Revenue Performance - For the three months ended September 30, 2025, total revenue was $37.4 million, an increase from $39.0 million for the same period in 2024, reflecting a decrease of approximately 4.2%[44] - For the nine months ended September 30, 2025, total revenue was $110.5 million, compared to $112.0 million for the same period in 2024, indicating a decline of about 1.3%[44] - Revenue from Proprietary Funds for the three months ended September 30, 2025, was $26.6 million, up from $25.4 million in 2024, representing an increase of approximately 4.8%[44] Accounts Receivable and Investments - As of September 30, 2025, accounts receivable from Proprietary Funds amounted to $10.5 million, slightly up from $10.3 million as of December 31, 2024[35] - The total investments as of September 30, 2025, amounted to $174,691,493, an increase from $159,752,981 as of December 31, 2024, reflecting a growth of 9.5%[58] - As of September 30, 2025, the Company held $30,909,036 in fair value investments within consolidated funds, down from $35,583,162 as of December 31, 2024, a decrease of 13.5%[58] Financial Position - The Company had $1.0 million in demand deposits and $42.0 million in money market mutual funds as of September 30, 2025, compared to $1.3 million and $40.3 million, respectively, as of December 31, 2024[34] - The Company has a committed Line of Credit Agreement allowing for borrowings up to $25 million, with no borrowings outstanding as of September 30, 2025[67][68] - The Company’s maximum risk of loss related to its investment in DHMF is limited to the carrying value of $23.7 million as of September 30, 2025[62] Revenue Sources and Advisory Fees - The Company operates in a single business segment, providing investment advisory and fund administration services, with no single client accounting for more than 10% of total revenue[33][31] - Investment advisory fees are primarily based on assets under management (AUM), which fluctuate with market conditions, impacting revenue recognition[46][45] - DHCM's investment advisory contracts have a single performance obligation, with fees based on AUM, which are variable and subject to market fluctuations[45][46] Fund Administration Revenue - For the three months ended September 30, 2025, gross fund administration revenue was $7,149,254, compared to $6,402,818 for the same period in 2024, representing an increase of 11.7%[50] - Net fund administration revenue for the nine months ended September 30, 2025, was $5,545,295, slightly down from $5,551,702 in 2024, indicating a decrease of 0.1%[50] Income and Earnings - The Company reported net investment income of $8,493,730 for the three months ended September 30, 2025, compared to $9,668,961 for the same period in 2024, showing a decrease of 12.1%[60] - The Company's equity method investments had a net income of $15,630,429 for the three months ended September 30, 2025, with DHCM's portion being $6,272,816[62] - Basic earnings per share for the three months ended September 30, 2025, was $4.99, compared to $5.35 for the same period in 2024, reflecting a decrease of 6.7%[86] Shareholder Equity and Dividends - The Company approved a regular quarterly cash dividend of $1.50 per common share and a special dividend of $4.00 per share, expected to reduce shareholders' equity by approximately $14.9 million[89][90] - As of September 30, 2025, the outstanding restricted shares increased to 275,933 from 173,120 as of December 31, 2024, reflecting a growth of 59.5%[73] - Total deferred equity compensation related to unvested restricted shares was $32.8 million as of September 30, 2025, with a recognition of compensation expense over the remaining vesting periods totaling $32.76 million[73] Tax and Compensation - The effective income tax rate for the nine months ended September 30, 2025, was 26.7%, slightly down from 27.0% in the same period of 2024[81] - The Company anticipates that the recently enacted OBBB Act will not significantly affect its projected annual effective tax rate for 2025[53] - The Company’s deferred compensation liability increased to $40.5 million as of September 30, 2025, up from $39.1 million as of December 31, 2024[76] Lease Liabilities and Expenses - Total lease liability as of September 30, 2025, was approximately $6.5 million, with a present value of operating lease liability of $6.5 million[80][77] - The Company recorded total lease and operating expenses of $743,489 for the nine months ended September 30, 2025, compared to $682,755 for the same period in 2024, representing an increase of 8.9%[80] - The weighted average discount rate applied to the Company's lease liability was 6.5% as of September 30, 2025[79]

