RPX Corp. (RPXC), the patent aggregator run by CEO John Amster, said first quarter net income rose 83% on higher revenue helped by the syndicated purchase of a portfolio of patents from the Rockstar Consortium for $900 million.
Net income in the first quarter was $18 million, or 33 cents a share, compared with $9.8 million, or 18 cents a share a year ago.
Subscription revenue for the first quarter of fiscal 2015 rose 9% to $66.2 million from $60.8 million in the prior year period.
Total revenue for the first quarter of fiscal 2015 rose 35% to $83.3 million from $61.9 million in the prior year period. Total revenue includes RPX's patent insurance services offered through a syndicate from Lloyd's of London.
"The first quarter numbers were in line with or above" the average analyst estimates, said Tim Quillin, an analyst at Stephens who rates the stock a "buy" and modeled earnings per share of 36 cents on revenue of $68 million.
Shares of RPX fell 1.5 cents to $15.10 in trading before the earnings were announced. They’ve traded between $11.94 and $18.16 over the past year.
Client count for the first quarter of fiscal 2015 increased by 20 net clients bringing our total client network to 224 as of March 31, 2015. The number of clients includes 57 who purchased insurance from RPX.
"We saw good results across all of our metrics in the first quarter, including the size of our network, number of insurance policy holders, fee revenue and cash generation," Amster said in a statement. "We are off to a solid start to 2015 and are pleased by our continued success in reducing patent risk for technology companies."
The company said its cost of revenue increased to $34.8 million in the first quarter from $28.9 million. Selling, general and administrative costs also rose to $19.5 million from $17.3 million
RPX also provided earnings guidance for the second quarter and full year 2015.
The company said it expects subscription revenue of $67 million to $67.5 million in the second quarter. The company, which provided no guidance on fee-related revenue, said total revenue also would be between $67 million and $67.5 million. The company forecast second quarter net income between $9.1 million and $9.6 million. For the year, RPX forecast total revenue of $285 million to $300 million and net income of $50 million to $54 million.
"For the second quarter, investors were hoping for a little more fee based revenue, which can be lumpy and hard to predict," Quillin said. The numbers for the second quarter and full year were in line with expectations, he added.
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