Revenue Growth - Total revenues for Q2 2024 reached $29.08 million, a significant increase from $11.38 million in Q2 2023, representing a growth of 155.5%[200] - Active management revenue surged to $27.01 million in Q2 2024, compared to $11.02 million in Q2 2023, marking a 145.0% increase[200] - Portfolio servicing revenue increased by 240.5% to $84,218 in Q2 2024 from $24,737 in Q2 2023, driven by a rise in serviced policies[204] - The company’s origination revenue for Q2 2024 was $1.86 million, compared to no origination revenue in Q2 2023[200] - Active management revenue rose by $15,989,358, or 145.0%, for the three months ended June 30, 2024, driven by a net increase of $24,245,464 related to policies accounted for under the fair value method[206] - 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 Metrics - Gross profit for Q2 2024 was $26.33 million, up from $10.41 million in Q2 2023, reflecting a growth of 153.0%[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] - Adjusted Net Income for Q2 2024 was $11,812,527, compared to $6,750,145 in Q2 2023, reflecting a significant increase of 75.7%[260] - Adjusted EPS for Q2 2024 was $0.19 (basic) and $0.18 (diluted), up from $0.13 (both) in Q2 2023, representing a 46.2% increase in basic EPS[260] - Adjusted EBITDA for Q2 2024 was $16,716,882, compared to $9,143,985 in Q2 2023, marking an increase of 82.8%[265] - The Adjusted EBITDA margin for Q2 2024 was 57.5%, down from 80.4% in Q2 2023, indicating a decrease in operational efficiency[265] Expenses and Losses - Operating income for Q2 2024 was $6.77 million, a decrease from $8.37 million in Q2 2023, indicating a decline of 18.9%[200] - Sales and marketing expenses increased by $1,868,960, or 273.3%, for the three months ended June 30, 2024, primarily related to an increase in advertising costs to support origination and active management growth strategy[220] - General and administrative expenses increased by $13,975,805, or 2,419.9%, for the three months ended June 30, 2024, primarily due to non-cash stock-based compensation expense and payroll expenses[222] - 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] 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] - The average realized gain on policies sold under the investment method was 48.2% for the six months ended June 30, 2024, compared to 16.3% in the same period in 2023[208] - 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] - Loss on change in fair value of debt decreased by $245,766 or 17.0% for the three months ended June 30, 2024, compared to the same period in 2023[231] - Loss on change in fair value of debt increased by $1,513,428 or 63.1% for the six months ended June 30, 2024, compared to the same period in 2023[232] Cash Flow and Financing - Net cash used in operating activities for H1 2024 was $(64,542,510), an increase of $26,178,339 compared to $(38,364,171) in H1 2023[275] - Net cash provided by financing activities surged to $130,993,784 in H1 2024, compared to $35,983,097 in H1 2023, reflecting a significant increase of 263.5%[279] - The company has a $15,000,000 share repurchase plan approved in December 2023, with $2,974,863 remaining available for repurchases as of June 30, 2024[273] Policy and Market Activity - The number of policies serviced increased by 41.0% to 1,155 in the first half of 2024, compared to 819 in the same period of 2023[270] - The value of policies serviced rose by 38.6% to $2,526,819,484 in H1 2024, up from $1,823,437,795 in H1 2023[270] - Total invested dollars increased by 59.4% to $1,081,579,116 in H1 2024, compared to $678,400,432 in H1 2023[270] - The company operates in 49 states and the District of Columbia, holding licenses in 43 jurisdictions for life and viatical settlements[195] - Abacus operates in 49 states and the District of Columbia, holding licenses in 43 jurisdictions for life and viatical settlements[287] Historical Performance - For the three months ended June 30, 2023, total revenue was $6,884,690, with origination revenue contributing $1,689,088 and related-party revenue at $5,195,602[289] - Gross profit for the same period was $1,986,710, resulting in a gross margin of 29%[296] - The net loss for the three months ended June 30, 2023, was $318,098, with an adjusted EBITDA of $(310,867)[312] - For the six months ended June 30, 2023, total revenue reached $13,184,676, with origination revenue at $3,252,738 and related-party revenue at $9,931,938[289] - The gross profit for the six months was $3,891,373, yielding a gross margin of 30%[298] - The net loss for the six months ended June 30, 2023, was $974,901, with an adjusted EBITDA of $(957,207)[312]
ET.RES.ACQ(ERESW) - 2024 Q2 - Quarterly Report