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May AMK Report
Newsfilter· 2024-06-10 20:15
CONCORD, Calif., June 10, 2024 (GLOBE NEWSWIRE) -- AssetMark Financial Holdings, Inc. (NYSE: AMK) released its “AssetMark Monthly Knowledge” Report today. Company results for the month of May 2024 include: Platform assets of $117.7 billion at the end of May, up 22.1% year-over-year. Net flows were $611 million in the month of May, down 4.1% year-over-year. AssetMark Trust Company client cash was $2.84 billion, down 3.7% year-over-year. Number of households increased 5.7% year-over-year to 260,756 at the end ...
MERGER INVESTIGATION ALERT: Kaskela Law LLC Announces Investigation of AssetMark Financial Holdings, Inc. (NYSE: AMK) Buyout and Encourages Investors to Contact the Firm
GlobeNewswire News Room· 2024-06-04 10:00
Core Viewpoint - Kaskela Law LLC is investigating AssetMark Financial Holdings, Inc. regarding the acquisition by GTCR at a price of $35.25 per share, questioning if shareholders are receiving adequate consideration and if there were any breaches of fiduciary duties by the company's officers or directors [1]. Group 1 - AssetMark announced an agreement to be acquired by GTCR for $35.25 per share in cash on April 25, 2024 [1]. - Following the acquisition, AssetMark's shares will no longer be publicly traded, and shareholders will be cashed out of their investment positions [1]. - Prior to the acquisition announcement, at least one stock analyst had a price target of $41.00 per share for AssetMark, indicating potential undervaluation in the buyout offer [1]. Group 2 - Shareholders who believe the buyout price is insufficient are encouraged to contact Kaskela Law LLC for representation [2]. - Kaskela Law LLC specializes in securities fraud, corporate governance, and merger & acquisition litigation on a contingent basis [2].
AssetMark Announces 2024 Practice Excellence Award Recipients
GlobeNewswire News Room· 2024-06-03 14:00
Core Insights - AssetMark announced the recipients of its 2024 Practice Excellence Awards, recognizing financial advisory firms for operational excellence and technology adoption [1] - The awards highlight the importance of digital tools in enhancing client service and operational efficiency within the financial advisory sector [1] Group 1: Awards and Recognition - The 2024 Operations Excellence Award was given to firms such as Personal Benefit Financial and B. Riley Wealth Management for accuracy in client requests [1] - The 2024 Digital Practice Award recognized firms like Financial Independence, LLC and GTX Wealth for their overall adoption of AssetMark's digital tools [1] - The 2024 Green Planet Award was awarded to firms including ERSI Wealth Management and Beyond Wealth Management Group for their adoption of eDelivery [1] Group 2: Company Overview - AssetMark operates a wealth management platform that supports independent financial advisors and their clients, providing flexible solutions that enhance client engagement and drive efficiency [2] - The company, founded in 1996 and based in Concord, California, has over 1,000 employees and serves more than 9,200 financial advisors and 257,000 investor households [2] - As of March 31, 2024, AssetMark reported $116.9 billion in platform assets [2]
AssetMark Announces 2024 Practice Excellence Award Recipients
Newsfilter· 2024-06-03 14:00
CONCORD, Calif., June 03, 2024 (GLOBE NEWSWIRE) -- AssetMark (NYSE:AMK), a leading wealth management platform for financial advisors, today announced the recipients of its 2024 Practice Excellence Awards. These awards, now in their seventh year, recognize financial advisory firms that have made significant achievements in the areas of operational excellence and technology adoption at AssetMark. This year's honorees are: 2024 Operations Excellence Award – Accuracy of Submitted Client RequestsSharla Rountree, ...
ASSETMARK INVESTOR NOTICE: Kaskela Law LLC Announces Investigation of AssetMark Financial Holdings, Inc. (NYSE: AMK) and Encourages Investors to Contact the Firm
prnewswire.com· 2024-05-30 10:00
PHILADELPHIA, May 30, 2024 /PRNewswire/ -- Kaskela Law LLC announces that it is investigating AssetMark Financial Holdings, Inc. (NYSE: AMK) ("AssetMark") on behalf of the company's investors.On April 25, 2024, AssetMark announced that it had agreed to be acquired by private equity firm GTCR at a price of $35.25 per share in cash.  Following the closing of the proposed transaction, AssetMark's shareholders will be cashed out of their investment position and the company's shares will no longer be publicly tr ...
