Good day, and welcome to the InterDigital, Inc. Second 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. Good morning everyone and welcome to InterDigital's second quarter 2020 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'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 during 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.

hese 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 measure.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our second quarter 2020 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 Q2 2020.

Finally, with COVID-19 the participants on this call are all in different locations some of which are experiencing significant weather events. If there is a weather related technical issue during the call, I’ll just ask everyone to be patient while we exercise the pull back option. And 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 the world continuous to be going through a crazy period and I hope all of you are well and finding some time to relax or something.

With that in mind, I am going to keep my remarks fairly brief today touching on the status of our licensing business and quick update on the litigations and then closing with some remarks and on the company’s operations in light of the continuing pandemic.

As for the business we proven once again how resilient our business model is growing revenues by 15% during – arguably one of the more difficult global period in recent memory, while that revenue increase was driven part by our renewed agreement with Huawei, we’ve also signed over half dozen new agreements in the last three quarters all of which is contributed to revenue.

We also signed a small new CE agreement early this quarter that will contribute the third quarter revenue. Licensing is also about momentum and we certainly have a good amount of that now. In addition to that licensing success we can also continue to move [indiscernible] with other potential licensees on both the mobile and CE side.

All of that speaks to how well are now larger and more diverse licensing business is operating. It gives us confident that we can deliver on the revenue goals, we articulated for the different licensee programs. Of course, occasionally do have the customer that simply refuses to negotiate the take.

And in case with Xiaomi despite years of effort by InterDigital Xiaomi has failed to take the license initiatives seriosuly. This type of behavior we have never seen [indiscernible]. Xiaomi success in the cellular handset market that never happened but for cellular standards. There is like no upfront investment and developed wireless technology.

And we’ve all provided to them and furthermore wide cellular standard process an incredible process that eliminates barriers to entry and enhance this competition benefiting product manufacturers and consumers alike essentially billions of dollars of research are made available to brand new market entrants allowing them to quickly scale up production and become a market force.

And that is exactly what Xiaomi did. And they have profited enormously. The only thing asked of them is that they pay a fair price for the billions of dollars in technology to which have been provided access. Xiaomi has failed to do so. Hence we made the decision to bring a patent infringement lawsuit against Xiaomi India, which we filed last week.

Although, we actually filed two patent actions in India, the first is based on cellular inventions created by InterDigital. The second lawsuit is based on the video coding technologies developed by our R&I team, which we acquired as part of the technical transactions.

The suit demonstrates the broader reach of the company’s innovations and the value that we believe we are due for the use of our inventions. Among other things, the lawsuit seeks injunctions against Xiaomi sales of handsets in India, which is a significant market for them.

Of course, we continue to be willing to enter into a license agreement with Xiaomi on fair, reasonable and non discriminatory terms. We will also be willing to arbitrate the terms of the license, which is something we offer to all prospective licensees. What we're not willing to do is how Xiaomi used our technology without appropriate compensation.

And as we said before, litigation tends to be the last option for us which we pursue only when other options are exhausted. That said, litigation can be effective as our recent agreements with ZTE and Huawei filed, the filing – a litigation. And every company that we have ever litigated against had ultimately signed a license with us.

The Xiaomi and Lenovo will do the same. Next let me touch quickly on the overall operations of the company in this period. As is evident from the financial results we continue to operate well.

The company remains in a remote work mode and will remain so at least until the fall, depending upon the status of the pandemic at that point we will reopen the offices consistent with all safety best practices for doing so, but we'll maintain the remote work option for all of our employees for the foreseeable future.

Our employees have been highly productive working from home. And we also have been very effective at recruiting new talent and weaving them into the employee populations. So we don't see the need to rush back to the office.

That said, we have a set of employees that our preferred office environment, so we're looking for the best way to balance these different interests. So as I said, I thought I'd keep it short. We've had a great first half of the year or we're looking to repeat that success in the second part of the year.

With that, let me turn the call over to Rich our CFO for discussion with the financial results..

Thanks Bill. We delivered strong top line growth in Q2, bringing us in at the top end of our ranges for both total and recurring revenue. This growth was driven by new agreements, including our recent patent license agreement with Huawei.

As noted in our 10-Q, as well as in the financial metrics published on our website this morning, Huawei made up approximately 30% of our total revenue in Q2 including contributions to both recurring and non-recurring revenue.

