Acacia Research (NASDAQ:ACTG) Releases Quarterly Earnings Results, Beats Estimates By $0.22 EPS

Key Points

• Acacia Research beat quarterly earnings estimates, reporting $0.13 adjusted EPS versus the expected $0.09 loss. Revenue reached $114.6 million, while adjusted EBITDA was $17.3 million and adjusted net income totaled $12.8 million.
• The company ended the quarter with $334.6 million in cash, securities, and loans receivable and no parent-company debt, supporting acquisitions and investments. Its Benchmark business posted record revenue of $20.5 million and $9.8 million in adjusted EBITDA.
• Licensing revenue was approximately $60.6 million, largely from a Wi-Fi 6 settlement, but management cautioned that such revenue is episodic. Acacia also wrote down its MalinJ1 investment, while analysts’ average rating remained “Hold” with a $6.00 consensus price target.

Acacia Research (NASDAQ:ACTG - Get Free Report) released its earnings results on Wednesday. The business services provider reported $0.13 EPS for the quarter, topping analysts' consensus estimates of ($0.09) by $0.22, FiscalAI reports. Acacia Research had a negative net margin of 8.53% and a negative return on equity of 2.81%. The company had revenue of $114.56 million during the quarter, compared to analysts' expectations of $49.50 million.

Here are the key takeaways from Acacia Research's conference call:

• Q2 results were strong, with revenue of $114.6 million, total company adjusted EBITDA of $17.3 million, and adjusted net income of $12.8 million, or $0.13 per diluted share.
• Acacia ended the quarter with $334.6 million in cash, securities, and loans receivable and no parent-company debt, providing flexibility for acquisitions and investment in existing businesses. Management said its acquisition pipeline is active, particularly for bilateral and distressed opportunities.
• Benchmark delivered record revenue of $20.5 million, $9.8 million of adjusted EBITDA, and $6.5 million of free cash flow; management is evaluating additional wells and expects future drilling economics to be similar to the Cherokee development.
• The intellectual property platform generated approximately $60.6 million in licensing revenue, primarily from a Wi-Fi 6 settlement, but management cautioned that licensing revenue is episodic and is reduced by payments to counsel, inventors, and partners; settlement cash was received after quarter-end.
• Acacia fully wrote down its MalinJ1 investment following liquidity problems at Mycovia, although it is exploring a transaction that could provide direct ownership in Mycovia; any recovery depends on financing and uncertain FDA milestones for VIVJOA.

Acacia Research Stock Performance

Shares of ACTG traded down $0.07 during midday trading on Wednesday, reaching $4.54. 681,053 shares of the stock were exchanged, compared to its average volume of 271,890. The company has a debt-to-equity ratio of 0.10, a current ratio of 8.56 and a quick ratio of 8.09. Acacia Research has a twelve month low of $3.12 and a twelve month high of $5.27. The business's 50-day moving average price is $4.61 and its 200 day moving average price is $4.55. The company has a market capitalization of $438.52 million, a price-to-earnings ratio of -25.22 and a beta of 0.45.

Institutional Investors Weigh In On Acacia Research

A number of hedge funds and other institutional investors have recently modified their holdings of ACTG. AQR Capital Management LLC bought a new stake in shares of Acacia Research in the 1st quarter valued at approximately $35,000. Zions Bancorporation National Association UT acquired a new position in shares of Acacia Research during the fourth quarter valued at $38,000. Occudo Quantitative Strategies LP bought a new stake in shares of Acacia Research during the 4th quarter worth about $49,000. Abel Hall LLC bought a new stake in shares of Acacia Research during the 4th quarter worth about $51,000. Finally, Verition Fund Management LLC acquired a new stake in shares of Acacia Research in the 3rd quarter worth approximately $65,000. 86.69% of the stock is currently owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

Separately, Weiss Ratings lowered Acacia Research from a "hold (c-)" rating to a "sell (d-)" rating in a report on Monday, May 11th. One equities research analyst has rated the stock with a Buy rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the stock currently has an average rating of "Hold" and a consensus price target of $6.00.

Acacia Research Company Profile

Acacia Research Corporation is a publicly traded patent licensing company based in New York City. The firm specializes in acquiring patented technologies through a network of wholly owned subsidiaries and seeking licensing agreements or settlements with companies that utilize those technologies. Since its founding in 1993, Acacia has built a business model centered on identifying innovative inventions and monetizing them through patent enforcement and strategic partnerships.

The company's activities span a broad range of technology sectors, including life sciences, medical devices, software, telecommunications and consumer electronics.

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