Adeia Inc. (NASDAQ: ADEA) announced a long‑term licensing agreement with The Walt Disney Company (NYSE: DIS) that resolves all outstanding litigation between the two firms. The deal grants Disney access to Adeia’s portfolio of media streaming and content‑delivery technologies, eliminating a significant legal overhang and providing a stable, long‑term revenue stream for Adeia.
The agreement lifts Adeia’s 2025 financial outlook across all key metrics. Revenue guidance is now $425 million to $435 million, up from the prior $360 million to $380 million. GAAP net income is projected at $96.4 million to $113.9 million versus $52.4 million to $71.6 million previously, while non‑GAAP net income rises to $169.8 million to $175.9 million from $127.4 million to $139.8 million. Adjusted EBITDA guidance is $257.1 million to $265.1 million, compared with $202.3 million to $218.3 million before the announcement. Management attributes the upward revision to the Disney deal’s scale, strong deal execution, and the elimination of litigation costs that previously weighed on margins.
Adeia’s Q3 2025 results, released on November 3, fell short of expectations: revenue of $87.3 million versus the consensus of $100.63 million, and EPS of $0.28 versus the expected $0.33. The miss was driven by weaker demand in certain media segments and the impact of headwinds such as the uncertain outcome of a potential AMD license agreement. The new guidance signals a sharp turnaround, with the company projecting a recovery that not only meets but exceeds the upper end of its prior forecast, reflecting confidence that the Disney partnership will generate significant incremental revenue and improve profitability.
CEO Paul E. Davis emphasized the deal’s strategic importance, stating, “We are very pleased to enter into this agreement with Disney, one of the most influential media and entertainment companies in the world. This deal reflects our commitment to enabling cutting‑edge media experiences and further validates the significance of our technology in connected entertainment.” CFO Keith A. Jones added, “The significant increase in our revenue guidance is being driven by strong deal execution, and the higher operating expenses reflect increased variable compensation tied to performance targets.”
The combination of a major customer win, litigation resolution, and a substantial upside to the 2025 outlook positions Adeia for accelerated growth and stronger margins, underscoring management’s confidence in the company’s execution and the value of its IP portfolio.
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