The contributions from these new agreements were partly offset by our estimate for a sequential decline in per unit royalties of about 20% from Q1 to Q2. This represents our best estimates for the impact of the current health and economic climate on our customers’ Q2 sales of royalty bearing products.

As is always the case will true up all the estimates next quarter when we received the related royalty reports. Our Q2 operating expenses increased $1 million in Q1.

This increase was driven by an expected $2 million charge to step up compensation accruals based on newly signed patent license agreements and a $2 million increase in litigation expenses both of which were offset by one-time and other cost reductions from Q1, 2012.

Increasing litigation expense reflected increase activities in our series with Lenovo and our recently filed patent infringement case again Xiaomi in India. We currently anticipate our Q3 operating expense could increase in the $2 million to $4 million range driven by additional litigation expense and revenue sharing within our CE portfolio.

Let me -- I'll take a moment to discuss our cash flow in some detail. Recently, I've received a number of questions about our cash flow and how it relates to our revenue in the given period.

We reported free cash flow of $60 million in Q2, this is a $95 million increase over the $35 million cash outflow we reported in Q1, many of you that follow us you recognize that such quarter-to-quarter variation is not unusual. Over 90% of our revenue comes from fixed price agreements. Such agreements typically have prescribed payment schedules.

Some agreements call for quarterly or annual payments to be spread evenly over the term of an agreement. Others might include an uneven payment schedule that for example may be front-loaded to degree. Ultimately, these payment schedules result in a timing difference between when we recognize revenue and when we collect the related cash payments.

To the extent the payments are front-loaded we recognize a deferred revenue liability. That liability is then reduced as we recognize revenue over the balance of the agreement. The sequential increase in cash flow from Q1 to Q2 was driven in part from the collection of approximately $100 million under agreement signed over the last three quarters.

These payments covered the $20 million of non-recurring revenue as well as recurring revenue we recognized from these customers in 2Q. It also represents a partial payment for the royalties due over the remaining terms of these agreements.

This is a big reason why we also see deferred revenue and long-term deferred revenue collectively increased by $50 million from Q1. In fact, you can look at the total deferred revenue balance of [$280] million as the total amount of cash we have collected to-date related to future periods under signed agreements.

As a final comment on this topic, we sometimes accept non-financial consideration as a component of the consideration due to us under patent license agreements. Overall, this is a very small percentage, averaging just 5% of our total revenue over the last three years.

All of this illustrates while recurring revenue is such an important measure to our business and while the free cash flow generated or used in any given quarter must be taken in context.

Finally, moving on to taxes, our recent agreements helped drive a level of profitability sufficient to somewhat normalize our effective tax rate coming in about 20% for the quarter and 27% year-to-date. With continued success and expanding our revenue platform, we still expect our long-term tax rate to be roughly 15% until about 2026.

And we expect it to increase to about [18%] based on prescribed changes in the [outlook]. I’ll now turn it back over to Patrick..

Thank you, Rich. Thank you, Bill and we will now open the call for questions..

Thank you. [Operator Instructions]. We'll pause just for a moment to allow everyone an opportunity to signal for questions. Our first question comes from Ian Zaffino, Oppenheimer..

Hi, thank you very much. I'm glad to see you guys are going after the patent enforcement pretty aggressively. Can you maybe give us color on some of the other ones that are not paying right now? Are those kind of close to litigation or -- are you presently just in negotiations and what you'd expect as far as the remaining ones? Thanks..

So Ian -- this is where I get to your question. Let me just thank you and for initiating coverage on a company we obviously appreciate that. And we welcome you to the first call as an analyst for the company, so..

Thank you..

Yes, in terms of patent enforcement in it, I guess I'm wondering, there is a breaking point with customers sometimes that we just say that we've exhausted all options. And we move ahead to litigation as we did with Xiaomi.

The other customers, we have no reasonable engagements with they vary obviously between customers, is there's a lot of thoughts that goes into why we bring litigation at particular times -- that’s a dominancy related to the company against whom we seek litigation, but there could be other strategic reasons as well.

So whether we would commence additional litigation, either against the current folks with whom we're in litigation with or new litigations that we take into account a lot of factors in making that decision. In fact, it's not something we do lightly.

I always hope that we can secure any agreements without resorting to litigation, because there's a cost of litigation. And if you can avoid that cost, that's a good thing. But also, at some point, you have to make sure that you get people on the paying side of the letter. So we'll see how it all plays out.

