Founder, BWS Financial Inc

Hamed Khorsand

Founder

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BWS Financial Inc

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Equity Bottom-Up

<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.


<ul>
<li>ADEA signed ten license agreements and reduced debt by approximately $40 million in the first quarter. ADEA has yet to announce a new major OTT license aside from Paramount renewing.</li>
<li>The investment case for owning ADEA’s stock has centered on the Company’s ability to sign more license agreements</li>
<li>ADEA remains on pace to generate $150 million of free cash flow to help reduce the Company’s debt balance further.</li>
</ul>


ADEA signed ten license agreements and reduced debt by approximately $40 million in the first quarter. ADEA has yet to announce a new major OTT license aside from Paramount renewing.
The investment case for owning ADEA’s stock has centered on the Company’s ability to sign more license agreements
ADEA remains on pace to generate $150 million of free cash flow to help reduce the Company’s debt balance further.


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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