Core Insights - Diamond Hill Investment Group, Inc. reported a decline in revenue for Q3 2025, totaling $37.4 million, down 4% from $39.0 million in Q3 2024 [4][5] - The company experienced net inflows of nearly $1 billion in fixed income strategies during the quarter, contributing to $2 billion year-to-date [1] - The board approved a regular quarterly cash dividend of $1.50 per share and a special dividend of $4.00 per share, totaling $10.00 per share for the year [3][4] Financial Performance - Total operating expenses for Q3 2025 were $27.7 million, a decrease of 4% from $28.8 million in Q3 2024 [4] - Net income for Q3 2025 was $13.6 million, down 7% from $14.6 million in Q3 2024, with diluted earnings per share at $4.99 compared to $5.35 in the prior year [4][5] - For the nine months ended September 30, 2025, net income attributable to common shareholders increased by 10% to $39.5 million, with diluted earnings per share rising to $14.47 from $12.90 [4][5] Assets Under Management - As of September 30, 2025, total assets under management (AUM) and assets under advisement (AUA) combined were $32.4 billion, a slight decrease from $33.2 billion a year earlier [5][6] - The company reported net client inflows of $41 million for Q3 2025, contrasting with net outflows of $22 million in Q3 2024 [5][6] - Average AUM and AUA during the quarter remained stable at $32.4 billion, consistent with the same period in 2024 [5] Capital Allocation - The company returned approximately $6.7 million to shareholders in 2025, including $2.6 million through share repurchases and $4.1 million via dividends [4][5] - The total capital return to shareholders for the year reached $27.2 million, reflecting a commitment to shareholder value [4]

Financial Performance - Revenue for the third quarter of 2025 was $37.4 million, down 4% from $39.0 million in the same quarter of 2024[8] - Net income attributable to common shareholders was $13.6 million, a decrease of 7% compared to $14.6 million for the third quarter of 2024[8] - Earnings per share attributable to common shareholders - diluted was $4.99, down from $5.35 in the third quarter of 2024[8] - Investment income was $8.5 million, down 12% from $9.7 million in the third quarter of 2024[8] - The company reported a GAAP net income of $10,217,000 for the three months ended September 30, 2024, with an earnings per share of $5.35 and a profit margin of 26%[14] - The company experienced a decrease in GAAP net income from $28,801,000 in Q3 2024 to $27,674,000 in Q3 2025, reflecting a decline of approximately 3.9%[13][14] Shareholder Returns - The company returned approximately $6.7 million to shareholders, including $2.6 million through share repurchases and $4.1 million through dividends[5] - A regular quarterly cash dividend of $1.50 per common share and a special dividend of $4.00 per share were declared, to be paid on December 5, 2025[6] - Year-to-date, the company has repurchased nearly $14.5 million in shares, contributing to a total annual dividend of $10.00 per share[7] Profit Margins - The company reported a net operating profit margin of 26% for both the third quarter of 2025 and 2024[5] - For the three months ended September 30, 2025, the GAAP net income was $9,729,000, with an earnings per share of $4.99, maintaining a profit margin of 26%[13] - The adjusted non-GAAP net income for the same period was $11,831,000, resulting in an adjusted earnings per share of $3.24, with a profit margin of 32%[13] - For the nine months ended September 30, 2025, the GAAP net income was $30,557,000, with an earnings per share of $14.47 and a profit margin of 28%[13] - The adjusted non-GAAP net income for the nine months ended September 30, 2025, was $34,842,000, leading to an adjusted earnings per share of $9.32, with a profit margin of 32%[13] - The adjusted non-GAAP net income for the three months ended September 30, 2024, was $12,467,000, resulting in an adjusted earnings per share of $3.35, with a profit margin of 32%[14] Tax and Adjustments - The effective tax rate for the three months ended September 30, 2025, was 25.6%, compared to 26.4% for the same period in 2024[17] - Non-GAAP adjustments included a deferred compensation liability impact of $2,052,000 for Q3 2025, which was a 6% adjustment[13] Assets and Client Activity - Total assets under management (AUM) and assets under advisement (AUA) combined were $32.4 billion, compared to $33.2 billion as of September 30, 2024[5] - Net client inflows were $41.0 million, a significant improvement from net outflows of $22.0 million for the third quarter of 2024[5] Future Strategy - The company anticipates continued focus on technological developments and market expansion as part of its future strategy[19]

