Latest news with #Deflecto
Yahoo
5 days ago
- Business
- Yahoo
Acacia Research Corp (ACTG) Q2 2025 Earnings Call Highlights: Navigating Challenges with ...
Total Revenue: $51.2 million for Q2 2025. Adjusted EBITDA: $1.9 million for the company. Free Cash Flow: $47.9 million, reflecting cash collection from a settlement in the IP business. Diluted EPS Loss: $0.03 per share; adjusted loss of $0.06 per share. Book Value Per Share: $5.99; excluding non-controlling interests, $5.58. Energy Operations Revenue: $15.3 million, up from $14.2 million year-over-year. Manufacturing Operations Revenue: $29 million for the quarter. Industrial Operations Revenue: $6.6 million, compared to $6.3 million last year. Intellectual Property Revenue: $0.3 million, down from $5.3 million last year. G&A Expenses: $15.5 million, up from $10.1 million last year, with $5.1 million increase due to Deflecto. Operating Loss: $12.4 million, compared to $4.8 million last year. Energy Operations Adjusted EBITDA: $7 million. Manufacturing Operations Adjusted EBITDA: $1.3 million. Industrial Operations Adjusted EBITDA: $0.6 million. Net Loss: $3.3 million or $0.03 per share; adjusted net loss of $5.9 million or $0.06 per share. Cash Equivalents and Equity Securities: $338.2 million as of June 30, 2025. Total Indebtedness: $104.4 million, with $58 million at Benchmark and $46.4 million at Deflecto. Warning! GuruFocus has detected 5 Warning Signs with ACTG. Release Date: August 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Acacia Research Corp (NASDAQ:ACTG) announced a partnership with Unchained Capital to offer secured lending solutions backed by Bitcoin, which could provide attractive risk-adjusted returns. The company generated total revenue of $51.2 million in the second quarter, with significant contributions from its energy and manufacturing operations. Acacia's hedging strategy for its energy operations is performing well, with over 70% of oil and gas production hedged through 2027, mitigating downside pricing risks. The company has made progress in optimizing operations at its Deflecto business, improving accountability, reducing overhead costs, and streamlining product offerings. Acacia's industrial segment, Printronix, is performing ahead of plan, with a successful transition to higher-margin consumable products and improved free cash flow. Negative Points Acacia reported a GAAP operating loss of $12.4 million for the second quarter, primarily due to a decline in revenue from its intellectual property business. The company experienced demand headwinds in its Deflecto business due to global trade uncertainties and tariffs, impacting its transportation safety and consumer products segments. The Class A truck market remains weak, with new orders at their lowest level since 2010, affecting Deflecto's transportation safety business. Acacia's intellectual property operations saw a significant decrease in revenue compared to the previous year, highlighting the episodic nature of this business. The macroeconomic environment, including potential recessions and declining oil and natural gas prices, poses risks to Acacia's energy operations despite hedging strategies. Q & A Highlights Q: Can you share the expected interest rates for the Bitcoin commercial loans and how do you assess their risk compared to typical commercial loans? A: The loans are expected to yield returns in the low teens, exceeding 10% for Acacia. These loans are collateralized by Bitcoin at a 50% loan-to-value ratio, stored in a secure cold storage vault. The risk is considered minimal due to the ability to manage the loan-to-value ratio and liquidate Bitcoin if necessary. Additionally, Acacia plans to hedge against Bitcoin exposure to mitigate risks. Q: Regarding Deflecto, is there any indication of recovery in the Class A truck market, or do you expect the downturn to continue? A: The tariffs have significantly impacted the market, altering buying patterns. While uncertainty persists, there is optimism that purchasing cycles may return once clarity is achieved. Acacia is implementing strategies like price increases and cost optimization to navigate the situation. The aging fleet suggests potential for market recovery once uncertainties are resolved. Q: What are Acacia's plans for the Cherokee asset over the next one to two years? A: Acacia is evaluating partnerships with third-party capital to pursue a drilling strategy in Cherokee. The company is in the middle stages of planning and aims to capitalize on the acreage acquired with the PDPs from the revolution. Specific details on the number of wells are not disclosed at this time. Q: How does Acacia ensure the security of Bitcoin collateral in cold storage, and what measures are in place to protect against regulatory changes? A: The Bitcoin collateral is held in a cold storage unit managed by Unchained, with a multi-signature system requiring two of three key holders to access the Bitcoin. This setup provides high security. The UCC lien is embedded in the Bitcoin's coding, ensuring clear ownership. Acacia is confident in the security and regulatory compliance of this arrangement. Q: With 70% of the benchmark resolution business hedged, is there a risk of going cash flow negative if oil and natural gas prices decline? A: While nothing is impossible, it is highly improbable for the business to go cash flow negative due to the hedges in place. There is some unhedged exposure, but the hedges have performed as expected, providing confidence in maintaining positive cash flow despite price volatility. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
5 days ago
- Business
- Yahoo
Acacia Research Corp (ACTG) Q2 2025 Earnings Call Highlights: Navigating Challenges with ...
