Janus Henderson(JHG) - 2025 Q2 - Quarterly Report

Part I. Financial Information Item 1. Financial Statements (unaudited) The unaudited financial statements for H1 2025 report total assets of $7.45 billion, Q2 revenue of $633.2 million, and net income attributable to JHG of $149.9 million Condensed Consolidated Balance Sheets Total assets increased to $7.45 billion by June 30, 2025, driven by investments and intangible assets, while total liabilities decreased and equity grew Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $882.6 | $1,217.2 | | Investments (Current) | $380.7 | $337.1 | | Investments (Consolidated VIEs) | $1,059.4 | $502.1 | | Intangible assets, net | $2,540.5 | $2,473.3 | | Goodwill | $1,633.8 | $1,550.4 | | Total Assets | $7,451.5 | $6,963.1 | | Liabilities & Equity | | | | Long-term debt | $395.2 | $395.0 | | Total liabilities | $1,806.9 | $1,880.0 | | Total shareholders' equity | $4,768.6 | $4,591.5 | | Total Liabilities & Equity | $7,451.5 | $6,963.1 | Condensed Consolidated Statements of Comprehensive Income Q2 2025 total revenue increased to $633.2 million, with net income attributable to JHG rising to $149.9 million, or $0.95 per diluted share Q2 2025 vs Q2 2024 Performance (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenue | $633.2 | $588.4 | | Operating Income | $163.8 | $164.3 | | Net Income Attributable to JHG | $149.9 | $129.7 | | Diluted EPS | $0.95 | $0.81 | H1 2025 vs H1 2024 Performance (in millions, except EPS) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Revenue | $1,254.6 | $1,140.1 | | Operating Income | $317.4 | $283.5 | | Net Income Attributable to JHG | $270.6 | $259.8 | | Diluted EPS | $1.72 | $1.62 | Condensed Consolidated Statements of Cash Flows H1 2025 operating cash flow decreased to $138.0 million, while investing activities used $518.1 million and financing activities provided $11.9 million Six Months Ended June 30 Cash Flow Summary (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Operating Activities | $138.0 | $218.8 | | Net Investing Activities | $(518.1) | $(114.7) | | Net Financing Activities | $11.9 | $(230.1) | | Net Change in Cash | $(323.0) | $(133.3) | Notes to the Condensed Consolidated Financial Statements The notes detail accounting policies, a new strategic partnership with Guardian Life Insurance, the acquisition of Victory Park Capital, and ongoing litigation - On June 30, 2025, JHG entered a strategic partnership with Guardian Life Insurance, recognizing a $41.1 million definite-lived intangible asset for managing Guardian's public fixed income portfolio[26][28] - The acquisition of a 55% interest in Victory Park Capital Advisors (VPC) was completed, with total consideration including $114.0 million in cash, JHG common stock, and contingent consideration valued at $18.7 million as of June 30, 2025[29][30][31] - The company is involved in a class action lawsuit, Schissler v. Janus Henderson, alleging breaches of fiduciary duties related to the company's 401(k) plan. The company intends to vigorously defend against these claims[104] Dividends Declared and Paid (H1 2025) | Declaration Date | Dividend per Share | Total Paid (millions) | Payment Date | | :--- | :--- | :--- | :--- | | Jan 30, 2025 | $0.39 | $61.5 | Feb 27, 2025 | | Apr 30, 2025 | $0.40 | $63.8 | May 29, 2025 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management reports Q2 2025 AUM increased 27% to $457.3 billion, driven by the Guardian partnership, with revenue growing 8% to $633.2 million and net income attributable to JHG up 16% to $149.9 million Second Quarter 2025 Summary Q2 2025 saw AUM grow 27% to $457.3 billion, driven by $46.7 billion in net inflows, with diluted EPS at $0.95 and $113.3 million returned to shareholders - AUM increased to $457.3 billion, up 27% from June 30, 2024[115] - Q2 2025 net inflows were $46.7 billion, including $46.5 billion from the strategic partnership with Guardian[115] - $113.3 million was returned to shareholders through dividends and share buybacks during the second quarter[115] Investment Performance (% of AUM outperforming benchmark as of June 30, 2025) | Period | Equities | Fixed Income | Multi-Asset | Alternatives | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | 1-Year | 59% | 96% | 93% | 77% | 72% | | 3-Year | 67% | 88% | 94% | 86% | 76% | | 5-Year | 54% | 87% | 97% | 100% | 67% | | 10-Year | 61% | 93% | 97% | 100% | 72% | Assets Under Management Total AUM reached $457.3 billion by Q2 