Executive Summary

Q4 2024 revenue rose sequentially to $48.8M as Deflecto’s first partial-quarter contribution ($23.2M) and stronger Energy ($17.3M) offset seasonally light IP licensing; GAAP diluted EPS was $(0.14) and Adjusted diluted EPS was $(0.07) . Operated Segment Adjusted EBITDA improved to $9.6M; Total Company Adjusted EBITDA was $4.9M as Parent costs and integration expenses persisted .
Year-over-year comparisons were tough due to a very strong IP quarter in Q4’23 ($82.8M IP revenue); Q4’24 IP revenue was $0.1M, underscoring the lumpy nature of the portfolio and driving the YoY revenue decline despite solid Energy and new Manufacturing contributions .
Balance sheet remains a key asset: $297.0M in cash, cash equivalents and equity investments at fair value; no parent-level debt; $114.0M of non-recourse debt at operating subs (Benchmark and Deflecto) . Book value per share was $5.75 at 12/31/24; the company completed $20.0M of buybacks in 2024 (avg price $4.61) .
Management emphasized operational integration (Deflecto), energy hedging (~70% of operated net production protected over the next 3 years) and disciplined M&A; Benchmark posted its highest-ever quarterly revenue, and management sees optionality in Cherokee/Cleveland formations for future monetization .

What Went Well and What Went Wrong

What Went Well
- Deflecto acquisition added $23.2M revenue and $2.4M Adjusted EBITDA in its first partial quarter; management outlined divisionalization, cost actions, and cash-flow focus to expand margins and earnings leverage through the cycle .
- Energy operations strengthened with $17.3M revenue and $8.4M Adjusted EBITDA; Benchmark achieved its highest revenue ever, supported by >40 workover projects and a robust hedging program (~70% of operated net production hedged for 3 years) .
- Capital allocation stayed shareholder-friendly: $20M buybacks completed; strong liquidity ($297.0M cash/securities FV) and no parent-level debt preserve M&A optionality .
What Went Wrong
- IP revenue fell to $0.1M in Q4 versus $82.8M in Q4’23, driving negative YoY comps and pressuring GAAP results (Operating loss $(15.8)M; GAAP EPS $(0.14)) .
- Elevated corporate/integration costs and amortization (IP amortization, Deflecto add-ons) weighed on profitability; Q4 included $5.2M in non-recurring parent G&A and transaction-related charges at the Parent level .
- Manufacturing gross margin ran below the targeted 15% in the seasonally weakest quarter for Deflecto; management reaffirmed the goal but cited seasonality and near-term cyclicality in certain end markets .

Financial Results

Consolidated results (oldest → newest):

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$25.838	$23.310	$48.844
GAAP Operating (Loss) ($M)	$(4.758)	$(10.272)	$(15.809)
GAAP Diluted EPS ($)	$(0.08)	$(0.14)	$(0.14)
Adjusted Diluted EPS ($)	$(0.01)	$(0.06)	$(0.07)
Total Company Adjusted EBITDA ($M)	$4.089	$1.674	$4.857
Operated Segment Adjusted EBITDA ($M)	$8.797	$6.882	$9.631

Margins (computed; sources in brackets):

Margin	Q2 2024	Q3 2024	Q4 2024
Operating Margin %	(−18.4%) = (−4.758/25.838)	(−44.1%) = (−10.272/23.310)	(−32.4%) = (−15.809/48.844)
Adjusted EBITDA Margin %	15.8% = (4.089/25.838)	7.2% = (1.674/23.310)	9.9% = (4.857/48.844)

Segment revenue ($M):

Segment Revenue	Q2 2024	Q3 2024	Q4 2024
Energy Operations	$14.2	$15.8	$17.3
Industrial (Printronix)	$6.3	$7.0	$8.2
Manufacturing (Deflecto)	$0.0	$0.0	$23.2
Intellectual Property	$5.3	$0.5	$0.1
Total	$25.8	$23.3	$48.8

Segment Adjusted EBITDA ($M):

Segment Adj. EBITDA	Q2 2024	Q3 2024	Q4 2024
Energy Operations	$7.039	$8.442	$8.380
Industrial (Printronix)	$0.449	$0.579	$1.604
Manufacturing (Deflecto)	$0.000	$0.000	$2.396
IP Operations	$1.309	$(2.139)	$(2.749)
Operated Segment Adj. EBITDA	$8.797	$6.882	$9.631
Total Company Adj. EBITDA	$4.089	$1.674	$4.857

Balance sheet snapshot and capital allocation:

Cash, cash equivalents and equity investments at FV: $297.0M at 12/31/24; parent-level debt: $0; consolidated non-recourse debt: $114.0M ($66.5M Benchmark, $47.5M Deflecto) .
Book value per share: $5.75 at 12/31/24; 96.0M shares outstanding .
Share repurchases: $20.0M completed in 2024; average repurchase price ~$4.61 per share (from call remarks) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Deflecto Revenue (FY)	FY 2024	$128–$136M (10/21/24 and reiterated 11/12/24)	No update in Q4 materials	Maintained/Not updated

