Hamilton Lane(HLNE) - 2025 Q4 - Annual Results

Report Overview & FY2025 Highlights Hamilton Lane reported strong growth for fiscal year 2025, marked by an 11% increase in Assets Under Management to $138 billion and a 14% rise in management and advisory fees to $513.9 million Fiscal Year 2025 Highlights Hamilton Lane reported strong growth for fiscal year 2025, marked by an 11% increase in Assets Under Management to $138 billion and a 14% rise in management and advisory fees to $513.9 million. The company achieved a GAAP EPS of $5.41 and increased its target full-year dividend by 10% to $2.16 per share Fiscal Year 2025 Key Metrics (Year-over-Year) | Metric | Value | YoY Growth | | :--- | :--- | :--- | | Assets under management (AUM) | $138 billion | 11% | | Fee-earning AUM | $72 billion | 10% | | Management and advisory fees | $513.9 million | 14% | | Unrealized carried interest | $1.3 billion | 3% | | GAAP Net Income | $217.4 million | 54% | | GAAP EPS | $5.41 | 47% | - Declared a quarterly dividend of $0.54 per share of Class A common stock. The target full-year dividend of $2.16 represents a 10% increase from the prior fiscal year[6][21] Business Performance & Asset Growth The company demonstrated robust asset growth in FY2025, with total AUM & AUA reaching $958 billion and fee-earning AUM increasing 10% to $72 billion, driven by new client activity and successful fundraises Assets Under Management & Advisement (AUM & AUA) As of March 31, 2025, total Assets Under Management and Advisement (AUM & AUA) reached $958 billion. Discretionary AUM grew 11% year-over-year to $138 billion, while non-discretionary AUA increased by 3% to $819 billion. Growth was driven by new client wins, re-ups, and successful fundraising for various specialized funds AUM & AUA Growth (as of March 31) | Metric | 2024 | 2025 | YoY Growth | | :--- | :--- | :--- | :--- | | Total AUM | $124B | $138B | 11% | | Total AUA | $796B | $819B | 3% | | Total AUM & AUA | $921B | $958B | 4% | - Growth drivers include: - Customized Separate Accounts: New client wins and re-ups from existing clients, with over 80% of gross contributions in the last 12 months coming from existing clients[32] - Specialized Funds: Fundraising for direct equity, credit-oriented, infrastructure, impact, and evergreen funds[32] - Advisory Services: Robust opportunity set for technology-driven reporting, monitoring, and analytics services[32] Fee-Earning AUM (FEAUM) Fee-Earning AUM (FEAUM) increased by 10% year-over-year to $72 billion as of March 31, 2025. This growth was balanced between Customized Separate Accounts, which grew 5% to $39 billion, and Specialized Funds, which grew 16% to $33 billion. The overall management fee rate as a percentage of average FEAUM remained stable FEAUM Growth by Type ($B) | Date | Customized Separate Accounts | Specialized Funds | Total FEAUM | | :--- | :--- | :--- | :--- | | Mar-23 | $38 | $28 | $66 | | Mar-24 | $39 | $33 | $72 | - Key drivers for FEAUM growth: - Customized Separate Accounts: Driven by new client acquisitions and client re-ups[30] - Specialized Funds: Supported by the closing of the 6th secondary fund and ongoing fundraising for multiple other strategies including credit, direct equity, infrastructure, and impact funds[30] FY 2025 FEAUM Roll-Forward ($M) | Description | Amount | | :--- | :--- | | Beginning Balance (Mar 31, 2024) | $65,749 | | Contributions | $3,532 | | Distributions | ($2,671) | | FX, Market Value, Other | $192 | | Ending Balance (Mar 31, 2025) | $72,047 | Financial Performance Hamilton Lane achieved strong financial results in FY2025, with total revenues up 29% to $713 million, GAAP net income increasing 54% to $217 million, and a robust balance sheet supporting continued growth Revenue Analysis For fiscal year 2025, total revenues increased 29% to $713 million, significantly boosted by a 95% surge in