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United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-24498 DIAMOND HILL INVESTMENT GROUP, INC. (Exact name of registrant as specified in its charter) (State of incorporation) Ohio 6 ...

FOR IMMEDIATE RELEASE: Investor Contact: Tom Line—Chief Financial Officer 614-255-5989 (tline@diamond-hill.com) Media Contact: Lara Hoffmans—Managing Director-Marketing 614-255-5550 (lhoffmans@diamond-hill.com) DIAMOND HILL INVESTMENT GROUP, INC. REPORTS RESULTS FOR FIRST QUARTER 2025 AND DECLARES QUARTERLY DIVIDEND COLUMBUS, Ohio - April 29, 2025 -- Diamond Hill Investment Group, Inc. (Nasdaq: DHIL) today reported unaudited financial results for the first quarter of 2025. The following are selected highlig ...

Annual Shareholder Presentation March 2025 614.255.3333 | DIAMOND-HILL.COM DIAMOND HILL® INVESTMENT GROUP, INC. 325 JOHN H. MCCONNELL BLVD., SUITE 200 COLUMBUS, OHIO 43215 Safe Harbor Statement This presentation and statements, whether oral or written, made from time to time by representatives of the Company may contain or incorporate forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section ...

Financial Data and Key Metrics Changes - The preliminary voting results indicate that all six nominated directors were elected for a one-year term, and the appointment of KPMG as the independent registered public accounting firm for the fiscal year 2025 has been ratified [15] - The Diamond Hill Investment Group, Inc. 2025 Equity and Cash Incentive Plan has been approved and adopted, along with the advisory approval of the 2024 compensation for named executive officers [15][16] Business Line Data and Key Metrics Changes - No specific business line data or key metrics were discussed in the meeting [17] Market Data and Key Metrics Changes - No specific market data or key metrics were provided during the meeting [17] Company Strategy and Development Direction and Industry Competition - The company did not provide detailed comments on its strategy or competitive landscape during this meeting [17] Management's Comments on Operating Environment and Future Outlook - Management did not offer specific insights regarding the operating environment or future outlook during the meeting [17] Other Important Information - The annual management presentation was posted on the company's Investor Relations website on March 12, 2025, and shareholders were encouraged to reach out via email for any questions regarding the presentation [17] Q&A Session All Questions and Answers Question: Were there any questions from shareholders? - No questions were received from shareholders during the meeting [13]

Company Information - Diamond Hill Investment Group, Inc. is a public company that generates consolidated revenues and net income from investment advisory and fund administration services through its wholly owned subsidiary, Diamond Hill Capital Management, Inc. [3] - As of February 28, 2025, Diamond Hill's combined assets under management and assets under advisement totaled $32.8 billion [3]. Shareholder Meeting - The 2025 Annual Meeting of Shareholders is scheduled to be held virtually on April 29, 2025, at 8:00 am ET, with a record date of March 3, 2025 [1]. - Shareholders can participate in the virtual meeting by visiting a specified website and entering a 16-digit control number [1]. Management Presentation - A video recording of Diamond Hill's management presentation to shareholders is currently available on their investor relations website [2].

