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Acacia(ACTG) - 2025 Q1 - Quarterly Report
ACTGAcacia(ACTG)2025-05-09 20:43
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Financial Performance - Total revenues for Q1 2025 reached 124.4million,asignificantincreaseof412124.4 million, a significant increase of 412% compared to 24.3 million in Q1 2024[16] - Operating income for Q1 2025 was 38.3million,comparedtoanoperatinglossof38.3 million, compared to an operating loss of 2.1 million in Q1 2024[16] - Net income attributable to Acacia Research Corporation for Q1 2025 was 24.3million,aturnaroundfromanetlossof24.3 million, a turnaround from a net loss of 0.2 million in Q1 2024[16] - The company reported a basic net income per common share of 0.25forQ12025,comparedtonoearningspershareinQ12024[16]−ForthethreemonthsendedMarch31,2025,AcaciaResearchCorporationreportedanetincomeof0.25 for Q1 2025, compared to no earnings per share in Q1 2024[16] - For the three months ended March 31, 2025, Acacia Research Corporation reported a net income of 23,528,000, a significant increase from a net loss of 189,000inthesameperiodof2024[19]−Acacia′snetincomeattributabletocommonstockholdersforthethreemonthsendedMarch31,2025,was189,000 in the same period of 2024[19] - Acacia's net income attributable to common stockholders for the three months ended March 31, 2025, was 24.287 million, compared to a loss of 186,000inthesameperiodof2024[186]CashandAssets−CashandcashequivalentsasofMarch31,2025,were186,000 in the same period of 2024[186] Cash and Assets - Cash and cash equivalents as of March 31, 2025, were 272.0 million, slightly down from 273.9millionattheendof2024[14]−Totalassetsincreasedto273.9 million at the end of 2024[14] - Total assets increased to 801.6 million as of March 31, 2025, up from 756.4millionattheendof2024[14]−Thecompany’stotalstockholders′equityincreasedto756.4 million at the end of 2024[14] - The company’s total stockholders' equity increased to 577.3 million as of March 31, 2025, from 552.6millionattheendof2024[14]−Acacia′scashandcashequivalentsdecreasedto552.6 million at the end of 2024[14] - Acacia's cash and cash equivalents decreased to 271,964,000 at the end of Q1 2025, down from 438,762,000attheendofQ12024,reflectingadeclineof38438,762,000 at the end of Q1 2024, reflecting a decline of 38%[19] Liabilities and Equity - Total liabilities rose to 224.3 million as of March 31, 2025, compared to 203.8millionattheendof2024[14]−Thecompanyrecordedtotalunrecognizedtaxbenefitsofapproximately203.8 million at the end of 2024[14] - The company recorded total unrecognized tax benefits of approximately 935,000 as of March 31, 2025[103] - The effective tax rate for the company was slightly lower than the U.S. federal statutory rate due to non-controlling partnership earnings allocated to minority shareholders[102] Revenue Sources - The company is focusing on expanding its intellectual property operations, which generated 69.9millioninrevenueforQ12025,comparedto69.9 million in revenue for Q1 2025, compared to 13.6 million in Q1 2024[16] - Acacia's total license revenue for the three months ended March 31, 2025, was 69,905,000,asignificantincreasefrom69,905,000, a significant increase from 13,623,000 in the same period of 2024, representing a growth of approximately 413%[49] - Paid-up license revenue agreements contributed 69,490,000tototalrevenueinQ12025,comparedto69,490,000 to total revenue in Q1 2025, compared to 12,365,000 in Q1 2024, indicating a growth of about 463%[49] Acquisitions and Investments - Acacia invested 10milliontoacquirea50.410 million to acquire a 50.4% equity interest in Benchmark Energy II, LLC, which operates in the oil and gas sector[31] - The company completed the acquisition of Deflecto Acquisition, Inc. for 103.7 million, funded by a combination of a 48millionsecuredtermloanandcash[34]−TheidentifiablenetassetsacquiredintheDeflectotransactionwerevaluedat48 million secured term loan and cash[34] - The identifiable net assets acquired in the Deflecto transaction were valued at 80.965 million, resulting in goodwill of 16.798million[111]OperationalHighlights−Thecompanyaimstoacquirebusinesseswithtotalenterprisevaluesof16.798 million[111] Operational Highlights - The company aims to acquire businesses with total enterprise values of 1 billion or less, focusing on those with stable cash flow generation and scalability[23] - The company operates in four reportable segments: Intellectual Property Operations, Industrial Operations, Energy Operations, and Manufacturing Operations[187] - The Manufacturing Operations segment was established following the acquisition of Deflecto in October 2024, focusing on specialty plastics[193] Segment Performance - The segment gross profit for intellectual property operations was 41,993,000,whilethetotalsegmentoperatingincomewas41,993,000, while the total segment operating income was 43,082,000 for the three months ended March 31, 2025[197] - Benchmark's total revenue for the three months ended March 31, 2025, was 18,306,000,asubstantialincreasefrom18,306,000, a substantial increase from 1,856,000 in Q1 2024, marking a growth of approximately 884%[67] Debt and Financing - The Benchmark Revolving Credit Facility has a maximum credit amount of 150million,withanoutstandingbalanceof150 million, with an outstanding balance of 61.5 million as of March 31, 2025, down from 66.5millionattheendof2024[132]−TheinterestrateontheDeflectoTermLoanwas866.5 million at the end of 2024[132] - The interest rate on the Deflecto Term Loan was 8% as of March 31, 2025, with an outstanding balance of 46.9 million[140] Stock and Compensation - The total compensation expense for share-based awards recognized in general and administrative expenses for the three months ended March 31, 2025, was 922,000,anincreasefrom922,000, an increase from 858,000 in 2024[184] - As of March 31, 2025, there were 15,999,789 shares of common stock reserved for issuance under the Plans[179] Strategic Initiatives - Acacia's relationship with Starboard Value, LP enhances its access to industry expertise and acquisition opportunities, contributing to its strategic growth initiatives[24] - The company emphasizes a disciplined approach to identifying acquisition opportunities, avoiding traditional sale processes to secure attractive pricing[209] - The company’s approach to transactions is as business owners rather than purely financial investors, aiming for long-term value creation for shareholders[205]