The current litigations I think are -- they're, I think they're well established meaning we've got good patents in these cases, I think will have good schedules to move forward on. They're also – they’re just part of a larger discussion with any licensee.

So with Xiaomi, it's not going to be just all about in litigation, we obviously would continue to engage with them in other ways and seek to reach an amicable result if that's [indiscernible] desire..

Thanks, Bill. Thanks for that color. And just as a follow up, you guys are sitting with a lot of kind of net cash even after -- even above and beyond what you need to run the business. So what are you thinking here as far as capital returns you've typically bought back a lot of stock in the past.

Where are your heads now? What are you thinking as far as buybacks and -- dividends, but specifically on buybacks? Thanks..

Yes, and I'll be happy to take that. So, yes you're exactly right that we have a very strong history on returning capital to shareholders through dividends, and especially through buybacks. I think it's more than $600 million over the last five years or so including almost $200 million last year.

And like a lot of companies in the current environment, we really value cash right now, given the overall uncertainty that exists in the broader market. But also for us the potential for opportunities to invest in a way that could drive the most shareholder, utmost value for our shareholders. So, that's kind of our current posture right now.

But this continues to be a topic as I always say it is. Every time we get together with the Board..

Okay, great. Thank you very much..

Thank you..

Our next question comes from Eric Wold, B. Riley..

Thank you. Good morning, guys. A couple of questions, I guess, one Bill can you maybe just talk about the rationale of filing the suit against Xiaomi in India, I know you mentioned obviously it's a big market for them just trying to get a sense of the benefit of that market versus the U.S. and the U.K. to go towards a global licenses.

The Indian courts going to share the same stance towards a global licenses like U.K.

courts too?.

Yes, I think the Indian courts, as you mentioned, it's obviously it's a big market for them. And the purpose of litigation is to be really for the other side to take this issue seriously. And so bringing on litigation in very important venue for Xiaomi and I think achieves that result.

The Indian courts have -- there's some opportunity at early on in the cases with respect to preliminary injunctions, as well as other sort of bonding and escrowing requirements that also would achieve the same result, which is to just make the other side think seriously about continuing to willfully infringe the patents that we have.

I think the court has been -- so far it's a lot of these friend related matters in many courts are new. But so far the Indian courts seem to deal with them in a fair way. And that's really all we want. We don't know need the playing field tilted in our favor.

We just need a playing field at law and the Indian courts seem to be doing a good job over there. And despite the pandemic issues around the world, the Indian courts on these particular matters have moved them along at reasonable speed. So for all those reasons, it was -- it seemed like a really good choice.

And it also shows I think, the fact that the portfolio is diverse, not only technologically but geographically that we can bring in actions in different countries as need be so. And the other factors I think those are important..

Now, once you – let’s say get in your litigation strategy on a public call like this, but is there I know your focus is always a global license, would you ever stray from that if there's a market as large enough for a single entity, you'd be okay getting a single country license is it going to hurts them or if you did that, does that kind of throw wrench into the works of the other global licenses you actually have and they are on pricing and whatnot?.

Yes. Yes, I think it's a slippery slope. If you think about mobile devices, what's the nature of a mobile device, right? It's designed in one country, parts are sourced from another country. It's manufactured in a third country. It's sold in the fourth country they used in 20 other countries.

So the whole concept of a license that just covers one country, it's a difficult concept. I'm not saying it's impossible, but we've always taken the view that worldwide license makes the absolute most sense here. And I think the other approach is don't really have a strong rationale for that.

So I think it's a slippery slope and that's why we've always been very adamant as all of the [indiscernible] other patent holders out there, it's all about a worldwide license. If you think about the standards themselves, the standards don't enable sales in a country. The whole nature of the standard is that it enables sales worldwide.

So having enabled sales worldwide the license should fall..

That makes sense.

And last question for me on the CE side, I guess, you previously signed setup boxes license a TV license, first question is, what, end-market was the CE license you mentioned sign in Q2 and then how should we think about the smaller licensees providing a tailwind towards larger licenses? And you are talking about these kind of providing some level of pricing framework as you talk to the bigger entities? Do the bigger entities consider these smaller deals as relatable and providing framework or do they think it’s more irrelevant smaller deals in -- a larger entity will provide more of the framework needed?.

Yes, so I'll go with the last question first. I think every deal becomes important for two reasons, right. They contribute to revenue, which is great.

