Adeia's stock surges after it strikes a deal with Disney
Adeia's (ADEA) stock surged 18% after the intellectual property (IP) licensing company announced that it has struck a new agreement with The Walt Disney Company (DIS), putting an end to a lawsuit that the company had filed against the entertainment giant last year.
The company also significantly raised its 2025 financial outlook due mainly to the new licensing deal it has signed with Disney.
Adeia increased its 2025 revenue guidance to a range of $425 million-$435 million, up from its previous forecast of $360 million-$380 million.
The company also raised its non-GAAP net income guidance to a range of $169.80 million-$175.9 million, up from $127.4 million-$139.8 million.
And it increased its adjusted EBITDA expectations to $257.1 million-$265.1 million, after previously targeting $202.3 million to $218.3 million.
“As we previously mentioned, we have been pursuing multiple opportunities that if achieved, could result in 2025 revenue being greater than our prior guidance,” Adeia CEO Paul E. Davis said in a statement.
“Driven primarily by the execution of the Disney agreement, our revised 2025 financial outlook reflects the strong momentum for our business.”
Adeia, which focuses on intellectual property deals related to the media and semiconductor industries, said that it had entered into a long-term agreement with Disney to give the latter access to its comprehensive media IP portfolio.
Terms of the agreement were not disclosed.
“We are very pleased to enter into this agreement with Disney, one of the most influential media and entertainment companies in the world,” Davis said in a statement. “This deal reflects our commitment to enabling cutting-edge media experiences and further validates the significance of our technology in connected entertainment.”
Adeia sued Disney in November 2024, alleging that the company and certain of its subsidiaries, including Hulu and ESPN, had infringed on nine patents from its IP portfolio. Six of these patents were in the United States and three were in Europe.
All nine of the patents were related to various aspects of media streaming and content delivery technology.
Adiea has one of the largest IP portfolios in the world, with about 13,000 patent assets, mostly related to media and semiconductors.
The company in November sued semiconductor giant Advanced Micro Devices (AMD), alleging that AMD had infringed on 10 of its patents in its semiconductor IP portfolio, including seven covering hybrid bonding and three covering advanced process node technology.
“For years, AMD’s products have incorporated and made extensive use of Adeia’s patented semiconductor innovations, which have greatly contributed to their success as a market leader," Davis said in a statement at the time.
"After prolonged efforts to reach a mutually agreeable resolution without litigation, we believe this step was necessary to defend our intellectual property from AMD’s continued unauthorized use.”
Adeia is seeking an unspecified amount of monetary damages and asked a US Court in the Southern District of Texas to order AMD to stop using its patented technology.
AMD has not publicly responded to the lawsuit.
Adeia's stock is up over 22% for the year.