AUM Growth and Composition - Total Assets Under Management (AUM) increased from $26.6 billion in 2022 to $31.9 billion in 2024[25] - Fixed income AUM has been a significant driver of overall growth[24], increasing from $2.1 billion in 2022 to $6.2 billion in 2024[25, 35] - The pace of fixed income AUM growth is accelerating, with the time to reach each additional $1 billion in AUM decreasing over time[33] Investment Performance - Diamond Hill's Short Duration Securitized Bond Composite showed net performance of 9.40% for 1 Year, 4.85% for 3 Years, 4.11% for 5 Years, and 4.01% Since Inception (5 Jul 2016)[28] - Diamond Hill's Core Bond Composite showed net performance of 3.58% for 1 Year, -0.81% for 3 Years, 0.89% for 5 Years, and 1.89% Since Inception (5 Jul 2016)[28] - Diamond Hill International Composite net performance was 4.03% for 1 Year, 2.14% for 3 Years, 5.14% for 5 Years, and 8.18% Since Inception (30 Dec 2016)[71] - Diamond Hill Large Cap Strategy outperformed the Russell 1000 Value Index in 61% of 1-year rolling periods, 76% of 3-year rolling periods, 89% of 5-year rolling periods, 95% of 7-year rolling periods, and 100% of 10-year and 15-year rolling periods[65] Market Environment and Equity Strategy Performance - Active equity managers faced headwinds in 2024, with active mutual funds experiencing net outflows of $373 billion[38] - US equity strategies have shown varied alpha versus core and value benchmarks, with a weighted average alpha of -9 bps versus core benchmarks and 156 bps versus value benchmarks over 5 years[58] Financial Performance - The company returned $46.8 million to shareholders in 2024 through dividends and share repurchases[82] - Revenue and average AUM show signs of improvement, with revenue increasing from $33.4 million in Q2 2023 to $39.1 million in Q4 2024[74] - Adjusted net operating profit margins have stabilized in a higher cost environment, reaching 34% in Q4 2024[77, 121] Asset Allocation - Diamond Hill Funds account for $18.05 billion of the total assets, while Institutional SMA represents $3.29 billion[93]

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]

Financial Performance - Revenue for Q3 2024 was $39.0 million, a 10% increase from $35.6 million in Q3 2023[5] - Net income attributable to common shareholders was $14.6 million, compared to $6.5 million in Q3 2023, representing a 126% increase[5] - Earnings per share attributable to common shareholders - diluted was $5.35, up 143% from $2.20 in Q3 2023[5] - For the three months ended September 30, 2023, the net income attributable to common shareholders was $6,473,000, with earnings per share of $2.20, reflecting a net operating profit margin of 35%[12] - For the nine months ended September 30, 2024, the GAAP basis net income was $35,786,000, with earnings per share of $12.90 and a net operating profit margin of 27%[12] - The adjusted non-GAAP basis for the nine months ended September 30, 2023, showed a net income of $23,841,000, with earnings per share of $8.01 and a net operating profit margin of 32%[12] Assets and Management - Total assets under management (AUM) and assets under advisement (AUA) reached $33.2 billion, up from $29.2 billion as of December 31, 2023, and $26.6 billion as of September 30, 2023[2] - Total fixed income assets reached $5.5 billion in Q3 2024, reflecting the launch of new investment strategies[2] Client Activity - The company reported net client outflows of $22.0 million, significantly improved from $343.0 million in net outflows for Q3 2023[2] Investment Income - Investment income was $9.7 million, compared to an investment loss of $4.6 million in Q3 2023[2] Shareholder Returns - The company returned approximately $7.5 million to shareholders, including $3.4 million through share repurchases and $4.1 million in dividends[2] - The board approved a quarterly cash dividend of $1.50 per common share, payable on December 6, 2024[3] - A new share repurchase plan was authorized, allowing for the repurchase of up to $50 million in common shares[4] Operating Expenses - The total operating expenses for the same period were $23,193,000, while the net operating income was $12,361,000[12] - The total operating expenses for the nine months ended September 30, 2023, were $71,806,000, with a net operating income of $31,089,000[12] - The company adjusted for deferred compensation liability, which impacted the net operating income by $(4,571,000) for the nine months ended September 30, 2024[12] Tax and Non-Operating Income - The non-GAAP effective tax rates were 26.4% for the three months ended September 30, 2024, and 28.0% for the three months ended September 30, 2023[13] - The company reported total nonoperating income (loss) of $(4,637,000) for the three months ended September 30, 2023[12] Forward-Looking Statements - Forward-looking statements include expectations regarding operating results, AUM levels, and technological developments, but are subject to various risks and uncertainties[15] Non-GAAP Measures - The company emphasizes that non-GAAP financial measures should not be considered alone or as a substitute for GAAP financial information[14]