NOTICE OF INVESTIGATION: Kaskela Law LLC Announces Shareholder Investigation of AssetMark Financial Holdings, Inc. (NYSE: AMK) and Encourages Investors to Contact the Firm
prnewswire.com· 2024-05-20 12:30
Core Viewpoint - Kaskela Law LLC is investigating AssetMark Financial Holdings, Inc. regarding the acquisition by GTCR at a price of $35.25 per share, questioning whether this price adequately reflects the company's value and if there were any breaches of fiduciary duties by the company's officers or directors [1][2]. Group 1: Acquisition Details - AssetMark announced an agreement to be acquired by GTCR for $35.25 per share in cash on April 25, 2024 [1]. - Following the acquisition, AssetMark's shareholders will be cashed out and the company's shares will cease to be publicly traded [1]. Group 2: Investigation Focus - The investigation aims to assess if the buyout price is sufficient and if there were any violations of securities laws or fiduciary duties by AssetMark's management [2]. - Prior to the acquisition announcement, at least one analyst had a price target of $41.00 per share for AssetMark, indicating a potential undervaluation in the buyout offer [2]. Group 3: Legal Representation - Kaskela Law LLC specializes in representing investors in cases of securities fraud, corporate governance, and merger & acquisition litigation on a contingent basis [3].
April AMK Report
Newsfilter· 2024-05-14 20:24
CONCORD, Calif., May 14, 2024 (GLOBE NEWSWIRE) -- AssetMark Financial Holdings, Inc. (NYSE:AMK) released its "AssetMark Monthly Knowledge" Report today. Company results for the month of April 2024 include: Platform assets of $113.7 billion at the end of April, up 17.3% year-over-year.Net flows were $696 million in the month of April, up 60.7% year-over-year.AssetMark Trust Company client cash was $2.86 billion, down 0.3% year-over-year.Number of households increased 6.0% year-over-year to 261,430 at the end ...
AssetMark(AMK) - 2024 Q1 - Quarterly Report
2024-05-07 20:34
PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2024 show significant net income growth and a pending merger agreement with GTCR [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and stockholders' equity increased as of March 31, 2024, driven by higher cash balances and retained earnings Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $247,626 | $217,680 | | Total current assets | $322,093 | $291,111 | | Goodwill | $487,909 | $487,909 | | **Total assets** | **$1,656,826** | **$1,620,563** | | **Liabilities & Equity** | | | | Total current liabilities | $69,247 | $75,842 | | Total liabilities | $347,312 | $353,181 | | Total stockholders' equity | $1,309,514 | $1,267,382 | | **Total liabilities and stockholders' equity** | **$1,656,826** | **$1,620,563** | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q1 2024 net income rose significantly due to revenue growth and the non-recurrence of a prior-year SEC settlement accrual Q1 2024 vs Q1 2023 Income Statement (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total revenue | $190,266 | $170,298 | | Total operating expenses | $138,576 | $124,148 | | Other (income) expense, net | ($332) | $19,865 | | Income before income taxes | $49,728 | $23,938 | | Net income | $37,964 | $17,222 | | Diluted EPS | $0.50 | $0.23 | - The significant increase in net income was largely due to a **$20.0 million accrual for an SEC settlement** recorded in 'Other (income) expense, net' during Q1 2023, which did not recur in Q1 2024[72](index=72&type=chunk)[163](index=163&type=chunk)[165](index=165&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased in Q1 2024 due to higher net income, while investing cash use grew and financing activities were nil Cash Flow Summary (in thousands) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $47,415 | $39,126 | | Net cash used in investing activities | ($17,469) | ($13,932) | | Net cash used in financing activities | $0 | ($25,000) | | **Net change in cash** | **$29,946** | **$194** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, goodwill stability, debt, and disclose the significant subsequent merger agreement with GTCR - On April 25, 2024, the Company entered into a merger agreement with GTCR Everest Borrower, LLC, valued at approximately **$2.62 billion**[81](index=81&type=chunk) - In September 2023, the company settled with the SEC regarding a previously disclosed matter, paying a civil penalty of **$9.5 million** and disgorgement and prejudgment interest of **$8.8 million**, with a **$20 million** accrual recorded in Q1 2023[72](index=72&type=chunk)[194](index=194&type=chunk) - The company's goodwill balance remained unchanged at **$487.9 million** as of March 31, 2024, and a qualitative analysis determined it was not impaired[37](index=37&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q1 2024 revenue and asset growth, the pending GTCR merger, and improved non-GAAP metrics [Overview and Merger Agreement](index=19&type=section&id=Overview%20and%20Merger%20Agreement) The