Total Revenue: $51.2 million for Q2 2025. Adjusted EBITDA: $1.9 million for the company. Free Cash Flow: $47.9 million, reflecting cash collection from a settlement in the IP business. Diluted EPS Loss: $0.03 per share; adjusted loss of $0.06 per share. Book Value Per Share: $5.99; excluding non-controlling interests, $5.58. Energy Operations Revenue: $15.3 million, up from $14.2 million year-over-year. Manufacturing Operations Revenue: $29 million for the quarter. Industrial Operations Revenue: $6.6 million, compared to $6.3 million last year. Intellectual Property Revenue: $0.3 million, down from $5.3 million last year. G&A Expenses: $15.5 million, up from $10.1 million last year, with $5.1 million increase due to Deflecto. Operating Loss: $12.4 million, compared to $4.8 million last year. Energy Operations Adjusted EBITDA: $7 million. Manufacturing Operations Adjusted EBITDA: $1.3 million. Industrial Operations Adjusted EBITDA: $0.6 million. Net Loss: $3.3 million or $0.03 per share; adjusted net loss of $5.9 million or $0.06 per share. Cash Equivalents and Equity Securities: $338.2 million as of June 30, 2025. Total Indebtedness: $104.4 million, with $58 million at Benchmark and $46.4 million at Deflecto. Warning! GuruFocus has detected 5 Warning Signs with ACTG. Release Date: August 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Acacia Research Corp (NASDAQ:ACTG) announced a partnership with Unchained Capital to offer secured lending solutions backed by Bitcoin, which could provide attractive risk-adjusted returns. The company generated total revenue of $51.2 million in the second quarter, with significant contributions from its energy and manufacturing operations. Acacia's hedging strategy for its energy operations is performing well, with over 70% of oil and gas production hedged through 2027, mitigating downside pricing risks. The company has made progress in optimizing operations at its Deflecto business, improving accountability, reducing overhead costs, and streamlining product offerings. Acacia's industrial segment, Printronix, is performing ahead of plan, with a successful transition to higher-margin consumable products and improved free cash flow. Negative Points Acacia reported a GAAP operating loss of $12.4 million for the second quarter, primarily due to a decline in revenue from its intellectual property business. The company experienced demand headwinds in its Deflecto business due to global trade uncertainties and tariffs, impacting its transportation safety and consumer products segments. The Class A truck market remains weak, with new orders at their lowest level since 2010, affecting Deflecto's transportation safety business. Acacia's intellectual property operations saw a significant decrease in revenue compared to the previous year, highlighting the episodic nature of this business. The macroeconomic environment, including potential recessions and declining oil and natural gas prices, poses risks to Acacia's energy operations despite hedging strategies. Q & A Highlights Q: Can you share the expected interest rates for the Bitcoin commercial loans and how do you assess their risk compared to typical commercial loans? A: The loans are expected to yield returns in the low teens, exceeding 10% for Acacia. These loans are collateralized by Bitcoin at a 50% loan-to-value ratio, stored in a secure cold storage vault. The risk is considered minimal due to the ability to manage the loan-to-value ratio and liquidate Bitcoin if necessary. Additionally, Acacia plans to hedge against Bitcoin exposure to mitigate risks. Q: Regarding Deflecto, is there any indication of recovery in the Class A truck market, or do you expect the downturn to continue? A: The tariffs have significantly impacted the market, altering buying patterns. While uncertainty persists, there is optimism that purchasing cycles may return once clarity is achieved. Acacia is implementing strategies like price increases and cost optimization to navigate the situation. The aging fleet suggests potential for market recovery once uncertainties are resolved. Q: What are Acacia's plans for the Cherokee asset over the next one to two years? A: Acacia is evaluating partnerships with third-party capital to pursue a drilling strategy in Cherokee. The company is in the middle stages of planning and aims to capitalize on the acreage acquired with the PDPs from the revolution. Specific details on the number of wells are not disclosed at this time. Q: How does Acacia ensure the security of Bitcoin collateral in cold storage, and what measures are in place to protect against regulatory changes? A: The Bitcoin collateral is held in a cold storage unit managed by Unchained, with a multi-signature system requiring two of three key holders to access the Bitcoin. This setup provides high security. The UCC lien is embedded in the Bitcoin's coding, ensuring clear ownership. Acacia is confident in the security and regulatory compliance of this arrangement. Q: With 70% of the benchmark resolution business hedged, is there a risk of going cash flow negative if oil and natural gas prices decline? A: While nothing is impossible, it is highly improbable for the business to go cash flow negative due to the hedges in place. There is some unhedged exposure, but the hedges have performed as expected, providing confidence in maintaining positive cash flow despite price volatility. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Globe and Mail
6 days ago
- Business
- Globe and Mail
Acacia Research (ACTG) Q2 Revenue Up 98%
