Adeia Inc. (ADEA) shares tumbled 5.75% in pre-market trading on Monday following the release of its third-quarter earnings report and the announcement of a patent infringement lawsuit against Advanced Micro Devices (AMD).

The intellectual property licensing company reported third-quarter earnings per share of $0.08 and adjusted earnings per share of $0.28. While the company's Q3 adjusted EBITDA came in at $50.7 million, investors seem to be focusing on concerns about future growth and potential legal battles.

Adeia's outlook for the full year 2025 may have contributed to the stock's decline. The company projects annual revenue between $360 million and $380 million, with net income ranging from $52.4 million to $71.6 million. This guidance suggests potential headwinds in the coming quarters, which could be weighing on investor sentiment.

Adding to the market's reaction, Adeia announced it has initiated patent infringement litigation against AMD, alleging that the chipmaker has infringed on ten patents from Adeia's semiconductor intellectual property portfolio. While such lawsuits can potentially lead to future licensing revenues or settlements, they also introduce uncertainty and legal costs that may have spooked some investors in the short term.

The combination of these factors appears to have triggered a significant sell-off in Adeia's stock during pre-market trading. Investors will likely be watching closely for any further developments regarding the AMD lawsuit and for signs of how Adeia plans to navigate the challenges reflected in its conservative full-year guidance.