Adeia posted second-quarter 2026 revenue of $96.1 million with a 59% adjusted EBITDA margin and $54.6 million of operating cash flow, closing six license agreements and adding a record 12 new customers. Highlights included a multi-year Google media renewal and a new RPX deal, with non-Pay TV recurring revenue up 54% year over year, now nearly double pay-TV recurring revenue, prompting management to raise its long-term annual revenue target to $600 million. The company also filed patent litigation against Fubo after failing to reach license terms, continued to navigate pay-TV headwinds, and advanced its ongoing CEO search.
Good afternoon, everyone. Thank you for joining us as we share with you details of our quarterly financial results. With me on the call today are Paul Davis, our President and CEO, and Keith Jones, our CFO. Paul will share with you some general observations regarding the quarter. Keith will give further details on our financial results and guidance. We will conclude with a question and answer period. In addition to today's earnings release, there is an earnings presentation which you can access along with the webcast in the IR portion of our website. Before turning the call over to Paul, I would like to provide a few reminders. First, today's discussion contains forward-looking statements that are predictions, projections, or other statements about future events, which are based on management's current expectations and beliefs, and are subject to risks, uncertainties, and changes in circumstances.
For more information on the risks and uncertainties that could cause our actual result to differ materially from what we discuss today, please refer to the Risk Factors section in our SEC filings, including our annual report on Form 10-K and our quarterly report on Form 10-Q. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. To enhance investors' understanding of our ongoing economic performance, we will discuss non-GAAP information during this call. We use non-GAAP financial measures internally to evaluate and manage our operations. We have chosen to provide this information to enable you to perform comparisons of our operating results as we do internally.
We have provided reconciliations of these non-GAAP measures to the most directly comparable GAAP measures in the earnings release, the earnings presentation, and on the Investor Relations section of our website. A recording of this conference call will be made available on the Investor Relations website at adeia.com. I'd like to turn the call over to our CEO, Paul Davis.
Thank you, Chris, and thank you everyone for joining us today. I'm pleased to share our results for the second quarter of 2026 and our strong performance in the first half of the year. Our second quarter results were in line with our expectations as we delivered revenue of $96 million with an adjusted EBITDA margin of 59%. We had another excellent quarter of cash generation, producing $55 million in cash from operations. We ended the quarter with $137 million in cash while executing on all four pillars of our capital allocation strategy. We closed six license agreements during the quarter and added a record 12 new customers in total. Our first half performance included solid execution across all aspects of our business, closing license agreements with Microsoft, AMD, Google, and our recent deal with RPX that further accelerates our e-commerce business.
We also continue to invest in growing our leading media and semiconductor portfolios and believe we are well positioned for the long term. The progress we've made to date is in line with our expectations, we are reiterating our 2026 revenue guidance of $395 million-$435 million. Our non-pay TV recurring revenue is strong and thriving, growing 54% year-over-year in the second quarter, and is now nearly double the size of our pay TV recurring revenue. Despite the known headwinds in pay TV, including recent litigation matters, our pipeline is robust, and we are confident in our long-term trajectory. The timing of resolution to any litigation, however, is difficult to predict and thus could impact us in the short term. As we look at the remainder of the year, our diversified and growing pipeline continues to provide multiple paths to achieve our revenue goals for 2026.
As we have stated before, we tend to do big deals, and operationally, we lean towards being a relatively small volume, high dollar shop. As always, we will remain disciplined in closing deals that are in the best long-term interest of the company and its stakeholders. Our range of outcomes for the year reflects this approach and will be impacted by the ultimate timing of when we sign license agreements, which we continue to have the utmost confidence in being able to do. Importantly, as we have seen in the past, to the extent any opportunities move out of 2026, they provide a springboard for us in the following year. One of our most significant license agreements in the second quarter was a multi-year renewal with Google for access to our media portfolio.
Google has been a valued customer for approximately 15 years, and this renewal reflects the continued relevance and strength of our media portfolio for pay TV. YouTube TV, which is operated by Google, has become one of the most important players in the pay TV market, with subscriber growth that has dramatically outpaced many of its peers. Its scale and trajectory are a clear demonstration of the ongoing migration from traditional pay TV to virtual MVPD services, our portfolio is well-positioned to capture that shift. With the renewal of Google, combined with our Disney agreement signed last year, which includes Hulu + Live TV, we now count two of the largest and fastest-growing virtual MVPD platforms in the country as our customers. In the second quarter, we made excellent progress in e-commerce, closing a seminal multi-year license agreement with RPX, a leading patent risk solutions company.
