Core Insights - The article does not provide specific company or industry insights, focusing instead on disclosures and disclaimers related to investment positions and advice [1][2] Group 1 - There are no stock, option, or similar derivative positions held by the analyst in any mentioned companies [1] - The article expresses personal opinions and is not compensated beyond Seeking Alpha [1] - The views may not reflect those of Seeking Alpha as a whole, and the analysts may not be licensed or certified [2]

Core Viewpoint - PennantPark Floating Rate Capital Ltd. has formed a joint venture, PennantPark Senior Secured Loan Fund II, LLC, with Hamilton Lane to invest primarily in middle market loans, enhancing its position as a direct lender in this sector [1][3]. Company Overview - PennantPark Floating Rate Capital Ltd. is a business development company that primarily invests in U.S. middle-market private companies through floating rate senior secured loans, including first lien, second lien, and subordinated debt [4]. - The company is managed by PennantPark Investment Advisers, LLC, which has approximately $10 billion of investable capital [5]. Joint Venture Details - The joint venture, PSSL II, will have a combined commitment of $200 million, with PennantPark contributing $150 million and Hamilton Lane contributing $50 million [2]. - PSSL II plans to establish a financing facility of $300 million, allowing the portfolio to grow to an initial size of $500 million [2]. - Investments in PSSL II's portfolio are expected to commence in late September or early October [2]. Strategic Importance - The joint venture is seen as a strategic move to broaden the impact of PennantPark as a core middle market direct lender, aiming to provide senior loan solutions to middle market sponsors and borrowers [3]. - The CEO of PennantPark anticipates that growing PSSL II will lead to higher returns on equity and net investment income per share [3]. Hamilton Lane Overview - Hamilton Lane is a leading private markets investment firm with approximately $986 billion in assets under management, specializing in providing access to a wide range of private market strategies [6].

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three months ended June 30, 2025, compared to the same period in 2024, including balance sheets, statements of income, stockholders' equity, cash flows, and comprehensive notes detailing accounting policies and financial positions [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $1.80 billion from $1.69 billion at March 31, 2025, primarily driven by growth in cash and investments, with total liabilities rising to $807.0 million and total equity growing to $995.0 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Total Assets** | **$1,802,038** | **$1,690,355** | | Cash and cash equivalents | $263,347 | $229,161 | | Investments | $674,453 | $664,354 | | **Total Liabilities** | **$806,992** | **$766,460** | | Debt | $288,582 | $290,303 | | **Total Equity** | **$995,046** | **$923,895** | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended June 30, 2025, total revenues decreased to $176.0 million from $196.7 million in the prior-year period, primarily due to lower incentive fees, resulting in net income attributable to Hamilton Lane Incorporated of $53.7 million, or $1.28 per diluted share Condensed Consolidated Statements of Income (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total Revenues** | **$175,958** | **$196,731** | | Management and advisory fees | $133,696 | $139,962 | | Incentive fees | $42,262 | $56,769 | | **Total Expenses** | **$98,983** | **$107,120** | | **Net Income** | **$77,070** | **$87,087** | | Net income attributable to HLI | $53,745 | $58,964 | | Diluted EPS | $1.28 | $1.47 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended June 30, 2025, net cash provided by operating activities significantly increased to $128.9 million, while net cash used in investing activities was $93.8 million, mainly due to higher contributions to funds, and net cash from financing activities was $3.3 million Cash Flow Summary (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $128,932 | $79,743 | | Net cash (used in) provided by investing activities | $(93,807) | $2,132 | | Net cash provided by (used in) financing activities | $3,261 | $(30,418) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies and financial statement items, including revenue disaggregation, investments, debt structure, equity-based compensation, and commitments, with unrecognized carried interest subject to contingencies amounting to approximately $1.31 billion as of June 30, 2025 Revenue Disaggregation (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Management & Advisory Fees** | **$133,696** | **$139,962** | | Specialized funds | $82,745 | $89,792 | | Customized