Company: ACTG
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000934549-25-000054
Chunk: 190

Company: ACACIA RESEARCH CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 190
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 balance sheet date. During the first quarter of 2024, Acacia fully exited its position in Arix, included in the gain on sale of equity securities in the nine months ended September 30, 2024. The 2024 period unrealized loss and realized gain primarily relates to the sale of Arix shares. Refer to periodic change explanations above. Refer to Notes 2 and 4 to the consolidated financial statements elsewhere herein for additional information regarding our investment in the Life Sciences Portfolio and other equity securities.

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Our results also include unrealized gains and losses from the change in fair value of our equity securities, and, when equity securities are sold, the realized gains from those sales. The results during the three and nine months ended September 30, 2025 relate to our trading securities portfolio. 

Non-recurring legacy legal expense

Three Months EndedSeptember 30,Nine Months EndedSeptember 30,20252024$ Change% Change20252024$ Change% Change(In thousands, except percentage change values)Non-recurring legacy legal expense$— $(2,000)$2,000 (100%)$— $(14,857)$14,857 (100%)

During the nine months ended September 30, 2024, we recorded an additional accrual of $12.9 million in connection with the AIP Matter in other income (expense) and an accrual of $2.0 million in connection with the Slingshot settlement in the consolidated statements of operations. There were no comparable expenses for the three and nine months ended September 30, 2025.

Income Taxes

Three Months EndedSeptember 30,Nine Months EndedSeptember 30,20252024$ Change% Change20252024$ Change% Change(In thousands, except percentage change values)Income tax benefit (expense)$968 $(5,497)$6,465 (118%)$(5,660)$2,673 $(8,333)(312%)Effective tax rate(29)%89 %n/a(118)%22 %(11)%n/a33 %

Our 2025 effective tax rate was slightly higher than the U.S. federal statutory rate primarily due to nondeductible stock based compensation. Our income tax benefit for the three months ended September 30, 2025 is primarily attributable to recognizing a benefit for losses incurred during the quarter offset by foreign withholding taxes. Our income tax expense for the nine months ended September 30, 2025 is primarily attributable to