Adeia Inc. (ADEA) Q2 2026 Earnings: Revenue $96M (+12.1%)
ADEA — Q2 2026 Financial Report Analysis
Q2 · Fiscal year 2026 · Published by Pham Hop
Adeia revenue rose 12.1% to $96.1M in Q2 2026, but only because of $22.6M in one-time patent catch-up payments; recurring revenue fell 13.6% as Pay-TV royalties declined, while semiconductor licensing tripled to $14.8M.
Revenue
$96M
+12.1% YoY
Net income
$17M
+3.9% YoY
Diluted EPS
$0.15
0.0% YoY
Operating margin
26.4%
This period vs a year ago
Same period last year
This period
Revenue▲+12.1%
≈$86M
$96M
Net income▲+3.9%
≈$17M
$17M
Diluted EPS▲+0.0%
≈$0.15
$0.15
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Revenue up 12%, but only because of one-time catch-up payments
Adeia makes its money by licensing patents. It owns more than 14,250 patent assets covering how TV guides, streaming apps and online shopping sites help people find content, plus chip-packaging technology such as hybrid bonding (a way of stacking chips directly on top of one another). Pay-TV operators, streaming services, device makers and chip companies pay Adeia for the right to use those inventions. It has one reporting segment, IP licensing, but splits revenue two ways that matter here: recurring revenue (ongoing license fees and royalties spread over a contract's life) and non-recurring revenue (one-time payments, mostly for use of the patents before a license was signed).
In the second quarter of 2026 (three months to June 30), revenue rose 12.1% to $96.1 million, from $85.7 million a year earlier. That growth came entirely from one-time money. Non-recurring revenue jumped to $22.6 million from $0.6 million, while recurring revenue fell 13.6% to $73.5 million. The 10-Q says the recurring decline was "driven primarily by declines in royalty revenue from certain Pay-TV customers," partly offset by new customers signed after Q2 2025. Revenue was also down from $104.8 million in Q1 2026.
At a glance
$22.6 million of one-time revenue (vs $0.6 million a year ago) accounted for all of the $10.4 million revenue increase. It came from two new multi-year licenses that each included a payment for past use of Adeia's patents.
Recurring revenue fell 13.6% to $73.5 million. This is the base Adeia can count on each quarter, and it is still shrinking as traditional Pay-TV royalties decline.
Semiconductor revenue roughly tripled to $14.8 million (from $4.7 million). Management's decision to raise its long-term revenue target to $600 million from $500 million rests mainly on this business.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
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Revenue
$96.1M
$85.7M
+12.1%
Recurring revenue
$73.5M
$85.1M
-13.6%
Non-recurring revenue
$22.6M
$0.6M
+$22.0M
Media revenue
$81.3M
$81.0M
+0.3%
Semiconductor revenue
$14.8M
$4.7M
+215%
Operating income
$25.4M
$16.4M
+54.7%
Operating margin
26.4%
19.1%
+7.3 pts
Net income
$17.4M
$16.7M
+3.9%
Diluted EPS (GAAP)
$0.15
$0.15
0.0%
Non-GAAP diluted EPS
$0.34
$0.25
+36%
Adjusted EBITDA
$56.4M
$45.7M
+23.5%
Operating cash flow
$54.6M
$23.1M
+136%
Operating margin is the share of revenue left after running the business (research, sales and admin, patent amortization, lawsuits) but before interest and tax.
What drove the quarter
Licensing deals. Adeia signed six license agreements in the quarter and added 12 new customers, a record according to the earnings release. The two largest were a multi-year renewal with Google (which covers YouTube TV, one of the largest Pay-TV services) and a multi-year license with RPX, a patent-risk company that bundles licenses for its members. The RPX deal alone added 10 e-commerce customers. A new license with L'Oréal and three smaller media deals made up the rest. Management said non-Pay-TV recurring revenue grew 54% year over year. The filing does not give the dollar amount behind that percentage.
Media vs semiconductor. Media revenue was flat at $81.3 million. Weaker Pay-TV royalties were offset by new streaming, e-commerce and consumer-electronics licensees plus the one-time payments. Semiconductor revenue rose to $14.8 million from $4.7 million. For the first half, semiconductor revenue was $48.3 million vs $8.4 million, which means Q1 alone contributed about $33.5 million.
Costs. Total operating expenses rose only 2.0% to $70.7 million. R&D grew 16% to $18.3 million because of higher patent-portfolio costs and more staff. Amortization rose 14% to $16.1 million because of patents bought in 2025 and 2026. Selling, general and administrative costs fell 4% to $31.0 million on lower advertising, and litigation expense fell to $5.3 million from $7.2 million as some cases settled. Because costs grew far more slowly than revenue, operating income rose 55%.
