AssetMark(AMK) - 2024 Q2 - Quarterly Results

Financial Performance - Net income for Q2 2024 was $32.3 million, or $0.43 per share, with adjusted net income of $49.8 million, or $0.66 per share on total revenue of $198.5 million[1]. - Total revenue for Q2 2024 was $198.5 million, a 13.1% increase from $175.5 million in Q2 2023[3]. - Adjusted net income for Q2 2024 was $49.767 million, representing a 20.5% increase from $41.242 million in Q2 2023[39]. - Net income for the six months ended June 30, 2024, was $70,278 thousand, compared to $50,099 thousand for the same period in 2023, reflecting a 40.2% increase[17]. - Total revenue for the six months ended June 30, 2024, was $388.757 million, an increase of 12.4% compared to $345.819 million for the same period in 2023[43]. - The total net income for the three months ended June 30, 2024, was $32,314 thousand, slightly down from $32,877 thousand in the same period of 2023, indicating a decrease of 1.7%[46]. - Adjusted earnings per share for Q2 2024 was $0.66, compared to $0.55 in Q2 2023, reflecting a 20% increase[39]. Revenue Breakdown - Asset-based revenue increased to $158,878 thousand for the three months ended June 30, 2024, up from $137,336 thousand, a growth of 15.7%[14]. - Subscription-based revenue rose to $4,306 thousand, a 16.6% increase compared to $3,693 thousand in the prior year[14]. - The company reported a total of $6.454 million in other revenue for Q2 2024, compared to $4.932 million in Q2 2023, marking a 31% increase[39]. Operating Metrics - Adjusted EBITDA for Q2 2024 was $71.9 million, representing 36.2% of total revenue, an increase from 34.4% in Q2 2023[3]. - Adjusted EBITDA for the three months ended June 30, 2024, was $71,873 thousand, up from $60,397 thousand, indicating a 19.5% increase year-over-year[25]. - The adjusted EBITDA margin for the three months ended June 30, 2024, was 36.2%, compared to 34.4% in the same period of 2023[25]. - Total operating expenses for the three months ended June 30, 2024, were $151,439 thousand, an increase of 17.3% from $129,145 thousand in the prior year[14]. Advisor and Asset Growth - Platform assets increased 18.5% year-over-year to $119.4 billion, with quarterly net flows of $1.7 billion and market impact net of fees of $0.8 billion[1][3]. - More than 4,300 new households and 164 new producing advisors joined the AssetMark platform during Q2 2024, totaling over 9,200 advisors and 261,000 investor households[2]. - Assets from engaged advisors at period-end increased 20.2% year-over-year to $111.9 billion[3]. - The company experienced a 20.2% annualized production lift from existing advisors, indicating organic growth and increased wallet share[2][3]. Expenses and Costs - Total adjusted operating expenses for the six months ended June 30, 2024, were $259.202 million, up from $235.333 million in the same period of 2023[43]. - The company’s total asset-based expenses for the six months ended June 30, 2024, were $93.200 million, compared to $76.778 million in the same period of 2023, an increase of 21.4%[43]. - Share-based compensation for the six months ended June 30, 2024, was $8,003,000, slightly higher than $7,974,000 in the previous year[32]. - Merger and acquisition expenses totaled $12,090,000 for the six months ended June 30, 2024, compared to only $173,000 in the same period of 2023[32]. Tax and Interest - The provision for income taxes increased to $24,496,000 for the six months ended June 30, 2024, from $18,366,000 in the prior year, reflecting a tax rate increase[26]. - Interest income for the six months ended June 30, 2024, was $(8,385,000), compared to $(4,560,000) in the same period of 2023, indicating a decline in interest income[26]. - Interest expense for Q2 2024 was $2.202 million, slightly up from $2.137 million in Q2 2023[39]. Acquisition and Settlement - The company signed a definitive agreement to be acquired by GTCR, expected to close in Q4 2024, subject to customary closing conditions and regulatory approvals[2][4]. - The company has recognized an accrual for SEC settlement amounting to $20,000,000 in the previous year, which is not present in the current reporting period[32].