Hilbert Group (HILB) Q2 2024 earnings summary

Executive summary

• Entered a partnership with Xapo Bank to launch a Bitcoin-denominated hedge fund with over $200 million in initial capital in September 2024, one of the largest crypto hedge fund launches to date.

• Q2 2024 revenue surged to KSEK 27,304.1, up 482% year-over-year, driven by proprietary trading and Coin360 growth.

• Operating loss widened to KSEK -13,736.7, with net loss at KSEK -14,996.8, reflecting higher trading and marketing costs.

• On track to surpass $300 million in assets under management by end of 2024, with ambitions to become a multi-billion dollar manager by 2026.

• Multi-year investment in staff and infrastructure is enabling scalability without increasing headcount.

Financial highlights

• Q2 2024 revenue: KSEK 27,304.1 (Q2 2023: KSEK 4,687.1); H1 2024: KSEK 39,234.8 (H1 2023: KSEK 10,666.4).

• Q2 EBIT: KSEK -13,736.7 (Q2 2023: KSEK -12,920.7); Q2 net loss: KSEK -14,996.8 (Q2 2023: KSEK -10,178.7).

• Q2 saw significant losses in crypto markets, with Hilbert V1 down 6%, V30 down 15.9%, and V100 down 37.5%.

• No performance fees generated in Q2 due to negative fund performance; management fees in Q2 were 27% of full-year 2023 results.

• Significant increase in trading revenue due to a shift toward high-frequency trading.

Outlook and guidance

• AUM target of $300 million to be surpassed in 2024; 2025 AUM target set at over $1 billion.

• Coin360 platform revamp launching October 2024, targeting 6 million users and a new subscription revenue model, expected to reach $10 million ARR in 2025.

• Expecting Coinbase SMA to be fully available globally in Q4 2024, anticipated as a major source of new assets.

• Likely to complete at least one accretive M&A deal before year-end, focusing on targets with $100 million+ AUM.

• Ambition to become a multi-billion dollar manager by 2026, leveraging new partnerships and platform upgrades.