Silvercrest Asset Management Group (SAMG) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 increased 4.2% year-over-year to $31.0 million, driven by market appreciation despite net client outflows and narrow market leadership.

• Total AUM reached $33.4 billion, up 4.7% year-over-year but down 3.2% sequentially, with discretionary AUM decreasing by $1.1 billion to $21.6 billion due to institutional mandate losses.

• Net income for Q2 2024 was $4.4 million, down from $5.1 million in Q2 2023, reflecting higher compensation and investments in growth.

• New hires, including a global equity team and business development leaders, are expected to drive future growth and expand institutional and ultra-high-net-worth relationships.

• Quarterly dividend increased by 5% to $0.20 per share, payable September 20, 2024.

Financial highlights

• Q2 2024 revenue was $31.0 million, up 4.2% year-over-year; H1 2024 revenue was $61.3 million, up 3.6%.

• Q2 2024 net income was $4.4 million (14.1% margin); adjusted EBITDA was $7.2 million (23.3% margin); adjusted net income was $4.4 million ($0.31 per basic adjusted EPS).

• Q2 2024 EPS was $0.28 basic and diluted, down from $0.33 in Q2 2023.

• Compensation and benefits expense rose 10.4% year-over-year in Q2 2024, mainly due to higher bonuses and merit-based increases.

• Cash and cash equivalents at June 30, 2024, were $49.9 million, down from $70.3 million at year-end 2023, with no outstanding debt.

Outlook and guidance

• The new global equity team is expected to create a multi-billion-dollar opportunity over the next few years, with significant institutional demand.

• Compensation expenses are expected to remain elevated (57%-58% of revenue) in 2024 due to ongoing investments, above the long-term target of 55%.

• The pipeline for new institutional business is strong and diversified, with OCIO and growth strategies leading, though value pipeline remains weak.

• Management expects cash and liquidity needs for the next twelve months to be met primarily through operating cash flows.

• Distributions to limited partners and quarterly dividends to Class A shareholders are expected to continue, subject to operating results and liquidity.