Artisan Partners Asset Management (APAM) Q4 2024 Earnings Call February 05, 2025 01:00 PM ET Company Participants Brendan Hughes - Investment AdvisorEric Colson - CEOJason Gottlieb - PresidentCharles Daley - Executive VP, CFO & TreasurerAlexander Blostein - Managing DirectorAlex Blostein - Managing Director Conference Call Participants William Katz - Senior Equity AnalystJohn Dunn - Analyst Operator Good day, everyone, and welcome to the Artisan Partners Fourth Quarter twenty twenty four Earnings Conference ...

Assets Under Management (AUM) - Assets Under Management (AUM) at December 31, 2024, was $161.2 billion, a 7% increase from $150.2 billion at December 31, 2023, primarily due to investment returns of $15.9 billion[11][16] - The average AUM for the year ended December 31, 2024, was $160.2 billion, a 15% increase from $139.3 billion in 2023[21] - Artisan Partners' assets under management (AUM) included non-discretionary assets reported at $105 million as of December 31, 2024, up from $78 million in 2023[34] - Total Assets Under Management (AUM) reached $161.208 billion, with significant contributions from various strategies[72] - Ending assets under management decreased to $161,208 million for the three months ended December 31, 2024, down 4.0% from $167,840 million in the previous quarter[55] - Average assets under management for the year ended December 31, 2024, were $160,232 million, compared to $139,321 million in 2023, indicating an increase of about 15.0%[67] Financial Performance - Revenues for the December 2024 quarter were $297.0 million, a 19% increase from $249.0 million in the December 2023 quarter, driven by higher average AUM and a $10.6 million increase in performance fee revenue[12][17] - Operating income for the year ended December 31, 2024, was $366.6 million, a 21% increase from $303.6 million in 2023, with an operating margin of 33.0% compared to 31.1% in 2023[21][23] - Adjusted net income for the December 2024 quarter was $85.2 million, or $1.05 per adjusted share, compared to $62.8 million, or $0.78 per adjusted share, in the December 2023 quarter[20] - GAAP net income for the year ended December 31, 2024, was $259.7 million, or $3.66 per share, up from $222.3 million, or $3.19 per share, in 2023[25] - Adjusted net income for the year ended December 31, 2024, was $287.3 million, or $3.55 per adjusted share, compared to $233.1 million, or $2.89 per adjusted share, in 2023[25] - Operating income for the three months ended December 31, 2024, was $109.1 million, representing a 43.0% increase from $76.4 million in the same quarter of 2023[45] - Net income attributable to Artisan Partners Asset Management Inc. for the three months ended December 31, 2024, was $69.7 million, up from $64.8 million in the same period last year, reflecting an increase of 4.8%[47] - Basic earnings per share for Class A common shares for the three months ended December 31, 2024, were $0.97, compared to $0.92 for the same period in 2023, marking a 5.4% increase[47] Cash Flow and Dividends - Cash and cash equivalents increased to $201.2 million at December 31, 2024, from $141.0 million at December 31, 2023[26] - The company declared a variable quarterly dividend of $0.84 per share and a special dividend of $0.50 per share for the December 2024 quarter[30] - The variable quarterly dividend represents approximately 80% of the cash generated in the December 2024 quarter[30] - The company expects to pay a quarterly dividend of approximately 80% of cash generated from operations, subject to board approval[31] Operating Expenses - Operating expenses for the year ended December 31, 2024, were $745.2 million, an 11% increase from $671.5 million in 2023, primarily due to a $64.7 million increase in compensation and benefits[22] - Total operating expenses for the three months ended December 31, 2024, were $187.9 million, up from $172.6 million in the same period last year, indicating an increase of 8.0%[45] Client Cash Flows - The company reported $3.6 billion in net inflows from its credit-oriented investment franchises in 2024, with nearly $15 billion managed across six different strategies[3][4] - Gross client cash inflows for the year ended December 31, 2024, were $25,650 million, a 19.9% increase from $21,395 million in 2023[55] - Net client cash flows for the year ended December 31, 2024, were $(3,699) million, a 9.2% improvement compared to $(4,076) million in 2023[55] - Gross client cash inflows for the quarter were $7.649 billion, while gross client cash outflows totaled $8.473 billion, resulting in net client cash flows of negative $824 million[58] Investment Performance - The Developing World strategy generated a cumulative return of 157.03% since inception, significantly outperforming the MSCI Emerging Markets Index's cumulative return of 38.83%[6] - The Artisan Sustainable Emerging Markets Strategy reported an AUM of $1,552 million, achieving a 7.50% return[72] - The U.S. Mid-Cap Growth Strategy had an AUM of $20,591 million, with a 1-year return of 16.13%[70] - The Global Opportunities Strategy achieved a 1-year return of 17.49% with an AUM of $12,410 million[70] - The Emerging Markets Debt Opportunities Strategy reported an AUM of $1,024 million, with a return of 10.85%[72] - The China Post-Venture Strategy had a 1-year return of 14.48% with an AUM of $178 million[70] - The Value Income Strategy achieved a return of 25.02% with an AUM of $16 million[70] - The International Value Strategy reported an AUM of $43,911 million, with a 1-year return of 7.77%[70] - The Developing World Strategy had a remarkable 1-year return of 30.04% with an AUM of $4,100 million[72] - The Global Unconstrained Strategy achieved a return of 12.25% with an AUM of $701 million[72] Balance Sheet - Total stockholders' equity rose to $422.0 million at December 31, 2024, compared to $351.4 million at December 31, 2023[28] - Total liabilities rose to $868.8 million as of December 31, 2024, compared to $802.1 million as of December 31, 2023, reflecting an increase of 8.3%[54] - Total assets increased to $1,618.8 million as of December 31, 2024, compared to $1,405.9 million as of December 31, 2023, representing a growth of 15.1%[54]

