Silvercrest Asset Management Group(SAMG) - 2025 Q1 - Quarterly Results

Q1 2025 Financial Highlights and Business Update Silvercrest reported strong Q1 2025 new client inflows and continued capital returns, despite a market-driven AUM decline, with key financial metrics detailed Business Update Silvercrest achieved strong new client inflows and returned capital to shareholders, despite a market-driven decline in total AUM, while investing in strategic growth initiatives - Experienced strong new client organic flows of $0.4 billion during Q1 2025, following significant flows of $1.4 billion in Q4 2024[3] - Total AUM declined during the quarter due to market volatility, with discretionary AUM at $22.7 billion (flat year-over-year) and total AUM at $35.3 billion[4] - Completed a $12.0 million stock repurchase program and the Board of Directors declared a quarterly dividend of $0.20 per share[7][8] - Strategic focus includes investing in talent to drive new growth and pursuing initiatives to enhance the company's profile in institutional and wealth markets[5] First Quarter 2025 Highlights Q1 2025 highlights include $35.3 billion in total AUM, $31.4 million revenue, $3.9 million GAAP net income, and $0.26 GAAP diluted EPS Q1 2025 Key Metrics | Metric | Value | | :--- | :--- | | Total AUM | $35.3 billion | | Discretionary AUM | $22.7 billion | | Non-discretionary AUM | $12.6 billion | | Revenue | $31.4 million | | GAAP Consolidated Net Income | $3.9 million | | GAAP Basic and Diluted EPS | $0.26 | | Adjusted EBITDA | $6.5 million | | Adjusted Net Income | $3.9 million | | Adjusted Diluted EPS | $0.27 | Financial Performance Analysis This section analyzes Q1 2025 financial performance, detailing revenue and expense trends, profitability metrics, and the company's liquidity position Summary of Financial Results (Q1 2025 vs Q1 2024) Q1 2025 revenue grew 3.7% to $31.4 million, but net income and Adjusted EBITDA declined due to a 9.0% increase in total expenses, compressing margins Financial Comparison (Q1 2025 vs Q1 2024) | Metric (in thousands, except percentages) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $31,392 | $30,272 | | Net Income | $3,928 | $4,915 | | Net Income Margin | 12.5% | 16.2% | | Adjusted EBITDA | $6,497 | $7,453 | | Adjusted EBITDA Margin | 20.7% | 24.6% | | Adjusted Net Income | $3,894 | $4,718 | | Assets Under Management (billions) | $35.3 | $34.5 | Revenue and Expense Analysis Q1 2025 revenue increased 3.7% to $31.4 million due to market appreciation, while total expenses rose 9.0% to $26.6 million, driven by higher compensation and administrative costs - Revenue increased by 3.7% YoY to $31.4 million, driven by market appreciation over the twelve-month period[14] - Total expenses increased by 9.0% YoY to $26.6 million[15] - Compensation and benefits expense rose 6.9% due to merit-based salary increases, while general and administrative expenses grew 14.6% from higher professional fees, portfolio systems expense, and other operational costs[15] Profitability Analysis Q1 2025 profitability declined, with consolidated net income at $3.9 million and Adjusted EBITDA at $6.5 million (margin 20.7%), leading to an Adjusted Diluted EPS of $0.27 Profitability Metrics Comparison (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Consolidated Net Income | $3.9 million | $4.9 million | | Adjusted EBITDA | $6.5 million | $7.5 million | | Adjusted EBITDA Margin | 20.7% | 24.6% | | Adjusted Net Income | $3.9 million | $4.7 million (from Exhibit 3) | | Adjusted Diluted EPS | $0.27 | $0.33 (from Exhibit 3) | Liquidity and Capital Resources As of March 31, 2025, Silvercrest reported $36.3 million in cash and equivalents and $81.0 million in total equity, with no outstanding debt, though cash decreased from year-end 2024 - Cash and cash equivalents stood at $36.3 million at March 31, 2025, a decrease from $68.6 million at December 31, 2024[18] - The company had no outstanding balance on its term loan or revolving credit facility with City National Bank[18] - Total equity attributable to Silvercrest Asset Management Group Inc. was $81.0 million at the end of the quarter[19] Assets Under Management (AUM) Analysis This section provides a detailed analysis of Assets Under Management (AUM), including total, discretionary, and non-discretionary AUM, and their roll-forward changes AUM Overview As of March 31, 2025, total AUM reached $35.3 billion, up 2.3% YoY but down 3.3% QoQ due to market depreciation, with discretionary AUM remaining flat YoY - Total AUM increased 2.3% YoY to $35.3 billion, primarily due to $0.8 billion in market appreciation[12] - Total AUM decreased 3.3% QoQ from $36.5 billion, driven by market depreciation of $1.4 billion, partially offset by net client inflows of $0.2 billion[13] - Discretionary AUM was flat YoY at $22.7 billion and decreased 2.6% QoQ from $23.3 billion[12][13] Total AUM Total AUM ended Q1 2025 at $35.3 billion, with $0.2 billion net client inflows offset by $1.4 billion market depreciation Total AUM Roll-Forward (in billions) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Beginning AUM | $36.5 | $33.3 | | Gross client inflows | $1.4 | $1.2 | | Gross client outflows | $(1.2) | $(1.5) | | Net client flows | $0.2 | $(0.3) | | Market (depreciation)/appreciation | $(1.4) | $1.5 | | Ending AUM | $35.3 | $34.5 | Discretionary AUM Discretionary AUM was $22.7 billion in Q1 2025, flat YoY, with $0.3 billion net client inflows offset by $0.9 billion market depreciation Discretionary AUM Roll-Forward (in