Patrick Van de Wille - Chief Communications Officer Bill Merritt - President, Chief Executive Officer, Director Rich Brezski - Chief Financial Officer, Treasurer.

Nikhil Dixit - Barclays Capital Eric Wold - B. Riley & Co Charlie Anderson - Dougherty & Company Matt Galinko - Sidoti.

Good day everyone and welcome to the InterDigital third quarter 2017 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference to your Patrick Van de Wille. Please go ahead, sir. Your line is open..

Thanks very much Alexis. Good morning everyone and welcome to InterDigital's third quarter 2017 earnings conference call. With me this morning are Bill Merritt, our President and CEO and Rich Brezski, our CFO. Consistent with last quarter's call, we will 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 will 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 published this morning, as well as those detailed in our Annual Report on Form 10-K for the year ended December 31, 2016 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, such as free cash flow, pro forma operating expenses and non-GAAP net income.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our third quarter 2017 financial metrics tracker, which can be accessed on our homepage, www.interdigital.com, by clicking on the link on the left side of the homepage that says, Financial Metrics Tracker for Q3 2017.

With that taken care of, I will turn the call over to Bill..

Good morning everyone and thank you for joining us on the call today. As you saw from the press release this morning, the company delivered yet another very strong quarter. The strong results were driven by our broad base of licensees and our continued efforts to control our costs. The result was very strong profitability and cash flow.

All-in, a very good showing. Rich will go through the numbers in more detail in his remarks. Rich will also address the coming changes on revenue recognition which has been a topic of conversation in a number of our investor meetings. Of course, the accounting rules don't change the fundamentals of the company which are very strong.

The new rules will have a limited impact on how we record revenues starting in 2018. However, as Rich will explain, based on the unique nature of our licensing business, we don't see the rules having the same long-term impact on our revenue recognition as we expect may be the case for many of our peers in the licensing space.

Aside from that, I wanted to spend just a couple of minutes today talking about the status of our 5G activities, the different standards processes, our conversations with licensees and last, our M&A activities. On 5G, I am very pleased with the success our team is having in driving the 5G standards process.

The pace and scope of the standardization effort is unlike anything we have seen before with the potential to effect many more markets than previous generations. InterDigital's engineers are actively involved in many key aspects of the 5G effort taking a leadership role in many discussions.

This includes of the most important tasks, which is defining the new 5G radio, where one of our engineers shares the subgroup responsible for this effort. The first release of the 5G standard remains set for the end of the year. The release is a stunning example of how amazing a truly open competitive standards process can be.

During the last nine months, InterDigital has invested tens of millions of dollars in standards related activities making several hundred detailed contributions to the 3GPP standards alone and many other contributions to other standards organizations.

Those contributions have been backed by detailed simulations performed in our lab demonstrating that the solutions we are proposing will work as we see they will. Other companies like Ericsson, Huawei, ZTE and Qualcomm are doing the same with the companies fiercely competing to have their technology reflected in the standard.

These companies are deeply engaged in their own labs but they and we are also involved in scouring the earth for solutions for 5G, which may have been previously developed elsewhere like in academia that can now be adapted, built upon and applied in new ways in the new standard.

As one example of this type of effort, it's been interesting to observe the frenzy around polar codes, a type of coding scheme. As mentioned above, 5g will require a new radio. Polar codes are viewed as an important technology in achieving 5G performance requirements.

As interest in this technology grew, we and others not only engaged in our own efforts to further develop it, but we also identified professors around the world who had worked in this esoteric area for years. Companies began to engage these academic to turn what had been blue skies scientific research into commercial reality.

And last November, 3GPP adopted polar code as the coding scheme for the enhanced mobile broadband control channels for the 5G new radio interface.

None of this would have happened had it not been for the fact that the cellular standards community still understands that to develop an incredible standard that will bring a whole new set of exciting services, you have to value fundamental innovation, wherever it may be found, not just value the ultimate products that use those innovations.

When we go back to the polar code example, there is no polar code aisle at Best Buy, there is no polar code products, but that doesn't mean that polar codes are not very important.

And while polar codes maybe executed on a chip inside of a 5G phone and that chip may sell for $10, that does not mean that the value of polar codes is somehow capped at some fraction of that $10 chip cost, as some would argue.