Note: The company did not provide formal quantitative forward guidance for 2025 in the Q4 press release or call .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2, Q3)	Current Period (Q4)	Trend
Energy hedging and stability	Hedge book protects ~70% of operated net production; PDP strategy, workovers, and cost optimization; growing Energy Adjusted EBITDA	~70% hedged over next 3 years; Benchmark posted highest-ever revenue; continued workovers and services org to control costs	Stable to positive: sustained protection and operational improvements
Deflecto integration and margins	Acquisition announced post-Q3 with FY24 revenue expectation $128–$136M; mid-teens EBITDA margin profile opportunity	$23.2M revenue, $2.4M Adj. EBITDA in seasonally weak Q4; divisionalization, cost actions, cash flow focus; 15% gross margin goal reaffirmed	Positive integration; margin improvement targeted through 2025
IP monetization lumpiness	Q2: IP revenue $5.3M; Q3: $0.5M; management reiterated episodic nature	Q4: $0.1M; significant YoY headwind vs $82.8M in Q4’23	Continuing volatility; smaller contribution near term
Legacy/legal and one-time costs	AIP/legal accruals in H1 depressed EPS; non-recurring charges noted	Q4 parent non-recurring G&A ~$5.2M; transaction costs tied to acquisitions	Fading but still present in Q4
Macro/tariffs exposure	Not a major Q2 theme; Q3 focused on operations	Management monitors tariffs; limited energy impact; optionality to shift Deflecto manufacturing footprint if needed	Watchlist item; management prepared to mitigate

Management Commentary

“2024 was a transformational year for Acacia… two opportunistic acquisitions… should create value for shareholders… we repurchased $20.0 million in Acacia shares during the year” — CEO MJ McNulty .
“For the fourth quarter, we generated consolidated revenue of $48.8 million, produced $4.9 million of total company adjusted EBITDA and recorded $9.6 million of operated segment adjusted EBITDA… Excluding our Intellectual Property operations… we delivered $12.4 million” .
“Benchmark’s highest ever revenue… over 40 capital workover projects… replenished the oil and gas produced since our acquisition… hedging strategy… protecting approximately 70% of our operated net oil and gas production over the next 3 years” .
“Since closing the Deflecto acquisition, we've been working with the team to organize the company into 3 distinct business units… reduce overhead costs… focus on cash flow and working capital” .

Q&A Highlights

Tariffs and macro: Management sees limited oil & gas impact; potential steel cost impacts are mitigated by a non-drilling-focused model; Deflecto has geographic manufacturing optionality to reduce tariff exposure .
Benchmark growth and asset strategy: Focus on tuck-in acquisitions around the Mid-Con footprint; evaluating upside in Cherokee/Cleveland formations for capital-light monetization .
Deflecto margins: Q4 gross margin below 15% goal due to seasonality; target maintained with operational opportunities identified .
Cash and Arix monetization: CFO confirmed ~$37M proceeds from Arix; overall cash stayed robust despite acquisitions, debt paydown, and buybacks .
Hedge sensitivity: ~70% hedged; company monitors sensitivity but does not publish a formal $/bbl sensitivity metric .

Estimates Context

S&P Global (Capital IQ) Wall Street consensus for Q4 2024 EPS, revenue, and EBITDA was unavailable at the time of this analysis due to access limitations; as a result, formal comparisons to consensus could not be included. Management did not provide quantitative guidance for 2025 in Q4 materials .

Key Takeaways for Investors

Mix shift underway: Energy and Manufacturing (Deflecto) now provide steadier cash generation, partially offsetting episodic IP revenue; sequential revenue acceleration in Q4 reflects this shift .
Integration-driven upside: Deflecto offers multiple levers (divisionalization, cost and working capital actions, product adjacencies, M&A) to drive margin expansion as markets normalize; early contribution ($2.4M Adj. EBITDA) came in seasonally weakest quarter .
Energy resilience with hedge support: Benchmark’s operating improvements and ~70% hedge coverage stabilize cash flows, while Cherokee/Cleveland optionality adds potential upside without heavy capex .
Non-recurring costs compressing normalized earnings: One-time legal/integration costs and amortization continued to burden GAAP; Adjusted metrics provide a better view of run-rate profitability while integration matures .
Balance sheet optionality: $297M liquidity, no parent debt, and completed buybacks enable disciplined M&A and opportunistic capital return, supporting the value-creation playbook into 2025 .
Monitoring points: (1) Deflecto margin trajectory toward targets, (2) cadence of IP settlements, (3) incremental tuck-in energy deals near existing footprint, and (4) any tariff regime changes affecting Manufacturing .

Supporting documents and data:

Q4 2024 press release/8-K (financials and non-GAAP reconciliations) .
Q4 2024 earnings call transcript (prepared remarks and Q&A) .
Prior quarters for trend analysis (Q3 and Q2 press releases/8-Ks and calls) .
Deflecto acquisition press release (context and 2024 revenue expectation) .

ACACIA RESEARCH CORP (ACTG)·Q4 2024 Earnings Summary