Cohen & Steers(CNS) - 2025 Q2 - Quarterly Results

Financial Highlights Financial Highlights For the second quarter of 2025, Cohen & Steers reported a U.S. GAAP diluted EPS of $0.72 and an adjusted diluted EPS of $0.73, with revenue increasing 1.2% to $136.1 million while expenses grew 4.0%, leading to a 4.1% decrease in operating income and ending AUM of $88.9 billion despite $131 million in net outflows Q2 2025 Financial Highlights vs. Q1 2025 (U.S. GAAP) | (in thousands, except per share data) | June 30, 2025 | March 31, 2025 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $136,126 | $134,467 | 1.2% | | Operating income | $43,327 | $45,198 | (4.1%) | | Net income attributable to common stockholders | $36,849 | $39,778 | (7.4%) | | Diluted earnings per share | $0.72 | $0.77 | (7.5%) | | Operating margin | 31.8% | 33.6% | (180 bps) | Q2 2025 As Adjusted Financial Highlights vs. Q1 2025 | (in thousands, except per share data) | June 30, 2025 | March 31, 2025 | % Change | | :--- | :--- | :--- | :--- | | Net income attributable to common stockholders | $37,324 | $38,353 | (2.7%) | | Diluted earnings per share | $0.73 | $0.75 | (2.8%) | | Operating margin | 33.6% | 34.7% | (110 bps) | - Key metrics for Q2 2025 include: - Ending AUM of $88.9 billion - Average AUM of $87.2 billion - Net outflows of $131 million[5] Financial Performance Revenue Analysis Total revenue for Q2 2025 was $136.1 million, a 1.2% increase from Q1 2025, primarily driven by a 1.4% rise in investment advisory and administration fees due to higher average AUM and an additional day Revenue Breakdown (Q2 2025 vs Q1 2025) | (in thousands) | June 30, 2025 | March 31, 2025 | % Change | | :--- | :--- | :--- | :--- | | Open-end funds | $70,613 | $69,658 | 1.4% | | Institutional accounts | $32,854 | $32,167 | 2.1% | | Closed-end funds | $25,078 | $24,946 | 0.5% | | Total investment advisory and administration fees | $128,545 | $126,771 | 1.4% | | Total revenue | $136,126 | $134,467 | 1.2% | Expense Analysis Total expenses increased by 4.0% to $92.8 million in Q2 2025, mainly due to higher employee compensation from accelerated restricted stock vesting, increased distribution fees, and higher general and administrative costs Expense Breakdown (Q2 2025 vs Q1 2025) | (in thousands) | June 30, 2025 | March 31, 2025 | % Change | | :--- | :--- | :--- | :--- | | Employee compensation and benefits | $56,640 | $54,554 | 3.8% | | Distribution and service fees | $15,706 | $15,189 | 3.4% | | General and administrative | $18,078 | $17,169 | 5.3% | | Total expenses | $92,799 | $89,269 | 4.0% | - Key drivers for the expense increase include: - Employee compensation: Accelerated vesting of restricted stock due to retirements - Distribution and service fees: Higher average AUM in U.S. open-end funds - General and administrative: Increased talent acquisition costs and higher travel and business development expenses[9] Operating Margin The operating margin for Q2 2025 was 31.8%, a decrease from 33.6% in Q1 2025, reflecting expense growth outpacing revenue growth during the quarter - Operating margin decreased by 180 basis points from 33.6% in Q1 2025 to 31.8% in Q2 2025[8] Non-operating Income (Loss) Total non-operating income attributable to the company was $5.6 million in Q2 2025, an increase from $4.2 million in Q1 2025, driven by higher net gains from investments and increased interest and dividend income Non-operating Income Attributable to the Company (Q2 2025 vs Q1 2025) | (in thousands) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Consolidated Funds | $1,844 | $1,829 | | Corporate - Seed and Other | $3,740 | $2,412 | | Total | $5,584 | $4,241 | Income Taxes The effective income tax rate for Q2 2025 was 24.7%, significantly higher than the 19.5% rate in Q1 2025, primarily due to the absence of large excess tax benefits from restricted stock unit vesting Effective Income Tax Rate Reconciliation | | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | U.S. statutory tax rate | 21.0% | 21.0% | | State and local income taxes | 3.0% | 2.9% | | Excess tax benefits related to RSU vesting | — | (6.6%) | | Effective income tax rate | 24.7% | 19.5% | Consolidated Statements of Operations For Q2 2025 year-over-year, revenue grew 11.8%, operating income increased 12.8%, and net income attributable to common stockholders rose 16.0% to $36.8 million, with six-month net income up 16.5% compared to 2024 Quarterly Performance (YoY) | (in thousands) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total revenue | $136,126 | $121,721 | 11.8% | | Operating income | $43,327 | $38,402 | 12.8% | | Net income attributable to common stockholders | $36,849 | $31,771 | 16.0% | Six-Month Performance (YoY) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total revenue | $270,593 | $244,431 | 10.7% | | Operating income | $88,525 | $78,667 | 12.5% | | Net income attributable to common stockholders | $76,627 | $65,775 | 16.5% | Assets Under Management (AUM) AUM Overview Total AUM increased by 1.5% to $88.9 billion at the end of Q2 2025, driven by $2.3 billion in market appreciation, offsetting $131 million in net outflows and $762 million in distributions - AUM increased from $87.6 billion at March 31, 2025, to $88.9 billion at June 30, 2025[12] - The AUM change was composed of: - Market appreciation: +$2.3 billion - Net outflows: -$131 million - Distributions: -$762 million[12] AUM by Investment Vehicle AUM increased across all investment vehicles in Q2 2025, with open-end funds growing 1.6% to $43.0 billion and institutional accounts rising 1.5% to $34.4 billion, despite institutional net outflows of $519 million AUM by Investment Vehicle (as of June 30, 2025) | Investment Vehicle | AUM (in millions) | QoQ % Change | | :--- | :--- | :--- | | Open-end funds | $42,962 | 1.6% | | Institutional accounts | $34,386 | 1.5% | | Closed-end funds | $11,588 | 1.7% | | Total | $88,936 | 1.5% | Quarterly Net Flows by Vehicle | (in millions) | Q2 2025 Net Flows | | :--- | :--- | | Open-end Funds | $285 | | Institutional Accounts | ($519) | | Closed-end Funds | $103 | AUM by Investment Strategy Global/International Real Estate saw the largest AUM growth at 6.5%, while U.S. Real Estate grew 0.9% to $44.0 billion, and Preferred Securities declined 1.7% due to $480 million in net outflows AUM by Investment Strategy (as of June 30, 2025) | Investment Strategy | AUM (in millions) | QoQ % Change | | :--- | :--- | :--- | | U.S. real estate | $43,972 | 0.9% | | Preferred securities | $17,902 | (1.7%) | | Global/international real estate | $13,980 | 6.5% | | Global listed infrastructure | $10,052 | 3.5% | | Other | $3,030 | 3.0% | - Key net flows by strategy for Q2 2025: - U.S. Real Estate: Net inflows of $349 million[27] - Preferred Securities: Net outflows of $480 million[28] - Global Listed Infrastructure: Net inflows of $21 million[27] - Global/International Real Estate: Net outflows of $23 million[28] AUM - Institutional Accounts Breakdown Within institutional accounts, Advisory AUM grew 1.7% to $20.0 billion despite $412 million in net outflows, while Subadvisory AUM increased 1.1% to $14.3 billion with $107 million in net outflows Institutional Accounts AUM and Flows (Q2 2025) | Account Type | Ending AUM (in millions) | Net Flows (in millions) | | :--- | :--- | :--- | | Advisory | $20,045 | ($412) | | Subadvisory | $14,341 | ($107) | | Total | $34,386 | ($519) | Balance Sheet and Other Information Balance Sheet Information As of June 30, 2025, liquidity improved to $322.8 million from $295.4 million, and stockholders' equity grew to $528.5 million, reflecting a stronger financial position - Cash, cash equivalents, U.S. Treasurys and liquid seed investments increased to $322.8 million as of June 30, 2025, from $295.4 million as of March 31, 2025[16] - Stockholders' equity increased to $528.5 million as of June 30, 2025, compared with $507.7 million as of March 31, 2025[16] Conference Call Information The company will host a conference call on July 18, 2025, at 10:00 a.m. (ET) to discuss the second quarter results, with an accompanying presentation and webcast available online - A conference call to discuss Q2 2025 results is scheduled for Friday, July 18, 2025, at 10:00 a.m. (ET)[18] Reconciliation of U.S. GAAP to As Adjusted Results Net Income and EPS Reconciliation For Q2 2025, U.S. GAAP net income of $36.8 million was adjusted to $37.3 million, resulting in an adjusted diluted EPS of $0.73 compared to the U.S. GAAP figure of $0.72, with adjustments for seed investments and foreign currency GAAP to As Adjusted EPS Reconciliation (Q2 2025) | | Per Share | | :--- | :--- | | Diluted earnings per share, U.S. GAAP | $0.72 | | Seed investments—net | ($0.07) | | Accelerated vesting of restricted stock units | $0.04 | | Foreign currency exchange (gain) loss—net | $0.05 | | Tax effects | ($0.01) | | Diluted earnings per share, as adjusted | $0.73 | Operating Results and Non-operating Income Reconciliation Adjusted operating income for Q2 2025 was $45.5 million with an adjusted operating margin of 33.6%, compared to the U.S. GAAP operating margin of 31.8%, after removing consolidated funds and non-recurring expenses GAAP to As Adjusted Operating Results (Q2 2025) | (in thousands) | U.S. GAAP | As Adjusted | | :--- | :--- | :--- | | Revenue | $136,126 | $135,320 | | Expenses | $92,799 | $89,862 | | Operating income | $43,327 | $45,458 | | Operating margin | 31.8% | 33.6% |