painstaking process. That slowdown is not all bad. In fact, typically, the companies that want the standards development to proceed at a breakneck pace are those with almost unlimited resources. And many of our colleagues at standards have been advocating a slowdown, especially after the accelerated work to deliver first with release of 5G. Some of our video technology development work involves a larger studio style setup. So we've refocused on other development work that doesn't require that capability. So there has been some impact, not all negative. But largely our work is able to continue very effectively. I appreciate some of the video work we are doing is very new to some of our investors. So we've posted links to some excellent feature articles produced by leading video technology, Trade Media, on our website homepage. I encourage you to read them. They describe our groundbreaking work in digital doubles, augmented and diminished reality, visual technology science and other areas. So to summarize. We've been through a period of tremendous progress on licensing side and remain focused on continuous execution there. And our research activities, while slightly affected by the coronavirus issue, are nonetheless progressing well. With that, I'll turn over to Rich.

Thanks, Kai. I'll start today by reviewing our first quarter 2020 results. Then I'll discuss our high-level expectations for Q2. Our first quarter results were very strong, especially in the context of the current macroeconomic environment. Revenue came in above our expectations, at $76.2 million. And we benefitted from two new agreements we signed during the quarter, which included just under $1 million of past sales. Our operating expenses came in at $71.5 million, which was in line with our previously communicated expectations. However, it is worth noting that these expenses included nearly $3 million of one-time costs associated with our efforts to bring expenses in line with 2017, as I've described on prior calls. Excluding these one-time costs, we have now delivered two consecutive quarters with an ongoing economic cost of running the business at or below that 2017 target. We take a lot of pride in having met our goal, especially with a much larger patent portfolio and a much stronger research team. That being said, we know how important ongoing cost control is to our company and to maximizing our operating leverage. Although we've checked that goal off, let me emphasize that we continue to be committed to carefully managing expenses. Litigation costs, which are excluded from that 2017 metric, were roughly $5 million in the quarter. This result was impacted, as expected, by a slower ramp up in outstanding matters due to the COVID-19 pandemic. Our Q1 results also included a one-time non-operating gain of about $5.5 million to write up the value of a long-term investment. In early Q2, we sold nearly half of that investment as part of a round of financing, and the increased value reflects the valuation from that deal. We reported a $1.8 million tax provision on just $200,000 of pretax book income, as our interim rate continues to be distorted by foreign, state and perm impacts that are generally small and semi-fixed but magnified in periods of breakeven earnings. Finally, it's important to note that our first quarter results do not include any benefit from our recently announced license renewal with Huawei, which was signed after March 31. Looking forward to Q2. We expect that our recently completed renewal with Huawei, combined with contributions from other fixed price agreements, will help drive another strong quarter, even as global shipments of smartphones are expected to decline substantially. Collectively, our fixed price agreements make up more than 90% of our revenue and includes substantially all of our key licensees, including Apple, Samsung and now Huawei. Under such fixed fee agreements, our revenue is not sensitive to our customers' underlying volume of shipments. This is of great benefit to us during periods of uncertainty such as the economic fallout from the COVID-19 pandemic. Having said that, we do expect declines in shipments from our [ permeative ] base of customers. That should lead to a sequential decline in the variable portion of our revenue, which contributes roughly between 5% and 10% of our overall revenue. All in, including both anticipated declines in variable per-unit revenue and our preliminary accounting estimates for the Huawei agreement, we currently expect Q2 revenue to be in the range of between $97 million to $105 million, including $82 million to $86 million of recurring revenue. Putting aside any Q2-specific impacts to our variable revenue, we now see our revenue platform at about $340 million. And we maintain our goal of increasing our recurring revenue platform to $500 million from wireless licensing, plus another $150 million from our CE business, with additional contributions from IoT and infrastructure coming in over time. We'll provide updated revenue and expense guidance for Q2 a bit later in the quarter. But let me speak to a couple of the implications of the Huawei agreement on operating expense. First, in connection with the Huawei license, we and Huawei agreed to dismiss the litigation between us. This will favorably impact litigation expense going forward, which we would have otherwise expected to increase over the balance of the year. Second, we expect to report a charge of roughly $2 million in the second quarter related to an increase in performance-based RSUs that will vest under long-term compensation plans. I'll now turn it back over to Patrick.

Thanks very much, Rich. Cassie, if we could open the line for questions?

[Operator Instructions] We'll take our first question from Eric Wold, with B. Riley.

This question is kind of related to the last comment around litigation. If I understood it correctly, is obviously with Huawei agreement [indiscernible] expecting it to increase going forward. Did I understand that correctly [indiscernible] after with Huawei sign that mitigation expense for this year should be lower than last year?