billions) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Beginning AUM | $23.3 | $21.9 | | Gross client inflows | $1.0 | $0.7 | | Gross client outflows | $(0.7) | $(1.1) | | Net client flows | $0.3 | $(0.4) | | Market (depreciation)/appreciation | $(0.9) | $1.2 | | Ending AUM | $22.7 | $22.7 | Non-Discretionary AUM Non-Discretionary AUM reached $12.6 billion in Q1 2025, up 6.8% YoY, despite $0.1 billion net client outflows and $0.5 billion market depreciation Non-Discretionary AUM Roll-Forward (in billions) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Beginning AUM | $13.2 | $11.4 | | Gross client inflows | $0.4 | $0.5 | | Gross client outflows | $(0.5) | $(0.4) | | Net client flows | $(0.1) | $0.1 | | Market (depreciation)/appreciation | $(0.5) | $0.3 | | Ending AUM | $12.6 | $11.8 | Condensed Consolidated Financial Statements This section presents the condensed consolidated statements of operations and financial condition, detailing revenue, expenses, net income, assets, and liabilities Condensed Consolidated Financial Statements of Operations Q1 2025 total revenue was $31.4 million, but increased expenses led to a decline in income before taxes to $5.1 million and diluted net income per share to $0.26 Q1 2025 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $31,392 | $30,272 | | Total expenses | $26,555 | $24,368 | | Income before provision for income taxes | $5,102 | $6,208 | | Net income | $3,928 | $4,915 | | Net income attributable to Silvercrest | $2,469 | $3,000 | | Diluted net income per share | $0.26 | $0.32 | Condensed Consolidated Statements of Financial Condition As of March 31, 2025, total assets were $159.9 million and total liabilities $43.2 million, both decreasing from year-end 2024, primarily due to changes in cash and accrued compensation Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $36,255 | $68,611 | | Goodwill | $63,675 | $63,675 | | Total assets | $159,926 | $194,432 | | Accrued compensation | $9,085 | $39,865 | | Total liabilities | $43,234 | $74,739 | | Total equity | $116,692 | $119,693 | Non-GAAP Financial Measures and Reconciliations This section explains and reconciles non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS, to their GAAP equivalents Explanation of Non-GAAP Financial Measures The company utilizes non-GAAP measures like Adjusted EBITDA and Adjusted Net Income to offer insights into operational performance by adjusting GAAP figures for non-recurring items and specific expenses - Adjusted EBITDA is defined as EBITDA adjusted for items such as Delaware franchise tax, certain professional fees, severance, and other non-recurring expenses[20] - Adjusted Net Income represents recurring net income adjusted for similar items as Adjusted EBITDA and assumes a blended corporate tax rate of 26%[20] - Adjusted Earnings Per Share is calculated using Adjusted Net Income and includes both Class A and Class B shares outstanding to provide a perspective of recurring EPS for the entire company[20] Reconciliation of GAAP to non-GAAP Adjusted EBITDA Measure Q1 2025 GAAP Net Income of $3.9 million was reconciled to Adjusted EBITDA of $6.5 million by adding back income taxes, depreciation, amortization, and equity-based compensation Adjusted EBITDA Reconciliation (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $3,928 | $4,915 | | Provision for income taxes | 1,174 | 1,293 | | Depreciation and amortization | 1,039 | 1,019 | | Equity-based compensation | 454 | 354 | | Other adjustments | 110 | 118 | | Interest expense (net of income) | (258) | (296) | | Delaware Franchise Tax | 50 | 50 | | Adjusted EBITDA | $6,497 | $7,453 | Reconciliation of GAAP to non-GAAP Adjusted Net Income and Adjusted Earnings Per Share Measures Q1 2025 Adjusted Net Income was $3.9 million, leading to Adjusted Diluted EPS of $0.27, after adjusting GAAP Net Income for taxes and other items using a 26% tax rate Adjusted Net Income & EPS Reconciliation (in thousands, except per share) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $3,928 | $4,915 | | Adjustments (pre-tax) | 160 | 168 | | Adjusted earnings before provision for income taxes | 5,262 | 6,376 | | Adjusted provision for income taxes (26%) | (1,368) | (1,658) | | Adjusted net income | $3,894 | $4,718 | | Adjusted basic earnings per share | $0.29 | $0.34 | | Adjusted diluted earnings per share | $0.27 | $0.33 | Supplemental Information This section provides supplemental information, including equity investment strategy performance and essential corporate disclosures Equity Investment Strategy Composite Performance As of March 31, 2025, Silvercrest's proprietary equity strategies showed mixed 1-year performance against benchmarks, though longer-term results generally exceeded them 1-Year Equity Performance vs. Benchmark (as of March 31, 2025) | Composite | 1-Year Return | Benchmark | Benchmark 1-Year Return | | :--- | :--- | :--- | :--- | | Large Cap Value | 1.1% | Russell 1000 Value | 7.2% | | Small Cap Value | -4.1% | Russell 2000 Value | -3.1% | | Smid Cap Value | -0.8% | Russell 2500 Value | -1.5% | | Focused Value | 6.3% | Russell 3000 Value | 6.7% | Corporate Information and Disclosures This section details the upcoming Q1 2025 earnings call, includes forward-looking statement disclaimers, and provides background on Silvercrest as an independent investment adviser - A conference call to discuss Q1 2025 results is scheduled for May 9, 2025, at 8:30 am (Eastern Time)[21] - The release contains forward-looking statements subject to risks and uncertainties as detailed in the company's Form 10-K[22]