incentive fees to $199 million. The core, recurring Management and Advisory fees grew by a strong 14% to $514 million, continuing to represent over 80% of total revenues on average over the past five years Revenue Performance ($M) | Revenue Type | FY24 | FY25 | YoY Change | | :--- | :--- | :--- | :--- | | Management and advisory fees | $451.9 | $513.9 | 14% | | Incentive fees | $101.9 | $198.3 | 95% | | Total revenues | $553.8 | $713.0 | 29% | - Recurring management and advisory fees have constituted an average of over 80% of total revenues over the past five fiscal years, providing a stable revenue base[42] - Incentive fees are derived from a highly diversified pool of over 110 funds and more than 3,000 assets, though the timing of their realization is unpredictable[42] Unrealized Carried Interest The unrealized carried interest balance grew 3% year-over-year to $1.26 billion as of March 31, 2025. The portfolio is mature, with 53% of the value in funds aged 5-8 years and another 17% in funds aged 8-12 years, suggesting potential for future realizations Unrealized Carried Interest Balance ($M) | Date | Balance | | :--- | :--- | | Mar-23 | $1,221 | | Mar-24 | $1,260 | | Mar-25 | $1,260 | - The unrealized carry is diversified by fund vintage: - < 5 years: 24% - 5-8 years: 53% - 8-12 years: 17% - > 12 years: 6%[47] Earnings Analysis The company demonstrated strong profitability growth in fiscal 2025. GAAP Net Income attributable to HLI rose 54% to $217 million. On a non-GAAP basis, Adjusted EBITDA increased 34% to $366 million, and Fee Related Earnings (FRE) grew 34% to $276 million, driven by robust growth in both management and incentive fees Earnings Performance ($M) | Metric | FY24 | FY25 | YoY Change | | :--- | :--- | :--- | :--- | | Net Income (to HLI) | $141 | $217 | 54% | | Adjusted EBITDA | $273 | $366 | 34% | | Fee Related Earnings | $207 | $276 | 34% | - The 34% year-over-year increase in Adjusted EBITDA was driven by growth in both incentive fees and management and advisory fees[56] - Fee Related Earnings have shown consistent long-term double-digit growth, with a 5-year CAGR of 20%[54][57] Balance Sheet & Investments Hamilton Lane maintains a strong balance sheet, with its total investment balance growing to $761 million as of March 31, 2025. The company utilizes modest leverage, with total debt at $290 million - The total investment balance of $761 million as of March 31, 2025, consisted primarily of: - ~$454 million in investments in the company's own funds - ~$307 million in technology-related and other investments[64] - The company maintains a modest leverage profile, with $290 million of debt as of March 31, 2025[65] Appendix: Detailed Financial Statements This appendix provides comprehensive financial statements for fiscal year 2025, detailing consolidated income, non-GAAP measures, revenue breakdowns, asset roll-forwards, balance sheets, and cash flow statements Consolidated Statements of Income For the fiscal year ended March 31, 2025, total revenues were $713.0 million, a 29% increase from $553.8 million in the prior year. This growth led to a Net Income Attributable to Hamilton Lane Incorporated of $217.4 million, up 54% year-over-year, resulting in a diluted EPS of $5.41 Condensed Consolidated Statements of Income (Year Ended March 31, $ in thousands) | Line Item | 2024 | 2025 | % Change | | :--- | :--- | :--- | :--- | | Total revenues | $553,842 | $712,963 | 29% | | Total expenses | $308,024 | $396,411 | 29% | | Income before income taxes | $281,661 | $362,277 | 29% | | Net income | $227,207 | $313,768 | 38% | | Net income attributable to Hamilton Lane Inc. | $140,858 | $217,417 | 54% | | Diluted EPS | $3.69 | $5.41 | 47% | Non-GAAP Financial Measures & Reconciliation For fiscal year 2025, key non-GAAP metrics showed significant growth. Fee Related Earnings (FRE) increased 34% to $276.5 