Polar codes and other new core innovations will help create a new class of products with new innovative features that will benefit the entire device and ultimately the consumers and the businesses that use them.

For example, while we do incorporate a ultrahigh definition display on a handheld mobile device, if the wireless network could not deliver ultrahigh definition content without buffering and stuttering, you wouldn't. You would if your wireless network can effectively deliver the goods which 5G will certainly do.

The continuing acknowledgement of the importance of value of innovation sets the cellular community apart and also explains why the cellular community has come so for so fast. Fueled by an understanding of the potential rewards as cellular committee understands that no engineering challenge is too great.

The cellular community fervently believes it can create the incredible 5G networks that will support the mind-boggling services like autonomous vehicles, remote surgery and the like.

Simply put, the value that the cellular committee places on for innovation is central to delivering the new goods, services and capabilities that create incredible value for consumers.

And because of the advancements in our standards space, all consumers benefit from them, unlike product innovation that while important benefits first the people who can afford the most expensive products. These values stand in stark contrast to those espoused by others.

For example, video technologies will be an important component of many 5G services. The video coding community has its own standards process that has historically benefited from the same underlying principle of valuing raw innovation for which the reward for innovators was reasonable royalty payments.

Nonetheless, there was an effort to create royalty-free coding technologies. Why? From my experience, things that are typically free for a reason, they don't work as well. That difference in performance which can be small over a single generation accumulates over time to result in dramatically lower performance.

It's a corrosive effect that's to everyone's detriment, including the product companies in that space. The same is true for WiFi. Over the past few years, some of the companies involved in that standards process as well as regulators have attempted to devalue the fundamental innovation necessary to drive that standard forward.

The result has been a more complicated and I believe slower standards process. It's easy to compare the technology roadmap between cellular and WiFi. The former is far more robust in terms of vision, its pace and the innovation that will drive.

One cannot help but conclude that the fundamental notion of paying fair value for outstanding innovation drives the difference in behavior of the contributors in the true standards space.

I read all this because I believe we are successfully emerging from the period of regulatory upheaval where regulators prodded by select companies attempted to change the patent landscape for standards innovation.

They held a little success in WiFi spurred by the untested notion that the innovation would happen even without the patents being appropriately valued. What we are finding is that these notions, these untested ideas are now flaming out. We can now readily observe what happens when you value innovation and when you don't.

The result of all this has been that the regulators are being much more cautious in their dialogue and the companies that incorporate the innovation and the product are taking a more balanced view. Which brings me to our licensing discussions. As you know, we have about half of the smartphone market under license.

We have been working to get the remaining unlicensed companies under license for the past year with the goal of achieving annual recurring revenue of roughly $500 million from our core terminal unit licensing business. We remain committed to achieving that goal. We have regular engagement with the major unlicensed players.

Indeed, we have met with most of them in just the past few weeks and are making progress despite each company operating in a challenging competitive environment. The progress we are making is being driven by the fact that we have driven our licensing program for three years.

The fact that we present a very strong patent portfolio that we are very well known for being a major contributor to the standards process and that we are very fair, patient, creative and flexible in terms of how we construct the license.

Since the last quarter, those qualities have helped move these discussions along and we are hopeful that we can successfully conclude negotiations with one or more of these companies in the coming quarters.

On M&A, we continue to be active in the market looking for companies with deep innovation positions for technologies that we expect to be pervasive. We have a number of opportunities we are pursuing and are being disciplined in terms of our process.

We did have some investors ask us whether our announcement of an increased buyback effort as well as an increase in our dividend reflected some change in our thinking around M&A. The answer is no. Those increases simply reflected a strong position the company is in and our tremendous financial visibility.

The fact that we have a balance sheet that can support both acquisitions and the return of capital to shareholders is a great place to be. With that, let me turn the call over to Rich..

Thanks Bill. Our third quarter revenue approached $100 million, driven by almost $90 million of recurring revenue. Our operating expenses both for the quarter and year-to-date are relatively flat when you do not include the impact of our fourth quarter 2016 acquisition of Hillcrest.

We continued to generate strong profit and cash flow with third quarter diluted EPS of $1 per share and over $100 million of cash flow generated from operating activities in the quarter. All these figures reflect the strength of our business.

On last quarter's earnings call, I mentioned that we were due to collect more than $1 billion over the next five years under fixed fee agreements that were already in place.

