Acadian Asset Management (BSIG) Q2 2024 earnings summary

Executive summary

• Q2 2024 U.S. GAAP EPS was $0.29, up from $0.27 in Q2 2023; ENI EPS rose to $0.45 from $0.28 year-over-year, driven by higher AUM, management fees, and share repurchases.

• Total AUM reached $112.6B as of June 30, 2024, a 12.7% increase year-over-year and 2.0% sequentially, primarily due to market appreciation.

• 86%, 92%, and 93% of strategies by revenue outperformed benchmarks over 3-, 5-, and 10-year periods, respectively.

• Repurchased 0.9M shares in Q2 (2% of shares) for $20.5M; 4.4M shares (11%) YTD for $94.9M.

• Net client cash flows were flat in Q2 2024, as large inflows and outflows offset each other.

Financial highlights

• Q2 2024 total revenue was $109.0M, up 13.2% year-over-year, mainly due to higher management fees from increased average AUM.

• ENI revenue grew 14% to $108.3M; ENI net income rose 43.3% to $17.2M; ENI diluted EPS was $0.45, up 60.7%.

• Adjusted EBITDA increased 29.6% to $32.0M; ENI operating margin improved to 27% from 22% year-over-year.

• U.S. GAAP operating margin was 19%, down from 21% in Q2 2023, due to higher compensation expenses.

• Management fees increased 13.7% year-over-year to $105.5M in Q2 2024.

Outlook and guidance

• Full-year ENI operating expense and variable compensation ratios expected at 46%-50% if equity markets remain stable.

• Affiliate key employee distribution ratio projected at 7%-8%.

• Expects to maintain a break-even to flat net flow cadence for the next few quarters.

• Continued focus on deploying free cash flow for organic growth and share repurchases.

• Expense levels expected to remain stable, with only modest cost-of-living increases (2%-3%).