Founder, BWS Financial Inc

Hamed Khorsand

Founder

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BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>ADEA announced a licensing agreement with AMZN setting the path for greater free cash flow in 2025. ADEA has previously mentioned it was close to signing two major licensing agreements.   </li>
<li>We assume ADEA’s full year guidance includes catch-up revenue associated with the license since AMZN was never a licensee before.   </li>
<li>ADEA had already signed several video streaming licenses, but AMZN would serve as the largest to date. It gives the investment story a stronger foundation.</li>
</ul>


ADEA announced a licensing agreement with AMZN setting the path for greater free cash flow in 2025. ADEA has previously mentioned it was close to signing two major licensing agreements.   
We assume ADEA’s full year guidance includes catch-up revenue associated with the license since AMZN was never a licensee before.   
ADEA had already signed several video streaming licenses, but AMZN would serve as the largest to date. It gives the investment story a stronger foundation.


<ul>
<li>ADEA signed seven license agreements but none of them were the two large license agreements ADEA’s management promised could happen on the prior earnings calls.</li>
<li>ADEA has been suggesting it was on the cusp of signing one major video streaming and one major semiconductor license, but none was announced. </li>
<li>Six of the seven licenses signed in the quarter were renewals. The seventh was an ecommerce license with Neiman Marcus. </li>
</ul>


ADEA signed seven license agreements but none of them were the two large license agreements ADEA’s management promised could happen on the prior earnings calls.
ADEA has been suggesting it was on the cusp of signing one major video streaming and one major semiconductor license, but none was announced. 
Six of the seven licenses signed in the quarter were renewals. The seventh was an ecommerce license with Neiman Marcus. 


<ul>
<li>Q3 is coming to an end and ADEA has yet to announce new licensing deals its management has been asserting would happen this year. </li>
<li>ADEA has maintained a revenue forecast of $380 million to $420 million on the expectation there would be at least two major new licenses announced this year.   </li>
<li>Our earning model currently calls for ADEA to generate $400 million in revenue with the third quarter being a smaller step up in revenue compared to the fourth quarter.</li>
</ul>


Q3 is coming to an end and ADEA has yet to announce new licensing deals its management has been asserting would happen this year. 
ADEA has maintained a revenue forecast of $380 million to $420 million on the expectation there would be at least two major new licenses announced this year.   
Our earning model currently calls for ADEA to generate $400 million in revenue with the third quarter being a smaller step up in revenue compared to the fourth quarter.


<ul>
<li>ADEA signed several renewals in the second quarter extending out terms with current licensees and showing to investors that there is value from the portfolio of more than 11,500 patents. </li>
<li>The deals ADEA signed in the quarter were not the headline grabbing nature, unlike those in prior quarters and those we expect the Company to sign in coming quarters. </li>
<li>ADEA generating annual free cash flow of approximately $150 million should become a bigger factor to valuing the equity as the debt balance becomes visually smaller to investors.</li>
</ul>


ADEA signed several renewals in the second quarter extending out terms with current licensees and showing to investors that there is value from the portfolio of more than 11,500 patents. 
The deals ADEA signed in the quarter were not the headline grabbing nature, unlike those in prior quarters and those we expect the Company to sign in coming quarters. 
ADEA generating annual free cash flow of approximately $150 million should become a bigger factor to valuing the equity as the debt balance becomes visually smaller to investors.


<ul>
<li>•It has been the summer of renewals at ADEA leading to a directionless stock since ADEA reported Q1 results. ADEA has announced several renewals, LBTYA, since the beginning of May</li>
<li>We are now more than two weeks into the third quarter lending credibility to why the shares have yet to react positively</li>
<li>We were already forecasting the probability of a new license occurring later in the year and are keeping our earnings estimates unchanged heading into ADEA reporting second quarter results.</li>
</ul>


•It has been the summer of renewals at ADEA leading to a directionless stock since ADEA reported Q1 results. ADEA has announced several renewals, LBTYA, since the beginning of May
We are now more than two weeks into the third quarter lending credibility to why the shares have yet to react positively
We were already forecasting the probability of a new license occurring later in the year and are keeping our earnings estimates unchanged heading into ADEA reporting second quarter results.


United States

Adeia Inc. operates as a consumer and entertainment product and intellectual property licensing company. The Company media solutions for use with traditional linear television in connection with OTT, direct-to-consumer, and social media services that provide access to entertainment inside and outside the home on a broad array of devices. Adeia serves customers worldwide.

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Adeia (ADEA US)

ADEA: AMZN License Announced

ADEA announced a license agreement with Amazon.com (AMZN). This is the first license between the two companies and helps establish higher baseline...

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ADEA: Cash Flow, But No Major License

ADEA reported third quarter results without announcing one or two major licenses as was expected to be the case. Management is now suggesting one...

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ADEA: Idea of a Scenario

ADEA has had several renewals in the quarter, but a license with a large video streaming service provider is what is expected to lead to ADEA...

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ADEA: Streaming Loading

ADEA continues to generate positive free cash flow to reduce its debt level. The catalyst in owning the stock is ADEA's ability to add new licensees.

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ADEA: License to Preview

Previewing the quarter that included several renewals, including Liberty Global (LBTYA). However, ADEA's stock price has yet to reflect this news...

BWS Financial Inc

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