Core Insights - Diamond Hill Investment Group has appointed Diane Nordin, CFA, as a new independent director on its Board, which consists of eight members [1][2] - Nordin brings over 40 years of experience in the financial services industry, having held significant roles at Wellington Management Company, Fidelity Investments, and Putnam Advisory Company [2] - The company emphasizes a client-first approach and aims to enhance investment outcomes while growing shareholder value [2][3] Company Overview - Diamond Hill operates as an independent active asset manager with a focus on valuation-driven investment principles and long-term perspectives [4] - As of September 30, 2025, the firm manages assets totaling $32.4 billion, which includes both assets under management and assets under advisement [4]

Core Insights - Diamond Hill Investment Group, Inc. reported its unaudited financial results for Q2 2025, highlighting a focus on long-term value creation amidst market volatility [1] - The company launched a new fixed income strategy, the Diamond Hill Securitized Total Return Fund, on July 1, 2025 [1] Financial Performance - Revenue for Q2 2025 was $36.0 million, a decrease of 2% from $36.7 million in Q2 2024 [4] - Net income attributable to common shareholders increased by 92% to $15.6 million in Q2 2025 from $8.1 million in Q2 2024 [4][5] - Earnings per share attributable to common shareholders - diluted rose to $5.73, a 96% increase compared to $2.93 in Q2 2024 [6] Capital Allocation - The board approved a quarterly cash dividend of $1.50 per common share, to be paid on September 12, 2025 [3] - The company returned approximately $12.3 million to shareholders through share repurchases and dividends [5] Assets Under Management - Total assets under management (AUM) and assets under advisement (AUA) were $31.9 billion as of June 30, 2025, unchanged from December 31, 2024, but up from $31.1 billion a year earlier [5][7] - Net client outflows were $644 million in Q2 2025, compared to net inflows of $229 million in Q2 2024 [5][7] Operating Expenses - Total operating expenses for Q2 2025 were $28.3 million, a 15% increase from $24.5 million in Q2 2024 [4] - The net operating profit margin decreased to 22% in Q2 2025 from 33% in Q2 2024 [5] Investment Income - Investment income for Q2 2025 was $14.6 million, compared to a loss of $0.7 million in Q2 2024 [5][6] - The company reported a net income before taxes of $22.3 million, a 94% increase from $11.5 million in Q2 2024 [4][5]

Revenue Performance - Total revenue for the three months ended June 30, 2025, was $36,025,931, a decrease of 1.7% compared to $36,661,333 for the same period in 2024[46] - Investment advisory revenue for the six months ended June 30, 2025, was $69,376,677, an increase of 3.0% from $69,192,918 in the same period in 2024[46] - The Company recorded $50,626,206 in total revenue from Proprietary Funds for the six months ended June 30, 2025, compared to $48,417,903 for the same period in 2024, reflecting a growth of 4.5%[46] - Fund administration gross revenue for Q2 2025 was $6,665,238, up from $5,930,195 in Q2 2024, representing a growth of 12.4%[52] - Net fund administration revenue for the first half of 2025 was $3,765,464, slightly up from $3,763,345 in the same period of 2024[52] Financial Position - As of June 30, 2025, accounts receivable from Proprietary Funds were $10.1 million, slightly down from $10.3 million as of December 31, 2024[37] - Cash and cash equivalents as of June 30, 2025, included $11.3 million in demand deposits and $37.7 million in money market mutual funds[36] - Total investments as of June 30, 2025, amounted to $173,497,273, an increase from $159,752,981 as of December 31, 2024, reflecting a growth of 8.6%[61] - The Company has a committed Line of Credit Agreement allowing borrowing up to $25 million, with no borrowings outstanding as of June 