Second, is when I go to a customer, an unlicensed customer they do provide validation because sometimes even though deals may be smaller, the companies that signed the deal are big and therefore they don't give away significant sums of money for no reason, right. And you can use those as benchmarks in negotiations with other people.

The third piece is very important too, because when you go to litigation, all of those agreements become important, right. It because you're actually in litigation this idea of very significant volume discounts, I think there's some limits on that. And so I think that they're important for all those reasons.

They give us price validation, patent validation, they give us usable material in litigation. And so I think it's -- I think in that context and as I mentioned, momentum in licensing, I've been doing it for our -- is really important. And, because people see others signing this, then we get this win at your back and it's really helpful.

So, I'll let change -- the other questions that you asked in terms of revenue contributions and things like that, but [indiscernible] to handle that strategic point..

Yes. And, Eric, I think you kind of framed this correctly in your question. We've had some good success with some smaller licensees on the CE side. But in terms of the traction they provide, it's just what Bill was saying it's distraction for the business.

It's -- they are smaller so on a current basis anyway, it has a nice recurring -- I'm sorry, non-recurring contributions from some of the new deals. But on a recurring basis, it hasn't moved the needle in a dramatic fashion. Generally discuss that the $150 million kind of top line goal we have for that business.

We're roughly 10% of the way there that that kind of ebbs and flows quarter-to-quarter because it is more per unit in nature.

So it's going to depend on our underlying customer sales to put that into perspective in the current quarter when -- we are estimating a lower level of per unit royalty also had some true-ups that come through that reduced revenue for the current quarter. We're actually turning more of that 10% line. So it's going to move around.

These haven't changed like the day, but they do set us up for more deals and further traction and eventually that begins to pile up..

And it’s [indiscernible] market for the newest one..

For the most recent deals, I believe it was televisions..

Great. Thank you, guys..

Our next question comes from [indiscernible]..

Yes, thanks for taking my questions. Congrats on a great quarter. So wanted to start with OpEx, Rich I wonder if you can maybe just provide a little bit extra context here. I think you alluded to a $2 million to $4 million bump. I think I heard that right that was sequentially.

I know there was a performance based comp increase embedded in Q2 $3 million or so. So my thinking about this right, that it's actually a naturally a $6 million move up.

And I know there was revenue share component or I want to be maybe you could speak to that went directly to in terms of how much of the lift is related to that, then I've got a follow up..

Yes, so at this point, Charlie, there's not too much more I can add, I mean, as you know, we typically don't provide a lot in terms of expense guidance, but we have a movement or a charge that we anticipate we’ll try to provide a heads up on that.

We of course, have to do a little bit more than traditionally given the Technicolor acquisitions and kind of the impact that has on the P&L.

But, again, litigation is definitely a factor there with the wearable case kind of going and picking up a little bit of momentum as well as now having a new case, which obviously, which was just recently filed, so. There's typically going to be some runoff prior to filing a case.

So it's not as if it's not in Q2 at all, but not to the level that it was we'd expect it to be in Q3. So that's definitely a component probably the biggest component of it. And then there's some smaller non-recurring items that's one of things as well..

Okay, great. And then Bill, just thinking big picture about the ability to get the rest of China under license, obviously great progress with Huawei and ZTE, but I'm sort of just curious, from your perspective.

Is there anything over the course of the next year you see as maybe -- an external factor whether it’s be 5G phone launches or whatnot that could maybe cause some of those negotiations to click in the base realms of normal? Thanks..

Yes. I mean I think there are factors, right? There's – that is obviously the things that we can do, right, so bringing litigation or even the threat of litigation is helpful.

I think, one of the benefits now having -- having filed a number of lawsuits against Huawei, Lenovo, and now Xiaomi, it's pretty clear the company is ready, willing and able to protect its IP. And that that’s a pretty strong message that is 30% so that's one. Second, I'm not sure that the 5G launch or things like that is a driver.

But what external driver on the legal side has been a development in Germany, which has been -- which is a great development for actually I think, for the industry and basically, what it is the establishment of a framework which says that if you are a customer and you're using the innovation and you fail to negotiate in good faith with the patent holder, that you may not be able to remedy that later like to wait until the see if you're actually infringing and then make an offer, that there may be a more draconian penalty for having negotiated in bad faith.