company agreed to be acquired by an affiliate of GTCR for $35.25 per share, pending regulatory approvals - On April 25, 2024, the company entered into a merger agreement with GTCR Everest Borrower, LLC, where stockholders will receive **$35.25 per share in cash**[87](index=87&type=chunk)[88](index=88&type=chunk) - The company's majority stockholder, HIIHL, has already provided the required stockholder approval for the merger via written consent[89](index=89&type=chunk)[91](index=91&type=chunk) [Financial and Operational Highlights](index=20&type=section&id=Financial%20and%20Operational%20Highlights) The company reported double-digit year-over-year growth in revenue, net income, platform assets, and engaged advisers in Q1 2024 Q1 2024 Financial Highlights (YoY) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $190.3M | $170.3M | +11.7% | | Net Income | $38.0M | $17.2M | +120.9% | | Adjusted EBITDA | $65.9M | $58.8M | +12.1% | Asset and Adviser Growth (as of March 31) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Platform Assets | $116.9B | $96.2B | +21.5% | | Engaged Advisers | 3,208 | 2,976 | +7.8% | [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Revenue growth was driven by higher asset-based fees, while a significant increase in net income was aided by a non-recurring prior-year expense Revenue Breakdown (in thousands) | Revenue Type | Q1 2024 | Q1 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Asset-based | $149,984 | $131,039 | $18,945 | 14.5% | | Spread-based | $30,093 | $31,999 | ($1,906) | (6.0)% | | Subscription-based | $4,252 | $3,544 | $708 | 20.0% | | **Total Revenue** | **$190,266** | **$170,298** | **$19,968** | **11.7%** | - Asset-based expenses increased by **$7.4 million (19.8%)** due to higher platform assets[156](index=156&type=chunk) - Employee compensation rose by **$3.1 million (6.6%)** due to increased salaries and related expenses to support growth[158](index=158&type=chunk) [Non-GAAP Financial Metrics](index=24&type=section&id=Non-GAAP%20Financial%20Metrics) Adjusted EBITDA and Adjusted Net Income both grew in Q1 2024, excluding items like share-based compensation and a prior-year SEC accrual Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $37,964 | $17,222 | | Adjustments (Taxes, Interest, D&A) | $19,557 | $15,440 | | **EBITDA** | **$57,921** | **$32,662** | | Share-based compensation | $4,168 | $3,822 | | Reorganization and integration costs | $3,841 | $1,909 | | Accrual for SEC settlement | $0 | $20,000 | | Other adjustments | ($23) | $405 | | **Adjusted EBITDA** | **$65,907** | **$58,788** | Adjusted Net Income Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $37,964 | $17,222 | | Acquisition-related amortization | $2,180 | $2,174 | | Expense adjustments | $3,853 | $22,216 | | Share-based compensation | $4,168 | $3,822 | | Other (income) expense, net | ($35) | $88 | | Tax effect of adjustments | ($2,910) | ($5,821) | | **Adjusted net income** | **$45,220** | **$39,701** | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through cash from operations and its credit facility, with cash and equivalents of $247.6 million - As of March 31, 2024, the company had cash and cash equivalents of **$247.6 million**[166](index=166&type=chunk) - The company has a 2022 Credit Agreement which includes a **$375.0 million** revolving credit facility and a term loan, with an outstanding balance of **$93.8 million** as of March 31, 2024[169](index=169&type=chunk)[171](index=171&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk from asset values, interest rate risk from client cash programs, and variable-rate debt - A **1% decrease** in the aggregate value of assets on the platform would have caused pre-tax income for the quarter to decline by approximately **$1.3 million**[181](index=181&type=chunk) - A **100 basis point** change in short-term interest rates would result in an approximate **$22.4 million** annual change in income before taxes from the client cash program[184](index=184&type=chunk) - A **100 basis point** increase in the interest rate on the 2022 Credit Agreement would decrease annual income before taxes by approximately **$0.9 million**[185](index=185&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the quarter-end with no material changes to internal controls - The Principal Executive Officer and Principal Financial Officer concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective[188](index=188&type=chunk) - There were no material changes in the company's internal control over financial reporting during the first quarter of 2024[189](index=189&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material impact from ongoing legal proceedings, referencing a previously disclosed and settled SEC matter - In September 2023, the company settled a matter with the SEC, paying a **$9.5 million** civil penalty and **$8.8 million** in disgorgement and prejudgment interest[194](index=194&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from its pending