Key Points GAAP revenue nearly doubled year over year to $51.2 million in Q2 2025, driven by newly acquired manufacturing operations, but missed the $55.0 million GAAP revenue estimate. Non-GAAP earnings per share came in at $(0.06), short of the $(0.05) non-GAAP consensus estimate; Adjusted EBITDA (non-GAAP) declined to $1.9 million from $4.1 million. Intellectual Property segment GAAP revenue dropped sharply to $0.3 million, highlighting continued volatility and reliance on one-time settlements. These 10 stocks could mint the next wave of millionaires › Acacia Research (NASDAQ:ACTG), an investment firm known for acquiring undervalued businesses across multiple sectors, released its second quarter results on August 6, 2025. The headline news from the period: GAAP revenue soared 98% from the prior-year quarter, reaching $51.2 million, primarily on the back of the Deflecto acquisition in its manufacturing business. However, The company missed analyst expectations, which had forecasted $55.0 million in GAAP revenue. Non-GAAP earnings per share (EPS) landed at $(0.06), compared with the anticipated $(0.05). Overall, the quarter reflected robust top-line growth from acquisitions. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS (Non-GAAP) $(0.06) $(0.05) $(0.01) (500.0%) EPS (GAAP) $(0.03) $(0.08) N/A Revenue (GAAP) $51.2 million $55.0 million $25.8 million 98.4% Total Company Adjusted EBITDA $1.9 million $4.1 million (53.7%) Free Cash Flow (Non-GAAP) $47.9 million N/A Source: Analyst estimates for the quarter provided by FactSet. Business Overview and Strategic Focus Acacia Research operates as an investment platform that acquires, manages, and seeks to unlock value in businesses across manufacturing, industrial, energy, and intellectual property. It searches for underappreciated and complex assets, with a specific emphasis on free cash flow potential and operational improvement. In recent quarters, the company has concentrated on expanding by acquisition, particularly with the addition of Deflecto to create a new manufacturing segment. Key success factors for Acacia Research include selecting the right acquisition targets, integrating them efficiently, and achieving steady cash flow. The company also leverages its partnership with Starboard Value to enhance sourcing and execution of strategic transactions. Quarter Highlights: Financial and Operational Performance The most prominent story this period was headline revenue growth, which nearly doubled year over year, with GAAP revenue increasing 98% to $51.2 million from $25.8 million in Q2 2024. This jump was primarily driven by the Manufacturing Operations segment, thanks to the second full quarter of Deflecto's contribution, generating $29.0 million in segment revenue. Energy Operations (Benchmark) delivered $15.3 million in GAAP revenue, up modestly from $14.2 million in Q2 2024, and Industrial Operations (Printronix) posted $6.6 million in GAAP revenue, up slightly from $6.3 million for Q2 2024. However, the IP segment, focused on licensing technology and patent portfolios, was a weak spot. IP revenue (GAAP) fell sharply to $0.3 million from $5.3 million in Q2 2024, reflecting a lack of new settlements or licensing income in the quarter. This high volatility is typical in IP licensing businesses, which often depend on unpredictable legal settlements. The first half of the year had been boosted by a large one-time intellectual property (IP) settlement, but the second quarter saw minimal activity. In contrast, Energy and industrial divisions showed modest revenue growth, with Energy Operations Adjusted EBITDA slightly declining and Industrial Operations Adjusted EBITDA increasing. The new manufacturing segment is now the largest by revenue, but its margin profile is slim, as shown by $1.3 million in adjusted EBITDA on $29.0 million in revenue, around a 4.4% margin. Despite strong revenue growth, profitability metrics deteriorated. Total company adjusted EBITDA (non-GAAP) was $1.9 million, a drop from $4.1 million in the prior-year period. Operated segment adjusted EBITDA (non-GAAP, excluding parent-level costs) was $6.8 million, down from $8.8 million for Q2 2024. Notably, Sales and marketing expenses for industrial and manufacturing operations increased to $3.4 million. Cash, cash equivalents, and equity securities totaled $338.2 million at period-end, up from $297.0 million at December 31, 2024, providing flexibility for future acquisitions or shareholder programs. Free cash flow (non-GAAP) was $47.9 million, aided mostly by IP settlement receipts booked earlier in the year. Total consolidated debt was $104.4 million as of June 30, 2025, with all borrowings at the operating subsidiary level and none at the parent company. Book value per share stood at $5.99, with 96.4 million shares outstanding. Segment and Product Updates, One-Time Items, and Dividend The company's diverse portfolio includes manufacturing products (Deflecto makes plastic-based goods for air distribution, transportation, and office use), industrial equipment (Printronix specializes in printing solutions), energy assets (Benchmark manages oil, gas, and natural gas liquids), and intellectual property (Acacia Research Group pursues patent-related revenue). Energy operations had an Adjusted EBITDA of $6.95 million on $15.32 million in revenue. -- while IP's contribution has proven highly variable and manufacturing's headline revenue has not yet delivered expected profit scales. Looking deeper at trends, the energy business posted stable results, reporting flat adjusted EBITDA (non-GAAP) on a modest increase in revenue. Industrial operations maintained small but positive margins. The manufacturing unit is in its initial integration phase, with management focusing on cost controls, footprint optimization, and streamlined product offerings. Despite