This unique deal includes 10 participating member companies in a single agreement, giving them a term license to our growing media portfolio of approximately 10,900 patent assets. This deal was driven by our e-commerce technologies, including intelligent search, virtual shopping experiences, and consumer engagement across connected platforms. The RPX members include a broad consortium of market leaders across the digital commerce ecosystem, spanning apparel, beauty, online marketplaces, delivery networks, and enterprise technology platforms. With the progress we've made in the past two years, we believe this business can grow over the long term to a size similar to our consumer electronics business, which has been approximately 10% of our total revenue.
Other deals signed in the second quarter include a new multi-year license agreement with L'Oréal, a leading cosmetics and personal care company, a new multi-year license agreement with a leading provider of streaming documentary programming, and renewals with a leading European pay TV provider and a consumer electronics manufacturer in Japan. Renewals are a cornerstone of our business model. With our renewal rate at over 90%, the vast majority of our customers renew with us because we continue to innovate and build positive relationships with them. I am pleased to announce that given the optimism in the trajectory of our business, and particularly the semiconductor market, we are raising our long-term revenue target to $600 million from $500 million annually.
Let me begin briefly with media and then provide more color on semiconductors. Our growth objective for our media business over the long term remains unchanged at $400 million annually.
Bolstered by our success in growing market adoption of our technology, we see key verticals such as OTT, e-commerce, consumer electronics, and social media as catalysts for growth. The increasing demands from AI have induced an unprecedented acceleration in the development and production of highly advanced logic and memory devices. This new super cycle is driving the semiconductor market to reach over $1.5 trillion this year. Hybrid bonding has become a critical enabler of next-generation chip architectures, helping to solve density, performance, and thermal management challenges. We are very excited about the opportunities that lie ahead for our semiconductor business, given these industry dynamics and increasing need for our technologies. We had previously estimated this opportunity to be $100 million annually.
Driven by the broader and faster adoption of hybrid bonding, we now expect our long-term semiconductor opportunity to reach $200 million annually. Custom and general purpose logic providers are already or will soon be incorporating hybrid bonding in both enterprise and consumer-related products. Apple, Intel, and Broadcom all have products ramping into production using hybrid bonding, further building on the momentum from our recent license agreement with AMD. According to industry reports, NVIDIA's Feynman will also incorporate hybrid bonding beginning in 2028. High-bandwidth memory and flash for both enterprise and consumer markets are also incorporating hybrid bonding. We believe hybrid bonding will be a requirement in HBM with 20 or more layers, if not sooner. 3D NAND leaders SanDisk and Kioxia, both customers of ours, began using hybrid bonding for NAND in 2023, and we believe others will follow as layer counts approach 400.
We know broad adoption of hybrid bonding is coming because the capital equipment required is being ordered. To meet demand for these next-generation devices, leading foundries, memory companies, and OSATs are planning to spend approximately $125 billion in the near term for advanced packaging, including hybrid bonding. Our investments in semiconductor innovations are coming to fruition, and the opportunities in front of us are very exciting. Let me now turn to our efforts to further diversify and grow our recurring revenue. As noted earlier, our non-pay TV recurring revenue grew an impressive 54% year-over-year in the second quarter, continuing a multi-quarter trend. I could not be more pleased with this progress, and it is a result of our execution and focus since our separation from Xperi almost four years ago.
We knew pay TV would remain a core part of our business, we have continued to invest in it. We also knew, given the secular trends of that industry, we needed to find other avenues of growth. Our teams across R&D, sales, and patent portfolio development have executed extremely well to this vision, maintaining our relevance and strength in pay TV, while at the same time impressively growing our business well beyond it. Our IP portfolios are at the foundation of everything we do, and we continue to invest in them strategically. In the second quarter, we completed six tuck-in IP portfolio acquisitions for $9.5 million, focused primarily on e-commerce, OTT, and imaging. Our portfolio grew to over 14,250 patent assets in the second quarter, up approximately 4% from the first quarter. In total, we have grown our patent portfolios by almost 5,000 patent assets since separation.