merger, market volatility, competition, regulation, cybersecurity, and its controlling stockholder [Risks Related to the Merger](index=37&type=section&id=Risks%20Related%20to%20the%20Merger) The pending merger with GTCR creates uncertainty, operational restrictions, and risks of non-completion or potential litigation - The company is subject to business uncertainties and contractual restrictions while the merger is pending, which could harm business relationships and financial results[195](index=195&type=chunk) - Failure to complete the merger could adversely affect the business and stock price, and the company may be required to pay a termination fee of approximately **$80.8 million** under certain circumstances[196](index=196&type=chunk)[198](index=198&type=chunk) [Risks Related to Business and Regulation](index=38&type=section&id=Risks%20Related%20to%20Business%20and%20Regulation) Business risks include revenue volatility from market conditions, intense competition, and compliance with extensive government regulations - Revenue may fluctuate significantly due to market conditions, as a majority of revenue is asset-based[202](index=202&type=chunk)[210](index=210&type=chunk) - The company operates in an intensely competitive industry and derives nearly all revenue from the financial advisory sector, making it vulnerable to industry downturns[205](index=205&type=chunk)[207](index=207&type=chunk) - The business is subject to extensive and evolving government regulation in the U.S., and failure to comply could result in fines, sanctions, or revocation of registrations[297](index=297&type=chunk)[305](index=305&type=chunk) [Risks Related to IP, Data, and Cybersecurity](index=46&type=section&id=Risks%20Related%20to%20IP,%20Data,%20and%20Cybersecurity) The company faces significant threats from cyber-attacks, data breaches, evolving AI risks, and complex data privacy regulations - The company is exposed to data and cybersecurity risks that could result in data breaches, service interruptions, and significant liability due to the sensitive financial information it stores[255](index=255&type=chunk) - The integration and use of Artificial Intelligence (AI) exposes the company to risks including potential biases, cybersecurity threats, and a rapidly evolving regulatory landscape[284](index=284&type=chunk)[285](index=285&type=chunk) - The company must comply with numerous, evolving data protection regulations like California's CCPA/CPRA and Europe's GDPR, which imposes significant compliance costs[262](index=262&type=chunk)[266](index=266&type=chunk)[272](index=272&type=chunk) [Risks Related to Controlling Stockholder and Ownership](index=52&type=section&id=Risks%20Related%20to%20Controlling%20Stockholder%20and%20Ownership) The PRC-based controlling stockholder introduces risks related to foreign laws, CFIUS review, and exemptions from certain NYSE governance rules - The controlling stockholder, HTSC, is subject to PRC laws and regulations that may influence decisions and require PRC regulatory approval for certain corporate actions[286](index=286&type=chunk)[288](index=288&type=chunk) - Future acquisitions may be subject to review by the Committee on Foreign Investment in the United States (CFIUS), which could delay or block transactions[293](index=293&type=chunk) - The company is a "controlled company" under NYSE rules due to HTSC's majority ownership, exempting it from requirements like having a majority of independent directors[331](index=331&type=chunk) [Other Information (Items 2-6)](index=62&type=section&id=Other%20Information%20(Items%202-6)) This section confirms no unregistered equity sales, defaults, or new 10b5-1 plans, and lists the exhibits filed with the report - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2024[350](index=350&type=chunk) - The sections for Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, and Mine Safety Disclosures are not applicable[349](index=349&type=chunk)
AssetMark Financial (AMK) Misses Q1 Earnings Estimates
Zacks Investment Research· 2024-05-01 23:46
Company Performance - AssetMark Financial reported quarterly earnings of $0.60 per share, missing the Zacks Consensus Estimate of $0.61 per share, but showing an increase from $0.53 per share a year ago, representing an earnings surprise of -1.64% [1] - The company posted revenues of $190.27 million for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 2%, compared to year-ago revenues of $176.56 million [1] - Over the last four quarters, AssetMark Financial has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [1] Stock Performance - AssetMark Financial shares have increased by approximately 12.9% since the beginning of the year, outperforming the S&P 500's gain of 5.6% [2] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.65 on revenues of $194.03 million, and for the current fiscal year, it is $2.65 on revenues of $780.66 million [4] - The estimate revisions trend for AssetMark Financial is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [4] Industry Context - The Financial - Investment Management industry, to which AssetMark Financial belongs, is currently in the top 29% of over 250 Zacks industries, suggesting a positive outlook for stocks in this sector [5] - Victory Capital Holdings, another company in the same industry, is expected to report quarterly earnings of $1.21 per share, reflecting a year-over-year change of +12% [5]
