ADEIA CORP (ADEA)

Gross profit margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Gross profit	US$ in thousands	188,207	190,494	-156,361	246,009	407,438
Revenue	US$ in thousands	376,024	388,788	438,933	391,212	515,919
Gross profit margin		50.05%	49.00%	-35.62%	62.88%	78.97%

December 31, 2024 calculation

Gross profit margin = Gross profit ÷ Revenue
= $188,207K ÷ $376,024K
= 50.05%

The gross profit margin of ADEIA CORP has exhibited significant fluctuations over the years based on the provided data. As of December 31, 2020, the gross profit margin stood at a high level of 78.97%, indicating that the company was able to effectively control its production costs relative to its revenue. However, by December 31, 2021, the gross profit margin decreased to 62.88%, suggesting a potential increase in costs or a decline in revenue efficiency.

The most concerning observation is the significant decrease to -35.62% by December 31, 2022. A negative gross profit margin indicates that the company's cost of goods sold exceeded its revenue from sales, which is unsustainable in the long term and warrants further investigation into the underlying issues affecting profitability.

Fortunately, there was a recovery in the gross profit margin to 49.00% by December 31, 2023, indicating improvements in cost management or revenue generation strategies. The trend continued positively with a further increase to 50.05% by December 31, 2024, demonstrating the company's efforts to enhance operational efficiency and profitability.

In conclusion, while ADEIA CORP experienced fluctuations in its gross profit margin over the years, the recent positive trend suggests that the company has taken steps to address previous challenges and improve its financial performance. However, ongoing monitoring and analysis will be essential to ensure sustained profitability and operational effectiveness.