Acacia Research Corp. (ACTG), the patent monetization company run by CEO Matthew Vella, cut its net loss in the fourth quarter of 2014 in half on higher revenue from new licensing agreement.
The net loss in the latest quarter fell to $16.24 million, or 34 cents, from $33.33 million, or 69 cents, a year ago.
Revenue doubled to $31.03 million from $15.07 million, a year ago. The company said it closed 32 licensing agreements in the quarter versus 24 a year earlier.
It was “a pretty healthy quarter,” said Mark Argento, an analyst at Lake Street Capital Management in Minneapolis, who rates Acacia a “buy” and had a $30 price target before the earnings were released. “They beat my top line number. The gross margins were good. But it’s a business that doesn’t make money at $31 million of revenue.”
Argento said the licensing deals Acacia completed in the quarter were pretty significant including a few Adaptix deals and one with Microsoft.
Acacia didn’t break out the numbers for each deal, but noted they included deals that were 35%, 19% and 10% of revenue.
“They’re doing deals,” Argento said. “The pace of activity is solid and should remain solid as they get closer to court dates in the coming year,” he said.
Vella said during a conference call with analyst and investors today that Acacia “is not out of its recent revenue trough but we are emerging from it.”
At its peak, Acacia brought in $200 million to $250 million in revenue a year.
Vella told investors he expects that Acacia will be able to return to those levels with its existing portfolio.
During the fourth quarter of 2014, Acacia acquired control of 2 new patent portfolios for about $18 million.
The company said it expects to increase the number of marquee portfolios to 15 to 17 from about 12.
Cash and cash equivalents and investments totaled $193,024,000 as of Dec. 31, 2014 .
For the fiscal year 2014, Acacia posted a net loss of $66.03 million, or $1.37 a share, compared with a loss of $56.4 million, or $1.18 a share, a year ago.
Fiscal year 2014 revenue rose slightly to $130.9 million from $130.6 million, a year ago. The revenue came from 88 new licensing agreements, compared with 120 new licensing agreements, a year ago.
Acacia said during fiscal year 2014 it acquired control of 6 new patent portfolios.
The company also said its board approved a quarterly cash dividend, payable in the amount of 12.5 cents a share, which will be paid on March 30, 2015, to shareholders of record at the close of business on March 2, 2015.
Shares of Acacia fell 3 cents to $13.28 today in trading on the Nasdaq before the earnings were announced.
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