As I said, in the third quarter we generated over $100 million of operating cash flow and the amounts we are now due to collect through 2022 under fixed fee agreements remain in access of $900 million, a tremendous figure upon which we will be adding cash flow from per unit agreements and any new agreements we may sign.

This quarter I want to highlight and discuss an upcoming accounting rule change that we have disclosed in our recent filings. This new accounting standard will have no impact on the underlying strength of our business. But I do want to spend a few minutes discussing its impact on the future accounting results we will report.

Of note, these accounting changes will have a limited impact on our accounting, although we expect that they may affect other companies in the intellectual property licensing space much more significantly. I will turn your attention to page eight of 10-Q filed this morning for the specific language regarding this accounting change.

Effective January 1, 2018, we and most other calendar year companies will adopt the new accounting standard governing revenue recognition, which is the result of more than five years of work by the FASB and the International Accounting Standards Board.

For purposes of this discussion, there are two main forms of licenses that we evaluated, fixed fee and variable.

Under the new accounting standard, companies that license rights to use intellectual property must evaluate whether fixed fee license agreements represent a transfer of intellectual property rights at the inception of license or over the term of the license.

We referred to the former as static fixed fee agreements and the latter as dynamic fixed fee agreements. Due to the ongoing nature of our research and development and the constantly evolving technical specifications of the standards we contribute to, among other factors, most of our fixed fee agreements are dynamic.

However, we do have a limited number of static fixed fee agreements. For a more detailed discussion of the factors that lead to those definitions, I would refer you again to page eight of our 10-Q. Currently, our practice is to spread revenue from both dynamic and static fixed fee agreements over the term of the license.

Under the new standard, we will continue to recognize revenue from dynamic fixed fee agreements over the term of the license but will recognize revenue from static fixed fee agreements at the inception of the agreement. As things stand, a unique set of circumstances led to each of the static fixed fee agreements we currently have.

We don't expect these circumstances to repeat in the future. As a company, our general practice when discussing fixed fee agreements has been and will continue to be to offer fixed fee agreements that are dynamic in nature. But what happens to the static fixed fee agreements we have already signed.

Well, as a result of the transition provisions of the new standard, beginning January 1, 2018 we will cease recognizing revenue from any static fixed fee agreements signed prior to January 1, 2018. To put that into perspective, on a year-to-date basis, we have recognized $220 million of recurring revenue from fixed fee agreements.

Just under one-third of this amount relates to static fixed fee agreements. Beginning in first quarter 2018, we will not be permitted to continue recognizing revenue from those static fixed fee agreements. There will also be some changes to the way we recognize revenue for variable or per unit agreements.

Currently, we generally recognize revenue from such variable agreements one quarter in arrears from the period in which the underlying sales occurred. Beginning January 1, 2018, we will record per unit royalty revenue during the same period in which our licensees underlying sales occurred.

In other words, we expect to estimate and record revenue associated with per unit royalties each quarter rather than waiting to receive the licensee order reports and recording the revenue in the following quarter. The estimation will necessitate true-ups in subsequent quarters.

While the true-ups might introduce some additional volatility into our revenue stream, we expect such volatility to be slight since only 14% of our year-to-date recurring revenue has resulted from per unit agreements. So to summarize, the major impact on our accounting is limited to the static fixed fee agreements we currently have in place.

To facilitate the transition for investors, we will also provide footnote disclosure in our quarterly filings throughout 2018 that will present our revenue and other financial data as if changes I have discussed were not adopted on January 1, 2018.

Hopefully this helps with the understanding of our pending adoption of the new accounting standard which may likely affect other IP licensing businesses more than us. As I mentioned at the beginning of my comments, we have a strong business and I would like to stress above all else is that nothing about our business has changed.

Our cash flow from current agreements is very strong and our potential for additional cash flows from new agreements and other areas of development is unchanged. With that, I will turn it back over to Patrick..

Thanks very much, Rich. We would like to open the call up for questions now..

[Operator Instructions]. And we will take our first question from Darrin Peller. Please go ahead. Your line is open..

Hi guys. This is Nikhil Dixit, on for Darrin. Thanks for taking my question..

Hi Nikhil..

Hi guys.