Yes. So Eric, what I'd say is we certainly expected it to increase as the year went on. Having said that -- that's prior to the resolution with Huawei. Having said that, Q1, as I noted, came in a little bit lower than we might've expected earlier in the year. And that was because of a slowness in the rollout of cases with the pandemic. So there's been some activity with Lenovo. Not ready to say exactly where litigation is going to come out in Q2. But it's not necessarily going to go down just yet. It's just not going to increase at the rate that we might've otherwise expected.

On the Lenovo litigation, I know you can't speak to all these specifically -- but any major change in timing right now because of the COVID pandemic? And how would you frame, I would say, public filings? How would you frame what was under dispute with Lenovo with what was under dispute with Huawei, and then how they are similar or different?

Yes. So I think the courts generally are trying to move things forward. I do think that things have slowed down a bit. But we have schedules. And so far, we have dates on the calendar, and we think that those calendar dates will be adhered to. So that's good. In terms of how does the Lenovo litigation look versus a Huawei litigation? There's a couple differences. So in terms of the rate settings that we've asked for in the U.K. -- so that was the first filed case, and we asked for a worldwide rate. So it's always a good position to be the first to have filed the case, because that's an important factor generally to what courts decide to do. That's different than Huawei, where they had first filed in Shenzhen, and then we second filed in the U.K. I think the other important factor is having Huawei does give us another very important benchmark to bring into the Lenovo litigation in terms of demonstrating that the rates that we have are fair, reasonable, nondiscriminatory, and what those rates may be. So I think that's a great piece of evidence to present in that case. And third, what you'll find a lot of times with litigants is they will ride the coattails of somebody else. And so it can reduce their costs. Because, as an example, the other company may be the one bearing the cost of patent and validations or bearing the cost of other things. And with Huawei now having final license agreements with us, and now both parties having agreed to settle litigation, Lenovo now is going to -- wants to do the same thing that Huawei was doing. It now starts to bear the cost of all of those activities, which certainly gets included in the calculus, I believe, on their side in terms of when should they enter into a license and when they should not. So I think at this point, we're very comfortable with the position about litigation. We always have been, and I think it's even stronger now with the Huawei deal done.

And then, a question on the CE licensing, with the Technicolor IP, you've now laid out kind of $150 million 3- to 5-year goal for revenues under that and you've announced you're framing deals around pricing. What is the path from here to that $150 million look like? And what are the major hurdles of getting major deals signed, anything like getting pricing deals done with smaller companies kind of set the framework, how important is that on the bigger deals? Or is there a risk that a bigger guy's going to say, we kind of don't care what the smaller guy is saying, we're a different entity?

Yes, Kai, I'll let you answer that.

So I think the smaller ones are very important in terms of -- especially when we get not just one but kind of a number of them together. So they actually verify the value of what our offering is. And they do play, I think, an important benchmark also in negotiations [ logically ] is like whatever it might be, Samsung or so. And that being said -- so in a [ standard ] essential [ patent ] side, obviously, that's -- the [ baits ] are what they are. On the CE side, we do have non-SAPs included as well. But our rates are -- so the offering is the same to whatever the licensees. And we are very comfortable with what we have now proven already so far in the marketplace.

And then, last question for me. Kind of looking at the $320 million of the revenue platform you laid out in the most recent presentation, how do I kind of think about that relative to what was recognized last year? That entirely new deal would've been signed since then? And should we assume that's somewhat of a fairly linear quarterly progression throughout the year?

Yes. Eric, I mentioned in my prepared comments that we're looking at, I think, $82 million to $86 million in recurrent revenue in Q2. So $340 million would be like an $85 million quarterly run rate. So it reflects basically everything that's happened since 2019. And that includes new agreements, as well as any licenses that turned out the end of '19.

And of course, the variable impact on Q2 is included in the Q2 range.

We'll take our next question from Charlie Anderson, with Dougherty & Company.

Congrats on getting the Huawei deal done. I want to start with -- speaking of the Huawei deal, and then you mentioned your confidence level in that next tier of licensees that you don't have under contract today. I wonder, to what degree is the Huawei deal an example of how some of those may look? Is there anything that you feel is unique about Huawei relative to licensing that next year? Just trying to understand the expectation level we could have for when you do execute in that next tier of licensees? And maybe a follow-up?

