ACTG - Earnings call transcript Q3 2017 | Acacia Research Corporation

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Operator

Good afternoon, and welcome ladies and gentlemen, to the Acacia Research Third Quarter 2017 Earnings Conference Call. At this time, I'd like to inform you that this conference is being recorded and that all participants are in a listen-only mode. I will now turn the conference over to Mr. Rob Stewart. Please go ahead, sir.

Rob Stewart

for third you conference XXXX thank call. and joining quarter today's shareholder Welcome Stewart, Research. of am President I Rob Acacia With me this and Ed afternoon are Clayton our Counsel. Haynes, General Treska, our CFO; review financial Today, overview enforcement programs. our performance the and status and current Clayton licensing of our Ed will of some will I provide and an brief Acacia. update of will then overview business

Research SEC exhibit our First, Harbor call Today's refer considers to operating our subsidiaries. statement. wholly will our subsidiaries. and operating filed development, earnings our disclaimer. the and now Acacia majority-owned SEC I licensing Please release forward-looking forward-looking over call an us review. turn be In the statements. may for Corporation Acacia our Research enforcement Haynes activities wholly solely to today with to X-K on Corporation's and today's rights, financial conducted the Clayton Safe to terms refer acquisitions, involve its majority to as and what All are statement the the we, and call, certain by

Clayton Haynes

those and third conference earnings Thank you, XXXX quarter you call. today's for joining thank us Rob, to

totaled revenues XXXX quarter. $XX.X compared million comparable prior quarter Third year million in to the $XX.X

quarter licensee for of prior revenues recognized. individually recognized. For XXXX, XX% accounted comparable the different year In and accounted the licensees two XX% of of revenues quarter, individually third XX% one for

for to the quarter of The GAAP per share reported $X.XX an net filed patent share share or non-GAAP of presentation GAAP per amortization SEC. net an quarter patent and and non-cash investment include $XXX today's we in fair versus $XXX.X For the investment to share non-GAAP quarter $X.X of XXXX a Veritone to comparable to XXXX third $XXX.X third to and or or non-GAAP quarter XXXX. XXXX. of of quarter. XXXX, On gain for release $X.XX we've $XX.X per X-K income excluding income our of and per million income the comprised million related September the Please equity compensation, regarding reported million GAAP stock prior requirement net and net $X.XX third disclosures our or $X.XX with mark of accounting of third financial basis, as results earnings as the compared income XX, charges, application investment million year of refer the of the non-GAAP Veritone measures unrealized of our totaling in market unrealized the method notes other gain million, non-GAAP impairment value to

to million third average in during Average the Third revenues quarter There on in for portfolios XXXX XX% $XX.X of the in to of third to rates quarter. the XX% increased were no lower XXXX. comparable quarter contingent quarter QX due increased XXXX legal as preferential for the to for expenses generating contingent the the XXXX, year due QX Royalties generating fee legal portfolios to expense returns fees revenues revenues quarter. XX% XXXX portfolios primarily compared to margins Inventor generating compared prior as

the to of licensing programs enforcement due licensing XXXX litigation $X.X an net in year ongoing prior million primarily decrease and associated technical expenses decrease in overall third-party compared enforcement quarter and and or litigation and a decreased XX% to consulting Third activities. portfolio with expenses quarter, support related

compensation variable connection in reductions a compensation XXXX excluding decrease in due expense with general recent our and in general decrease in headcount, a decreased corporate stock non-cash and a to administrative performance-based costs reduction in employee administration expenses costs, decrease in a personnel severance cost, quarter Third XX%, and cost. primarily

the interest of profits vesting in value the of our is totaling due quarter of consistent to period. the profit during required million Veritone certain the the expense on be during price hurdles. impact stock of on the changes the vesting the the XXXX. the common increase full third of our value investment during Compensation capitalization the value based XXXX of fair increased Third interest Vesting interest stock. market All $X.X which Veritone was to for reporting expense quarter quoted profits related compensation to market the sustained of was with the recognized million interest each in fair fair primarily increase XXXX. achievement [ph] in related period interest is stock for quarter based profits unrecognized full The increase upon non-cash related of units third compensation $X.X profits Veritone's Veritone to of adjust to reflects the units also

