InterDigital Inc (IDCC)

Interest coverage

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands 439,512 282,443 148,691 95,888 78,952
Interest expense US$ in thousands 2,200 44,817 29,496 25,225 40,799
Interest coverage 199.78 6.30 5.04 3.80 1.94

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $439,512K ÷ $2,200K
= 199.78

The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt obligations. A higher interest coverage ratio indicates a stronger ability to meet interest payments.

Analyzing InterDigital Inc's interest coverage over the years reveals a positive trend. In December 2020, the interest coverage ratio was 1.94, indicating the company's operating income was almost sufficient to cover its interest expenses.

By December 2021, the interest coverage ratio improved to 3.80, suggesting the company's ability to cover its interest payments had strengthened. The ratio continued to increase significantly, reaching 5.04 in December 2022 and 6.30 in December 2023.

The most notable improvement in interest coverage occurred by December 2024, with the ratio soaring to 199.78. This substantial increase reflects a significant enhancement in InterDigital's ability to comfortably cover its interest obligations through its operating income.

Overall, the trend in InterDigital Inc's interest coverage ratio showcases a consistent and notable improvement, indicating a positive financial health and strong ability to handle its debt obligations.


Peer comparison

Dec 31, 2024

Company name
Symbol
Interest coverage
InterDigital Inc
IDCC
199.78
Dolby Laboratories
DLB
7.58
Marathon Digital Holdings Inc
MARA
27.82