30, 2025[71][72] - The carrying value of the right-of-use asset related to the operating lease was approximately $3.6 million, with a lease liability of approximately $6.6 million as of June 30, 2025[80] Investment Performance - DHCM's investment advisory fees are based on assets under management (AUM), which are subject to market fluctuations[48] - The Company reported net investment income of $14,554,685 for Q2 2025, compared to a loss of $654,591 in Q2 2024[63] - The Company’s equity method investments generated a net income of $26,135,916 for Q2 2025, with DHCM's portion being $11,803,043[65] - The Company’s maximum risk of loss related to its investment in DHMF is limited to the carrying value of $23 million as of June 30, 2025[65] - The Company’s fair value investments include $62,035,855 in securities held in Consolidated Funds as of June 30, 2025[69] Shareholder Equity and Compensation - The Company began recording share repurchases as a reduction to retained earnings effective January 1, 2024[23] - As of June 30, 2025, the outstanding restricted shares increased to 268,761, up from 173,120 as of December 31, 2024, reflecting a growth of 55.4%[76] - Total deferred equity compensation related to unvested restricted shares was $33.7 million as of June 30, 2025, with a recognition of compensation expense over the remaining vesting periods totaling $33.7 million[76] - The Company’s deferred compensation liability was $38.5 million as of June 30, 2025, a slight decrease from $39.1 million as of December 31, 2024[79] - The Company maintains a 2025 Equity and Cash Incentive Plan authorizing the issuance of 225,000 DHIL common shares, with 184,222 shares available for grants as of June 30, 2025[73] Tax and Regulatory Matters - The effective income tax rate for the six months ended June 30, 2025, was 27.3%, slightly down from 27.5% in 2024[84] - The Company’s deferred tax assets and liabilities are adjusted for changes in tax laws, with no significant impact anticipated from the recently enacted OBBB Act[56] Earnings and Dividends - Basic earnings per share for the three months ended June 30, 2025, was $5.73, compared to $2.93 for the same period in 2024, representing an increase of 95.5%[89] - The Company declared a quarterly cash dividend of $1.50 per share on July 29, 2025, expected to reduce shareholders' equity by approximately $4.1 million[92] Lease Obligations - Total undiscounted operating lease payments amounted to $8.99 million, with a present value of operating lease liability at $6.58 million as of June 30, 2025[83] - The weighted average discount rate applied to the Company's lease liability was 6.5% as of June 30, 2025[82]

Financial Performance - Revenue for the second quarter of 2025 was $36.0 million, a decrease of 2% from $36.7 million in the second quarter of 2024[7] - Net income attributable to common shareholders was $15.6 million, a 92% increase from $8.1 million in the second quarter of 2024[5] - Earnings per share attributable to common shareholders - diluted was $5.73, up 96% from $2.93 in the second quarter of 2024[7] - GAAP basis net income for the three months ended June 30, 2025, was $8,126,000, with an earnings per share of $2.93 and a profit margin of 33%[1] - Adjusted non-GAAP basis net income for the same period was $7,974,000, with an earnings per share of $2.88 and a profit margin of 31%[1] - For the six months ended June 30, 2025, GAAP basis net income was $25,933,000, with an earnings per share of $9.49 and a profit margin of 28%[1] - The company reported a total operating income of $20,829,000 for the six months ended June 30, 2025[1] - Non-GAAP adjustments included a deferred compensation liability impact of $(2,077,000) for the six months ended June 30, 2025[1] - The non-GAAP effective tax rate for the three months ended June 30, 2025, was 28.4%[3] Assets Under Management - Total assets under management (AUM) and assets under advisement (AUA) combined were $31.9 billion, unchanged from December 31, 2024, and up from $31.1 billion as of June 30, 2024[5] - Average AUM and AUA combined during the quarter was $31.0 billion, slightly down from $31.1 billion in the second quarter of 2024[5] - The company anticipates continued growth in assets under management (AUM) and assets under administration (AUA) in the upcoming quarters[2] Client Activity - Net client outflows were $644.0 million, compared to net inflows of $229.0 million for the