AssetMark(AMK) - 2024 Q1 - Quarterly Results
2024-05-01 20:19
[Executive Summary & Highlights](index=1&type=section&id=1.%20Executive%20Summary%20%26%20Highlights) AssetMark reported strong Q1 2024 financial and operational growth, with significant increases in net income, platform assets, and key advisor metrics, detailed across financial and operating highlights [First Quarter 2024 Financial and Operational Highlights](index=1&type=section&id=1.1%20First%20Quarter%202024%20Financial%20and%20Operational%20Highlights) AssetMark reported strong Q1 2024 results with significant growth in net income, adjusted net income, and platform assets, alongside an increase in new households and advisors Q1 2024 Financial Highlights | Metric | Value | | :------------------- | :------------------- | | Net income | $38.0 million | | Net income per share | $0.51 | | Adjusted net income | $45.2 million | | Adjusted net income per share | $0.60 | | Total revenue | $190.3 million | | Adjusted EBITDA | $65.9 million | | Adjusted EBITDA margin | 34.6% of total revenue | - Platform assets increased **21.5% year-over-year** to **$116.9 billion**, and **7.3% quarter-over-quarter**, driven by **$6.1 billion** market impact net of fees and **$1.8 billion** quarterly net flows[1](index=1&type=chunk) - Year-to-date annualized net flows as a percentage of beginning-of-year platform assets were **6.8%**[1](index=1&type=chunk) - The AssetMark platform added over **3,000 new households** and **169 new producing advisors** during the first quarter[2](index=2&type=chunk) - An **18.6% annualized production lift** was realized from existing advisors, indicating organic growth and increased wallet share[2](index=2&type=chunk) [Key Operating and Financial Metrics](index=2&type=section&id=1.2%20Key%20Operating%20and%20Financial%20Metrics) A detailed comparison of Q1 2024 versus Q1 2023 reveals significant year-over-year growth across most operational and financial indicators, particularly in platform assets, net flows, and net income First Quarter 2024 Key Operating Metrics (YoY Variance) | Metric | 1Q23 | 1Q24 | Variance per year | | :--------------------------------------------------- | :------- | :--------- | :---------------- | | Platform assets (at period-beginning) (millions of dollars) | $91,470 | $108,929 | 19.1 % | | Net flows (millions of dollars) | 1,631 | 1,842 | 12.9 % | | Market impact net of fees (millions of dollars) | 3,102 | 6,130 | 97.6 % | | Platform assets (at period-end) (millions of dollars) | $96,203 | $116,901 | 21.5 % | | Net flows lift (% of beginning of year platform assets) | 1.8 % | 1.7 % | (10 bps) | | Advisors (at period-end) | 9,319 | 9,280 | (0.4)% | | Engaged advisors (at period-end) | 2,976 | 3,208 | 7.8 % | | Assets from engaged advisors (at period-end) (millions of dollars) | $88,587 | $109,267 | 23.3 % | | Households (at period-end) | 243,775 | 257,162 | 5.5 % | | New producing advisors | 166 | 169 | 1.8 % | | Production lift from existing advisors (annualized %) | 18.8 % | 18.6 % | (20 bps) | | Assets in custody at ATC (at period-end) (millions of dollars) | $70,069 | $86,373 | 23.3 % | | ATC client cash (at period-end) (millions of dollars) | $3,189 | $3,170 | (0.6)% | First Quarter 2024 Key Financial Metrics (YoY Variance) | Metric | 1Q23 | 1Q24 | Variance per year | | :--------------------------------------------------- | :------- | :--------- | :---------------- | | Total revenue (millions of dollars) | $170.3 | $190.3 | 11.7 % | | Net income (millions of dollars) | $17.2 | $38.0 | 120.9 % | | Net income margin (%) | 10.1 % | 20.0 % | 990 bps | | Capital expenditure (millions of dollars) | $10.0 | $11.9 | 19.0 % | | Adjusted EBITDA (millions of dollars) | $58.8 | $65.9 | 12.1 % | | Adjusted EBITDA margin (%) | 34.5 % | 34.6 % | 10 bps | | Adjusted net income (millions of dollars) | $39.7 | $45.2 | 13.9 % | [Corporate Developments](index=2&type=section&id=2.