IMMERSION CORP

Immersion Corporation

Overview

Immersion Corporation licenses haptic (touch) technology and related software to manufacturers and product developers. The company holds a large portfolio of patents and other intellectual property that enable tactile feedback in devices and digital experiences. Immersion’s business model centers on IP licensing and providing software and tools to integrate its patented haptic technology into customer products. Licenses may be patent licenses (including fully paid-up perpetual licenses), technology licenses, or combined licenses, with revenue generated through fixed fees, per-unit royalties, or a mix of fixed and variable payments.

In June 2024 Immersion acquired a controlling interest in Barnes & Noble Education, Inc. (BNED). BNED has been consolidated as a subsidiary and its results are included in Immersion’s consolidated financial statements. Following the acquisition, Immersion reports two segments:

• Immersion (haptics IP licensing)
• Barnes & Noble Education (BNED) (education/college bookstore and related services)

Immersion segment (haptics IP licensing)

• Core activity: licensing patented haptic technology and providing enabling software, tools, and technical support to integrate touch-based experiences into customer products.
• Patent portfolio: just under 300 issued or pending patents worldwide as of April 30, 2026.
• Market focus: mobility/automotive, gaming, consumer electronics, VR/AR, wearables, and related content and software. Historical licensees include major technology and game companies and IC manufacturers.
• Revenue structure (fiscal 2026):
  • Fixed fee license revenue: $2.963 million
  • Per-unit royalty revenue: $12.961 million
  • Royalty and license (aggregate): $15.924 million
  • Total Immersion segment revenues (breakouts): roughly $31.8 million for 2026
• Segment results (fiscal 2026):
  • Operating income: $3.771 million
  • Selling and administrative expenses: $12.153 million

Barnes & Noble Education (BNED) segment

• Business description: a contract operator of physical and virtual college and K-12 bookstores in the U.S., a textbook wholesaler, and a provider of inventory management hardware and software. Operates a network of campus bookstores and related ecommerce platforms.
• Scale and footprint (as of April 30, 2026):
  • Physical campus bookstores: 647 locations
  • Virtual campus bookstores: 469
  • Total campus stores: 1,116
  • Operations are U.S.-based with some international activities; services include campus store management, distribution, and digital course materials via publisher partnerships.
• Customer and partner relationships:
  • Service providers and partners include Fanatics Retail Group Fulfillment and Lids (the F/L relationship), which provide ecommerce capabilities and manage emblematic/general merchandise for partner campuses.
  • Schools enter into long-term management agreements for bookstore operations. First Day programs (First Day Complete and First Day) focus on affordable access to course materials.
• Revenue mix (BNED portion; fiscal 2026):
  • Product and other sales: $1,564.365 million
  • Rental income: $150.405 million
  • Total BNED revenue: $1,714.770 million
• Operating results (BNED portion; fiscal 2026):
  • Cost of sales (excluding depreciation/amortization): $1,359.411 million
  • Selling and administrative expenses: $288.487 million
  • Depreciation and amortization: $42.499 million
  • Impairment losses: $5.089 million
  • Operating income: $22.143 million
• Highlights and initiatives:
  • Growth in First Day program sales (28% year-over-year in fiscal 2026)
  • Expansion of ecommerce capabilities and partnerships (for example, Fanatics/Lids) to broaden product and service offerings
• Risks and financing:
  • BNED has previously identified material weaknesses in internal controls over financial reporting; remediation is ongoing.
  • BNED’s consolidated results include a material debt facility (Restated ABL Facility) and ongoing capital-market activities, including ATM stock sales.

Consolidated financial highlights (fiscal 2026)

• Total revenues: $1,730.694 million
  • Immersion segment revenues: approximately $31.8 million
  • BNED segment revenues: $1,714.770 million
• Operating income (consolidated): $25.914 million
  • Immersion operating income: $3.771 million
  • BNED operating income: $22.143 million
• Net income and earnings per share:
  • Consolidated net income: $9.213 million
  • Net income attributable to Immersion stockholders: $4.524 million
  • Net income attributable to noncontrolling interest: $4.689 million
  • Basic earnings per share (Immersion stockholders): $0.14
  • Diluted earnings per share (Immersion stockholders): $0.14
• Cash, investments, and liquidity (as of April 30, 2026):
  • Immersion cash and cash equivalents: $129.868 million
  • BNED cash: $8.418 million
  • Investments — current: $42.168 million
  • Restricted cash: $19.800 million (primarily BNED-related)
  • Total cash, cash equivalents, and restricted cash: $158.086 million
• Debt and financing:
  • Restated ABL Facility: up to $325 million revolving facility, with $71.0 million outstanding as of April 30, 2026
  • BNED completed refinancing and related activities in 2024–2025 to improve liquidity
• Employees (as of April 30, 2026):
  • Immersion: 8 full-time equivalent employees
  • BNED: approximately 3,613 domestic employees (about 2,196 full-time), approximately 169 international employees, and approximately 3,459 temporary/seasonal domestic employees
  • Combined: roughly 3,621 full-time-equivalent positions plus a substantial temporary workforce

Customers, geography and strategy

• Customer base:
  • Immersion serves OEMs, gaming console makers, automotive suppliers, and other technology developers; major named licensees include Microsoft and other mobile, VR/AR, and automotive OEMs.
  • BNED serves colleges and universities through physical and virtual stores, ecommerce platforms, and wholesale channels.
• Geographic mix:
  • Immersion revenue historically concentrated in Asia (Japan and Korea), with a 2026 mix of roughly 73% Asia, 25% North America, and 2% Europe.
  • BNED operates primarily in the United States.
• Strategic focus:
  • Immersion continues to manage and enforce a broad IP portfolio and to expand licensing opportunities in mobility, gaming/VR, automotive, and related digital content.
  • BNED’s strategy emphasizes growth in First Day programs, expansion of ecommerce capabilities, and partnerships with Fanatics/Lids to increase emblematic and general merchandise revenue.

Risk factors and disclosures

The Form 10-K discusses risks common to licensing and retail businesses, including IP litigation, license renewals, international operations, supply chain constraints, cybersecurity, regulatory and tax matters, and BNED-specific risks such as seasonality, supplier relationships, and historical control deficiencies. The two segments have distinct operating activities and risk profiles, and their assets and liabilities are presented separately in the consolidated financial statements where appropriate.