Financial Analysis

The following table presents the disaggregation of our revenue for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, 2026 2025 Increase/(Decrease) Smartphone $ 122,700 $ 235,084 $ (112,384) (48) % CE, IoT/Auto 27,470 65,331 (37,861) (58) % Streaming and Cloud Services 110,000 110,000 N/M Other 181 (181) (100) % Total Revenue $ 260,170 $ 300,596 $ (40,426) (13) % Catch-up revenue (a) , included above $ 103,745 $ 162,328 $ (58,583) (36) % Six Months Ended June 30, 2026 2025 Increase/(Decrease) Smartphone $ 246,091 $ 419,075 $ (172,984) (41) % CE, IoT/Auto 109,361 91,598 17,763 19 % Streaming and Cloud Services 110,000 110,000 N/M Other 134 430 (296) (69) % Total Revenue $ 465,586 $ 511,103 $ (45,517) (9) % Catch-up revenue (a) , included above $ 167,368 $ 247,113 $ (79,745) (32) % (a) Catch-up revenue represents revenue associated with reporting periods prior to the execution of the license agreement. N/M Not meaningful …

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INCOME TAXES In the six months ended June 30, 2026 and 2025, the Company had an estimated effective tax rate of 14.1% and 13.7%, respectively. The change in effective tax rate is due to an increase in the amount of non-deductible officers compensation. During the six months ended June 30, 2026 and 2025, the Company recorded discrete net benefits of $11.0 million and $5.6 million, respectively, primarily related to share-based compensation. The One Big Beautiful Bill Act (the OBBBA) was signed into law on July 4, 2025. The OBBBA contains significant tax law changes with various effective dates affecting business taxpayers. The tax law changes affecting the Company primarily involve changes to the timing and amount of certain tax deductions, including those related to Foreign-Derived Deduction Eligible Income (FDDEI), Net CFC Tested Income (NCTI), depreciation, R&D expenditures, and interest expense. The OBBBA did not have a material impact on our financial statements in second quarter 2026. The effective tax rate reported in any given year will continue to be influenced by a variety of factors, including timing differences between the recognition of book and tax revenue, the level of pre-tax income or loss, the foreign vs. domestic classification of the Companys customers, and any discrete items that may occur. During the six months ended June 30, 2026 and 2025, the Company paid approximately $19.7 million and $14.5 million, respectively, in foreign source creditable withh …

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"LITIGATION AND LEGAL PROCEEDINGS ARBITRATIONS AND COURT PROCEEDINGS Amazon In June 2026, the Company reached an agreement with Amazon.com, Inc. and certain of its subsidiaries (Amazon) to suspend or withdraw all pending litigation and enter into binding arbitration to determine the final terms of a patent license agreement. Brazil Proceedings In September 2025, Amazon filed a claim in the Second Business Court of Sao Paulo (Sao Paulo Court) against the Company and certain of its subsidiaries. The claims alleged the non-infringement and non-essentiality of certain patents relating to video coding and video streaming technologies. Amazon was seeking a declaration that the challenged Brazilian patents were not infringed, and a declaration preventing enforcement by the Company of any video coding patents anywhere in Brazil. In November 2025, the Company and certain of its subsidiaries filed a claim in the Regional Business Court of Rio de Janeiro against Amazon. The claim alleged infringement of certain of the Companys patents relating to video coding technologies. The Company was seeking, among other relief, damages and injunctive relief to prevent further infringement of the asserted patents. In July 2026, the parties stayed all Brazil proceedings pending the outcome of the arbitration described above. Eastern District of Virginia Proceedings In December 2025, the Company and certain of its subsidiaries filed a claim in the Federal District Court of the Eastern District of Vir …

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"OBLIGATIONS 2027 Notes and Related Note Hedge and Warrant Transactions On May 27, 2022, we issued $460.0 million in aggregate principal amount of 3.50% Senior Convertible Notes due in 2027 (the ""2027 Notes""). The net proceeds from the issuance of the 2027 Notes, after deducting the initial purchasers' transaction fees and offering expenses, were approximately $450.0 million. The 2027 Notes bear interest at a rate of 3.50% per year, payable in cash on June 1 and December 1 of each year, commencing on December 1, 2022, and mature on June 1, 2027, unless earlier redeemed, converted or repurchased. The 2027 Notes will be convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and in respect of the remainder, if any, of the Companys obligation in excess of the aggregate principal amount of the 2027 Notes being converted, pay or deliver, as the case may be, cash, shares of the Companys common stock or a combination thereof, at the Companys election. The initial conversion rate was 12.9041 shares of common stock per $1,000 principal amount of the 2027 Notes. Effective July 8, 2026, the conversion rate was adjusted to 13.0351 shares of common stock per $1,000 principal amount of the 2027 Notes (which is equivalent to a conversion price of approximately $76.72 per share), subject to further adjustment. From the period January 1, 2024 through September 30, 2026, the holders of the 2027 Notes have the right, but not the obligation, to convert any …

