Rpx (RPXC) has reported 3.59 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $8.12 million, or $0.16 a share in the quarter, compared with $7.83 million, or $0.14 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $12.70 million, or $0.25 a share compared with $10.65 million or $0.19 a share, a year ago. 

Revenue during the quarter grew 29.69 percent to $88.46 million from $68.21 million in the previous year period. Gross margin for the quarter contracted 228 basis points over the previous year period to 42.54 percent. Total expenses were 84.16 percent of quarterly revenues, up from 82.70 percent for the same period last year. That has resulted in a contraction of 145 basis points in operating margin to 15.84 percent.

Operating income for the quarter was $14.02 million, compared with $11.80 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $62.08 million compared with $53.52 million in the prior year period. At the same time, adjusted EBITDA margin contracted 828 basis points in the quarter to 70.18 percent from 78.46 percent in the last year period.  

"We had a solid third quarter with strong cash flow," said John Amster, chief executive officer of RPX Corporation. "Revenue in our patent risk and discovery businesses was in line with expectations. We had an active quarter of patent acquisitions, while carefully controlling our operating costs. As we integrate the two businesses, we continue to assess new opportunities to provide services that can enhance the operational efficiency of corporate legal departments."

For the fourth-quarter, Rpx expects revenue to be in the range of $82 million to $86 million. Rpx projects adjusted net income to be in the range of $7 million to $10 million for the fourth-quarter. The company expects adjusted operating income to be in the range of $12 million to $15 million for the fourth-quarter. 

For fiscal year 2016, Rpx expects revenue to be in the range of $333 million to $337 million. It projects adjusted net income to be in the range of $37 million to $40 million.  The company expects adjusted operating income to be in the range of $61 million to $64 million.

The company has spent $171.01 million cash to meet investing activities during the nine month period as against cash outgo of $110.33 million in the last year period.

Cash flow from financing activities was $43.68 million for the nine month period as against cash outgo of $1.65 million in the last year period.

Cash and cash equivalents stood at $87.17 million as on Sep. 30, 2016, down 16.64 percent or $17.40 million from $104.57 million on Sep. 30, 2015.

Working capital drops significantly
Rpx has witnessed a decline in the working capital over the last year. It stood at $122.70 million as at Sep. 30, 2016, down 52.66 percent or $136.49 million from $259.18 million on Sep. 30, 2015. Current ratio was at 2.02 as on Sep. 30, 2016, down from 2.94 on Sep. 30, 2015.

Days sales outstanding went up to 24 days for the quarter compared with 15 days for the same period last year.

At the same time, days payable outstanding was almost stable at 3 days for the quarter, when compared with the previous year period.

Debt increases substantially
Rpx has witnessed an increase in total debt over the last one year. It stood at $95.73 million as on Sep. 30, 2016, up 1,091.02 percent or $87.70 million from $8.04 million on Sep. 30, 2015. Long-term debt stood at $89.88 million as on Sep. 30, 2016. Total debt was 13.42 percent of total assets as on Sep. 30, 2016, compared with 1.20 percent on Sep. 30, 2015. Debt to equity ratio was at 0.20 as on Sep. 30, 2016, up from 0.02 as on Sep. 30, 2015.