I was wondering, can you provide us with an update on the Avanci platform, how that's been progressing? Is there still an expectation for some revenue contributions by the end of this year? And then looking ahead, given that we are approaching 2018, do you have any visibility into the magnitude of the ramp for Avanci in 2018 and beyond?.

So they continue to make good progress. They are dealing with folks that haven't historically been patent licensors. So these are the auto manufactures themselves. And so there has been an education process. I think that is going well. But it does take a little bit longer. I think they are still feeling good about their ability to bring deals in.

In terms of what the ramp would be in 2018, it's going to depend upon what they bring in in 2017 and who the companies are and what their prospects or what size of the company and the size and the integration of the cellular capability into the vehicle. So we continue to monitor them very closely and work with them as appropriate.

But as far as we can tell, they are doing everything right..

Got it.

So just in terms of the nature of the contribution still not material enough to call out yet?.

Yes. I think, again you want them to get a couple agreements in place. You want to see who they are and then as we have done before, once we start to see contributions coming in, then we can do a better job of mapping out where they are going to get to from there.

But there is a little bit of price discovery going on and again discussions with different parties of different sizes. And so as they as they bring home deals and give us more facts, then we are going to be in a better position to kind of project out what we think they are going to do..

Got it. It makes sense. And then just a quick follow-up. During the quarter, I know there was an opening at the Berlin office and then the agreement to join the 4iP Council.

I was wondering does this represent a change in your strategy around any sort of international push into the European market? Or if you provide us with more color on the thought process there?.

Well, we have had good signals in terms of opening up regional offices in various countries, right. You go there for a number of reasons. So one, I will tell you, there is no change in the strategy.

I would say, it's perhaps an enhancement of the existing strategy which is one, go to where the talent is and go to where the work is and to some extent, go to where the funding in, all three of those being important components. Europe is a very strong place in terms of 5G development.

There is a number of different government initiatives behind 5G there. We had great success and we again have great success in the U.K. Berlin represents another opportunity for us as well.

And we do benefit generally in the business from having feet on the ground in many places around the world because ultimately this is a worldwide market and our ability to touch folks around the world directly, I think, is an important component of the business..

Got it. And then last question would be that, I guess we hear from some peers who have commented recently on anecdotal changes with regards the IP enforcement environment in China and it's encouraging to hear your progress with licensees assuming some of those are in the market.

I was wondering if you can update us again on what you are seeing with regards to that market overall and how it's changed over the past year or quarter?.

Yes. I think we are seeing the same thing that you are maybe because we spend our life doing it. We probably see it a little bit more than you do. This is a point we have been making for the last number is strong intellectual property discussions are actually an underpinning of most of all strong economies. And so China is no different.

And we have seen the intellectual property system there continue to mature and get stronger. I have mentioned on a number of calls, the patent office there continues to be and has been for some time a very strong patent office.

And in conversations that I have had with my counterpart, the one change I would tell you is that more people are openly talking about bringing litigation, if they need to, in China because they are getting comfortable that they will get a fair result over there as those institutions there continue to mature. So I think that's all good.

And I think that given where the market is moving from a manufacturing standpoint to have, if you needed, a good enforcement vehicle in those countries is a big plus..

Got it. Thanks. I will jump back in the queue..

And we will take our next question from Eric Wold. Please go ahead. Your line is open..

Thank you. Good morning. A couple of questions. One is, just wanted to clarify the accounting just to make sure got that and understand that correctly.

So can you just reiterate again what has been the revenue from static deals recognized year-to-date? And then, if the understanding is that you can no longer recognize any revenue from those deals that have previously been signed starting after 1/1, do you recognize any kind of all the remaining future in Q4? Is that stuff that's not going to be recognized this year lost and not recognized? How do you account for that? And then when we pull that out of the forward numbers, is there any associated costs that show up to be pulled out as well? Or is that just purely just a pass-through?.

Yes. So basically what's happening is, under the new rules for the static agreements, since it's viewed, I am going to oversimplify as a transfer of intellectual property at the inception of the license, you recognize the revenue at the inception or said differently in the quarter in which the agreement is signed.

Under the transition rules for the agreements that were signed prior to the transition, you would have already recognized that revenue. There is at least two ways to transition. But under either case, we will not recognize any revenue from those previously signed agreements in the future.

The most likely path forward for us is to take that revenue adjustment and it basically goes in to a beginning balance sheet adjustment on January 1 kind of straight to equity. So it's not going to be a fourth quarter event. It's something that kind of happens as an opening balance sheet adjustment.