Interest. Interest expense fell 21% to $8.0 million, which the filing attributes to "lower debt balance and lower variable interest rates." Adeia paid down $6.1 million of its term loan in the quarter and $34.2 million in the first half. The balance is now $392.6 million.
What the headline numbers hide
Pre-tax profit more than doubled, but net income barely moved because of taxes. Income before tax rose to $19.0 million from $7.6 million (+149%). In Q2 2025 Adeia recorded a $9.1 million tax benefit (an effective tax rate of -119.4%), which pushed that quarter's net income above its pre-tax profit. This quarter it recorded $1.6 million of tax expense (an 8.6% rate, below the 21% federal rate because of tax benefits tied to stock-based pay). Flat GAAP EPS makes the underlying improvement look smaller than it was. The comparison is distorted by the prior-year tax item, not by weaker operations.
The GAAP vs adjusted gap is large, and most of it is a real cost. Non-GAAP EPS ($0.34) was more than double GAAP EPS ($0.15). The adjustments were $16.1 million of patent amortization, $10.5 million of stock-based compensation, $3.8 million of costs still tied to the 2022 separation from Xperi, and $0.2 million of leadership-transition costs, partly offset by an $8.8 million tax adjustment. Patent amortization is a non-cash charge, but Adeia keeps buying patents ($15.0 million in the first half), so it is not a cost that goes away. Stock-based pay is also an ongoing cost to shareholders (see the share count below).
Growth depends on one-time payments. Non-recurring revenue was 23.5% of revenue this quarter and 26.6% for the half ($53.5 million), up from 2.2% in H1 2025. Payments for past infringement are real cash, but they arrive when deals close and do not repeat each quarter. Without them, revenue would have fallen.
Cash flow was strong, partly because customers paid upfront. Operating cash flow for the first half was $113.1 million, 2.8 times net income of $40.1 million. Much of that gap is non-cash charges added back: $32.0 million of amortization and $19.2 million of stock pay. Another $20.8 million came from higher deferred revenue, meaning cash received before the matching revenue has been recognized. That cash is real, but future revenue from those contracts will now come in with no new cash attached.
Buybacks did not shrink the share count. Adeia spent $20.0 million on buybacks in the first half, plus $32.9 million buying back shares to cover employees' tax on vesting stock awards. Diluted shares still rose to 114.4 million from 112.2 million. Per-share gains came from profit growth, not from a smaller share count.
Revenue is concentrated. Two customers accounted for 15.6% and 13.7% of Q2 revenue. A year ago, a different customer accounted for 20.0%. Signing or losing a single large license can swing a quarter.
Guidance was reiterated, not raised. The full-year 2026 revenue range of $395–435 million is unchanged. The raised target (to $600 million) is a long-term annual goal with no date attached. It is not a 2026 number.
Takeaway: Adeia's reported growth this quarter came entirely from one-time licensing payments. Recurring revenue, the part that repeats every quarter, fell 13.6% as Pay-TV royalties declined. Pay-TV means traditional cable and satellite TV. The key question is whether new streaming, e-commerce and chip licenses can grow recurring revenue faster than Pay-TV royalties shrink, and on this quarter's numbers they have not yet done so.
Outlook
Management reiterated its 2026 guidance: revenue of $395–435 million, GAAP net income of $57.2–80.4 million, adjusted EBITDA of $213.4–245.4 million, and interest expense of $34–36 million. After $200.9 million in the first half, Adeia needs $194–234 million in the second half to land in the range. The low end is slightly below the first-half pace. Reaching the high end would take more one-time deal payments like those in Q1 and Q2.
The long-term annual revenue target rose to $600 million from $500 million: $400 million from media and $200 million from semiconductors. Management tied the semiconductor figure to "the trajectory of hybrid bonding adoption across both memory and logic," driven by AI data-center and high-performance computing demand. Semiconductor revenue was $48.3 million in the first half, so that target is roughly double the current annualized run rate, and some of the first-half figure may itself be one-time.
There is also a leadership change. CEO Paul Davis said in May 2026 that he would step down. On September 28, 2026, Adeia named Dipti Vachani, previously head of Arm's automotive business, as CEO effective October 12, 2026. The board said her focus includes "diversifying our recurring revenue streams beyond Pay-TV."
Our read: The business is profitable and generates plenty of cash. It is paying down debt ($356.0 million of the term loan is due in June 2028) while also paying a $0.05 quarterly dividend. The weak spot is recurring revenue, which fell 13% in the first half. Watch three things in Q3: whether recurring revenue stabilizes as the Google renewal and the RPX and L'Oréal deals start adding to it, how much of semiconductor revenue turns out to be recurring rather than one-time, and whether second-half deal signings put the company on track for the upper or lower half of the 2026 revenue range.