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Pay Close Attention to This Crucial Revenue Source

By David Kretzmann, The Motley Fool

Apr 6, 2025

When it comes to evaluating the financial health of a company, there are many important metrics to consider. But one crucial revenue source often flies under the radar: the sale of intangible assets.

Intangible assets, such as patents, copyrights, and trademarks, can be a significant source of revenue for companies, particularly those in the technology and healthcare sectors. These assets can be sold, licensed, or used to generate royalties, providing a steady stream of income.

In recent years, the value of intangible assets has skyrocketed. According to the World Intellectual Property Organization (WIPO), the global value of intangible assets increased by 15% in 2024 alone, reaching a staggering $2.2 trillion.

This trend is expected to continue, driven by the rapid pace of innovation and technological advancements. As companies invest more in research and development, the value of their intangible assets is likely to grow, providing a valuable source of revenue.

One company that has already benefited from the sale of intangible assets is pharmaceutical giant Pfizer. In 2023, Pfizer sold its consumer healthcare business to GlaxoSmithKline for $13.5 billion, generating a significant windfall.

Other companies, such as technology giants like Apple and Google, are also sitting on a treasure trove of intangible assets. Apple, for example, owns a vast portfolio of patents related to its iPhone and other products, which can be licensed to other companies or used to generate royalties.

As investors, it's essential to pay close attention to the sale of intangible assets when evaluating a company's financial health. By doing so, you can gain a better understanding of a company's potential revenue streams and make more informed investment decisions.

In conclusion, the sale of intangible assets is a crucial revenue source that should not be overlooked. As the value of these assets continues to grow, companies that can effectively monetize them will be well-positioned for future success.