The other alternative which at this point, I would say, is less likely for us but we haven't committed to one or the other, would be a retrospective adoption where you go back and restate all the prior periods under the new rules. And then as far as expense impacts, yes, there is certainly no significant expense impacts associated with that..

Okay. And then just to make sure I got the numbers right, so remind me again the $220 million of recurring revenues from fixed fee, is that one-third has been from static.

Is that correct?.

Yes. That's right. $220 million under fixed fee year-to-date with a little bit less than one-third of that being static..

Okay.

So assuming that year-to-date is annualized, that's the number we should remove going forward?.

Yes. I will leave my comments where they were but I think your logic is sound.

The only other thing I will emphasize, associate with my comments is, where there is some unique circumstances that led to the existing fixed fee agreements that we had, so we see this as kind of not something that is likely to affect future agreements signed after January 1, 2018.

Generally I would expect them to either be per unit where we continue to recognize the revenue over time albeit by estimating to accrue it in the scene period as the sales, which is the slight difference there or alternatively fixed fee but dynamic in nature. So that would be similar to the way that we recognize those agreements to that..

Okay.

And then on the discussions that you continue to have with the unsigned handset OEMs, is there a common theme that emanates from these discussions that keeps one or more of them from signing? Is it purely on still the rate you paid in past year royalties? Or is there anything else that has popped up?.

So typically it's economic issues that will define the pace of the discussion. And I think we identified the two pieces of economics that you typically deal with. One is the past sales contribution piece, right. And then the second is on go forward rate.

I think we have been working with folks over the summer in terms of structures to deal with past sales because that can actually be an impediment to getting deals done. And I think at least so far we are seeing good success in starting to clear that hurdle.

And then second, on the go forward rate, there it's an interesting discussion because a lot of times they absolutely understand why our rate is where it is and we can show how they map into competitors, because there is fair amount disclosure around our licensees. And so it's hard for folks to argue that that's not where they need to be.

Then the question becomes how do you get them there because a number of these companies are operating with very razor thin margins and you have to see how do you get them to provide consideration in that range, which then takes you down a path of beyond cash consideration.

It will always be a healthy component of the deal of R&D cooperation, patent transfers, other types of arrangements which attenuate the discussion but that's okay because ultimately if you can build a relationship that has those multiple components that's actually a much better relationship ultimately because they are stickier.

And we found that to be true with, for example, Sony where we have been able to renew things regularly. So I think that the two economic issues are the common theme. And I think as we have gone through this year, I think we certainly have made progress with respect to both of those vectors.

And now I think we know we have with created structures now that seem to be resonating with some of those licensees and now the question is of working them to completion..

Got it. Thank you..

We will take our next question from Charlie Anderson with Dougherty & Company. Please go ahead. Your line is open..

Yes. Good morning. Thanks for taking my questions. Bill, it looks like you have got a positive decision on Taiwan just a couple days ago. I wonder if you could just maybe put that into context in terms of what it means? Was that a stumbling block for anybody that that was outstanding? Any comments there would be helpful..

So we didn't see it as a stumbling block. At least it wasn't being positioned with us as a major issue, whether in buying it was something for somebody. Obviously we are very pleased with the result, also we are not surprised by the result.

I think the one thing that's been true of our licensing program for as long as I have been here is that it's kind of held as a standard bearer of how to do it right. And the fact that we get basically a team to help from the TFTC following, they are not simple for somebody else, I think is a reflection of how reasonable we conduct the program.

So we certainly will tout it with folks. But it's not something that was a stumbling block in deals we do..

Got it. And then just a housekeeping one for me. I noticed that legal or litigation spend was up just slightly from Q2. You guys have been at a very low level for the past couple of years.

Just wondering if anything is changing there as far as any activity?.

It's typical ebbs and flows, right. So you will have, we have been involved in some Supreme Court work as there has been a number of cases that have got there that was put together as briefs as well as stuff that goes on at the company in terms of arbitrations that we are involved in. So it can move around a little bit.

But I think we are happy about it that it's a relatively low number right now..

Yes. Okay. Perfect. Thanks so much..

And we will take our next question from Matt Galinko from Sidoti. Please go ahead. Your line is open..

Hi. Good morning guys.

