en & pany (COHN) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights The company achieved strong financial results in Q2 2025, marked by significant revenue and net income growth, alongside a declared quarterly dividend Second Quarter 2025 Performance Overview Cohen & Company reported strong financial results for Q2 2025, with significant increases in revenue and net income compared to both the prior quarter and prior year. The company also declared a quarterly dividend of $0.25 per share | Metric | Q2 2025 ($ Million) | Q1 2025 ($ Million) | Q2 2024 ($ Million) | | :----------------------------------- | :------------------ | :------------------ | :------------------ | | Revenue | 59.9 | 28.7 | 10.8 | | Net Income Attributable to COHN | 1.4 | 0.3 | (2.3) | | Diluted EPS | $0.81 | $0.19 | ($1.47) | | Adjusted Pre-Tax Income | 5.5 | 1.3 | (8.6) | | Adjusted Diluted EPS | $0.94 | $0.22 | ($1.51) | - The Board of Directors declared a quarterly dividend of $0.25 per share[2] Summary Operating Results The company's Q2 2025 operating results show substantial revenue growth, primarily from new issue and advisory services, leading to improved operating income Consolidated Operating Results The second quarter of 2025 saw a substantial increase in total revenues, primarily driven by new issue and advisory services, which significantly improved operating income compared to previous quarters | Metric | Three Months Ended 6/30/25 (in thousands) | Three Months Ended 3/31/25 (in thousands) | Three Months Ended 6/30/24 (in thousands) | | :--------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net trading | 10,757 | 9,211 | 8,798 | | Asset management | 2,168 | 2,020 | 2,078 | | New issue and advisory | 37,411 | 33,239 | 6,500 | | Principal transactions and other revenue | 9,535 | (15,730) | (6,578) | | Total revenues | 59,871 | 28,740 | 10,798 | | Compensation and benefits | 44,323 | 21,666 | 10,699 | | Non-compensation operating expenses | 8,053 | 6,967 | 6,466 | | Operating income (loss) | 7,495 | 107 | (6,367) | Management Commentary & Business Updates CEO Lester Brafman highlighted strong performance in capital markets, significant SPAC market involvement, and a new SPAC-focused equity trading desk CEO Statement CEO Lester Brafman highlighted the strong performance of Cohen & Company Capital Markets (CCM) and the growing involvement in the SPAC market, including a new SPAC-focused equity trading desk and a significant business combination agreement - Cohen & Company Capital Markets (CCM) generated $37.4 million in new issue and advisory revenue across 25 clients, entering the second half with strong momentum and a robust pipeline[5] - The sponsored SPAC, Columbus Circle Capital Corp I, entered into a business combination agreement with ProCap BTC, a bitcoin-native financial services firm, expected to close by year-end, with Cohen & Company retaining 2.1 million founder shares[5] - A new SPAC-focused equity trading desk was launched, generating over $1.4 million in trading revenue in its first quarter of operation, serving as a complementary strategy to CCM[5] Detailed Financial Highlights The company experienced significant revenue growth across all major streams, particularly in new issue and advisory, alongside increased compensation expenses and a gain from asset sales Revenue Performance All major revenue streams showed positive growth in Q2 2025, with new issue and advisory revenue experiencing the most significant increase, driven by strong performance from Cohen & Company Capital Markets Q2 2025 Revenue Performance (vs. prior periods) | Revenue Type | Q2 2025 ($M) | Change from Q1 2025 ($M) | Change from Q2 2024 ($M) | Primary Driver | | :-------------------------- | :----------- | :----------------------- | :----------------------- | :------------------------------------------------ | | Net trading | 10.8 | +1.5 | +2.0 | Higher trading revenue from SPAC equity, SBA, and mortgage groups | | Asset management | 2.2 | Slightly up | Slightly up | Deferred performance fees in European funds | | New issue and advisory | 37.4 | +4.2 | +30.9 | CCM performance (Q2 2025: $37.4M, Q1 2025: $33.2M, Q2 2024: $6.4M) | | Principal transactions & other | +9.5 | +25.2 (from -15.7) | +16.1 (from -6.6) | Non-cash consideration received by CCM (Q2 2025: $6.7M) | Expense Analysis Compensation and benefits expense significantly increased in Q2 2025, primarily due to variable incentive compensation tied to higher revenues, while interest expense remained relatively stable - Compensation and benefits expense increased by $22.7 million from the prior quarter and $33.6 million from the prior year quarter, mainly due to fluctuations in revenue and related variable incentive compensation[6] - Interest expense for Q2 2025 was $1.5 million, including $1.2 million on trust preferred securities debt, $0.3 million on senior promissory notes, and $22 thousand on the bank credit facility[6] Other Income/Expense Items The company recognized a gain from the sale of management contracts and experienced a loss from equity method affiliates, primarily due to an investment in Columbus Circle Capital Corp I. Income tax expense also increased - A gain of $0.8 million was recognized from the sale of two legacy Alesco CDO management contracts, with three remaining contracts in the process of being sold[10] - Loss from equity method affiliates was $1.4 million in