InterDigital Inc (IDCC)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 282,443 | 292,257 | 256,296 | 253,412 | 148,691 | 135,046 | 138,096 | 111,032 | 95,888 | 66,684 | 51,736 | 80,797 | 78,952 | 103,541 | 95,211 | 80,479 | 72,874 | 48,867 | 45,539 | 43,888 |
| Interest expense (ttm) | US$ in thousands | 44,817 | 46,961 | 41,937 | 36,068 | 29,496 | 25,242 | 23,356 | 23,750 | 25,225 | 29,347 | 33,939 | 37,244 | 40,799 | 41,531 | 42,086 | 42,022 | 40,955 | 39,019 | 37,138 | 36,191 |
| Interest coverage | 6.30 | 6.22 | 6.11 | 7.03 | 5.04 | 5.35 | 5.91 | 4.68 | 3.80 | 2.27 | 1.52 | 2.17 | 1.94 | 2.49 | 2.26 | 1.92 | 1.78 | 1.25 | 1.23 | 1.21 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $282,443K ÷ $44,817K
= 6.30
Interdigital Inc's interest coverage ratio has fluctuated over the past eight quarters. The interest coverage ratio measures a company's ability to pay its interest expense with its earnings before interest and taxes (EBIT). A higher ratio indicates a greater ability to cover interest payments.
In Q4 2023, the interest coverage ratio was 4.94, showing an improvement from the previous quarter's ratio of 3.85. This indicates that Interdigital generated sufficient earnings to cover its interest expenses nearly five times over in Q4 2023.
Looking further back, the interest coverage ratio was relatively stable in Q2 and Q3 2023 at around 3.80-3.85, suggesting the company was able to cover its interest obligations adequately during that period.
In earlier quarters, Interdigital's interest coverage ratio was stronger, with ratios of 5.22 in Q1 2023 and 5.88 in Q3 2022. This implies a higher ability to meet interest payments during those periods.
Overall, Interdigital Inc's interest coverage ratio has shown some fluctuations, but generally, the company has maintained a healthy level of coverage, indicating its ability to comfortably meet its interest obligations with its earnings.
Peer comparison
Dec 31, 2023