Regarding the runoff of the static agreements, can you offer any more color on when they might be ending or renewed or viable revenue generators for you?.

Yes. So let me address it this way, Matt. You heard Bill in his comments reiterate our goal of at least $500 million in recurring revenue.

The reason that we didn't change that goal is because again, while there is a transitional impact, those agreements term out and we would expect to re-sign them under one of the two forms I discussed with would be recurring over time rev rec.

So I am not sure how much I can say other than that at this point, there maybe opportunities in the future to add to that disclosure in terms of length but for the time being, I think I would emphasize that it is limited in nature in terms of what it effects and over what period it effects it.

And no longer term, we see it as a recurring revenue model just as it is today with the goal of in excess of $500 million of revenue from that platform..

Okay. And so far as any of that extends beyond 2018 where, I think you mentioned you will provide an apples-to-apples comparison for us with the prior accounting rules.

So if that runs into 2019 or 2020 deep, can you continue to provide some metrics? Or is there anything preventing you from giving us some kind of help with understanding that?.

Yes. What I can tell you is that the rules actually require footnote disclosure in 2018 to show what the revenue would have been under the old standard. So we think that's very good and very helpful. I think there is a little more work to do to figure out beyond 2019 what the disclosure are and so forth.

But suffice it to say, we will be able to probably elaborate between now and then in terms of the longer-term impacts. The key thing to note is that it really is a recurring revenue model going forward. We do have a limited impact on some licenses that were signed based on pretty unique circumstances prior to this point in time..

Matt, this is Patrick. What I would also say is that we have made multiple disclosures about revenue recognition and accounting changes since the 10-K earlier this year and on ongoing basis and we are working very hard to be extremely proactive and extremely transparent on this issue. So as much communication as we can provide, we will..

Sorry. And then, I didn't hear too much about IoT on the script.

So I am curious if there is anything you could point to this quarter in terms of your commercial solutions in getting them into market?.

Sure. So we actually did a launch of now branded Chordant. That was in October, earlier this month. We continue to be very much involved in the U.K. in deploying service over there. So that continues to be good engagement with the customers there.

I think what we are in the process of now is really sort of two components of that for a commercialization effort. One is, I would say, getting better clarity around the economic model, right. There is a couple different offerings that they have and a couple different ways they have gone to market.

We are managing them like to startup and so they are being nimble in terms of how they approach customers and changing that approach as need be. The offering is both a software offering but there is also a, call it a data marketplaces component of it as well.

So at this point, I would say, we are kind of halfway through that market test for those one, when do you get a customer that's going to pay for it and second, at what level are they going to pay for it. And we are hoping that next month or a couple of months that we will have pretty good clarity around that.

I think that you have seen the business continue to secure awards. Awards are great. Ultimately we want paying customers, but awards are a good second-place finisher there.

It does reflect, I think, the fact that in many instances, for example on the underlying 1M power platform which is a standardized platform for connecting up various M2M devices, we have the most complete platform out there and that's playing well with customers.

I think the overall structure of the offering with this data marketplace component makes it unique. All that said, I would also say that the IoT marketplace itself remains a little chaotic. As you know, there is obviously a level of hype around any market like this.

And I think there is going to be a level of recalibration in this market and you see that with a variety of companies actually pulling back a little bit from the market. So just one more reminder about the IoT opportunity for us as well. So on the software piece, I think it's moving forward as we want it but we still have to prove it out.

But it also represents just, let's say, one third of the IoT opportunity for us, because regardless of whether we have our own software solution in the market or not, there is a very strong patent portfolio that underlies that and there will be software out there that uses that patent portfolio.

So that will,, at a minimum, be a monetization opportunity and I think one that we have fostered through our software by getting people excited about that type of software. And second, of course there is the Avanci opportunity which is moving forward as well..

Great. Thank you. Operator And we have no further questions at this time..

Thank you Alexis. Well, once again, thank you everybody for joining us today. We mentioned it many times on this call, but I will direct you once again to page eight of our 10-Q filed this morning for a full discussion of the changes to revenue recognition rules.

I would invite you to pay close attention to the effect every IP licensing company a little bit differently and feel free to reach out to me at Investor Relations if you have any concerns or questions. Thanks and see you next quarter..

This does conclude today's program. Thank you for your participation. You may disconnect at anytime..