Just like there's there can be draconian penalties on the other side, if as a patent holder, you negotiate with it. I actually say that if that could have a significant impact in just causing people to do reasonable. And you maybe they are reasonable guess what deals get done.

So I actually thought it was a really well thought out structure that the German courts have come up with. So, I think that can be an external forcing function. I think other than that, I think as I mentioned before if we can get to the finish line with a Xiaomi or Lenovo import assisted by the litigation.

I think that -- then the other customers start to become outliers. And on with the heightened focus by the Trump administration and frankly a lot of people on India's respect as our China's respect for IP being an outlier is not where we going to want to be.

So I think there's -- like we should do, we have a lot of irons in the fire, and there's things we can do ourselves there's external policies that we could influence. There's other policies that get developed that we can simply highlight to our customers and I think it's that whole.

And again, at the end of the day, it's also our ability to be fair and reasonable in our negotiations offer a variety of structures continue to get things done, so. I feel good about where we are. And hopefully that means we drive a few more [indiscernible]..

Okay, great. Thank you so much for the call. I appreciate it..

Thanks Charlie..

Our next question comes from Scott Searle, ROTH Capital..

Hey, good morning. Good afternoon. Thanks for taking my questions. Hey, Rich, just quickly, I'm not sure if I missed this.

But did you give a number for video or Technicolor in the quarter and I have a couple follow ups on the India and China?.

We say a number you mean revenue?.

Yes, yep..

Yes, yes. Scott, I mentioned that. We were -- that we've been kind of operating at [indiscernible] roughly $15 million annualized. And that even with new deals, we're trending a little bit below that, this last quarter. And that's based on really two things.

We had a couple of true ups that came through related to our estimates for Q1 that were booked in Q1, and then the actual reports come through in Q2. So that’s suppress things a little bit.

And then in addition, the TV businesses largely per unit at this point and as I mentioned we're anticipating and included in our numbers an estimate for lower per unit royalties in the quarter..

Great, perfect.

And on the India front, could you give us a better idea of what the timing is of the Indian legal process in terms of injunction and otherwise and what we can expect in terms of the cadence of the litigation?.

Yes, I think people have their self disclosure in the queue around the case. Generally like the -- it moves and it’s a little quicker on the front-end and things, I think that occur on the front-end are things like preliminary injunction requests and also to the extent that money put up for an eventual license and maybe so those things happen sooner.

Yes, I think after that when you get into the niche of the case and I think like my senses, and we're obviously very skilled counsel in that area and our internal folks are at the business somewhat new for the company. My sense is it's a little -- it probably has the same level of lack of predictability, as other courts do.

But it's that it's -- I think it's the front-end process that exists here that again, I think the purpose of all this is to get the company Xiaomi to statistic decision seriously, and I think that that is hopefully achieved early on in the process obviously..

So, Bill, just to follow up on that point, is there a timeline or a date associated with the injunction because that seems like it's the real trigger point here to get them to the table and start to engage.

Is that something that would be decided upon this year?.

So my -- I don't know -- I have to go back and look at the disclosures that we put out and to be honesty it's developing sort of as we speak. And so that's an item we can follow up on. And so it's, I think the important part is, it's -- it is relatively quick to my understanding.

That’s [indiscernible] halfway through the year so that, I think with that said, I think that's a good thing..

Fair enough. And then to transition over to some of the larger China based OEMs. In particular Vivo and Oppo, you've seen Huawei get a lot more aggressive within the domestic market, given the limitations of using certain Android features internationally.

It's translated to pretty meaningful increase in share I think from the first quarter of the second quarter.

So I'm wondering if that the licensing agreement with Huawei in combination and even with Xiaomi litigation in India on top of it, how is it changing the tone or the cadence and the pace of engagement with Vivo and Oppo particularly given now it seems like they're shifting more of their attention on the export front?.

Yes, so I think you're right, I mean, Huawei has it is focused on that domestic market for the reasons that you gave and the result of that as others are getting pushed out little bit. So then they've got to decide where to go to, to grow their businesses, and they're going to the places you'd expect, which is two places where we cannot go.

So they're in India for one, while we've actually never been very strong. In India, they're in Europe and to some extent they're in the U.S. Historically, as companies have moved into regions where IP enforcement is more predictable and worked and stronger, that they do need to take the licensing issues more seriously.

