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Adeia (ADEA) is soaring today after the technology IP licensing company, which develops foundational innovations for the semiconductor and media ecosystems, raised its FY25 guidance well above estimates this morning. The upside revision reflects strong deal execution and follows ADEA's announcement that it entered a long-term media IP license agreement with Disney (DIS) that also resolves outstanding litigation. ADEA now expects FY25 revenue of $425-435 mln, up from $360-380 mln.

• The long-term license gives DIS access to ADEA's media IP portfolio, reinforcing its role in streaming and content delivery that can drive durable, high-margin licensing revenue.
• It also resolves all outstanding Disney litigation, removing an overhang. On the Q3 call in early November, management said the cases were tracking better than expected (Delaware motion-to-dismiss denied; Brazil injunction upheld; Europe trials slated for Q1'26), but timing was still tied to the courts.
• ADEA has also been diversifying beyond its legacy Pay-TV base into higher-growth verticals like semiconductors, OTT, social, and e-commerce. Non-Pay-TV recurring revenue increased 31% yr/yr in Q3.
• That push is showing up in the customer mix. It has semiconductor agreements with Sandisk (SNDK) and Kioxia, OTT deals with Amazon (AMZN) and Paramount (PSKY), and consumer electronics/social relationships with Samsung (SSNLF) and LG (among others).
• A semiconductor overhang remains Advanced Micro Devices (AMD) due to ongoing IP litigation; ADEA had been pursuing a license agreement, so a resolution could be a longer-term positive, even if timing is uncertain.

Briefing.com Analyst Insight

Investors are responding to the sharp upside to ADEA's FY25 guidance, a notable reversal after it guided lower in Q3. That earlier cut was largely tied to the breakdown in negotiations with AMD and the decision to pursue value for its semiconductor IP through litigation, pushing a potential license out of the near-term timing window, an overhang that still remains. Even so, the DIS agreement is meaningful not only because it expands/validates ADEA's media licensing footprint across major streaming and entertainment platforms, but also because it removes a headline litigation risk and improves revenue visibility. For now, the raised guidance is encouraging, and it will be important to watch for continued momentum in non-Pay-TV growth verticals and any developments around the AMD situation.