separate accounts | $34,575 | $33,453 | | **Incentive Fees** | **$42,262** | **$56,769** | | Specialized funds | $38,209 | $52,054 | | Customized separate accounts | $4,053 | $4,715 | - As of June 30, 2025, the company had allocated carried interest still subject to contingencies (unrecognized) of **$1,309,480,000**, net of amounts attributable to NCI[90](index=90&type=chunk) - The company's aggregate unfunded commitment to its Funds was **$264.7 million** as of June 30, 2025[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the quarter ended June 30, 2025, highlighting a $20.8 million year-over-year revenue decrease primarily from lower incentive and management fees, an $8.3 million decrease in total expenses, $2.4 billion growth in fee-earning AUM, and a strong liquidity position [Consolidated Results of Operations](index=32&type=section&id=Consolidated%20Results%20of%20Operations) For the quarter ended June 30, 2025, total revenues decreased to $176.0 million from $196.7 million YoY, driven by a $14.5 million decrease in incentive fees and a $6.3 million decrease in management fees, while total expenses fell by $8.3 million to $98.5 million, mainly from an $11.0 million decrease in incentive fee compensation - Total revenues decreased by **$20.8 million** YoY, driven by decreases in both management and advisory fees (**-$6.3 million**) and incentive fees (**-$14.5 million**)[138](index=138&type=chunk)[139](index=139&type=chunk) - The decrease in management fees was primarily due to a **$20.4 million reduction** in retroactive fees from specialized funds compared to the prior-year period[140](index=140&type=chunk) - The decrease in incentive fees was mainly due to a **$24.5 million drop** in tax-related carried interest distributions and a significant realization event in the prior-year quarter[141](index=141&type=chunk) - Total expenses decreased by **$8.3 million** YoY, largely due to an **$11.0 million reduction** in incentive fee compensation, which was partially offset by a **$9.6 million increase** in equity-based compensation[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) [Fee-Earning AUM](index=37&type=section&id=Fee-Earning%20AUM) Fee-earning Assets Under Management (AUM) increased by $2.4 billion during the three months ended June 30, 2025, reaching a total of $74.4 billion, driven by $3.4 billion in contributions from customized separate accounts and specialized funds, partially offset by $1.6 billion in distributions Fee-Earning AUM Roll-Forward (in millions) | Period | Balance, beginning of period | Contributions | Distributions | FX, market value, other | Balance, end of period | | :--- | :--- | :--- | :--- | :--- | :--- | | **Q1 FY26** | **$72,047** | **$3,370** | **$(1,575)** | **$557** | **$74,399** | | Q1 FY25 | $65,749 | $4,256 | $(2,292) | $(3) | $67,710 | [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) The company reported non-GAAP financial measures, with Fee Related Earnings (FRE) increasing to $83.7 million from $64.0 million YoY, Adjusted EBITDA remaining stable at $95.8 million, and Non-GAAP EPS decreasing to $1.31 from $1.51, reflecting a modified FRE definition for comparability Non-GAAP Financial Highlights (in thousands, except per-share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Fee Related Earnings (FRE) | $83,710 | $63,974 | | Adjusted EBITDA | $95,839 | $96,224 | | Adjusted Net Income | $71,604 | $81,423 | | Non-GAAP EPS | $1.31 | $1.51 | - The definition of FRE was modified beginning in Q4 FY25 to exclude equity-based compensation and include fee related performance revenues (FRPR), with prior periods recast to reflect this change[167](index=167&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position with $263.3 million in cash and cash equivalents as of June 30, 2025, total debt outstanding of $291.3 million, and $133.8 million available under loan agreements, ensuring sufficient capital for short-term and long-term needs - As of June 30, 2025, cash and cash equivalents were **$263.3 million**[186](index=186&type=chunk) - Total debt outstanding was **$291.3 million**, with **$133.8 million** in availability under existing loan agreements[196](index=196&type=chunk) - On August 5, 2025, the company announced a quarterly dividend of **$0.54 per share** of Class A common stock[99](index=99&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk stems from the fair value of fund investments impacting 'equity in income of investees', while management fees are largely insulated from market volatility, and a 100 basis point increase in interest rates would raise annual interest expense by approximately $0.9 million - The company's main market risk is the impact of investment valuations on its 'equity in income of investees', while management fees are not significantly affected by market value changes[221](index=221&type=chunk)[223](index=223&type=chunk) - A **100 basis point increase** in interest rates is estimated to increase annual interest expense by approximately **$0.9 million** based on the floating rate debt outstanding as of June 30, 2025[227](index=227&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[231](index=231&type=chunk) - No material changes were made to internal control over financial reporting during the quarter ended June 30, 2025[232](index=232&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that management believes would have a material adverse effect on its consolidated financial statements - In the opinion of management, there are no pending or threatened legal proceedings that would materially affect the company's financial statements[234](index=234&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - No material changes from the risk factors disclosed in the 2025 Form 10-K were reported[235](index=235&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter, the company repurchased 18 shares of Class A common stock at an average price of $149.51 per share to satisfy employee tax withholding obligations, with its $50 million stock repurchase program remaining fully available - **18 shares** of Class A common stock were repurchased to cover employee tax withholding on vested restricted stock[236](index=236&type=chunk) - The company has a **$50 million** stock repurchase program, which was re-approved in December 2024 and has full purchase authority remaining[237](index=237&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) The company reported that none of its directors or officers adopted, terminated, or modified any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No directors or officers adopted, terminated, or modified any Rule 10b5-1 trading arrangements during the quarter[238](index=238&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including Sarbanes-Oxley Act certifications from the Principal Executive Officers and Principal Financial Officer, as well as Inline XBRL documents - The report lists required exhibits, including CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[239](index=239&type=chunk)

Financial Data and Key Metrics Changes - Total asset footprint increased to $986 billion, representing a 5% year-over-year growth [4] - Assets Under Management (AUM) grew by $11 billion or 9% year-over-year, reaching $141 billion [5] - Assets Under Administration (AUA) rose by $35 billion or 4% year-over-year, totaling $845 billion [5] - Quarterly GAAP EPS was $1.28 based on $54 million of GAAP net income, while non-GAAP EPS was $1.31 based on $72 million of adjusted net income [6] - Fee-related earnings for the quarter increased by 31% compared to the prior year period [6] Business Line Data and Key Metrics Changes - Total fee-earning AUM stood at $74 billion, growing by $6.7 billion or 10% year-over-year [8] - Customized separate account fee-earning AUM reached $40 billion, growing by $2.1 billion or 5% year-over-year [10] - Specialized funds fee-earning AUM increased to $34 billion, reflecting a 16% growth year-over-year [12] - Evergreen platform AUM approached $12.5 billion, marking a nearly 65% growth over the last twelve months [16] Market Data and Key Metrics Changes - The company continues to see strong momentum in its semi-liquid Evergreen products, contributing to the growth of total fund net asset value [9] - The company has maintained a strong backlog of business, with significant committed and contractual dry powder available for deployment [11] Company Strategy and Development Direction - The company is focused on expanding strategic partnerships and enhancing its global distribution strategy [18] - New product offerings have been launched, including infrastructure products and a fund focused on Asian private market investments [18] - The company emphasizes a long-term growth strategy, viewing its investments alongside clients as crucial for continued growth [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, highlighting strong execution across all business fronts [8] - The company is focused on meeting diverse customer needs through various distribution channels, including digital and traditional methods [33] - Management noted that while recent quarters have seen lighter incentive fees, a positive macroeconomic environment could lead to increased exit opportunities [49] Other Important Information - Management and advisory fees decreased by 4% year-over-year, primarily due to retro fees [20] - Total expenses decreased by $8 million compared to the prior year period, with total compensation and benefits down by $9 million [23] Q&A Session Summary Question: Insights on DBS private banking relationship - Management described the relationship as an expansion of existing strategies, focusing on diverse distribution methods and meeting customer needs [31][36] Question: Status of fund secondary fund six and marketing for fund seven - Management confirmed that fund six is more than halfway invested and that marketing for fund seven has not yet started [38][39] Question: Drivers of customized separate account growth - Management indicated that growth was driven by new sales, re-ups, and increased investment activity, with a significant pipeline of business in progress [44] Question: Outlook on incentive fees and market conditions - Management agreed that a positive macro backdrop could enhance exit opportunities, with expectations for increased activity in the latter half of the year [48] Question: Institutional demand for Evergreen Fund - Management noted that approximately 15% of flows into Evergreen are from institutional investors, with the remainder from traditional retail wealth [52][55] Question: G&A expense outlook - Management projected G&A expenses to be around $33 million per quarter, with some increases expected due to revenue-related expenses [58]

Core Insights - Hamilton Lane (HLNE) reported a revenue of $175.96 million for the quarter ended June 2025, reflecting a year-over-year decline of 10.6% and an EPS of $1.31 compared to $1.51 a year ago, with a revenue surprise of +6.52% over the Zacks Consensus Estimate of $165.19 million and an EPS surprise of +33.67% over the consensus estimate of $0.98 [1] Financial Performance Metrics - Fee Earning AUM - Customized Separate Accounts (CSA) reached $40.28 billion, slightly above the average estimate of $40.27 billion [4] - Total Fee Earning AUM was $74.4 billion, exceeding the average estimate of $74.12 billion [4] - Fee Earning AUM - Specialized Funds (SF) stood at $34.12 billion, surpassing the average estimate of $33.85 billion [4] - Total AUM & AUA amounted to $986.17 billion, compared to the average estimate of $978.08 billion [4] - Assets Under Management (AUM) were reported at $140.88 billion, slightly below the average estimate of $141.2 billion [4] - Assets Under Advisement (AUA) totaled $845.29 billion, exceeding the average estimate of $836.88 billion [4] Revenue Breakdown - Incentive fees revenue was $42.26 million, significantly higher than the average estimate of $29.19 million, but represented a year-over-year decline of -25.6% [4] - Management and advisory fees from Customized Separate Accounts were $34.58 million, slightly above the average estimate of $34.28 million, reflecting a +3.4% year-over-year change [4] - Total management and advisory fees were $136.7 million, slightly above the average estimate of $136 million, with a year-over-year change of -2.3% [4] - Management and advisory fees from Specialized Funds were $82.75 million, below the average estimate of $84.41 million, indicating a -7.9% year-over-year change [4] - Fund reimbursement revenue was $1.52 million, lower than the average estimate of $2.06 million, representing a -54.1% year-over-year decline [4] - Distribution management revenue was $0.98 million, below the average estimate of $1.18 million, but showed a significant +95.8% year-over-year increase [4] Stock Performance - Hamilton Lane shares returned +3.3% over the past month, outperforming the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The total asset footprint increased by 5% year over year, reaching $986 billion [4] - Assets Under Management (AUM) grew by $11 billion or 9% compared to the prior year, totaling $141 billion [5] - Assets Under Administration (AUA) rose by $35 billion or 4% year over year, amounting to $845 billion [5] - Quarterly GAAP EPS was $1.28, with non-GAAP EPS at $1.31 based on adjusted net income of $72 million [6] - Fee-related earnings for the quarter increased by 31% compared to the prior year [6] Business Line Data and Key Metrics Changes - Total fee-earning AUM reached $74 billion, growing by $6.7 billion or 10% year over year [7] - Customized separate account fee-earning AUM grew by $2.1 billion or 5% over the last twelve months [10] - Specialized funds fee-earning AUM increased by $4.6 billion or 16% year over year, totaling $34 billion [11] - The blended fee rate improved to 64 basis points, benefiting from a shift towards higher fee rate specialized funds [9] Market Data and Key Metrics Changes - The evergreen platform AUM approached $12.5 billion, representing a growth of nearly 65% over the last twelve months [16] - Net inflows for the evergreen platform surpassed $1 billion for the first time in a quarter [16] Company Strategy and Development Direction - The company is focused on expanding strategic partnerships and enhancing distribution channels to meet diverse customer needs [31][33] - Continued emphasis on the evergreen platform as a key growth driver, with plans to launch new products targeting various investor segments [19][20] - The company aims to maintain a long-term growth perspective, viewing its investments alongside clients as crucial for future expansion [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, citing strong performance across all business fronts [7][62] - The company anticipates increased exit activity in the second half of the year, contingent on a favorable macroeconomic environment [49] - Management highlighted the importance of educating clients on the tactical use of evergreen products as a portfolio management tool [56] Other Important Information - Management and advisory fees decreased by 4% year over year, primarily due to retro fees [21] - Total expenses decreased by $8 million compared to the prior year, with compensation and benefits down by $9 million [24] Q&A Session Summary Question: Insights on the DBS private banking relationship - Management described the relationship as an expansion of existing strategies, focusing on diverse distribution methods and technology integration [31][36] Question: Status of fund secondary fund six and marketing for fund seven - Management confirmed that fund six is more than halfway invested and that marketing for fund seven has not yet begun [38][39] Question: Drivers of growth in customized separate accounts - Management indicated that growth was driven by new sales, re-ups, and increased investment activity, with a strong pipeline of business [42][45] Question: Incentive fee trajectory and market conditions - Management noted that a positive macro backdrop could lead to increased exit opportunities and a rise in incentive fees in the latter half of the year [48][49] Question: Institutional demand for the Evergreen Fund - Management reported that approximately 15% of flows into the Evergreen product came from institutional investors, with the remainder from retail wealth [52][56] Question: Outlook for G&A expenses - Management expects G&A expenses to remain around $33 million per quarter, with some increases anticipated due to revenue-related expenses [58][59]

Financial Performance - GAAP net income was $77.1 million for the quarter, a decrease of 12% compared to the three months ended June 30, 2024[8] - Net income attributable to Hamilton Lane Incorporated was $53.7 million for the quarter, a decrease of 9% compared to the three months ended June 30, 2024[8] - Management and advisory fees were $133.7 million, a decrease of 4% year-over-year[14, 29] - Incentive fees decreased by 26% year-over-year to $42 million[9, 37] - Fee Related Earnings increased 31% compared to the three months ended June 30, 2024, reaching $83.7 million[10, 16] - Adjusted EBITDA was $95.8 million, remaining flat year-over-year[14, 45] Assets Under Management - Assets under management reached $141 billion as of June 30, 2025, an increase of 9% compared to June 30, 2024[16] - Fee-earning assets under management were $74 billion as of June 30, 2025, an increase of 10% compared to June 30, 2024[16] Unrealized Carried Interest - Unrealized carried interest was $1.309 billion as of June 30, 2025[38, 40] - 52% of the unrealized carry is from vehicles aged 5-8 years[41] Other - The company declared a quarterly dividend of $0.54 per share of Class A common stock[15]

Group 1 - Hamilton Lane reported quarterly earnings of $1.31 per share, exceeding the Zacks Consensus Estimate of $0.98 per share, but down from $1.51 per share a year ago, representing an earnings surprise of +33.67% [1] - The company posted revenues of $175.96 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.52%, compared to year-ago revenues of $196.73 million [2] - Over the last four quarters, Hamilton Lane has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - Hamilton Lane shares have increased by approximately 1.9% since the beginning of the year, while the S&P 500 has gained 7.6% [3] - The current consensus EPS estimate for the upcoming quarter is $1.03 on revenues of $167.25 million, and for the current fiscal year, it is $4.42 on revenues of $692.73 million [7] Group 3 - The Zacks Industry Rank indicates that the Financial - Investment Management sector is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

[Report Overview](index=1&type=section&id=Report%20Overview) This section provides an overview of Hamilton Lane's Q1 FY2026 results, including its financial position, dividend declaration, and standard forward-looking statement disclosures [Company Profile & Dividend Announcement](index=1&type=section&id=Company%20Profile%20%26%20Dividend%20Announcement) Hamilton Lane, a leading private markets investment firm, reported its first quarter fiscal 2026 results, with $986.2 billion in assets under management and supervision as of June 30, 2025, and declared a quarterly dividend of $0.54 per share, marking a 10% increase in the target full-year dividend from the prior fiscal year - Declared a quarterly dividend of **$0.54 per share** of Class A common stock, with a target full-year dividend of **$2.16**, representing a **10% increase** from the prior fiscal year[3](index=3&type=chunk) Assets Under Management and Supervision (AUMS) as of June 30, 2025 | Category | Amount (USD) | | :--- | :--- | | Discretionary Assets | $140.9 billion | | Non-discretionary Assets | $845.3 billion | | **Total AUMS** | **$986.2 billion** | - The company employs approximately **750 professionals** in offices across North America, Europe, Asia Pacific, and the Middle East[6](index=6&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section contains standard cautionary language regarding forward-looking statements, outlining numerous known and unknown risks and uncertainties that could cause actual results to differ materially from expectations, directing investors to the company's SEC filings for a more detailed discussion of risk factors - The report includes forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially[7](index=7&type=chunk) - Key risks include historical performance not being indicative of future results, intense competition, potential conflicts of interest, reliance on senior management, and volatile market conditions[7](index=7&type=chunk) - Investors are advised to refer to the "Risk Factors" in the company's Annual Report on Form 10-K for more comprehensive information on potential risks[8](index=8&type=chunk) [Financial & Operational Highlights](index=8&type=section&id=Financial%20%26%20Operational%20Highlights) This section details Hamilton Lane's first quarter fiscal 2026 financial performance, including key revenue and earnings metrics, alongside significant growth in its asset management base [Q1 FY2026 Key Financial Results](index=8&type=section&id=Q1%20FY2026%20Key%20Financial%20Results) For Q1 FY2026, Hamilton Lane reported GAAP net income attributable to the company of $53.7 million, a 9% decrease year-over-year, with diluted GAAP EPS of $1.28, primarily driven by lower total revenues which fell 11% to $176.0 million due to a significant drop in incentive fees, though Fee Related Earnings (FRE) increased 31% year-over-year to $83.7 million Q1 FY2026 Financial Performance vs. Prior Periods | Metric (in millions, except EPS) | Q1 FY26 | vs. Q1 FY25 | vs. Q4 FY25 | | :--- | :--- | :--- | :--- | | Management and advisory fees | $133.7 | (4)% | 5% | | Net income attributable to HLNE | $53.7 | (9)% | 6% | | GAAP EPS | $1.28 | (13)% | 4% | | Fee Related Earnings (Non-GAAP) | $83.7 | 31% | (7)% | | Adjusted EBITDA (Non-GAAP) | $95.8 | 0% | (6)% | - Total revenues for Q1 FY26 were **$176.0 million**, an **11% decrease** YoY, primarily due to a **26% decline** in incentive fees[19](index=19&type=chunk) - GAAP net income was **$77.1 million** for the quarter, a **12% decrease** compared to the prior-year quarter[18](index=18&type=chunk) [Asset Management Performance](index=14&type=section&id=Asset%20Management%20Performance) The company demonstrated continued growth in its asset base, with total Assets Under Management and Advisement (AUM/AUA) reaching $986 billion as of June 30, 2025, driven by new client wins, re-ups, and successful fundraising for various specialized funds, resulting in AUM growing 9% to $141 billion and Fee-Earning AUM (FEAUM) increasing 10% to $74 billion - Total Assets Under Management/Advisement (AUM/AUA) reached **$986 billion** as of June 30, 2025[31](index=31&type=chunk) Year-over-Year Asset Growth (as of June 30, 2025) | Metric | Value (USD) | YoY Growth | | :--- | :--- | :--- | | Assets Under Management (AUM) | $141 billion | 9% | | Fee-Earning AUM (FEAUM) | $74 billion | 10% | | Assets Under Advisement (AUA) | $845 billion | 4% | - Growth in FEAUM was driven by both Customized Separate Accounts (**+$4.6 billion** YoY increase) and Specialized Funds (**+$2.1 billion** YoY increase), with over **80%** of gross contributions in the last 12 months coming from existing clients[41](index=41&type=chunk)[43](index=43&type=chunk) - The company is actively fundraising for several specialized funds, including its **9th credit-oriented fund**, **6th direct equity fund**, and various evergreen funds[38](index=38&type=chunk)[44](index=44&type=chunk) [Detailed Financial Analysis](index=20&type=section&id=Detailed%20Financial%20Analysis) This section provides an in-depth analysis of Hamilton Lane's Q1 FY2026 financial performance, focusing on revenue streams, earnings metrics, unrealized carried interest, and the strength of its balance sheet [Revenue Analysis](index=22&type=section&id=Revenue%20Analysis) Total revenues for Q1 FY26 decreased 11% year-over-year to $176 million, with management and advisory fees falling 4% to $134 million due to a significant reduction in retroactive fees, and incentive fees