capturing the most revenue, Deflecto's margins were slim due to ramp-up costs and higher G&A. though investors should note that first quarter results included a sizeable legal settlement in the Intellectual Property segment, distorting free cash flow and headline earnings for the current year. The company also announced a new partnership with Unchained Capital and Build Asset Management to pursue a Bitcoin-backed commercial lending product. This represents a move outside its traditional domains, and the company did not specify the scale or risk profile of the initiative in its filing. Acacia Research does not currently pay a dividend. Outlook and What to Watch Ahead Management did not provide explicit financial guidance for the remainder of fiscal 2025 or for its key segments. The leadership team reaffirmed its acquisition-driven growth strategy and noted that its strong cash position enables continued pursuit of new investments, but stopped short of giving concrete forecasts. For observers, several issues warrant attention in coming quarters. Key areas include the sustainability of revenue mix, integration of newly acquired businesses (especially Deflecto), margin recovery efforts, and the ability to generate recurring cash flow beyond large, infrequent IP settlements. Volatility in the IP segment and the still-maturing manufacturing business will likely be central drivers of earnings variability for the foreseeable future. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. 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Yahoo
09-05-2025
- Business
- Yahoo
Acacia Research Corp (ACTG) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and ...
Release Date: May 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Acacia Research Corp (NASDAQ:ACTG) reported strong first-quarter revenue of $124.4 million, driven by gains in its intellectual property business. The company achieved a significant IP settlement related to its Wi-Fi portfolio, contributing approximately $69 million in revenue. Benchmark Energy, a subsidiary, successfully generated free cash flow to repay over 25% of its $82 million debt, showcasing effective cash flow management. Acacia's diversified production profile in energy provides flexibility in capital allocation, with over 70% of production hedged through 2027. The integration of Deflecto into Acacia's portfolio is progressing well, with initiatives to optimize operations and improve cash conversion rates. General and administrative expenses increased to $17.3 million, partly due to the addition of Deflecto, impacting overall profitability. The industrial operations segment saw a slight revenue decrease compared to the same quarter last year, indicating potential challenges in that area. Macroeconomic uncertainties and tariff-related demand headwinds have impacted Deleo's transportation unit, affecting overall performance. Despite strong cash flow generation, Acacia's share price does not reflect the underlying value of its assets, according to management. The company faces ongoing legal challenges, including a $37 million judgment under appeal, which could impact future financial outcomes. Warning! GuruFocus has detected 4 Warning Signs with ACTG. Q: Can you provide details on the total winnings from the Wi-Fi 6 portfolio and if there are more companies to pursue? A: MJ McNulty, CEO: Since Q1 2023, we've secured about $178 million from the Wi-Fi assets. We believe there's more value in the portfolio, with ongoing cases like TP-Link, which strengthen our position for future settlements. Q: Are you seeing changes in valuations for M&A opportunities, and which sectors are you focusing on? A: MJ McNulty, CEO: We're exploring opportunities in energy, industrials, and mature technology. In mature tech, we're looking for assets where we can add value through operational improvements. In industrials, we're interested in expanding our transportation and air distribution businesses. In energy, we're focused on opportunities in the Anadarko Basin. Q: Could you elaborate on the considerations regarding tax attributes and share buybacks? A: MJ McNulty, CEO: We completed a $20 million buyback and are cautious about protecting our tax attributes, which are influenced by change control metrics. We monitor these factors to determine the optimal timing for further buybacks. Q: With patent portfolio prices decreasing, will you consider allocating more capital to new patent portfolios? A: MJ McNulty, CEO: We're focused on high-quality, standards-essential patents like our Wi-Fi portfolio. While we evaluate opportunities, the execution timeline in IP is longer compared to industrials or energy. Q: Would it be feasible to spin off the patent business once your industrial and manufacturing segments achieve critical mass? A: MJ McNulty, CEO: We constantly evaluate if any of our businesses, including the patent segment, are worth more to others than to us. If so, we consider options like selling or spinning off to maximize value. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Business Wire
08-05-2025
- Business
- Business Wire
Acacia Research Corporation Reports First Quarter 2025 Financial Results