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"New Accounting Guidance Accounting Standards Update: Induced Conversions of Convertible Debt Instruments In November 2024, the FASB issued ASU 2024-04, ""DebtDebt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments"". The amendments in ASU 2024-04 require disclosures for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025, with early adoption allowed. We adopted this guidance as of January 1, 2026, and there was no impact of this adoption on our consolidated financial statements. Accounting Standards Update: Targeted Improvements to the Accounting for Internal-Use Software In September 2025, the FASB issued ASU 2025-06, ""IntangiblesGoodwill and Other Internal-Use Software (Subtopic 350-40)"". The amendments in ASU 2025-06 amend certain aspects of the accounting for and disclosure of software costs under ASC 350-40. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption allowed. We adopted this guidance as of January 1, 2026, and there was no material impact of this adoption on our consolidated financial statements. Accounting Standards Update: Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, ""Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disa …

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"REVENUE Disaggregated Revenue The following table presents the disaggregation of our revenue for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, 2026 2025 Increase/(Decrease) Smartphone $ 122,700 $ 235,084 $ (112,384) (48) % CE, IoT/Auto 27,470 65,331 (37,861) (58) % Streaming and Cloud Services 110,000 110,000 N/M Other 181 (181) (100) % Total Revenue $ 260,170 $ 300,596 $ (40,426) (13) % Catch-up revenue (a) , included above $ 103,745 $ 162,328 $ (58,583) (36) % Six Months Ended June 30, 2026 2025 Increase/(Decrease) Smartphone $ 246,091 $ 419,075 $ (172,984) (41) % CE, IoT/Auto 109,361 91,598 17,763 19 % Streaming and Cloud Services 110,000 110,000 N/M Other 134 430 (296) (69) % Total Revenue $ 465,586 $ 511,103 $ (45,517) (9) % Catch-up revenue (a) , included above $ 167,368 $ 247,113 $ (79,745) (32) % (a) Catch-up revenue represents revenue associated with reporting periods prior to the execution of the license agreement. N/M Not meaningful During the six months ended June 30, 2026, we recognized $108.1 million of revenue that had been included in deferred revenue as of the beginning of the period. As of June 30, 2026, we had contract assets of $32.3 million included within "" Accounts receivable "" and $143.0 million included within "" Other non-current assets, net "" in the condensed consolidated balance sheet. As of December 31, 2025, we had contract assets of $19.7 million included within "" Accounts receivable "" an …

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SEGMENT PERFORMANCE MEASURES AND EXPENSES Our Chief Executive Officer, who is our chief operating decision maker (CODM), assesses company-wide performance and allocates resources based on consolidated financial information. Consequently, we view the entire organization as one reportable segment and the strategic purpose of all operating activities is to support that one segment. Our CODM evaluates company-wide performance based on multiple performance measures, including, but not limited to, net income. Our CODM does not generally evaluate our performance using asset or historical cash flow information. The table below provides the calculation of net income, which is the performance measure that is most consistent with GAAP, and the significant operating expenses included in this performance measure (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 260,170 $ 300,596 $ 465,586 $ 511,103 Less: Departmental expenses (a) 51,005 49,355 99,610 90,692 Depreciation and amortization 19,482 19,465 38,690 37,678 Intellectual property enforcement 25,417 11,963 42,922 18,941 Share-based compensation 24,103 11,836 34,442 21,334 Revenue share costs 924 2,550 28,422 5,199 Other non-operating income, net (b) (4,139) (5,607) (1,672) (5,994) Income tax provision 27,006 30,466 31,471 47,083 Net income $ 116,372 $ 180,568 $ 191,701 $ 296,170 (a) Includes personnel costs, consulting costs, outside services, administrative costs, and other operating …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing