• Consolidated Revenue (Q4 2024): $48.8 million
• Consolidated Revenue (Full Year 2024): $122.3 million
• Total Company Adjusted EBITDA (Q4 2024): $4.9 million
• Total Company Adjusted EBITDA (Full Year 2024): $17 million
• Net Loss (Q4 2024): $13.4 million
• Net Loss (Full Year 2024): $36.1 million
• Cash and Cash Equivalents (End of 2024): $297 million
• Book Value Per Share (End of 2024): $5.75
• Energy Operations Revenue (Q4 2024): $17.3 million
• Manufacturing Operations Revenue (Q4 2024): $23.2 million
• Industrial Operations Revenue (Q4 2024): $8.2 million
• Intellectual Property Operations Revenue (Q4 2024): $0.1 million
• General and Administrative Expenses (Q4 2024): $21.5 million
• Stock Repurchase (2024): $20 million at an average price of $4.61 per share
• Total Indebtedness (End of 2024): $114 million

• Warning! GuruFocus has detected 5 Warning Signs with ACTG.

Release Date: March 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Acacia Research Corp (NASDAQ:ACTG) successfully executed its acquisition strategy in 2024, acquiring Benchmark Energy and Deflecto, which are expected to drive significant value.
• The company generated consolidated revenue of $122.3 million for the year, with a notable contribution from its energy operations, which produced $49.2 million.
• Acacia Research Corp (NASDAQ:ACTG) repurchased $20 million of stock, reflecting confidence in its valuation and a strategic use of shareholder capital.
• The company maintains a strong cash position with approximately $274 million available for future acquisitions and strategic investments.
• Benchmark Energy reported its highest-ever revenue, demonstrating the effectiveness of Acacia Research Corp (NASDAQ:ACTG)'s investment and operational strategies.

Negative Points

• Acacia Research Corp (NASDAQ:ACTG) reported a net loss of $13.4 million for the fourth quarter, primarily due to increased GAAP operating costs and one-time acquisition-related charges.
• The company's intellectual property operations experienced a significant decline in revenue, generating only $0.1 million compared to $82.8 million in the same quarter last year.
• General and administrative expenses increased to $21.5 million during the fourth quarter, driven by acquisition-related charges and the addition of new operations.
• The manufacturing operations, including Deflecto, faced challenges with a seasonally weak quarter, impacting gross margins and overall performance.
• Acacia Research Corp (NASDAQ:ACTG) faces macroeconomic uncertainties, including potential impacts from tariffs, which could affect its operations and strategic plans.

Q & A Highlights

Q: How are tariffs impacting Acacia Research Corp, particularly with Deflecto? A: Martin McNulty, CEO, explained that while tariffs are a concern, Acacia's position in the midcontinent allows flexibility in selling hydrocarbons to multiple markets, minimizing tariff impacts. For Deflecto, manufacturing operations in both Canada and the US provide options to mitigate tariff effects, and plans are in place to adjust as needed.

Q: Is Acacia targeting more wells for acquisition, and what is the potential upside in the Cherokee play and Cleveland formations? A: McNulty noted that Acacia is disciplined in acquiring asset packages, focusing on those that can be integrated with existing operations. The Cherokee play is gaining interest, and Acacia is evaluating how best to monetize these assets, seeing potential for future growth.

Q: Deflecto's gross margin was below the targeted 15%. Is this due to seasonal weakness or other factors? A: McNulty confirmed that the fourth quarter is seasonally weak for Deflecto. However, operational improvements are underway, and the 15% gross margin target remains.

Q: Can you provide examples of operational improvements at Deflecto? A: McNulty highlighted restructuring efforts, such as divisionalizing business units for better accountability and optimizing plant operations. These efforts aim to enhance cash flow management and operational efficiency.

Q: How has Acacia managed to maintain cash levels despite significant acquisitions and share buybacks? A: Kirsten Hoover, Interim CFO, explained that cash from the monetization of Erics and cash-generating acquisitions have helped maintain strong cash reserves, allowing Acacia to continue strategic investments.

Q: Are private equity firms more flexible on pricing due to market conditions? A: McNulty stated that while private equity seeks high valuations, Acacia focuses on B&C quartile assets that require operational improvements, which are less competitive and offer better value.

Q: What is the impact of oil price fluctuations on Benchmark's cash flow? A: McNulty mentioned that while they monitor oil price impacts, specific metrics are not publicly shared. Benchmark's hedging strategy protects against price volatility.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.