NEW YORK--(BUSINESS WIRE)--Acacia Research Corporation (Nasdaq: ACTG) (' Acacia ' or the ' Company '), which acquires and operates businesses across the industrial, energy and technology sectors, today reported financial results for the three months ended March 31, 2025. The Company also posted its first quarter 2025 earnings presentation on its website at under Events & Presentations. Martin ('MJ') D. McNulty, Jr., Chief Executive Officer, stated, 'Acacia had a very strong start to the year, generating first quarter revenue of $124.4 million and Total Company Adjusted EBITDA of $50.7 million. These results were driven by $69.9 million in revenue from our Intellectual Property operations primarily relating to our WiFi-6 portfolio, the first full quarter of performance from Deflecto, and continued execution at Benchmark and Printronix. Against the backdrop of macro-economic uncertainty, we continued to execute our strategy of building businesses with stable cash flow generation and scalability and believe the combination of our existing businesses and strong balance sheet will ensure Acacia continues to deliver long-term shareholder value. Including the net proceeds from the Intellectual Property settlement recorded in the first quarter, and received after quarter end, current cash, cash equivalents and equity securities is approximately $338.2 million, or $3.52 per share. Our strong cash position provides us with substantial dry powder to grow our business and positions us well to opportunistically pursue accretive investment opportunities that may become available.' First Quarter 2025 Highlights Total revenue of $124.4 million for the quarter, up 412% compared to $24.3 million for the prior-year quarter, primarily driven by $69.9 million in license fee revenue from our Intellectual Property Operations, $18.3 million in revenue from Energy Operations, which is the largest Energy Operations quarterly revenue under Acacia ownership, and $28.5 million in revenue from our first full quarter of Manufacturing Operations. GAAP Net Income of $24.3 million, or $0.25 GAAP Diluted EPS, for the three months ended March 31, 2025. Adjusted Net Income of $33.1 million, or $0.34 Adjusted Diluted EPS, for the three months ended March 31, 2025. Operated Segment Adjusted EBITDA of $54.7 million for the three months ended March 31, 2025. Total Company Adjusted EBITDA of $50.7 million for the three months ended March 31, 2025. Including the net proceeds received from our Intellectual Property Operations after quarter end, cash, cash equivalents, and equity securities is approximately $338.2 million, or $3.52 per share. Revenue The following table provides a breakdown of the Company's total revenue for the three months ended March 31, 2025 and March 31, 2024. For the purposes of financial reporting, Acacia's operations are broken out as follows: Energy Operations (Benchmark), Industrial Operations (Printronix), Manufacturing Operations (Deflecto), and Intellectual Property Operations (Acacia Research Group). Adjusted EBITDA The following table provides a reconciliation of consolidated Net Income (Loss), the most directly comparable GAAP measure, to Total Company Adjusted EBITDA for the three months ended March 31, 2025 and March 31,2024. Three Months Ended March 31, 2025 2024 (In thousands, unaudited) GAAP Net Income (Loss) $ 24,287 $ (186 ) Net (Income) Loss Attributable to Noncontrolling Interests (759 ) (3 ) Income Tax Expense (Benefit) 6,081 (1,109 ) Interest Expense 2,451 326 Interest (Income) and Other, Net (1,793 ) (5,095 ) (Gain) Loss on Foreign Currency Exchange (155 ) 68 Net Realized and Unrealized (Gain) Loss on Derivatives 5,021 (171 ) Net Realized and Unrealized (Gain) Loss on Investments 3,172 (2,160 ) Non-recurring Legacy Legal Expense — 6,243 GAAP Operating Income (Loss) $ 38,305 $ (2,087 ) Depreciation, Depletion & Amortization 10,610 4,568 Stock-Based Compensation 922 858 Realized Hedge Gain (Loss) (43 ) 800 Transaction-Related Costs 554 — Legacy Matter Costs 8 2,193 Severance Costs 343 — Total Company Adjusted EBITDA $ 50,699 $ 6,332 Expand The following table provides the Adjusted EBITDA for each of the Company's operating segments for the three months ended March 31, 2025 and March 31, 2024. Adjusted Net Income and Adjusted Diluted EPS The following table provides a reconciliation of Net Income (Loss), the most directly comparable GAAP measure, to Adjusted Net Income (Loss) and Adjusted Diluted EPS for the three months ended March 31, 2025 and March 31, 2024. Three Months Ended March 31, 2025 2024 GAAP Net Income (Loss) $ 24,287 $ (186 ) Non-recurring Legacy Legal Expense — 6,243 Legacy Matter Costs 3 258 2,193 Stock-Based Compensation 922 858 Transaction-Related Costs 554 — Severance Costs 343 — Amortization of Acquired Intangibles 907 433 Unrealized Loss (Gain) on Securities 4,777 26,701 Unrealized Loss (Gain) on Hedges 3,661 317 Tax Effect of Adjustments (2,629 ) (8,100 ) Adjusted Net Income (Loss) $ 33,080 $ 28,459 GAAP Diluted EPS $ 0.25 $ — GAAP weighted average diluted shares 96,981,413 99,745,905 Adjusted Diluted EPS $ 0.34 $ 0.28 Adjusted diluted weighted average shares 96,981,413 100,390,881 Expand ____________________ 2 Energy Operations Adjusted EBITDA, Industrial Operations Adjusted EBITDA, Manufacturing Operations Adjusted EBITDA, Intellectual Property Operations Adjusted EBITDA, and Parent Costs are non-GAAP financial measures. For the definitions of these measures and reconciliations of these measures to the most directly comparable GAAP financial measures, see the accompanying supplemental information section. 