Acacia(US:ACTG)2025-05-09 20:43Financial Performance - Total revenues for Q1 2025 reached $124.4 million, a significant increase of 412% compared to $24.3 million in Q1 2024[16] - Operating income for Q1 2025 was $38.3 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 $24.3 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 $0.25 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 $189,000 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 $186,000 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 $273.9 million at the end of 2024[14] - Total assets increased to $801.6 million as of March 31, 2025, up from $756.4 million at the end of 2024[14] - The company’s total stockholders' equity increased to $577.3 million as of March 31, 2025, from $552.6 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 $438,762,000 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 $203.8 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 $69.9 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, 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 $69,490,000 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 $10 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 $48 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 $16.798 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, 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, 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 $150 million, with an outstanding balance of $61.5 million as of March 31, 2025, down from $66.5 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, 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]