seeing a more significant decline of 26% to $42 million, reflecting the unpredictable timing of realizations Q1 Revenue Breakdown (Year-over-Year) | Revenue Stream (in millions) | Q1 FY25 | Q1 FY26 | YoY Change | | :--- | :--- | :--- | :--- | | Management & Advisory Fees | $140 | $134 | (4)% | | Incentive Fees | $57 | $42 | (26)% | | **Total Revenues** | **$197** | **$176** | **(11)%** | - The YoY decrease in Management and Advisory Fees was largely due to **$20.7 million** in retroactive fees in the prior year quarter, compared to only **$0.3 million** in the current quarter[58](index=58&type=chunk) - Recurring management and advisory fees have constituted approximately **80%** of total revenues over the past five fiscal years, providing a stable base[58](index=58&type=chunk) [Earnings Analysis](index=26&type=section&id=Earnings%20Analysis) Despite lower revenues, the company's core profitability remained strong, with Fee Related Earnings (FRE) growing 31% year-over-year to $84 million, Adjusted EBITDA remaining flat at $96 million, and Net income attributable to Hamilton Lane Incorporated (HLI) decreasing by 9% to $54 million due to lower incentive fees Q1 Earnings Breakdown (Year-over-Year) | Metric (in millions) | Q1 FY25 | Q1 FY26 | YoY Change | | :--- | :--- | :--- | :--- | | Fee Related Earnings | $64 | $84 | 31% | | Adjusted EBITDA | $96 | $96 | 0% | | Net Income Attributable to HLI | $59 | $54 | (9)% | - The **31% YoY growth** in Fee Related Earnings highlights the strength and long-term double-digit growth trajectory of the company's core earnings stream[71](index=71&type=chunk) [Unrealized Carried Interest](index=24&type=section&id=Unrealized%20Carried%20Interest) The balance of unrealized carried interest, a key indicator of future potential incentive fee revenue, grew to $1.31 billion as of June 30, 2025, representing a 6% increase from $1.24 billion in the prior year, with the portfolio diversified across 116 vehicles and the majority (52%) of value in funds aged between 5 and 8 years, indicating a mature pipeline for future realizations - Unrealized carried interest increased to **$1.309 billion** as of June 30, 2025, up from **$1.238 billion** as of June 30, 2024[62](index=62&type=chunk) - The unrealized carry is diversified across **116 different vehicles**[62](index=62&type=chunk) Unrealized Carry by Fund Age | Age of Fund | Percentage of Total | | :--- | :--- | | < 5 years | 26% | | 5-8 years | 52% | | 8-12 years | 17% | | > 12 years | 5% | [Balance Sheet & Key Items](index=28&type=section&id=Balance%20Sheet%20%26%20Key%20Items) Hamilton Lane maintains a strong balance sheet with a total investment balance of $863 million as of June 30, 2025, primarily composed of investments in its own funds (~$464 million) and technology-related investments (~$399 million), while employing modest leverage with total debt standing at $289 million - The total investment balance was **$863 million** as of June 30, 2025[76](index=76&type=chunk) - The investment portfolio consists of approximately **$464 million** in Hamilton Lane funds and **$399 million** in technology-related and other investments[79](index=79&type=chunk) - The company maintains a modest leverage profile with **$289 million** of debt as of June 30, 2025[80](index=80&type=chunk) [Appendix](index=30&type=section&id=Appendix) This appendix provides comprehensive supporting financial data, including detailed breakdowns of revenue and asset growth, consolidated financial statements, non-GAAP reconciliations, and definitions of key financial and operational terms [Detailed Financial Tables](index=32&type=section&id=Detailed%20Financial%20Tables) The appendix provides detailed breakdowns of key financial and operational metrics, showing that for Q1 FY26, management and advisory fees were primarily driven by specialized funds (62%) and customized separate accounts (26%), incentive fees were significantly impacted by a sharp decline in secondary and direct credit funds, and Fee-Earning AUM saw a net increase of $2.35 billion during the quarter - For the three months ended June 30, 2025, Specialized Funds contributed **$82.7 million (62%)** and Customized Separate Accounts contributed **$34.6 million (26%)** to total management and advisory fees[85](index=85&type=chunk)[86](index=86&type=chunk) - Incentive fees from Evergreen funds were the largest contributor in Q1 FY26 at **$32.6 million**, though this was down **47% sequentially**. Fees from secondary funds dropped **95% YoY** to **$0.5 million**[88](index=88&type=chunk) - Total Fee-Earning AUM increased from **$72.0 billion** at the beginning of the quarter to **$74.4 billion** at the end, driven by **$3.4 billion** in contributions offset by **$1.6 billion** in distributions[90](index=90&type=chunk) [Consolidated Financial