3 Legacy Matter Costs for the three months ended March 31, 2025 includes $250,000 related to a one-time legacy tax matter at Printronix that has been settled, which amount is included within Interest Income and Other, Net in Acacia's condensed consolidated statement of operations Expand Free Cash Flow 4 The following table provides a reconciliation of Free Cash Flow (FCF) for the three months ended March 31, 2025. ____________________ 4 Free Cash Flow (FCF) is a non-GAAP financial measure. For a definition of this measure, see the accompanying supplemental information section. Expand Balance Sheet and Capital Structure Cash, cash equivalents, and equity investments measured at fair value totaled $290.0 million at March 31, 2025 compared to $297.0 million at December 31, 2024. The decrease in cash was primarily due to $1.9 million of capital expenditures at Benchmark, $0.2 million of capital expenditures at Deflecto, $5.0 million of debt repayment on the Benchmark revolving credit facility, and $0.6 million of principal repayment on the Deflecto Term Loan, offset by $1.2 million of working capital benefit from the Deflecto transaction, $1.9 million of net proceeds from the purchase and sale of equity securities and cash provided by operating activities from our business segments. Equity securities without readily determinable fair value totaled $5.8 million at March 31, 2025, unchanged from December 31, 2024. Investment securities representing equity method investments totaled $19.9 million at March 31, 2025 (net of noncontrolling interests), unchanged from December 31, 2024. Acacia owns 64% of MalinJ1, which results in a 26% indirect ownership stake in Viamet Pharmaceuticals, Inc. for Acacia. The Parent company's total indebtedness was zero at March 31, 2025. On a consolidated basis, Acacia's total indebtedness was $108.4 million, consisting of $61.5 million in non-recourse debt at Benchmark and $46.9 million in non-recourse debt at Deflecto as of March 31, 2025. Book Value as of March 31, 2025 At March 31, 2025, Acacia's book value (which includes noncontrolling interests) was $577.3 million and there were 96.2 million shares of common stock outstanding, for a book value per share of $6.00. This value is impacted by one-time expenses and other adjustments detailed in the above reconciliation from GAAP Net Income (Loss) to Adjusted Net Income (Loss). Investor Conference Call The Company will host a conference call today, May 8, 2025 at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time). To access the live call, please dial 877-545-0523 (U.S. and Canada) or 973-528-0016 (international) and if requested, reference the access code '476097.' The conference call will also be simultaneously webcast at and on the investor relations section of the Company's website at under Events & Presentations. Following the conclusion of the live call, a replay of the webcast will be available on the Company's website for at least 30 days. About the Company Acacia (Nasdaq: ACTG) is a publicly traded company that is focused on acquiring and operating attractive businesses across the mature technology, energy and industrial/manufacturing sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management. Additional information about Acacia and its subsidiaries is available at Safe Harbor Statement This news release contains forward-looking statements within the meaning of the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon the Company's current expectations and speak only as of the date hereof. All statements other than statements of historical fact are forward-looking statements and include statements related to estimates and projections with respect to, among other things, the Company's anticipated financial condition, operating performance, the value of the Company's assets, general economic and market conditions and other future circumstances and events. This news release attempts to identify forward-looking statements by using words such as 'anticipate,' 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'forecast,' 'future,' 'guidance,' 'intend,' 'may,' 'outlook,' 'plan,' 'potential,' 'predict,' 'project,' 'seek,' 'should,' 'target' and 'will,' and similar words and expressions; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially and adversely from those expressed or implied in any forward-looking statements, including, but not limited to: the Company's ability to successfully identify, diligence, complete, and integrate strategic acquisitions of businesses, divisions, and/or assets, the performance of the Company's businesses, divisions, and/or assets, disruptions or uncertainty caused by an ability to retain or changes to the employees or management teams of the Company's businesses, changes to the Company's relationship and arrangements with Starboard Value LP, any inability of the Company's operating businesses to execute on their business and, with respect to Benchmark, hedging strategy, risks related to price and other fluctuations in the oil and gas market, inflationary pressures, supply chain disruptions or labor shortages, the impact of tariffs and trade policy, non-performance by third parties of contractual or legal obligations, changes in the Company's credit ratings or the credit ratings of the Company's businesses, security threats, including cybersecurity threats and disruptions to the Company's business and operations from breaches of information technology systems, or breaches of information technology systems, facilities and infrastructure of third parties with which the Company transacts business, oil or natural gas production becoming uneconomic, causing write downs or adversely affecting Benchmark's ability to borrow, Benchmark's ability to replace reserves and efficiently develop current reserves, risks, operational hazards, unforeseen interruptions and other difficulties involved in the production of oil and natural gas, the impact of any seismic events, environmental liability risk, regulatory changes related to the oil and gas industry, the ability to successfully develop licensing programs and attract new business, changes in demand for current and future intellectual property rights, legislative, regulatory and competitive developments addressing licensing and enforcement of