Market Performance - The U.S. equity markets saw significant gains in 2024, with the Russell 3000 Index rising by 23.81% and large-cap stocks leading at 24.51%[112] - Growth stocks outperformed value stocks for the second consecutive year, with the Russell 1000 Growth Index returning 33.4%, exceeding the Russell 1000 Value Index by 19 percentage points[113] - The U.S. fixed income market posted a modest return of 1.25% in 2024, as measured by the Bloomberg U.S. Aggregate Bond Index[116] Fund Flows and Inflows - Total mutual fund and ETF inflows reached $720 billion in 2024, marking the second-highest annual inflow in the past 25 years[118] - Actively managed funds experienced $166 billion in outflows, while passively managed strategies accounted for $885 billion in inflows[118] - Large-cap ETFs received $514 billion in inflows, while large-cap mutual funds saw $318 billion in outflows[119] - The market for actively managed ETFs expanded significantly, with 500 new products introduced and $285 billion in inflows, representing 26% of total ETF flows[119] Company Financial Performance - Total revenue for 2024 was $151,095,000, an increase of 11% compared to $136,716,000 in 2023[142] - Net operating income for 2024 was $43,892,000, a 24% increase from $35,504,000 in 2023[142] - Adjusted net operating income for 2024 was $48,696,000, an 18% increase from $41,434,000 in 2023[142] - The Company generated net income attributable to common shareholders of $43.2 million ($15.66 per diluted share) for 2024, compared to $42.2 million ($14.32 per diluted share) for 2023, reflecting a year-over-year increase[150] Assets Under Management (AUM) - Ending Assets Under Management (AUM) and Assets Under Advisement (AUA) reached $31,925,000,000 in 2024, up from $29,164,000,000 in 2023, representing a growth of 9.5%[135] - Average AUM during 2024 was $29,718,000,000, reflecting a 16% increase from $25,552,000,000 in 2023[144] - Total AUM by product for 2024 included $18,097,000,000 in proprietary funds, $6,108,000,000 in separately managed accounts, and $1,947,000,000 in collective investment trusts[135] Expenses and Costs - The average advisory fee rate decreased to 0.45% in 2024 from 0.47% in 2023[144] - Compensation and related costs, excluding deferred compensation, increased by $3.9 million in 2024, primarily due to higher incentive compensation and salary expenses[166] - General and administrative expenses increased by $1.8 million, or 12%, in 2024, primarily due to enhancements in technology support and research management systems[169] Cash Flow and Capital Management - In 2024, net cash provided by operating activities totaled $16.6 million, driven by net income of $43.2 million and non-cash adjustments[188] - The company repurchased 195,224 shares in 2024 at an average price of $154.92, totaling $30.2 million[182] - The company paid a total dividend of $16.5 million in fiscal 2024, maintaining a regular dividend of $6.00 per share[183] - The company had no debt and believes its available working capital is sufficient to cover current expenses and anticipated capital expenditures[186] Tax and Income Adjustments - The effective tax rate increased from 26.4% in 2023 to 26.8% in 2024, attributed to an increase in income before taxes[148] - The company reported a non-GAAP effective tax rate of 26.8% for both 2024 and 2023, and 25.8% for 2022[209] Investment Valuation - The fair value of equity investments as of December 31, 2024, was $79,207,519,000, with a hypothetical 10% increase bringing it to $87,128,271,000, and a decrease to $71,286,767,000[218] - The fair value of fixed income investments as of December 31, 2024, was $80,545,462,000, with a hypothetical 10% increase resulting in $88,600,008,000, and a decrease to $72,490,916,000[218] - Total fair value of investments as of December 31, 2024, was $159,752,981,000, with a hypothetical 10% increase leading to $175,728,279,000, and a decrease to $143,777,683,000[218] Operational Insights - The company emphasizes the importance of understanding core operating results by adjusting for non-GAAP items, which helps improve comparability across periods[210] - The company consolidates all subsidiaries and certain investments where it has a controlling interest, which is determined based on ownership and contractual involvement[211]

Revenue and Earnings - Revenue for 2024 was $151.1 million, an increase of 11% compared to $136.7 million in 2023[3] - Adjusted earnings per share for 2024 were $12.92, compared to $10.28 in 2023, representing a 25.7% increase[3] - The net operating profit margin improved to 29% in 2024, up from 26% in 2023[3] - The adjusted operating margin improved to 32% in 2024, compared to 30% in 2023[3] Assets Under Management - Assets under management (AUM) at the end of 2024 were $30.0 billion, up from $27.4 billion at the end of 2023, reflecting a year-over-year increase of 5.8%[7] - Average AUM and AUA combined for 2024 was $31.6 billion, compared to $27.3 billion in 2023, an increase of 15.8%[3] Shareholder Returns - The company returned approximately $46.8 million to shareholders in 2024, including $30.3 million through share repurchases and $16.5 million in dividends[3] - The Company approved a quarterly cash dividend of $1.50 per common share, to be paid on March 21, 2025[5] Investment Income - Investment income for 2024 was $15.1 million, down from $23.1 million in 2023, a decline of 34.7%[3] Client Flows - Net client outflows were $0.3 billion in 2024, a decrease from $0.5 billion in 2023[3] Non-GAAP Financial Measures - The Company reported a non-GAAP effective tax rate of 26.8% for both 2024 and 2023[3] - The non-GAAP adjustments aim to clarify the core operating results by excluding the impact of the Consolidated Fund on the Company's GAAP consolidated statements[1] - The adjustments also account for net gains or losses from the non-consolidated investment portfolio, enhancing comparability of operating results[2] - The Company emphasizes that investors should not rely solely on non-GAAP financial measures as substitutes for GAAP-compliant financial information[4] Risks and Uncertainties - The Company faces risks that could materially affect actual results, including potential reductions in Assets Under Management (AUM) or Assets Under Administration (AUA)[14] - Forward-looking statements are subject to various risks and uncertainties, and actual results may differ significantly from expectations[15] - The Company does not commit to updating forward-looking statements unless required by law, acknowledging the emergence of new risks over time[16] - Factors such as competition, regulatory changes, and economic conditions may impact the Company's performance and strategic objectives[14] Technological Adaptation - The Company is focused on adapting to technological changes, including artificial intelligence, to enhance its business operations[14] Risk Factors - The Company has outlined various risk factors in its Annual Report that could influence its financial performance and strategic direction[14]