Revenue and Growth - Total revenue for the three months ended June 30, 2024, was $36.7 million, compared to $33.4 million for the same period in 2023, representing an increase of approximately 9.5%[36] - Revenue from investment advisory services for the six months ended June 30, 2024, was $69.2 million, up from $63.5 million in the same period of 2023, reflecting a growth of about 8.5%[37] - Total revenue for the three months ended June 30, 2024, increased by $3.3 million, or 10%, compared to the same period in 2023, primarily due to a 16% increase in average AUM and AUA[98] - Total revenue for the six months ended June 30, 2024, increased by $5.6 million, or 8%, compared to the same period in 2023, primarily due to a 13% increase in total average AUM and AUA[108] Assets Under Management (AUM) - Total Assets Under Management (AUM) increased to $29.291 billion as of June 30, 2024, representing a 12% increase from $26.066 billion in June 2023[84] - The average AUM during the three months ended June 30, 2024, was $29.206 billion, compared to $25.056 billion in the same period of 2023[91] - The Company’s AUM by product showed a 90% increase in Collective Investment Trusts, rising from $975 million in June 2023 to $1.857 billion in June 2024[84] - Fixed Income AUM increased by 69% to $4.873 billion, driven by significant inflows into the Short Duration Securitized Bond and Core Fixed Income strategies[89] - The Large Cap strategy AUM increased to $17.917 billion, a 6% rise from $16.834 billion in June 2023[88] - The Company noted a 106% increase in International Equity AUM, growing from $65 million to $134 million[87] Financial Performance - Net operating income for the three months ended June 30, 2024, was $12.1 million, a 56% increase from $7.8 million in the same period in 2023[97] - Net income attributable to common shareholders for the three months ended June 30, 2024, was $8.1 million ($2.93 per diluted share), down from $9.4 million ($3.18 per diluted share) in the same period in 2023[100] - The company reported a net operating income of $12,133,000 for the three months ended June 30, 2024, compared to $7,786,000 for the same period in 2023, marking an increase of approximately 56%[131] - Net income attributable to common shareholders for the six months ended June 30, 2024, was $21.1 million ($7.57 per diluted share), compared to $22.1 million ($7.39 per diluted share) in the same period in 2023[109] Expenses and Costs - Total operating expenses for the three months ended June 30, 2024, were $24,529,000, compared to $25,564,000 for the same period in 2023, reflecting a decrease of approximately 4%[131] - Total operating expenses for the six months ended June 30, 2024, were $52,521,000, compared to $48,613,000 for the same period in 2023, reflecting an increase of approximately 8%[132] - Employee compensation and related costs (excluding deferred compensation) increased by $2.7 million, or 8%, to $36.5 million for the six months ended June 30, 2024[113] - General and administrative expenses increased by $1.3 million, or 18%, to $8.4 million, driven by technology support and research management system improvements[115] Investment Performance - The Company reported realized gains of $631,300 for the three months ended June 30, 2024, compared to a loss of $12,598 for the same period in 2023[53] - The company experienced $0.7 million in investment losses for the three months ended June 30, 2024, compared to $6.3 million in investment income for the same period in 2023[100] - The Company recorded a net investment income loss of $(654,591) for the three months ended June 30, 2024, compared to a gain of $6,276,708 for the same period in 2023[53] Shareholder Returns - The Company approved a quarterly cash dividend of $1.50 per share, expected to reduce shareholders' equity by approximately $4.1 million[75] - The company expects to pay a regular quarterly dividend of $1.50 per share, totaling $8.4 million for the first two quarters of 2024[120] - The company repurchased 120,049 common shares for a total of $18.4 million during the six months ended June 30, 2024[119] Tax and Regulatory Matters - The effective income tax rate for the six months ended June 30, 2024, was 27.5%, compared to 26.6% for the same period in 2023[68] - The effective tax rate for the three months ended June 30, 2024, was 29.2%, consistent with the same rate for the three months ended June 30, 2023[134] - The Company did not recognize any interest and penalties related to tax uncertainties during the six months ended June 30, 2024[70] Cash Flow and Liquidity - Net cash provided by operating activities was $6.9 million for the six months ended June 30, 2024, primarily driven by net income of $21.1 million[124] - Cash and cash equivalents, investments, and accounts receivable totaled $164.2 million as of June 30, 2024, compared to $181.8 million as of December 31, 2023[117] - The Company did not borrow under its $25 million line of credit during the six months ended June 30, 2024, and had no outstanding borrowings as of that date[57] Accounting and Estimates - The Company has maintained its critical accounting estimates with no material changes during the quarter ended June 30, 2024[136] - The Company recognizes revenue when performance obligations are satisfied under client contracts, with investment advisory fees recorded as services are performed[35]

Company Overview - Diamond Hill Investment Group Inc. has appointed Gordon Fowler as a Director, who will serve on the Audit Committee, Compensation Committee, and Nominating and Governance Committee [3] - As of June 30, 2024, Diamond Hill's assets under management and assets under advisement totaled $31.1 billion [5] Leadership Experience - Gordon Fowler brings over 40 years of experience in the financial services industry, including a 20-year tenure at Glenmede Corporation where he served as CEO and President [1] - Fowler has held various roles at J.P. Morgan Chase, culminating in the position of Chief Investment Officer of the J.P. Morgan Private Bank [1][2] Investment Philosophy - Diamond Hill emphasizes a valuation-driven investment philosophy, long-term perspective, capacity discipline, and client alignment [5] - Fowler expressed alignment with Diamond Hill's investment philosophy and commitment to client experience, aiming to strengthen the firm's position in active management [4][5]