second quarter of 2024[5] Shareholder Returns - The company returned approximately $12.3 million to shareholders, including $8.3 million through share repurchases and $4.0 million in dividends[5] - The board approved a quarterly cash dividend of $1.50 per common share, to be paid on September 12, 2025[6] Investment Strategy - The company launched a new fixed income strategy, the Diamond Hill Securitized Total Return Fund, on July 1, 2025[4] Future Outlook - The company is focusing on technological developments and adapting to industry trends towards lower fee strategies[2] - The forward-looking statements include expectations regarding economic trends and potential impacts from regulatory changes[2] - The company emphasizes the importance of understanding core operating results by adjusting for non-operating income or loss items[3]

Core Insights - Joseph Noko is an Investment Analyst & Economist with a strong track record, achieving over 70% annualized portfolio returns since 2024 and maintaining a 74.5% accuracy in decade-ahead S&P 500 forecasting [1]. Group 1: Analyst Expertise - Noko specializes in financial modeling, forensic accounting adjustments, and high-conviction equity research [1]. - He is skilled in building reverse-DCF frameworks and rolling out standardized stock and credit ratings [1]. - Noko presents actionable buy/sell recommendations to senior stakeholders [1]. Group 2: Publications and Influence - Noko writes "The Mirandolan," a collection of thoughts on investment opportunities and the economics of risk, which is read by buy-side analysts, portfolio managers, and industry leaders [1]. - His work on Seeking Alpha is evolving to focus on recent and forthcoming IPOs [1].

Revenue and Income - Total revenue for the three months ended March 31, 2025, was $37.1 million, an increase from $36.3 million for the same period in 2024, representing a growth of 2.2%[45] - Investment advisory revenue for the three months ended March 31, 2025, was $35.3 million, compared to $34.4 million in the same period in 2024, reflecting a year-over-year increase of 2.8%[45] - Fund administration gross revenue increased to $6,642,148 in Q1 2025 from $5,718,610 in Q1 2024, representing a growth of 16.2%[51] - Fund administration net revenue decreased to $1,807,399 in Q1 2025 from $1,943,137 in Q1 2024, a decline of 7.0%[51] - Net investment income for Q1 2025 was $1,119,969, significantly lower than $9,365,678 in Q1 2024, a decrease of 88.1%[61] - Net income attributable to common shareholders for the three months ended March 31, 2025, was $10,362,263, a decrease from $13,015,933 in 2024, representing a decline of approximately 20.3%[88] - Basic and diluted earnings per share for the three months ended March 31, 2025, were both $3.77, down from $4.62 in 2024, indicating a decrease of approximately 18.4%[88] Assets and Liabilities - Accounts receivable from Proprietary Funds as of March 31, 2025, was $10.5 million, slightly up from $10.3 million as of December 31, 2024[37] - Cash and cash equivalents as of March 31, 2025, included $2.2 million in demand deposits and $22.9 million in money market mutual funds, compared to $1.3 million and $40.3 million respectively as of December 31, 2024[36] - Total investments as of March 31, 2025, were $158,809,737, a slight decrease from $159,752,981 as of December 31, 2024[59] - Total deferred equity compensation related to unvested restricted shares was $31.4 million as of March 31, 2025[74] - Deferred compensation liability decreased to $35.5 million as of March 31, 2025, down from $39.1 million as of December 31, 2024[77] - The present value of the operating lease liability as of March 31, 2025, was $6,281,315, with total undiscounted operating lease payments amounting to $8,674,190[81] Business Operations - The Company operates in a single business segment, providing investment advisory and fund administration services, with no single customer accounting for more than 10% of total revenue[33][35] - The Company recognizes revenue from investment advisory and fund administration fees based on assets under management (AUM), which are recorded as services are performed[44] - DHCM's investment advisory contracts have a single performance obligation, with fees based on AUM, which are subject to market fluctuations[46][47] - The Proprietary Funds pay DHCM fees for administrative services calculated using an annual rate multiplied by the average