Cohen & Steers (CNS) Q2 2024 earnings summary

Executive summary

• Assets under management (AUM) at June 30, 2024, were $80.7 billion, up 0.4% year-over-year but down 1% sequentially, with market appreciation offsetting net outflows and distributions.

• Q2 2024 diluted EPS was $0.68 (adjusted), down from $0.70 sequentially; net income was $34.5 million (adjusted).

• Revenue for Q2 2024 was $122 million, up year-over-year but slightly down sequentially.

• Operating margin was 34.9% (adjusted), but declined to 31.5% on a GAAP basis due to higher compensation and amortization expenses.

• Leadership transition: Raja Dakkuri appointed CFO, and new Head of Wealth Distribution named.

Financial highlights

• Effective fee rate held steady at 58 basis points; annualized fee rates for open-end funds were 65.6 bps, institutional accounts 38.3 bps, and closed-end funds 88.4 bps.

• Operating margin (adjusted) was 34.9% in Q2 2024, down from 35.5% in Q1 2024.

• Total expenses were flat sequentially, with higher G&A offset by lower compensation and benefits.

• Cash, cash equivalents, and liquid investments rose to $325.1 million at June 30, 2024, up from $233.1 million last quarter.

• Effective tax rate was 25.4%, consistent with guidance.

Outlook and guidance

• Compensation to revenue ratio expected to remain at 40.5%.

• G&A expected to increase 5%-7% for the year from 2023, or 3%-5% excluding a prior adjustment, mainly due to technology and office investments.

• Effective tax rate expected to remain at 25.4%.

• Anticipates that a rate-cutting cycle could shift flows from outflows to organic growth.

• Continued capital investment in new strategies, private real estate vehicles, and firm infrastructure is planned.