Company: ACTG
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000934549-25-000054
Chunk: 77

Company: ACACIA RESEARCH CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 77
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30, 2024

Total revenues increased $161.6 million to $235.1 million for the nine months ended September 30, 2025, as compared to $73.5 million for the nine months ended September 30, 2024, primarily due to an increase in our Intellectual Property Operations revenues and increases in Energy Operations and Manufacturing Operations revenues from acquisitions in the comparable prior period. Intellectual Property Operations revenues increased due to an increase in average license fees, which contributed to Intellectual Property Operations revenues increasing by $58.6 million. Refer to “Investments in Patent Portfolios” above for additional information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues. The increases were offset by a decrease in Industrial Operations of $1.3 million. Refer to “Industrial Operations – Revenues” below for further detailed discussion.

Income before income taxes was $25.4 million for the nine months ended September 30, 2025, as compared to a loss of $23.3 million in the comparable prior period. The net increase comprised the change in total revenues described above and other changes in operating expenses and other income or expense for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 as follows:

•Cost of revenues for Intellectual Property Operations increased $24.3 million, from $18.5 million to $42.8 million  in 2025 primarily due to an increase in inventor royalties, contingent legal fees, litigation and licensing expenses and patent amortization expense.

◦Inventor royalties increased $15.5 million, from $1.6 million to $17.1 million in 2025, primarily due to higher license fees being generated in 2025 with inventor royalties. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.

◦Contingent legal fees increased $3.8 million, from $2.4 million to $6.2 million in 2025, primarily due to the change in Intellectual Property Operations revenues described above. Refer to “Intellectual Property Operations – Cost of Revenues” below for further discussion.

◦Litigation and licensing expenses increased $1.2 million, from $3.1 million to $4.3 million in 2025, primarily due to a net increase in litigation support and third-party technical consulting expenses associated with ongoing litigation. Refer to "Intellectual Property Operations – Cost of Revenues" below for