million with a margin of 48%. Adjusted EBITDA grew 34% to $366.1 million. Adjusted Net Income rose 29% to $273.7 million, resulting in a Non-GAAP EPS of $5.04 Non-GAAP Financial Measures (Year Ended March 31, $ in thousands) | Metric | 2024 | 2025 | % Change | | :--- | :--- | :--- | :--- | | Fee Related Earnings | $206,719 | $276,465 | 34% | | Adjusted EBITDA | $272,524 | $366,069 | 34% | | Adjusted net income | $211,529 | $273,741 | 29% | | Non-GAAP earnings per share | $3.92 | $5.04 | 29% | Detailed Revenue Breakdown For fiscal year 2025, Specialized Funds were the primary driver of management and advisory fees, contributing $315.2 million (61% of total), a 21% increase year-over-year. Incentive fees surged 95% to $199.1 million, with Evergreen funds being the largest contributor at $69.6 million, a 352% increase from the prior year Management and Advisory Fees by Source (FY2025, $M) | Source | Revenue | % of Total | | :--- | :--- | :--- | | Specialized funds | $315.2 | 61% | | Customized separate accounts | $134.4 | 26% | | Reporting and other | $29.2 | 8% | | Advisory | $22.8 | 5% | | Total | $513.9 | 100% | Incentive Fees by Source (Year Ended March 31, $ in thousands) | Source | 2024 | 2025 | % Change | | :--- | :--- | :--- | :--- | | Evergreen funds | $15,404 | $69,603 | 352% | | Secondary funds | $41,464 | $46,601 | 12% | | Other specialized funds | $17,861 | $36,779 | 106% | | Customized separate accounts | $11,918 | $16,204 | 36% | | Direct credit funds | $7,872 | $14,963 | 90% | | Direct equity funds | $7,387 | $14,949 | 102% | | Total | $101,906 | $199,099 | 95% | Asset Roll-Forward Total Assets Under Management (AUM) grew 11% from $124.4 billion to $138.3 billion during fiscal year 2025. Fee-Earning AUM (FEAUM) increased by 10% from $65.7 billion to $72.0 billion, with net new capital from contributions exceeding distributions Fee-Earning AUM Roll-Forward (Year Ended Mar 31, 2025, $M) | Description | Customized Separate Accounts | Specialized Funds | Total | | :--- | :--- | :--- | :--- | | Balance, beginning of period | $37,574 | $28,175 | $65,749 | | Contributions | $1,939 | $1,593 | $3,532 | | Distributions | ($2,244) | ($427) | ($2,671) | | FX, market value and other | ($135) | $327 | $192 | | Balance, end of period | $39,343 | $32,704 | $72,047 | Consolidated Balance Sheets As of March 31, 2025, total assets stood at $1.69 billion, a significant increase from $1.27 billion the prior year, driven by higher cash, fees receivable, and investments. Total liabilities rose to $766.5 million from $595.2 million, primarily due to increased debt and a larger payable to related parties under the tax receivable agreement Condensed Consolidated Balance Sheets ($ in thousands) | (As of March 31) | 2024 | 2025 | | :--- | :--- | :--- | | Total assets | $1,271,200 | $1,690,355 | | Cash and cash equivalents | $114,634 | $229,161 | | Investments | $603,697 | $664,354 | | Total liabilities | $595,242 | $766,460 | | Debt | $196,159 | $290,303 | | Payable to related parties (TRA) | $201,422 | $240,648 | | Total equity | $675,958 | $923,895 | Consolidated Statements of Cash Flows For the fiscal year ended March 31, 2025, the company generated $300.8 million in net cash from operating activities. Net cash used in investing activities was $117.6 million, largely due to contributions to partnerships. Financing activities used a net $19.2 million, reflecting dividend payments and debt management activities Condensed Consolidated Statements of Cash Flows (Year Ended March 31, $ in thousands) | Cash Flow Activity | 2024 | 2025 | | :--- | :--- | :--- | | Net cash provided by operating activities | $120,852 | $300,820 | | Net cash (used in) investing activities | $(122,184) | $(117,576) | | Net cash provided by (used in) financing activities | $4,399 | $(19,157) | | Increase in cash and cash equivalents | $3,067 | $163,985 |