Core Insights - Diamond Hill Investment Group, Inc. (NASDAQ: DHIL) is highlighted as a favorable opportunity for net buyers of stocks due to its ability to grow assets under management [1] Company Analysis - The company has shown a strong capacity for asset growth, which is a positive indicator for potential investors [1] Market Context - The article reflects a broader perspective on market trends and the importance of identifying value in investment opportunities [1]

Revenue Growth - Total revenue for the three months ended September 30, 2024, was $39,018,232, an increase from $35,554,280 in the same period of 2023, representing a growth of approximately 6.9%[47][48] - For the nine months ended September 30, 2024, total revenue reached $111,974,495, compared to $102,895,420 for the same period in 2023, indicating an increase of about 8.5%[50][51] - Investment advisory revenue for the three months ended September 30, 2024, was $23,595,204, up from $21,714,872 in 2023, reflecting a growth of approximately 8.6%[47][48] - Mutual fund administration gross revenue for the three-month period ended September 30, 2024, was $6.4 million, up from $5.5 million in 2023, representing an increase of about 16.6%[59] - Total revenue for the three months ended September 30, 2024, was $39.0 million, a 10% increase from $35.6 million in the same period of 2023[128] - Total revenue for the nine months ended September 30, 2024, was $111.974 million, up from $102.895 million in 2023, reflecting a 9% increase[149] Investment Performance - The Company recorded net investment income of $18.4 million for the nine-month period ended September 30, 2024, compared to $9.7 million for the same period in 2023, indicating a significant increase of approximately 89.5%[68] - The Company experienced net cash inflows of $2.0 billion during the three months ended September 30, 2024, primarily due to market appreciation[126] - For the nine months ended September 30, 2024, AUM increased by $3.9 billion, driven by market appreciation and net inflows into the Company's strategies[126] - The Company reported a net market appreciation of $2.006 billion during the three months ended September 30, 2024[122] Assets and Liabilities - As of September 30, 2024, accounts receivable from the Funds amounted to $10.0 million, compared to $9.1 million as of December 31, 2023, showing an increase of approximately 9.9%[38] - Cash and cash equivalents as of September 30, 2024, included $2.0 million in demand deposits and $31.7 million in money market mutual funds, totaling $33.7 million[37] - Total investments as of September 30, 2024, amounted to $163.3 million, an increase from $147.7 million as of December 31, 2023, reflecting a growth of about 10.5%[67] - The Company has a committed Line of Credit Agreement allowing borrowing up to $25 million, with no borrowings outstanding as of September 30, 2024[76][77] - Deferred compensation liability increased to $38.9 million as of September 30, 2024, up from $36.1 million as of December 31, 2023[85] Shareholder Information - Net income attributable to common shareholders for the nine months ended September 30, 2024, was $35.8 million, compared to $28.6 million for the same period in 2023[100] - Basic earnings per share for the nine months ended September 30, 2024, was $12.90, up from $9.61 for the same period in 2023[100] - The Company approved a quarterly cash dividend of $1.50 per share, expected to reduce shareholders' equity by approximately $4.1 million[104] - The company expects to pay a regular quarterly dividend of $1.50 per share, totaling $12.5 million for the nine months ended September 30, 2024[161] Operating Expenses - Total expenses for the three months ended September 30, 2024, were $28.8 million, a 24% increase from $23.2 million in 2023[138] - Employee compensation and related costs (excluding deferred compensation) increased by 9% to $19.5 million for the three months ended September 30, 2024[138] - Total operating expenses for the nine months ended September 30, 2024, were $81,322,000, with net operating income of $30,653,000, leading to a net income of $35,786,000 attributable to common shareholders[177] Taxation - The effective income tax rate for the nine months ended September 30, 2024, was 27.0%, compared to 27.8% for the same period in 2023[93] - The effective tax rate for the three months ended September 30, 2024, was 26.4%, compared to 28.0% for the same period in 2023[179] Market and Client Strategy - The Company emphasizes a client alignment philosophy to ensure clients' interests come first, which is reflected in its investment strategies[111] - The average advisory fee rate decreased from 0.48% in the nine months ended September 30, 2023, to 0.46% in the same period of 2024[144] - The average advisory fee rate decreased from 0.48% to 0.46% due to growth in lower fee fixed income assets, which rose from 10% to 14% of AUM and AUA[150] Stock and Equity Compensation - The Company has 153,478 DHIL common shares available for grants under the 2022 Equity and Cash Incentive Plan as of September 30, 2024[78] - As of September 30, 2024, total outstanding restricted stock increased to 195,620 shares, with a weighted-average grant date price per share of $158.13[81] - Total deferred equity compensation related to unvested restricted stock was $18.5 million as of September 30, 2024[81] - The company repurchased 142,425 common shares for a total of $21.7 million during the nine months ended September 30, 2024[160]