Sure. So if you kind of walk your way through our rate sheet, and then think about how the different companies may fit into -- or how that will operate with respect to those companies -- you start with the same base rate. That's constant across the customer base. We've always had factors like volume discounts. And so that can differ between one company or another. We've talked about other discounts related to the regions in which a company ships. So that can be a different factor. And one thing that we expect from Huawei, with their limited access to Google Mobile Services -- obviously, that business has really shrunk back to China, to a large extent. Otherwise, if you think about forecasting -- because particularly in fixed price deals you're going to need to create a forecast for a company. So with respect to some of the companies that, I'd say, a common factor across all of the companies today is the COVID-19 impact. So we'd say that that kind of depresses the whole market uniformly over the next couple years. But then there are the particular Huawei-specific issues around access to Google Mobile Services or other issues that are going on that could be unique to them. So you kind of need to work your way through all those, and compare and contrast the different customers in China. And I think you can start to get a feel for how they would compare to Huawei.

And then, I've got a few for Rich. Thank you, Rich, for the commentary on OpEx. I know you don't guide OpEx specifically. But I'm curious, if I exclude what's happening with the litigation, if I exclude the $2 million, I guess, that would be in performance comp; and then some of the one-time impacts we saw in Q1. So taking all those aside, how should I think about the trajectory of OpEx otherwise? And then, it sounded like the unrealized gain on the investment in Q1 -- it looks like it got taken out of non-GAAP. How should I think about the treatment of the realized gain and its impact on non-operating income in Q2?

Yes. So at least from a GAAP perspective, the gain has been recognized, right? And then, the realization of that doesn't hit the P&L in Q2. From an OpEx perspective, at this stage, without being overly precise, I think about the levels that we're at. As we review things and get a better bead on Q2, particularly where litigation stands, we'll include some commentary when we provide the revenue guidance. As you know, typically it's not our practice to provide expense guidance. But we've been doing it a little more regularly on the heels of the two separate Technicolor acquisitions. As things eventually smooth out, I probably wouldn't feel the need to continue to do that. So in summary for now, I would say we're kind of in the range that we're at. Add the $2 million. And we'll provide an update if we see anything dramatic changing there.

And then, lastly for me, I know in the past, you had given some commentary as to future expected cash inflows from all of your deals. I know we're probably midway through that since the last time you gave that update. But since we've now signed Huawei, I wonder if you'd be willing to update us on -- maybe it's just for this year or any multiyear period -- expected future cash inflows?

Yes. So not providing an update today. But we'll certainly look to provide an update at some point in the not-too-distant future.

[Operator Instructions] We will take our next question from Scott Searle, with Roth Capital.

Congratulations on the Huawei deal. Just to get a little more clarity on Technicolor, could you give us an idea in terms of what video was in the March quarter? And in terms of your expectations of that recurring component of $82 million to $86 million in the June quarter, what are you thinking about from a video perspective? I know that's been ramping up a little bit. But help guide us a little bit in terms of how that fits in? And just to clarify, it sounds like, then, $15 million to $20 million would be past sales being recognized in the quarter. Is that a one-time event, or is there some sort of recurring element that'll be going on related to larger past sale deals?

Yes. So I'll start with the second part of the question, then go back to the CE business. On the guidance, the $82 million to $86 million is the recurring number. So the delta would be related to past. And I'll just leave it at that. The recurring number -- I mean, we always say don't ignore past sales, but we really track and emphasize the recurring number and the platform. On the CE side, it's in the neighborhood of $4 million on the quarter. There was a little bit of -- we have true-ups from time to time, so there was a little bit of favorable true-up in there. So the annualized rate is probably a little bit south of that. All in, it's not dramatically different from a year ago, despite signing some new deals. As Kai noted, those deals are smaller, but they're still very important. So we're very happy to make any progress in new deals. And in time, they'll start to add up.

And then, to dig in a little bit on that target of $700 million in revenue, it seems like there's a $50-ish million type of component related to IoT and infrastructure. Could you give us a little more color on that? Is all of the IoT, then, related to Avanti? Is this external to Avanti? And when would you expect to see some of that starting to feather in?

Rich, I'll take that. I'd say that's a rough order of magnitude, this $59 million number. And I'll give you a couple reasons why. So on the IoT side, there's still a lot of uncertainty in the IoT market in terms of penetration of cellular, how the various middleware gets deployed, what's the nature of that middleware. And so until that kind of sorts itself out a little bit, we're not comfortable providing a more specific number around that opportunity. We think it's still meaningful. And that's why I say the $50 million is just kind of a place marker for the time being. In that would be things like Avanti revenue and things like that, which is -- that's moving along just fine. But that's still a small component of revenue, the number of connected cars being fairly small. On the infrastructure -- we have revenue today on the infrastructure side. Again, it's an area that will evolve under 5G as the types of deployments will differ than prior G. So we think that there's a nice, solid opportunity there. And I'd say for all these opportunities, the value of them is there's very little, if any, cost to [ carrying ] opportunity. So we're currently looking at how we may go about the infrastructure market. A lot of the innovation that we do for the terminal replicates itself on the infrastructure side, and there's an opportunity to license. It's a fairly concentrated market today. But that could change with 5G depending upon the microcell deployment. So I think as we go through this year, we'll probably spend a little bit more time building those numbers up a little bit better. And once we see the market develop a little bit better over there, we'll have a better idea of what -- to put out a number that would be, I'd say, comparable in quality and data to what we've done on mobile and what we've done on CE. Those are very much informed by established markets, established licensing practices, negotiating history, things that we don't quite have yet on those other two.