patents and/or intellectual property in general, the decrease in demand for Printronix' products, changes in safety, health, environmental, tax and other regulations, requirements or initiatives, hazards such as weather conditions, a health pandemic (similar to COVID-19), acts of war or terrorist acts and the government or military response thereto, general economic conditions, and the success of the Company's investments. For further discussions of risks and uncertainties, you should refer to the Company's filings with the Securities and Exchange Commission, including the 'Risk Factors' section of the Company's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. In addition, actual results may differ materially as a result of additional risks and uncertainties of which the Company is currently unaware or which the Company does not currently view as material. Except as otherwise required by applicable law, the Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason. December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 271,964 $ 273,880 Equity securities 18,064 23,135 Equity securities without readily determinable fair value 5,816 5,816 Equity method investments 30,934 30,934 Accounts receivable, net 95,725 26,909 Inventories 26,264 27,485 Prepaid expenses and other current assets 15,866 31,987 Total current assets 464,633 420,146 Property, plant and equipment, net 23,354 23,865 Oil and natural gas properties, net 189,104 191,680 Goodwill 25,566 29,339 Other intangible assets, net 67,739 55,429 Operating lease, right-of-use assets 8,001 9,287 Deferred income tax assets, net 17,231 20,233 Other non-current assets 5,978 6,415 Total assets $ 801,606 $ 756,394 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 12,457 $ 12,074 Accrued expenses and other current liabilities 24,084 20,575 Accrued compensation 6,879 6,277 Current asset retirement obligation 1,565 1,546 Royalties and contingent legal fees payable 26,699 5,448 Deferred revenue 1,403 1,319 Current portion of long-term debt, net 2,400 2,400 Total current liabilities 75,487 49,639 Asset retirement obligation 31,401 31,070 Long-term lease liabilities 5,872 6,778 Deferred income tax liabilities, net 2,697 2,609 Revolving credit facility 61,500 66,500 Term loan and revolving credit facility 44,488 45,088 Other long-term liabilities 2,901 2,091 Total liabilities 224,346 203,775 Commitments and contingencies Stockholders' equity: Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; no shares issued or outstanding — — Common stock, par value $0.001 per share; 300,000,000 shares authorized; 96,171,702 and 96,048,999 shares issued and outstanding as of March 31, 2025 and 2024, respectively 96 96 Treasury stock, at cost, 20,542,064 and 20,542,064 shares as of March 31, 2025 and 2024, respectively (118,542 ) (118,542 ) Accumulated other comprehensive income (518 ) (1,180 ) Additional paid-in capital 910,688 910,237 Accumulated deficit (251,499 ) (275,786 ) Total Acacia Research Corporation stockholders' equity 540,225 514,825 Noncontrolling interests 37,035 37,794 Total stockholders' equity 577,260 552,619 Total liabilities and stockholders' equity $ 801,606 $ 756,394 Expand ACACIA RESEARCH CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share data) Three Months Ended March 31, 2025 2024 Revenues: Intellectual property operations $ 69,905 $ 13,623 Industrial operations 7,676 8,841 Energy operations 18,306 1,856 Manufacturing operations 28,535 — Total revenues 124,422 24,320 Costs and expenses: Cost of revenues - intellectual property operations 27,912 7,001 Cost of revenues - industrial operations 4,064 4,049 Cost of production - energy operations 12,698 1,315 Cost of revenues - manufacturing operations 20,811 — Sales and marketing expenses - industrial and manufacturing operations 3,312 1,555 General and administrative expenses 17,320 12,487 Total costs and expenses 86,117 26,407 Operating income (loss) 38,305 (2,087 ) Other (expense) income: Equity securities investments: Change in fair value of equity securities (4,777 ) (26,701 ) Gain on sale of equity securities 1,605 28,861 Net realized and unrealized (loss) gain (3,172 ) 2,160 Non-recurring legacy legal expense — (6,243 ) Loss on derivatives - energy operations (5,021 ) 171 Gain (loss) on foreign currency exchange 155 (68 ) Interest expense (2,451 ) (326 ) Interest income and other, net 1,793 5,095 Total other (expense) income (8,696 ) 789 Income (loss) before income taxes 29,609 (1,298 ) Income tax (expense) benefit (6,081 ) 1,109 Net income (loss) including noncontrolling interests in subsidiaries 23,528 (189 ) Net loss (income) attributable to noncontrolling interests in subsidiaries 759 3 Net income (loss) attributable to Acacia Research Corporation $ 24,287 $ (186 ) Income (loss) per share: Net income (loss) attributable to common stockholders - Basic $ 24,287 $ (186 ) Weighted average number of shares outstanding - Basic 96,018,047 99,745,905 Basic net income per common share $ 0.25 $ — Net income (loss) attributable to common stockholders - Diluted $ 24,287 $ (186 ) Weighted average number of shares outstanding - Diluted 96,981,413 99,745,905 Diluted net income per common share $ 0.25 $ — Other comprehensive income (loss): Foreign currency translation $ 662 $ — Total other comprehensive income, net 662 — Total comprehensive income (loss) 24,190 (189 ) Comprehensive loss (income) attributable to noncontrolling interests 759 3 Comprehensive income (loss) attributable to Acacia Research Corporation 24,949 (186 ) Expand ACACIA RESEARCH CORPORATION - SUPPLEMENTAL INFORMATION NON-GAAP FINANCIAL MEASURE This earnings release includes Adjusted EBITDA on a consolidated basis and for each of the