The vast majority of this growth generated organically. Consistent with our commitment to defending our IP, earlier this quarter, we filed patent infringement claims against Fubo, asserting four patents from our media portfolio. We are disappointed we could not reach acceptable terms for a new license agreement. Our goal, as always, is a business resolution, a license agreement that reflects the underlying value of our IP. I want to be clear that this matter is completely separate from our license agreement with Disney. Fubo represents a distinct opportunity, and the litigation has no impact on our license agreement with Disney. I also want to provide a brief update on the CEO search we announced in connection with our first quarter results. The board's search process is going well. We have engaged a nationally recognized search firm, the board is actively evaluating candidates.
Thank you, Paul. I am pleased to be speaking with you today to share details of our second quarter 2026 financial results. During the second quarter, we delivered results that were in line with our expectations. Revenue of $96.1 million was driven by the execution of six license agreements across a diverse mix of customers, including OTT, e-commerce, consumer electronics, and pay TV. Our second quarter was highlighted by our renewal with Google and a new license agreement with RPX. In all, we added a record 12 new customers in the quarter. Now I would like to discuss our operating expenses, for which I will be referring to non-GAAP numbers only. During the second quarter, operating expenses were $40.2 million, a decrease of $2.7 million or 6% from the prior quarter. The decrease was primarily due to lower litigation and personal-related costs.
Research and development expenses were essentially flat compared to the prior quarter. Selling, General, Administrative expenses decreased $2 million or 10% from the prior quarter, primarily due to lower personal-related expenses. Litigation expense was $5.3 million, a decrease of $639,000 or 11% compared to the prior quarter, primarily driven by lower spending on AMD due to the resolution of litigation in the prior quarter, which was partially offset by new litigation matters. Interest expense during the second quarter was $8 million, a decrease of $511,000, primarily due to our debt repayments and due to lower variable interest rates during the period. Our current effective interest rate, which includes amortization of debt issuance costs, was 7.1%. Other income was $1.7 million and was primarily related to interest earned on our cash and investment portfolio and due to interest income recognized on revenue agreements with long-term billing structures under ASC 606.
Our adjusted EBITDA for the second quarter was $56.4 million, reflecting an adjusted EBITDA margin of 59%. Depreciation expense for the second quarter was $480,000. Our non-GAAP income tax rate was 21% for the quarter. Our income tax expense consists primarily of federal and state domestic taxes, as well as Korean withholding taxes. Now for a few details on the balance sheet. We ended the second quarter with $137.1 million in cash equivalents, and marketable securities, and we generated $54.6 million in cash from operations. We made $6.1 million in principal payments on our debt in the second quarter and ended the quarter with a term loan balance of $392.6 million. We repurchased approximately 353,000 shares of our common stock for $10 million, bringing the remaining amount available for future repurchases to $140 million under our current stock repurchase program.
Our strong financial performance in the second quarter once again allowed us to execute on all four pillars of our balanced capital allocation approach. This includes paying down our debt, repurchasing shares, paying our dividend, and making tuck-in portfolio acquisitions. We paid a cash dividend of $0.05 per share of common stock. Our board also approved payment of another $0.05 per share dividend to be paid on September 14th to shareholders of record as of August 24th. For 2026, we are reiterating our prior revenue guidance range of $395 million-$435 million. Our pipeline remains strong and reflects the widespread adoption of our technologies across both the media and semiconductor markets. Operating expenses are expected to be in the range of $184 million-$192 million. We expect interest expense to be in the range of $34 million-$36 million.
We expect other income to be in the range of $5.5 million-$6.5 million. We expect a resulting adjusted EBITDA margin of approximately 55%. We expect the non-GAAP tax rate to be 21% for the full-year. We also expect capital expenditures to be approximately $2 million for the full-year. I am truly excited about our future. The increase in our long-term revenue outlook to $600 million annually is a clear reflection of this enthusiasm. We find ourselves at the right place at the right time with the right assets. Our entire team remains dedicated to executing on this goal. That brings an end to our prepared remarks. With that, I'd like to turn the call over to the operator to begin our question and answer session. Operator?