Acacia Research achieves 155% revenue growth in Q3 2025, driven by strategic initiatives despite ongoing geopolitical headwinds.

Kelly - Operator - (00:00:22)

Good morning everyone. Thank you for joining Acacia Research third quarter 2025 earnings conference call. My name is Kelly and I will be your conference facilitator for today. All lines are currently muted to prevent any background noise. I would like to remind you that this conference call is being recorded today and is also available through audio webcast on Acacia's website. Following the speaker's remarks, there will be time for questions. Questions can also be directed anytime to Acacia. I would now like to turn the conference over to Mr. Brent Anderson of Gagneer Communications. Mr. Anderson, you may begin the conference.

Brent Anderson - (00:01:07)

Thank you, operator. Leading today's call are MJ McNulty, Acacia's chief executive Officer, and Michael Zambito, Acacia's Chief Financial Officer. Before MJ and Mike begin their prepared remarks, please be reminded that certain information provided during this call may contain forward looking statements relating to current expectations, estimates, forecasts and projections about future events that are forward looking as defined in the Private Securities Litigation Reform Act of 1995. These forward looking statements generally relate to the Company's plans, objectives and expectations for future operations and are based on current estimates and projections, future results and trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, please see the risk factors described in Acacia's most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC. Earlier this morning, Acacia issued a press Release disclosing its third quarter 2025 financial results. The press release may be accessed on the Company's website under the Press Releases section of the Investor Relations tab at acaciaresearch.com the company also posted its Q3 2025 earnings presentation to its website, which includes detailed GAAP and non GAAP financial disclosures and can be found under the Quarterly Results tab. On today's call, the team will discuss certain non GAAP financial measures, including adjusted EBITDA for the company and each of its operating segments. Information regarding the comparable GAAP metrics along with required definitions and reconciliations can be found in the Press release disclosing third quarter 2025 financial results available under the Press Releases section of the Investor Relations tab at acaciaresearch.com I'll now turn the call over to Acacia's Chief Executive Officer, MJ McNulty.

MJ McNulty - Chief Executive Officer - (00:03:05)

Thanks, Brent and thank you to everyone for joining us for our third quarter 2025 earnings call. Acacia delivered good results in the third quarter with significant increases sequentially and year over year across many key metrics despite persistent macroeconomic geopolitical headwinds, our team executed well against our disciplined and operationally focused strategy. While our businesses are not immune to these headwinds, we're using this as an opportunity to accelerate our value creation plan swiftly and decisively across our portfolio. These include the implementation of pricing strategies, cost savings initiatives, operational efficiencies, and plant consolidations to mitigate tariff pressures and to position our companies for continued growth. These ongoing initiatives and the team's consistent execution drove our strong quarterly results with Acacia delivering total revenue of 59.4 million, up 16% sequentially and up 155% compared to the prior year quarter. The year over year comparison primarily driven by our third full quarter of Deflecto, the company total Company adjusted EBITDA was 8 million and operated segment adjusted EBITDA was 12.6 million while free cash flow for the quarter was 7.7 million with the net result being a GAAP loss of $0.03 a share or a loss of a penny per share on an adjusted basis, book value per share at the end of the third quarter was $5.98 and book value per share to Acacia excluding our non Controlling interests was $5.57. Both essentially flat versus last quarter. Put Acacia's performance in context in spite of the macroeconomic and geopolitical headwinds, the businesses we own are still delivering attractive return characteristics. As you've heard me say before, Acacia is focused on identifying and acquiring under loved under managed and undervalued businesses where we believe we can leverage our significant capital base and experienced leadership teams to streamline operations, materially improve performance and drive long term growth. As a result of our actions on a year to date annualized basis, Benchmark is generating a roughly high teens free cash flow yield, Deflecto is generating a high single digit free cash flow yield prior to the impact of our in-flight operational improvement initiatives and Printronics is generating a high teens free cash flow yield with strong and improving cash yields at each of our operating companies and disciplined cost control at the parent.