Shares of Adeia (ADEA) are soaring in Monday’s premarket trading after the company announced an agreement to give Disney (DIS) access to its intellectual property portfolio, ending all outstanding litigation between the two.
Driven by the Disney (DIS) agreement Adeia (ADEA) also raised its outlook for 2025.
On an adjusted basis, Adeia (ADEA) now expects revenue to be within a range of $425M and $435M from the prior range of $360M and $380M, with the low end of the new range beating the consensus estimate by $60M.
Net income estimates were raised to $169.8M and $175.9M from $127M and $139.8M, while adjusted EBITDA estimate was increased a range of $257.1M and $265.1M from $202.3M and $218.3M, previously.
The improved outlook comes as Adeia (ADEA) entered into a long-term agreement with Disney (DIS) to Adeia’s (ADEA) “comprehensive media intellectual property portfolio.”
Financial terms of the agreement were not disclosed.
As part of the agreement, Adeia (ADEA) and Disney (DIS) have resolved a lawsuit filed in November 2024 by Adeia (ADEA) accusing the media giant of multiple patent infringements relating to various aspects of media streaming and content delivery technology.
“While we remain willing to negotiate a resolution that fairly compensates Adeia for our valuable intellectual property, we are also fully prepared to proceed through the entirety of the legal process to protect our rights, and we remain confident in our ability to achieve a positive outcome,” Adeia said at the time of the November 2024 filing.
The deal with Disney (DIS) coupled with the raised FY25 outlook launched Adeia (ADEA) nearly 30% higher in premarket trading.