There's other things can occur within those jurisdictions as well beyond just sort of the court systems. But, there's regulatory pressure that can be brought to there -- I'll give an example, back in 2010 to 2018 there was a provision or ‘19 there was a provision put into the National Defense Act that comes out of the U.S.

once a year dealing specifically with ZTE and IP. And so -- and that created some level of pressure on ZTE. So I know these companies focus on the international markets more, they're subject to both regulatory and judicial things in a more significant way. And that that helps. So again, I feel like the level of engagement is good.

And obviously, when we don't feel it’s good, the company has not been shy about bringing the appropriate losses..

Great.

And lastly just maybe a quick update on IoT in advance what you're seeing on that front, I know it's early stage, and it's been taking a little bit longer, but it seems like they -- the COVID environment, constant connectivity, the ability to efficiently optimize et cetera devices that are connected seems like it's gaining more momentum, whether it's an auto and otherwise, so? Just kind of wondering if there are any thoughts or updates as we're going into 2021, does that become a little more measurable in terms of the results? Thanks..

So, I think you are right I think that -- while the IoT market has an accelerated the way I think people would have thought and I think some of that was hype, the direction is certainly correct in that, and so there's obviously.

There was always a need for connectivity, constant connectivity, I think what you're seeing in the pandemic is sort of making that even more apparent that this kind of it is important. I think the [indiscernible] platform. Yes, it had a nice measure of success, it's really good and getting licensed was onboard.

There’s been some litigation in Europe that they're working their way through, I feel like they're in a good position there. I think that their approach is one that is very much embraced by a lot of people because ultimately, I don't think people want this continuing [indiscernible] filled environment around licensing on such a critical technology.

And I'll take it back to that German -- recent German decision.

I think that's underlying in some ways that decision, which is -- this is not good at all these cases end up important, it's consuming a lot of resources, there should be rational result -- there should be a rational result here and simply putting in place a structure that forces people to be reasonable.

So we'll see to some extent I think there are two pieces here, one is, how quickly do the [indiscernible] settles, roll off the lines with that constantly [indiscernible]. And then you know, how effective is advancing and licensing off, we are very confident with where Avanti is. And I think the other big part is just, it's going to happen.

It just happened a little slower..

Great, thank you..

Our next question comes from Michael Cohen, MDC Financial Research..

Yes. Hi, Bill thanks, and congratulations on the quarter.

I was wondering if you could share the names of some parties that are not fully licensed that you would like to have under license other than one Lenovo and Xiaomi?.

So it is mostly the Chinese manufacturers. So it's, Oppo it’s Vivo, it's TCL, they are the ones that were in litigation with or Lenovo and Xiaomi, I think if you look at -- there's a smattering. I think I'm missing any of the major Chinese companies.

But every once in while, the beauty of the cellular market is and the cellular standards is people can become major players in a relatively short period of time. There are smaller players outside of China, but I'd say most of them are relatively small.

So I think that the ones I gave you are pretty much the drivers that get us to -- up to our desire revenue platform..

And, and we saw the U.S.

government's Department of Justice filed a statement of interest in Qualcomm's case and now we've seen it filed them in your case in Lenovo, I was wondering if you have any comments on that?.

Yes, I think, this particular Department of Justice has taken an interest in making sure that, particularly antitrust laws are not abused in a sense that they're not applied in circumstances that they were not intended to be applied in. Because, to the extent you start to stretch a law beyond its original purpose, it starts to lose its effect.

And so, the [indiscernible] particular division within the DOJ has been an advocate of making sure that there's discipline around the use of antitrust, antitrust division. And that's why, they filed a statement in our case, basically claiming that the -- the claims, antitrust claims that are [indiscernible] are not well founded.

So we are happy to see that report. We think it make a lot of sense. I think that ultimately when you look at these disputes on [indiscernible], they're actually very straightforward disputes. It's a contract dispute, it's, -- we've undertaken the obligation to make a fair reasonable and non-discriminatory terms.

And the other side has an obligation on negotiating in good faith to get to that end as well. And if there's a disagreement on that, it's a kind of – it’s essentially it's a breach of contract.

So, I think it's been a lot of other things have been tried to be applied into it to make it more complicated or costly, a lot of things to make the licensing more difficult. And I think what you're saying is, I think hopeful it's a simplification of the issue, right. We are very happy to see that support from the DOJ..

There are no further questions in the queue at this time..

Okay, well thank you very much, Travis, and thank you for joining our call this quarter. We look forward to giving you an update the next quarter. Thanks, everyone..

Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect..