RPX Corp. (RPXC), the patent aggregator and provider of patent litigation loss control services run by CEO John Amster, said its second quarter 2016 net income fell 47.5% on higher cost of revenue and other expenses.

San Francisco, California-based RPX said net income fell to $4.2 million, or 8 cents a share, from $8 million, or 14 cents a share a year ago. That’s below the company’s forecast of net income of $6 million to $7 million.

Shares of RPX gained 4 cents to $10.06 in trading on Tuesday, Aug. 6. They have traded between $8.60 and $15.66 over the past year.

Non-GAAP net income for the first quarter, which excludes stock-based compensation, the amortization of acquired intangibles, fair value adjustments on deferred payment obligations, gains on extinguishment of deferred payment obligations, other-than-temporary impairments on short-term investments, and realized losses on exchange of short-term investments (in each case, net of tax), also fell to $9.1 million, or 18 cents a share, from $11.2 million, or 20 cents a share.

The nonGAAP profit also was below RPX’s forecast of $11 million to $12 million; however, the nonGAAP earnings per share beat the 13 cents average estimate of four analysts.

Revenue for the second quarter rose to $83.1 million from $67.6 million in the prior year period. That was slightly better than the $82.15 million estimated by analysts. Subscription revenue including insurance fell to $63.2 million from $67.6 million in the prior year period. Discovery services revenue from RPX’s acquisition of Inventus Solutions came in at $19.3 million. RPX acquired Inventus in January, so there’s no comparable with a year ago.

Cost of revenue in the quarter rose to $49.07 million from $37 million. Selling, general and administrative expenses also increased in the quarter to $25.9 million from $19 million. The company said its net patent spend in the quarter was $20.9 million on 20 transactions.

RPX ended the quarter with 317 clients including insurance clients, which is 31 more than in the first quarter. The company said it now has 150 insurance clients, up from 120 at the end of the first quarter.

Amster and RPX, which was founded to provide a solution to the problem of enforcement actions by non-practicing entities (NPEs), or so-called patent trolls, have struggled to grow earnings because of the perception that patent reform and recent rulings by the U.S. Supreme Court have largely solved the problem. With revenue falling, Amster and RPX three years ago turned to offering NPE litigation insurance. In January, the company acquired Inventus Solutions, a provider of discovery services, for $232 million.

During a conference call with analysts and investors, Amster said the company believes there’s currently a disconnect between the perception of the litigation problem and the reality. He said the problem is no longer just NPEs but also universities and even operating companies who all want to monetize their IP portfolios.

Marathon Patent Group Inc. (MARA), the patent licensing company run by CEO Doug Croxall, for instance, teamed with a university, Rensselaer Polytechnic Institute, to file an enforcement action against Apple Inc. and won a $24.5 million settlement.

Amster said that while the Supreme Court’s CLS Bank v. Alice decision and the America Invents Act, which created the inter partes review (IPR) and covered business method (CBM) review processes to challenge weak patents, has no doubt reduced nuisance litigation by NPEs, the problem has not gone away.

Indeed, he noted that a number of private equity firms have been acquiring patent portfolios.

Centerbridge Partners acquisition of a USB power patent portfolio from Blackberry Corp. for $30 million is an example of private equity investment in IP monetization. Other examples, include Les Ware’s Optis UP Holdings‘ acquisition of the former Unwired Planet Inc. for $40 million and Dean Becker’s Equitable IP Corp.’s collaboration with Spherix Inc. (SPEX).

Moreover, he added that NPEs are adapting or staying on the sidelines while the nuances of IPRs and CBMs work themselves out.

“We see a very robust pipeline of litigation” still to come, he said.

Amster also said that RPX recently arranged a syndicate to acquire a patent portfolio from The Kudelski Group, a Cheseaux-sur-Lausanne, Switzerland-based digital security and licensing company.

RPX ended the quarter with cash and cash equivalents of $199.1 million. The company said it is forecasting total revenue of $87 million to $89 million in the third quarter, including subscription and discovery revenue of $81 million to $83 million and fee related revenue of $6 million.

It expects third quarter net income of $10 million to $11 million and operating income of $16 million to $17 million.