%20Corporate%20Developments) AssetMark announced its acquisition by GTCR, leading to the withdrawal of financial guidance, while highlighting its core business as a wealth management platform for independent advisors [Acquisition Announcement](index=2&type=section&id=2.1%20Acquisition%20Announcement) AssetMark announced its agreement to be acquired by GTCR, with the transaction expected to close in Q4 2024, leading to the withdrawal of previous financial guidance and cancellation of the earnings call - AssetMark entered into an agreement to be acquired by GTCR on April 25, 2024[5](index=5&type=chunk) - The transaction is subject to customary closing conditions and regulatory approvals, expected to close in Q4 2024[5](index=5&type=chunk) - Due to the announced transaction, AssetMark will not host an earnings call and has withdrawn all previously provided financial guidance[5](index=5&type=chunk) [About AssetMark Financial Holdings, Inc.](index=3&type=section&id=2.2%20About%20AssetMark%20Financial%20Holdings%2C%20Inc.) AssetMark operates a wealth management platform supporting independent financial advisors with flexible solutions to enhance client engagement, efficiency, and advisor productivity - AssetMark operates a wealth management platform that powers independent financial advisors and their clients, offering flexible, purpose-built solutions[8](index=8&type=chunk) - The platform serves over **9,200 financial advisors** and over **257,000 investor households**[8](index=8&type=chunk) - As of March 31, 2024, the company had **$116.9 billion in platform assets**[8](index=8&type=chunk) [Financial Statements](index=4&type=section&id=3.%20Financial%20Statements) The company's Q1 2024 financial statements show increased total assets, significant revenue growth, and a substantial rise in net income and operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=3.1%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows an increase in total assets from $1,620,563 thousand at December 31, 2023, to $1,656,826 thousand at March 31, 2024, primarily driven by higher cash and capitalized software Condensed Consolidated Balance Sheets (in thousands) | ASSETS | March 31, 2024 (unaudited) | December 31, 2023 | | :------------------------------------------ | :------------------------- | :------------------ | | Cash and cash equivalents | $247,626 | $217,680 | | Total current assets | $322,093 | $291,111 | | Capitalized software, net | $113,123 | $108,955 | | Goodwill | $487,909 | $487,909 | | Total assets | $1,656,826 | $1,620,563 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Total current liabilities | $69,247 | $75,842 | | Long-term debt, net | $93,567 | $93,543 | | Total liabilities | $347,312 | $353,181 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=3.2%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For Q1 2024, total revenue increased by 11.7% year-over-year to $190.3 million, while net income more than doubled to $38.0 million, resulting in a significant improvement in net income margin Condensed Consolidated Statements of Comprehensive Income (in thousands, except per share data) | Revenue | Three Months 2024 | Three Months Ended March 31, 2023 | | :--------------------------- | :------------------ | :-------------------------------- | | Asset-based revenue | $149,984 | $131,039 | | Spread-based revenue | $30,093 | $31,999 | | Subscription-based revenue | $4,252 | $3,544 | | Other revenue | $5,937 | $3,716 | | Total revenue | $190,266 | $170,298 | | Total operating expenses | $138,576 | $124,148 | | Income before income taxes | $49,728 | $23,938 | | Provision for income taxes | $11,764 | $6,716 | | Net income | $37,964 | $17,222 | | Net income per share (Basic) | $0.51 | $0.23 | | Net income per share (Diluted) | $0.50 | $0.23 | | Weighted average common shares outstanding (Diluted) | 75,269,626 | 74,370,353 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=3.3%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased to $47.4 million in Q1 2024, while net cash used in investing activities also increased, leading to a substantial net change in cash, cash equivalents, and restricted cash Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flows From | Three Months 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------------------- | :------------------ | :-------------------------------- | | Net income | $37,964 | $17,222 | | Net cash provided by operating activities | $47,415 | $39,126 | | Net cash used in investing activities | $(17,469) | $(13,932) | | Net cash used in financing activities | $0 | $(25,000) | | Net change in cash, cash equivalents, and restricted cash | $29,946 | $194 | | Cash, cash equivalents, and restricted cash at end of period | $262,626 | $136,468 | [Non-GAAP Financial Measures Reconciliation](index=7&type=section&id=4.%20Non-GAAP%20Financial%20Measures%20Reconciliation) This section provides detailed reconciliations of Adjusted EBITDA and Adjusted Net Income to GAAP measures, defining their utility and limitations for evaluating core operating performance [Adjusted EBITDA and Adjusted EBITDA Margin](index=7&type=section&id=4.1%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) This section defines Adjusted EBITDA and its margin, explains their utility for evaluating core operating performance by excluding non-cash and non-recurring items, and outlines their inherent limitations [Definition and Use](index=7&type=section&id=4.1.1%20Definition%20and%20Use) Adjusted EBITDA is defined as EBITDA adjusted for certain non-cash charges and other items not representative of core business, used for performance evaluation, planning, and resource allocation - Adjusted EBITDA is defined as EBITDA (net income plus interest expense, income tax expense, depreciation and amortization, less interest income) further adjusted to exclude certain non-cash charges and other adjustments[21](index=21&type=chunk) - It excludes items not representative of core business, such as share-based compensation, strategic initiatives, reorganization, and integration costs[21](index=21&type=chunk) - Adjusted EBITDA is used for evaluating operating performance, planning, resource allocation, and in communications with the board of directors[23](index=23&type=chunk) - Limitations include not reflecting all cash expenditures, future capital requirements, working capital needs, or interest expense on debt[23](index=23&type=chunk) [Reconciliation to GAAP Net Income](index=9&type=section&id=4.1.2%20Reconciliation%20to%20GAAP%20Net%20Income) The reconciliation shows Adjusted EBITDA increased by 12.1% to $65.9 million in Q1 2024, primarily due to higher net income and adjustments for income taxes, share-based compensation, and reorganization costs Reconciliation from Net Income to Adjusted EBITDA (in thousands, except percentages) | Metric | Three Months 2024 | % of Revenue | Three Months Ended March 31, 2023 | % of Revenue | | :----------------------------------- | :------------------ | :----------- | :-------------------------------- | :----------- | | Net income | $37,964 | 20.0 % | $17,222 | 10.1 % | | Provision for income taxes | 11,764 | 6.2 % | 6,716 | 3.9 % | | Interest income | (4,023) | (2.2)% | (2,051) | (1.2)% | | Interest expense | 2,294 | 1.2 % | 2,347 | 1.4 % | | Depreciation and amortization | 9,922 | 5.2 % | 8,428 | 5.0 % | | **EBITDA** | **$57,921** | **30.4 %** | **$32,662** | **19.2 %** | | Share-based compensation | 4,168 | 2.2 % | 3,822 | 2.2 % | | Reorganization and integration costs | 3,841 | 2.0 % | 1,909 | 1.1 % | | Acquisition expenses | 12 | — | 313 | 0.2 % | | Business continuity plan | — | — | (6) | — | | Accrual for SEC settlement | — | — | 20,000 | 11.8 % | | Other (income) expense, net | (35) | — | 88 | — | | **Adjusted EBITDA** | **$65,907** | **34.6 %** | **$58,788** | **34.5 %** | [Summary of Adjustments](index=10&type=section&id=4.1.3%20Summary%20of%20Adjustments) Total adjustments to Adjusted EBITDA were $7.986 million in Q1 2024, primarily driven by share-based compensation and reorganization and integration costs Summary of Adjustments to Adjusted EBITDA (in thousands) | Adjustment Type | Three Months 2024 Compensation | Three Months 2024 NonCompensation | Three Months 2024 Total | Three Months 2023 Compensation | Three Months 2023 NonCompensation | Three Months 2023 Total | | :----------------------------------- | :----------------------------- | :-------------------------------- | :---------------------- | :----------------------------- | :-------------------------------- | :---------------------- | | Share-based compensation | $4,168 | $— | $4,168 | $3,822 | $— | $3,822 | | Reorganization and integration costs | 1,532 | 2,309 | 3,841 | 1,064 | 845 | 1,909 | | Acquisition expenses | — | 12 | 12 | 100 | 213 | 313 | | Business continuity plan | — | — | — | — | (6) | (6) | | Accrual for SEC settlement | — | — | — | — | 20,000 | 20,000 | | Other (income) expense, net | — | (35) | (35) | — | 88 | 88 | | **Total adjustments to adjusted EBITDA** | **$5,700** | **$2,286** | **$7,986** | **$4,986** | **$21,140** | **$26,126** | Summary of Adjustments to Adjusted EBITDA Margin (% of Revenue) | Adjustment Type | Three Months 2024 Compensation | Three Months 2024 NonCompensation | Three Months 2024 Total | Three Months 2023 Compensation | Three Months 2023 NonCompensation | Three Months 2023 Total | | :----------------------------------- | :----------------------------- | :-------------------------------- | :---------------------- | :----------------------------- | :-------------------------------- | :---------------------- | | Share-based compensation | 2.2 % | — | 2.2 % | 2.2 % | — | 2.2 % | | Reorganization and integration costs | 0.8 % | 1.2 % | 2.0 % | 0.6 % | 0.5 % | 1.1 % | | Acquisition expenses | — | — | — | 0.1 % | 0.1 % | 0.2 % | | Business continuity plan | — | — | — | — | — | — | | Accrual for SEC settlement | — | — | — | — | 11.8 % | 11.8 % | | Other (income) expense, net | — | — | — | — | — | — | | **Total adjustments to adjusted EBITDA margin %** | **3.0 %** | **1.2 %** | **4.2 %** | **2.9 %** | **12.4 %** | **15.3 %** | [Adjusted Net Income](index=11&type=section&id=4.2%20Adjusted%20Net%20Income) This section defines Adjusted Net Income, detailing its adjustments to GAAP net income to provide a clearer view of core operating performance, while also acknowledging its limitations as a non-GAAP measure [Definition and Use](index=11&type=section&id=4.2.1%20Definition%20and%20Use) Adjusted net income is defined as net income before share-based compensation, amortization of acquisition-related intangibles, acquisition/integration expenses, and restructuring costs, aiming to