Company's segments. Total Company Adjusted EBITDA, Operated Segment Adjusted EBITDA and Adjusted EBITDA and Free Cash Flow (FCF) for each of the Company's segments are supplemental non-GAAP financial measures used by management and external users of the Company's consolidated financial statements. This earnings release also includes the Company's Adjusted Net Income (Loss) and Adjusted Diluted Earnings Per Share (EPS), which are non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flow that includes or excludes amounts that are excluded or included, respectively, in the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements. Total Company Adjusted EBITDA is defined as net income / (loss) before net income / (loss) attributable to noncontrolling interests, income tax (benefit) / expense, interest expense, interest income and other, net, loss / (gain) on foreign currency exchange, net realized and unrealized (gain) / loss on derivatives, net realized and unrealized loss / (gain) on investments, non-recurring legacy legal expenses, depreciation, depletion and amortization, stock-based compensation, realized hedge gain / (loss), transaction-related costs, and costs related to the legacy items. Operated Segment Adjusted EBITDA is the aggregate of Energy Operations Adjusted EBITDA, Manufacturing Operations Adjusted EBITDA, Industrial Operations Adjusted EBITDA, and Intellectual Property Operations Adjusted EBITDA. See below for the definition of each of those measures. The Company is providing Total Company Adjusted EBITDA and Operated Segment Adjusted EBITDA, non-GAAP financial measures, because management believes these metrics provide investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. These measures are not intended to replace the presentation of financial results in accordance with GAAP and may be different from or otherwise inconsistent with similar non-GAAP financial measures used by other companies. The presentation of these non-GAAP financial measures supplements other metrics the Company uses to internally evaluate its subsidiary businesses and facilitate the comparison of past and present operating performance. These measures should not be considered in isolation or as a substitute for measures calculated and presented in accordance with GAAP. Energy Operations Energy Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Energy Operations before depreciation, depletion and amortization expense and transaction-related costs, and including realized hedge gain / (loss). The Company is providing its Energy Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Industrial Operations Industrial Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Industrial Operations before amortization of acquired intangibles and depreciation and amortization expense. The Company is providing its Industrial Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Intellectual Property Operations Intellectual Property Operations Adjusted EBITDA is defined as operating income / (loss) for Acacia's Intellectual Property Operations before patent amortization, depreciation and amortization expense and stock-based compensation. The Company is providing Intellectual Property Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Manufacturing Operations Manufacturing Operations Adjusted EBITDA is defined as operating income / loss for Acacia's Manufacturing Operations before amortization of acquired intangibles, depreciation and amortization expense, and transaction-related costs. The Company is providing its Manufacturing Operations Adjusted EBITDA, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Parent Costs are defined as operating income / (loss) attributable to Parent before depreciation and amortization expense, stock-based compensation, transaction-related costs, and costs related to certain legacy matters attributable to the Parent organization. The Company is providing Parent Costs, a non-GAAP financial measure, because it believes it gives investors a clear picture of normalized Parent-level expenses. Free Cash Flow is defined as net cash provided by (used in) operating activities, less net purchases of property and equipment, oil and gas properties, and patent acquisitions ('Capital Expenditures'). The Company is providing Free Cash Flow, a non-GAAP financial measure, because it believes free cash flow gives investors a good sense of how much cash flows are available to be used for de-levering, making acquisitions, repurchasing shares or similar uses of cash. Adjusted Net Income (Loss) Adjusted Net Income (Loss) is defined as Acacia's GAAP Net Income (Loss) excluding costs related to certain legacy matters, stock-based compensation, transaction-related costs, amortization of acquired intangibles, any unrealized (gain) / loss on securities, any unrealized (gain) / loss on hedges, and any (gain) / loss on non-cash derivatives and taking into account the tax effect(s) of those adjustments. The Company is providing Adjusted Net Income (Loss), a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. Adjusted Diluted Earnings Per Share (EPS) Adjusted Diluted EPS is defined as Adjusted Net Income (Loss) divided by the Company's weighted average diluted share count as of the relative period end date. The Company is providing its Adjusted Diluted EPS, a non-GAAP financial measure, because the metric provides investors with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of core operating performance. The following tables reconcile Operating Income (Loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA for each of the Company's operating segments and for Parent Costs for the three months ended March 31, 2025 and March 31, 2024.
