Adeia Inc. (NASDAQ:ADEA) announced Monday that it has finalized a long-term licensing arrangement with The Walt Disney Company (NYSE:DIS), bringing an end to all pending legal disputes between the two companies. The stock soared post the announcement.
The deal grants Disney access to Adeia’s media-related intellectual property, covering the technologies involved in the resolved litigation.
The agreement closes years of courtroom friction and replaces it with a license spanning Disney’s relevant products and services. Adeia CEO Paul E. Davis said the pact underscores the importance of the company’s technology in modern entertainment delivery.
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Strategic Importance of Adeia’s Media IP
Adeia’s patents focus on streaming, content delivery, and audience interaction, areas central to global media distribution. By securing Disney as a long-term licensee, Adeia strengthens its position as a core technology provider for widely used entertainment platforms.
Outlook Raised Following Disney Agreement
The Disney license also prompted Adeia to raise its outlook for the year ending Dec. 31, 2025. Management now expects results to surpass the upper range of its previous guidance, citing improved deal execution and expanding commercial momentum.
Adeia raised its full-year revenue outlook to $425 million–$435 million, a significant increase from its prior forecast of $360 million–$380 million, reflecting stronger-than-expected performance.
The company also expects operating expenses to increase, primarily due to higher incentive-based compensation. Nevertheless, profitability metrics are projected to improve significantly.
GAAP net income is now forecast at $96.4 million–$113.9 million, compared with the earlier range of $52.4 million–$71.6 million, representing a substantial upward revision. Non-GAAP net income is projected at $169.8 million–$175.9 million, up from $127.4 million–$139.8 million previously.
On a non-GAAP basis, adjusted EBITDA is now expected to reach $257.1 million–$265.1 million, well above the prior outlook of $202.3 million–$218.3 million, underscoring the strength of operating leverage.
CEO Commentary
Paul E. Davis, chief executive officer of Adeia, stated, “As we previously mentioned, we have been pursuing multiple opportunities that if achieved, could result in 2025 revenue being greater than our prior guidance. Driven primarily by the execution of the Disney agreement our revised 2025 financial outlook reflects the strong momentum for our business.”
Price Action: ADEA shares were up 26.62% at $16.16 at the time of publication on Monday, according to Benzinga Pro data. DIS was up 1.20%.
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