2025, a 21% increase from year-end 2024, driven by $48.7 billion in net inflows and positive market performance AUM Roll-Forward for Six Months Ended June 30, 2025 (in billions) | Capability | AUM Dec 31, 2024 | Net Sales | Markets | FX | AUM June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Equities | $229.4 | $(6.8) | $15.6 | $5.4 | $243.6 | | Fixed Income | $82.7 | $55.3 | $1.9 | $2.3 | $142.2 | | Multi-Asset | $53.1 | $(1.7) | $3.7 | $0.5 | $55.6 | | Alternatives | $13.5 | $1.9 | $(0.1) | $0.6 | $15.9 | | Total | $378.7 | $48.7 | $21.1 | $8.8 | $457.3 | Closing AUM by Client Location (in billions) | Region | June 30, 2025 | June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | North America | $303.2 | $221.3 | 37% | | EMEA and Latin America | $115.4 | $104.2 | 11% | | Asia Pacific | $38.7 | $35.9 | 8% | | Total | $457.3 | $361.4 | 27% | Results of Operations Q2 2025 revenue increased 8% to $633.2 million, driven by management and performance fees, while operating expenses rose 11% to $469.4 million Revenue Breakdown (in millions) | Revenue Type | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Management fees | $507.0 | $472.8 | 7% | | Performance fees | $14.8 | $7.4 | 100% | | Shareowner servicing fees | $60.0 | $58.5 | 3% | | Other revenue | $51.4 | $49.7 | 3% | | Total revenue | $633.2 | $588.4 | 8% | Operating Expenses Breakdown (in millions) | Expense Type | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Employee compensation & benefits | $179.0 | $166.3 | 8% | | Long-term incentive plans | $39.7 | $36.4 | 9% | | Distribution expenses | $132.9 | $126.6 | 5% | | General, administrative & occupancy | $80.4 | $66.9 | 20% | | Depreciation and amortization | $8.5 | $5.3 | 60% | | Total operating expenses | $469.4 | $421.1 | 11% | - The increase in employee compensation was primarily due to higher average headcount following acquisitions completed in 2024[144] - The increase in depreciation and amortization was primarily driven by intangible assets from the acquisition of VPC in Q4 2024[155] Liquidity and Capital Resources The company maintains strong liquidity with $870.4 million in cash and an undrawn $200 million credit facility, while meeting regulatory capital requirements with a $413.8 million surplus - The company has a $200 million unsecured revolving credit facility maturing in June 2030, with no borrowings outstanding as of June 30, 2025[185][186] - On April 30, 2025, the Board approved a new $200 million corporate share buyback program. As of June 30, 2025, $49.5 million had been repurchased under this program[178] - The FCA-supervised regulatory group held capital of $413.8 million above its requirement of $218.2 million as of June 30, 2025[176] Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk exposure were reported compared to the 2024 Annual Report on Form 10-K - There were no material changes in the company's market risk exposure compared to the 2024 Form 10-K[195] Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[196] - No material changes were made to internal controls over financial reporting during the second quarter of 2025[197] Part II. Other Information Legal Proceedings This section refers to Note 16 of the financial statements for details on the ongoing class action lawsuit regarding the company's 401(k) plan - For information on legal proceedings, the report refers to Note 16 of the Financial Statements[198] Risk Factors No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - No material changes to risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2024[199] Unregistered Sales of Equity Securities and Use of Proceeds The company details Q2 2025 share repurchase activities, including a new $200 million corporate buyback program and repurchases for employee share plans - A new $200 million share repurchase program (2025 Corporate Buyback Program) was approved on April 30, 2025[201] Common Stock Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid | Value Remaining (millions) | | :--- | :--- | :--- | :--- | | April 2025 | — | $— | $200 | | May 2025 | 2,744,804 | $37.08 | $173 | | June 2025 | 1,099,700 | $36.51 | $150 | | Total Q2 | 3,844,504 | $36.92 | $150 | Exhibits The report lists all filed exhibits, including employment agreements, CEO/CFO certifications, and XBRL data files - Key exhibits filed include an employment agreement with CEO Ali Dibadj, CEO/CFO certifications (Sections 302 and 906), and XBRL interactive data files[209]