Core Viewpoint - Artisan Partners Asset Management Inc. reported its financial results for the quarter and year ended December 31, 2024, and declared a quarterly and special annual dividend [1]. Financial Results - The Company will discuss its financial results in a conference call scheduled for February 5, 2025, at 1:00 p.m. (Eastern Time) [2]. - The call will be hosted by key executives including the CEO, President, and CFO, with supplemental materials available on the Company's website [2]. Company Overview - Artisan Partners is a global investment management firm that offers a wide range of high value-added investment strategies to sophisticated clients worldwide [3]. - The firm has been focused on attracting experienced investment professionals since its establishment in 1994, managing client assets through autonomous investment teams [3].

Group 1 - Artisan Partners Asset Management Inc. will report its fourth quarter and full-year 2024 financial results on February 4, 2025 [1] - A conference call to discuss the results will be hosted by CEO Eric Colson, President Jason Gottlieb, and CFO C.J. Daley on February 5, 2025 [1] - The earnings release and supplemental materials will be available on the investor relations section of artisanpartners.com [1] Group 2 - A live webcast of the conference call will be accessible via the investor relations section of artisanpartners.com [2] - Participants can join the conference call using specific dial-in numbers for the United States and international callers [2] - An audio replay of the conference call will be available shortly after the event and can be accessed until February 12, 2025 [2] Group 3 - Artisan Partners is a global investment management firm offering a range of high value-added investment strategies [3] - The firm has been focused on attracting experienced investment professionals since its establishment in 1994 [3] - Artisan Partners' investment teams manage a diverse array of strategies across multiple asset classes [3]

Stocks Added to Zacks Rank 5 (Strong Sell) List - Baidu, Inc (BIDU) is an internet search services company with a Zacks Consensus Estimate for current year earnings revised downward by 8.2% over the last 60 days [1] - Artisan Partners Asset Management Inc (APAM) is an investment management company with a Zacks Consensus Estimate for current year earnings revised downward by 8.9% over the last 60 days [1] - Conagra Brands, Inc (CAG) is a packaged food company with a Zacks Consensus Estimate for current year earnings revised downward by 5% over the last 60 days [2]

Core Insights - Artisan Partners Asset Management Inc. reported preliminary assets under management (AUM) of $161.2 billion as of December 31, 2024, with Artisan Funds and Artisan Global Funds contributing $77.6 billion and separate accounts and other AUM accounting for $83.6 billion [1][2] AUM Breakdown - Artisan Funds distributions not reinvested amounted to approximately $450 million, impacting the December month-end AUM [1] - The AUM by strategy includes: - Global Opportunities: $20.591 billion - U.S. Mid-Cap Growth: $12.952 billion - U.S. Small-Cap Growth: $3.094 billion - International Value: $43.911 billion - Global Value: $28.364 billion [2][3] Additional Information - AUM for Artisan Sustainable Emerging Markets and U.S. Mid-Cap Growth Strategies includes $105.0 million for which Artisan Partners provides investment models to managed account sponsors [4] - Artisan Partners is a global investment management firm established in 1994, focusing on high value-added investment strategies across multiple asset classes [5]

Group 1 - Premier, Inc. (PINC) has seen a 5.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - DXP Enterprises, Inc. (DXPE) has experienced a 14.3% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Peoples Financial Services Corp. (PFIS) has reported a 27.3% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Colony Bankcorp, Inc. (CBAN) has seen a 3.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Artisan Partners Asset Management Inc. (APAM) has experienced a 3.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

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