Third quarter XXXX due on a non-cash portfolio in existing recorded primarily to amortization previously scheduled charges patent in decrease patent various XXXX. portfolios, reflecting amortization charges impairment decreased QX XX%, patent

addition, September impairment XXXX. million $X.X From sheet perspective, balance XX, In $XXX.X $XXX.X patent XXXX, as of XX, investments totaled in and million December a million as cash of XXXX. charges totaled QX versus

we excluding operations an our expense range certain standpoint, to XXXX the million. charges, and from in SG&A fixed non-cash be severance expenses $XX.X million to $XX variable to expect forward continue of Looking

patent be scheduled approximately XXXX amortization million. expense expect to also $XX.X We

to interest XXXX $XX compensation third of expect for acceleration us turn Ed the enforcement related Veritone Treska and for the of And impact the a be XXXX. in of our the million We I of joining today. now to Thank the call of over of non-cash including current recorded expense quarter the some of stock status programs. profits review licensing to stock approximately million $X.X compensation expense the will you

Ed Treska

Equipment IPR previously we Apple the CCE with currently provide has additional Clayton. growing subsidiaries. Cellular you, already argued of IPRs to CCE, CCE the other is for and U.S. as announced, for three This before, CCE including circuit Germany. [indiscernible] against dispute the of proceedings prevailed that begin federal Acacia's to And awaiting scheduled proceeding was at in Verizon. suites Trials part ZTE circuit. litigation I remaining Communications and as an two are federal Thank the with we HTC, Limestone late Today, with resolved updates in activity Lawrence CCE; has these [ph] in also sentences in from cases pending together. its pending and XXXX. some respect will IPR or the announced Beginning St.

prevailed to willfulness patent resolved not trial Moving U.S. is Lawrence; on still for considering reporting of been against IPRs the since resolution the Motorola to IPR the Limestone the for of has activity proceedings. With stay Limestone stayed order. that adjunction cases with pending further damages week has actions you. of the pending accord now Systems; final of adjunction just subsidiaries. has respect now Limestone a will and stipulation have Motorola March filing on hardware turn corresponding victory on Apple fees. I'll this Lawrence's active become attorney's upheld against to XXXX, can this mentioned, Limestone's on the the the and and the have with in Memory three which other the as this Thank adjunction the Court developments various four still Acacia look of petition anticipate will of violation end forward in for XXXX. and In the manufacturers litigation against appealed and based St. to Manheim be District Limestone proceedings Lawrence the motion granted February to post-trial assertion District near Motorola and various St. of U.S. litigation last Apple and trail patent St. is to sanctions Court was Germany, trial lift in and terminate IPR. on pending in as against this enhanced year, we early continue Limestone's appeal the litigation just the board against We again patents year. joint well cases been against

Rob Stewart

and Thank Clayton Ed. you,

encouraged our we As and is patent current programs. assets Acacia's licensing litigation are progressing, by

stated we the conference surrounding environment intake. the challenges continue patent previously including as the in calls, However, experience quality existing patent challenges to in

investment. can fair remind consistently of and and nature quarter third will increase Clayton A our of We increase quarter-to-quarter. fixed million. for trend $XX.X his revenues capital and mentioned revenue Acacia's increase from an quarter. the to due included quarter-over-quarter, million to the licensing want totaling investors expenses, in our downward in nearly $XXX.X the million value As million, continued our to working operating market vary of financial performance $XX business remarks, in Veritone an An $XXX Acacia's

company is the manage results goal to basis financial not quarterly a but value. the on of Our long-term shareholder build rather

in currently to our licensing theme, May the owns we Veritone. the warrants we year, received, and leverage XX, in relationships has unrealized Veritone. in into response common brand, new on excited resulted patent clarify of Since with In of shares intend Acacia's investment Acacia's previously Acacia Veritone in data stock stock stock $XX.XX with financial statements. IPO QX with communicated, risen purchase to Consistent this XXXX. X,XXX,XXX reflected September Acacia's an price. ownership of Veritone of $XX.XX expertise, common we in let about me be Acacia's and gain continue at closing As enquiries Veritone this opportunities. investment to X,XXX,XXX This

and and For revolutionizing excited our more investment AI productivity, to Robotics Miso help please on robotics additional for reduce innovative and restaurant Robotics website. associated Miso please the technology progress the Robotics. increase on information opportunities visit intelligent profitability. and leverages information Miso Veritone's industries Again, the Miso's with partnership Veritone artificial and We're solutions. website. about with cost visit robotics and also with food Miso is drive

with to continue exciting in this patent companies our like Miso forward, I Veritone and move is As call. Robotics. innovative thank we want licensing partner our and success everyone on to intent

we please next anyone myself. you if much and Thank do speaking not Clayton look you any call to questions, forward to very always, or with As quarter. has hesitate

End of Q&A

concludes All have Thank disconnect. gentlemen, today. this day. a conference all Ladies participation, and may nice for our for and parties you

Acacia Research (ACTG) 29 Oct 172017 Q3 Earnings call transcript