reflect core operating performance - Adjusted net income represents net income before share-based compensation, amortization of acquisition-related intangible assets, acquisition and related integration expenses, restructuring and conversion costs, and certain other expenses[32](index=32&type=chunk) - It is prepared to eliminate the effects of items not considered indicative of core operating performance, such as non-cash equity grants and acquisition-related amortization[32](index=32&type=chunk) - Adjusted net income has limitations as an analytical tool, as it is not defined under GAAP and does not reflect all cash expenditures or working capital needs[33](index=33&type=chunk) [Reconciliation to GAAP Net Income](index=12&type=section&id=4.2.2%20Reconciliation%20to%20GAAP%20Net%20Income) Adjusted net income increased by 13.9% to $45.2 million in Q1 2024, reflecting adjustments for employee compensation, depreciation and amortization, and other expenses Reconciliation from Net Income to Adjusted Net Income (in thousands, except per share data) | Metric | Three Months 2024 GAAP | Adjustments | Three Months 2024 Adjusted | Three Months 2023 GAAP | Adjustments | Three Months 2023 Adjusted | | :--------------------------------------------------- | :--------------------- | :---------- | :------------------------- | :--------------------- | :---------- | :------------------------- | | Total revenue | $190,266 | $— | $190,266 | $170,298 | $— | $170,298 | | Employee compensation | $50,007 | $(5,700) | $44,307 | $46,911 | $(4,986) | $41,925 | | General and operating expenses | $27,324 | $(1,710) | $25,614 | $25,689 | $(884) | $24,805 | | Professional fees | $6,081 | $(611) | $5,470 | $5,393 | $(168) | $5,225 | | Depreciation and amortization | $9,922 | $(2,180) | $7,742 | $8,428 | $(2,174) | $6,254 | | Total operating expenses | $138,576 | $(10,201) | $128,375 | $124,148 | $(8,212) | $115,936 | | Income before income taxes | $49,728 | $10,166 | $59,894 | $23,938 | $28,300 | $52,238 | | Provision for income taxes | $11,764 | $2,910 | $14,674 | $6,716 | $5,821 | $12,537 | | **Net income / Adjusted net income** | **$37,964** | | **$45,220** | **$17,222** | | **$39,701** | | Adjusted earnings per share | | | $0.60 | | | $0.53 | | Weighted average common shares outstanding (diluted) | | | 75,269,626 | | | 74,370,353 | [Summary of Adjustments](index=14&type=section&id=4.2.3%20Summary%20of%20Adjustments) Total adjustments to Adjusted Net Income were $7.256 million in Q1 2024, primarily from acquisition-related amortization, expense adjustments, and share-based compensation, offset by tax effects Summary of Adjustments to Adjusted Net Income (in thousands) | Adjustment Type | Three Months 2024 Compensation | Three Months 2024 NonCompensation | Three Months 2024 Total | Three Months 2023 Compensation | Three Months 2023 NonCompensation | Three Months 2023 Total | | :----------------------------------- | :----------------------------- | :-------------------------------- | :---------------------- | :----------------------------- | :-------------------------------- | :---------------------- | | Net income | | | $37,964 | | | $17,222 | | Acquisition-related amortization | $— | $2,180 | $2,180 | $— | $2,174 | $2,174 | | Expense adjustments | 1,532 | 2,321 | 3,853 | 1,164 | 21,052 | 22,216 | | Share-based compensation | 4,168 | — | 4,168 | 3,822 | — | 3,822 | | Other (income) expense, net | — | (35) | (35) | — | 88 | 88 | | Tax effect of adjustments | (1,397) | (1,513) | (2,910) | (1,197) | (4,624) | (5,821) | | **Adjusted net income** | **$4,303** | **$2,953** | **$45,220** | **$3,789** | **$18,690** | **$39,701** | [Additional Information](index=3&type=section&id=5.%20Additional%20Information) This section includes cautionary forward-looking statements regarding potential risks and uncertainties, along with essential contact information for investor relations and media inquiries [Forward-Looking Statements](index=3&type=section&id=5.1%20Forward-Looking%20Statements) This section serves as a cautionary note, indicating that the press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially - This press release contains forward-looking statements regarding future financial and operating performance, which involve risks and uncertainties[9](index=9&type=chunk) - Actual results may differ materially from predicted results due to known and unknown risks, uncertainties, assumptions, and other factors[9](index=9&type=chunk) - The company undertakes no duty to update this information unless required by law[9](index=9&type=chunk) [Contacts](index=14&type=section&id=5.2%20Contacts) Provides contact details for investor relations and media inquiries for AssetMark Financial Holdings, Inc - Investors can contact Taylor J. Hamilton, CFA, Head of Investor Relations, at InvestorRelations@assetmark.com[40](index=40&type=chunk) - Media inquiries can be directed to Alaina Kleinman, Head of PR & Communications, at alaina.kleinman@assetmark.com[40](index=40&type=chunk)