daily net assets of each fund share class[49] - The Company has not provided liquidity arrangements or guarantees to support DHMF's operations, limiting its exposure to the amount of its investment[31] Expenses and Taxation - Total lease and operating expenses for the three months ended March 31, 2025, were $223,455, compared to $201,595 for the same period in 2024, reflecting an increase of approximately 10.4%[81] - The effective income tax rate for the three months ended March 31, 2025, was 26.9%, compared to 26.3% for the same period in 2024[83] - The Company did not recognize any interest and penalties related to tax uncertainties during the three months ended March 31, 2025[87] - The Company has not recorded any valuation allowance for deferred tax assets as of March 31, 2025, indicating confidence in future taxable income generation[85] Financing and Credit - The Company has a committed Line of Credit Agreement allowing borrowing up to $25.0 million, with no borrowings outstanding as of March 31, 2025[69][70] - The maturity analysis of the Company's operating lease liability shows significant future cash outflows, with the largest payment of $4,870,011 due in 2030 and thereafter[81] Shareholder Information - On April 29, 2025, the Company approved a quarterly cash dividend of $1.50 per share, expected to reduce shareholders' equity by approximately $4.1 million[91] - The Company recorded $0.1 million of share-based payment expense related to the Employee Stock Purchase Plan for Q1 2025[75] Lease Information - The carrying value of the right-of-use asset for the office lease was approximately $3.4 million as of March 31, 2025[78] - As of March 31, 2025, the weighted average discount rate applied to the Company's lease liability was 6.5%[80]

Financial Performance - Revenue for the first quarter of 2025 was $37.1 million, a 2% increase from $36.3 million in the first quarter of 2024[8] - Net income attributable to common shareholders was $10.4 million, down 20% from $13.0 million in the first quarter of 2024[6] - Earnings per share attributable to common shareholders - diluted was $3.77, an 18% decrease from $4.62 in the first quarter of 2024[6] - The net operating profit margin was 35%, compared to 23% for the first quarter of 2024[6] - Investment income was $1.1 million, significantly down from $9.4 million in the first quarter of 2024, representing an 88% decrease[6] Shareholder Returns - The company returned approximately $7.8 million to shareholders, including $3.6 million through share repurchases and $4.2 million through dividends[6] - The Company declared a quarterly cash dividend of $1.50 per common share, payable on June 13, 2025[5] Assets Management - Assets under management (AUM) and assets under advisement (AUA) combined were $31.6 billion, a decrease from $31.9 billion as of December 31, 2024[6] - Average AUM and AUA combined were $32.3 billion, compared to $30.1 billion for the first quarter of 2024[6] - Net client outflows were $529 million, compared to net inflows of $118 million for the first quarter of 2024[6] Risks and Challenges - The Company faces significant risks that may impact its actual results, including potential reductions in Assets Under Management (AUM) or Assets Under Administration (AUA) [15] - Challenges from competition and industry trends towards lower fee strategies are identified as key risks [15] - The Company emphasizes the importance of compliance with investment guidelines and contractual requirements to mitigate risks [15] - Technological changes, including the integration of artificial intelligence (AI), are critical for the Company's future success [15] - The Company acknowledges the potential impact of adverse regulatory and legal developments on its operations [15] - Economic uncertainties, including changes in interest rates and inflation, are highlighted as factors that could affect performance [15] - The Company is aware of the risks associated with civil litigation and government investigations [15] - The ongoing economic uncertainty in various parts of the world is a concern for the Company's future outlook [15] Forward-Looking Statements - The Company does not commit to updating forward-looking statements unless required by law, acknowledging the unpredictability of future events [16] - The Company does not endorse third-party projections regarding future performance, emphasizing its own risk assessments [16]