Hilbert Group (HILB) Q3 2024 earnings summary

Executive summary

• Announced acquisition of Liberty Road Capital (LRC), adding $110 million in AUM and a profitable, stable track record over five years.

• LRC brings AI trading and crypto derivatives expertise, enhancing strategic offerings and product development capabilities.

• Major strategic moves included the launch of the Xapo Byzantine BTC Credit Fund and the acquisition of Liberty Road Capital.

• Russell Thompson, a seasoned hedge fund leader, will join the board, with other LRC co-founders contributing operational and quantitative expertise.

• CEO transition set for January 2025, with Barnali Biswal, former CIO at Atitlan and ex-Goldman Sachs MD, taking over; Niclas Sandström to focus on strategy and M&A.

Significant events and developments

• Acquisition of LRC structured as an equity-only earnout over two years, incentivizing performance-based integration.

• Directed share issue for advisory fees and SEK 20 million capital raise via B-shares, mainly to Norwegian investors.

• Strategic partnership with Xapo Bank and launch of Bitcoin hedge fund with 3,000 BTC initial investment.

• Hilbert Capital selected by Reservoir Protocol as collateral source for stablecoin rUSD.

• Coin360 platform upgrade scheduled for December 2024, introducing a subscription service and new features.

Financial highlights

• Q3 2024 revenue surged to KSEK 31,551.7 from KSEK 5,811.2 year-over-year, driven by proprietary trading and fund management growth.

• Q3 fund management income was weak as most funds remained below high-water marks, except for the newly launched Xapo Byzantine Fund.

• Q3 operating loss widened to KSEK -12,095.7; net loss for the period was KSEK -18,820.5.

• Substantial income uptick expected in Q4 2024 and Q1 2025 as new funds and LRC income are consolidated.

• Coin360 monthly visits up 98% month-over-month to 8.5 million; 2 million unique active users year-to-date.