Company: ACTG
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0000934549-25-000004
Chunk: 63

Company: ACACIA RESEARCH CORP
Filing Date: 2025-03-17
Form: 10-K
Item: Item 7
Chunk 63
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44 %)Licensing and enforcement programs   generating revenues6 7 (1)(14 %)

For the periods presented above, the majority of the revenue agreements executed during the relevant period provided for the payment of one-time, paid-up license fees in consideration for the grant of certain IP Rights for patented technology owned by our operating subsidiaries. These rights were primarily granted on a perpetual basis, extending until the expiration of the underlying patents. Paid-up revenue decreased $70.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to a decrease in the number of new license agreements in 2024 and a decrease in average license fees. Recurring revenue, that provides for quarterly sales-based license fees, increased $1.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, from various on-going license arrangements.

Refer to Note 2 to the consolidated financial statements elsewhere herein for additional information regarding our revenue arrangements and related concentrations for the periods presented herein.

65

Refer to “Investments in Patent Portfolios” above for information regarding the impact of portfolio acquisition trends on current and future licensing and enforcement related revenues.

Cost of Revenues

Years EndedDecember 31,20242023$ Change% Change(In thousands, except percentage change values)Inventor royalties$1,731 $1,025 $706 69 %Contingent legal fees2,285 10,998 (8,713)(79 %)Litigation and licensing expenses4,438 10,771 (6,333)(59 %)Amortization of patents16,097 11,370 4,727 42 %Total$24,551 $34,164 $(9,613)(28 %)

Refer to detailed change explanations above for the years ended December 31, 2024 and 2023 regarding cost of revenues for our Intellectual Property Operations.

The economic terms of patent portfolio related partnering agreements and contingent legal fee arrangements, if any, including royalty obligations, if any, royalty rates, contingent fee rates and other terms and conditions, vary across the patent portfolios owned or controlled by our operating subsidiaries. In certain instances, we have invested in certain patent portfolios without future patent partner royalty obligations. The costs associated with the forementioned obligations fluctuate period to period, based on the amount of revenues recognized each period, the terms and conditions of revenue agreements executed