Revenue Growth - Total revenues for the three months ended June 30, 2024, were $29,076,102, a significant increase from $11,378,765 in the same period of 2023, representing a growth of 155.5%[200] - Active management revenue rose to $27,013,757 for the three months ended June 30, 2024, compared to $11,024,399 in 2023, marking an increase of 145.1%[200] - Portfolio servicing revenue increased by 240.5% to $84,218 for the three months ended June 30, 2024, up from $24,737 in 2023, driven by a rise in serviced policies[204] - Origination revenue reached $1,857,457 for the three months ended June 30, 2024, compared to $0 in the same period in 2023, related to the acquisition of Abacus[210] - Total revenue for the active management segment increased by $15,989,358 or 145.0% for the three months ended June 30, 2024, compared to the same period in 2023[249] - Total revenue for the originations segment increased by $1,857,457 for the three months ended June 30, 2024, compared to the same period in 2023, with no prior revenue recorded[251] Profitability - Gross profit for the three months ended June 30, 2024, was $26,332,568, compared to $10,405,365 in 2023, reflecting a growth of 153.3%[200] - Gross profit increased by $15,927,203, or 153.1%, for the three months ended June 30, 2024, primarily due to an increase in active management revenue driven by an increase in policies purchased[217] - For the three months ended June 30, 2024, the adjusted net income was $11,812,527, compared to $6,750,145 for the same period in 2023, reflecting a significant increase[260] - The adjusted EPS for the three months ended June 30, 2024, was $0.19 (basic) and $0.18 (diluted), compared to $0.13 (basic and diluted) in 2023[260] - Adjusted EBITDA for the three months ended June 30, 2024, was $16,716,882, up from $9,143,985 in 2023, with an adjusted EBITDA margin of 57.5% compared to 80.4% in 2023[265] Expenses - Operating income for the three months ended June 30, 2024, was $6,770,770, a decrease from $8,370,594 in the same period of 2023[200] - Sales and marketing expenses surged by $1,868,960, or 273.3%, for the three months ended June 30, 2024, primarily due to increased advertising costs to support origination and active management growth strategies[220] - General and administrative expenses increased by $13,975,805, or 2,419.9%, for the three months ended June 30, 2024, largely due to non-cash stock-based compensation and payroll expenses[222] - Cost of revenue (excluding depreciation and amortization) increased by $1,768,681, or 181.7%, for the three months ended June 30, 2024, primarily due to increased payroll and commission expenses[213] Investment Performance - Unrealized loss on investments increased by $1,035,418, or 153.9%, for the three months ended June 30, 2024, primarily due to changes in the fair value of S&P 500 options[226] - Unrealized gain on investments increased by $4,328 or 0.5% for the six months ended June 30, 2024, compared to the same period in 2023[227] - Realized gain on investments increased by $856,744 for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to the sale of S&P 500 options[228] Cash Flow - Net cash used in operating activities for the six months ended June 30, 2024, was $(64,542,510), an increase of $(26,178,339) compared to $(38,364,171) in 2023[275] - Net cash provided by financing activities surged to $130,993,784 for the six months ended June 30, 2024, compared to $35,983,097 in 2023, marking an increase of $95,010,687[279] - The company believes its current cash and cash equivalents will be sufficient to support operating and debt service needs for the next 12 months[274] Policy and Market Activity - The number of policies serviced increased by 41.0% to 1,155 for the six months ended June 30, 2024, from 819 in 2023[270] - The value of policies serviced rose to $2,526,819,484 for the six months ended June 30, 2024, a 38.6% increase from $1,823,437,795 in 2023[270] - Total invested dollars increased by 59.4% to $1,081,579,116 for the six months ended June 30, 2024, compared to $678,400,432 in 2023[270] Related Party Transactions - Related-party revenue for the three months ended June 30, 2023 included $1,579,864 from 38 originated policies for the Nova funds, valued at $56,688,680[292] - Related-party revenue for the six months ended June 30, 2023 included $3,093,797 from 72 originated policies for the Nova funds, valued at $96,674,080[294] Other Financial Metrics - Interest expense increased to $4,529,187 for the three months ended June 30, 2024, compared to $584,075 for the same period in 2023, primarily due to various interest expenses[234] - Income tax expense increased by $573,139 or 48.4% for the three months ended June 30, 2024, compared to the same period in 2023[242] - Other income (expense) decreased by $73,869 or 60.7% for the three months ended June 30, 2024, compared to the same period in 2023[233]
EAST RESOURCES A(ERES) - 2024 Q2 - Quarterly Report