Statements](index=38&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated balance sheets and statements of cash flows, showing total assets of $1.80 billion as of June 30, 2025, with cash and cash equivalents increasing to $263.3 million, and net cash provided by operating activities of $128.9 million for the quarter, while net cash used in investing activities was $93.8 million Key Balance Sheet Items (in thousands) | Account | March 31, 2025 | June 30, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $229,161 | $263,347 | | Investments | $664,354 | $674,453 | | Total Assets | $1,690,355 | $1,802,038 | | Debt | $290,303 | $288,582 | | Total Liabilities | $766,460 | $806,992 | Key Cash Flow Items (Three Months Ended June 30) | Activity (in thousands) | 2024 | 2025 | | :--- | :--- | :--- | | Net cash provided by operating activities | $79,743 | $128,932 | | Net cash provided by (used in) investing activities | $2,132 | $(93,807) | | Net cash (used in) provided by financing activities | $(30,418) | $3,261 | [Non-GAAP Reconciliations](index=42&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures to their most directly comparable GAAP counterparts, bridging GAAP Net Income to key metrics such as Fee Related Earnings (FRE), Adjusted EBITDA, and Adjusted Net Income, offering transparency into the adjustments made for items like incentive fees, equity-based compensation, and other non-core expenses - Provides a full reconciliation from GAAP Net Income to Fee Related Earnings and Adjusted EBITDA for current and historical periods[96](index=96&type=chunk) - Details the calculation of Adjusted Net Income and Non-GAAP Earnings Per Share, including adjustments for taxes and share counts[96](index=96&type=chunk) - Breaks down GAAP revenue and expense lines into their 'fee related' non-GAAP components, such as 'Fee related management and advisory fees' and 'Fee related compensation and benefits expenses'[100](index=100&type=chunk) [Definitions and Disclosures](index=46&type=section&id=Definitions%20and%20Disclosures) The final section of the appendix defines the key terms and non-GAAP measures used throughout the presentation, such as Adjusted EBITDA, Fee Related Earnings (FRE), Assets Under Management (AUM), and Fee-Earning AUM (FEAUM), and includes the full forward-looking statements disclosure, reiterating the risks and uncertainties associated with the company's business - Provides specific definitions for non-GAAP measures like Fee Related Earnings (FRE), which is used to highlight recurring revenue streams[103](index=103&type=chunk) - Defines operational metrics including Assets Under Management (AUM), Assets Under Advisement (AUA), and Fee-Earning AUM (FEAUM), explaining how each is calculated and its relevance[105](index=105&type=chunk)[106](index=106&type=chunk) - Contains the full legal disclosure regarding forward-looking statements, consistent with the information presented at the beginning of the report[110](index=110&type=chunk)[111](index=111&type=chunk)

Core Insights - Wormhole has been selected as the official multichain partner for the SCOPE Access Fund, which provides access to Hamilton Lane's Senior Credit Opportunities Fund, with Hamilton Lane managing approximately $958 billion in assets as of March 31, 2025 [1][7]. Company Overview - Wormhole is a leading interoperability platform that connects traditional finance with the internet economy, enabling seamless movement of assets across multiple blockchain networks [2][8]. - Securitize is a prominent tokenized asset platform that partners with top-tier asset managers to tokenize real-world assets, enhancing accessibility and liquidity in institutional finance [9]. Product Development - The SCOPE Access Fund is a tokenized feeder fund that has been upgraded to include on-chain capabilities such as daily NAV pricing, instant subscriptions, and on-demand redemptions across Ethereum and Optimism [3][4]. - The integration of Wormhole's multichain capabilities transforms the SCOPE Feeder Fund into an interoperable asset, facilitating unified liquidity and composable integrations for developers [4][5]. Market Trends - There is a growing trend among large asset managers to not only tokenize funds but also to seek infrastructure that allows for the free flow of assets across different blockchain networks [5][6]. - The partnership between Wormhole and Securitize aims to redefine capital movement in the internet economy, making institutional-grade credit strategies more accessible [6]. Financial Metrics - Wormhole currently manages over $3.5 billion in multichain tokenized assets under management (MTAUM), reflecting its significant role in the evolving landscape of multichain infrastructure [5]. - Hamilton Lane's asset management includes over $138 billion in discretionary assets and more than $819 billion in non-discretionary assets [7][10].