And lastly, if I could, just to dig in a little bit more on some of the parameters around Huawei, I know without getting too specific, but there are a lot of moving elements there where there's a strong domestic presence. But their export presence has really been marginalized by trade issues, by other ban-related issues, inability to use Google Play within their devices, et cetera. So you see their share declining, not clear exactly at what rate. But in terms of extrapolating that and then looking at some of the unsigned Chinese OEMs -- specifically, Xiaomi, Vivo and Oppo -- Xiaomi has exports that are at comparable or above Huawei levels. Vivo and Oppo probably a little bit less, but moving in the direction where they probably quickly pass them from an export standpoint. So when you're thinking about both their competitiveness and the opportunity for those vendors, should they be similar size or larger type deals as you're starting to think about the annual opportunity with them over the next couple years?

Sure. As I mentioned to Charlie -- and I think that the things that you've pointed out, Scott, are definitely the factors that we would look at, the beauty of actually having a very settled rate sheet and a very fairly transparent rate sheet. So you actually look at things like current volume forecast, regions of sale, price point of devices, risk in forecasts as well. Because I think that there's a different risk level between, for example, an Oppo forecast today and a Huawei forecast today. So do all of those come into play? I don't want to talk to the relative size of the other deals. But as I said, I think our rates are fairly transparent, and how we handle things are fairly transparent. And I think people can work their way through that. Obviously, when we look at the collective group that is unlicensed in China -- Oppo, Vivo, Xiaomi, TCL and Lenovo -- that group is five or six companies -- what we're saying is that that group will get us up to platform. So I think you can kind of look at that as a marker as well as to what we think the, quote, average size of the deals could be. But obviously, things will be above and below the average.

We'll take our next question from Anja Soderstrom, with Sidoti & Company.

Congratulations on a good quarter and getting the Huawei deal done. A lot of good questions asked already. But if you can just give us some color on maybe how the current environment has impacted your discussions with other Chinese OEMs? If at all?

Kai, can you get on it?

Yes. So as kind of noted on the ability to get a Huawei deal across the finish line, the current environment has not really kind of impacted on our capability to execute. Now, I would say this, that it's kind of interesting and somewhat surprising that getting meetings done in this environment, where it's all virtual, is actually much easier, just from a logistics perspective. [ Sitting ] and meeting next week or two weeks from now with anybody is way easier than agreeing to travel logistics and needing logistics and everything else. And that's exactly what we are experiencing. And I would kind of say this way, that especially on the technical meetings, where we go through the kind of technical aspects of our portfolio, it's kind of, I would say, significantly increased the rate of interactions with all of our customers. And also, on the business terms, I would say the same way, that's it's the frequency of the interactions is, I would say, gone up, rather than the other way around. Now predicting any deals in the future is very difficult. And if you look at the history, we'd rather take the right deal than rush into a wrong deal. So making a prediction on when you get a deal cross the finish line, that's harder to say. But the activity has gone up, and the interactions have gone up.

And then, also on the consumer electronics, Kai, you said, or you all said, that you're proceeding with the smaller agreements to validate before you move into the larger agreements. Do you have any sort of time frame for this when you sort of approach the larger deals in this segment?

Again, kind of giving you a specific timing on any of the larger deals would be premature. Again, I just want to reiterate what I just said, that our strategy and approach has been that we'd rather make the right deal, irrespective of whether it's in [indiscernible] what quarter it is. And it takes the time that it takes. That being said, we've given the guidance on getting to the $150 million in years.

There are no further questions at this time. Mr. Van de Wille, I'd like to turn the conference back to you for any additional or closing remarks.

Thanks very much, Cassie. And thanks to everybody for joining us today. As Bill and Kai mentioned, we've taken steps at InterDigital to ensure the safety and security of our company. And our concern for safety and security certainly extends for investors. So please, stay safe. Accept our best wishes. And we look forward to meeting with you again next quarter. Thanks, and have a good day.

That concludes today's presentation. Thank you for your participation. You may now disconnect.