Q2 2025, compared to income of $2.4 million in the prior quarter, mainly due to the consolidated sponsor entity's investment in Columbus Circle Capital Corp I[10] - Income tax expense was $0.8 million in Q2 2025, up from $0.1 million in the prior quarter, with future adjustments to the valuation allowance against tax assets possible[10] Total Equity and Dividend Declaration Total equity increased to $92.5 million as of June 30, 2025, and the Board of Directors declared a quarterly dividend of $0.25 per share Total Equity | Metric | As of June 30, 2025 ($M) | As of December 31, 2024 ($M) | | :------------------------------------------ | :----------------------- | :--------------------------- | | Total equity | 92.5 | 90.3 | | Total equity excluding non-convertible NCI | 81.6 | 78.8 | - The Board of Directors declared a quarterly dividend of $0.25 per share, payable on August 29, 2025, to stockholders of record as of August 15, 2025[10] Company Information Cohen & Company is a financial services firm specializing in capital markets and asset management, operating through three main segments: Capital Markets, Asset Management, and Principal Investing About Cohen & Company Cohen & Company is a financial services firm specializing in capital markets and asset management, operating through three main segments: Capital Markets, Asset Management, and Principal Investing - Cohen & Company is a financial services firm specializing in capital markets and asset management services[9] - The company's operating segments are Capital Markets, Asset Management, and Principal Investing[9] Operating Segments The Capital Markets segment focuses on fixed income, new issue placements, underwriting, and advisory services, including M&A and SPAC advisory. The Asset Management segment manages various fixed income assets, and the Principal Investing segment holds investments related to its SPAC franchise and other investment returns - Capital Markets segment includes fixed income sales, trading, gestation repo financing, new issue placements, underwriting, and advisory services (M&A, capital markets, SPAC advisory) through Cohen & Company Securities, LLC and Cohen & Company Financial (Europe) S.A[9] - Asset Management segment manages assets through CDOs, managed accounts, joint ventures, and investment funds, primarily in fixed income assets[9] - Principal Investing segment is comprised primarily of investments related to the SPAC franchise and other investments made for earning an investment return[9] Assets Under Management As of June 30, 2025, the company managed approximately $2.2 billion in assets, primarily in fixed income across various asset classes - As of June 30, 2025, the Company had approximately $2.2 billion of assets under management (AUM)[9] - AUM is primarily in fixed income assets, including U.S. and European bank and insurance trust preferred securities, debt issued by small and medium-sized European, U.S., and Bermudian insurance and reinsurance companies, equity interests of SPACs and their sponsor entities, and commercial real estate loans[9] Financial Statements The consolidated financial statements reflect significant revenue growth and a return to profitability in Q2 2025, with increased total assets and equity compared to the prior year-end Consolidated Statements of Operations The consolidated statements of operations show a significant increase in total revenues and a return to profitability for Q2 2025 and the six months ended June 30, 2025, compared to prior periods, driven by strong new issue and advisory revenue Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended 6/30/25 (in thousands) | Three Months Ended 3/31/25 (in thousands) | Three Months Ended 6/30/24 (in thousands) | Six Months Ended 6/30/25 (in thousands) | Six Months Ended 6/30/24 (in thousands) | | :--------------------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Total revenues | 59,871 | 28,740 | 10,798 | 88,611 | 29,362 | | Total operating expenses | 52,376 | 28,633 | 17,165 | 81,009 | 39,104 | | Operating income (loss) | 7,495 | 107 | (6,367) | 7,602 | (9,742) | | Net income (loss) attributable to Cohen & Company Inc. | 1,408 | 329 | (2,349) | 1,737 | (326) | | Fully diluted net income (loss) per share | $0.81 | $0.19 | ($1.47) | $1.00 | ($0.20) | Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows an increase in total assets and total equity compared to December 31, 2024, with significant growth in receivables under resale agreements and investments Consolidated Balance Sheets Highlights (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------- | :--------------------------- | :------------------------------- | | Cash and cash equivalents | 25,996 | 19,590 | | Investments - trading | 170,955 | 148,332 | | Receivables under resale agreements | 790,874 | 668,259 | | Total assets | 1,131,650 | 971,149 | | Accrued compensation | 48,750 | 17,770 | | Securities sold under agreements to repurchase | 816,290 | 695,966 | | Total liabilities | 1,039,192 | 880,866 | | Total equity | 92,458 | 90,283 | Non-GAAP Measures The report defines and reconciles 'Adjusted pre-tax income (loss)' as a non-GAAP measure, providing a supplemental view of performance by excluding income tax and adding back convertible non-controlling interest Definition and Reconciliation The report defines and reconciles 'Adjusted pre-tax income (loss)' as a non-GAAP measure, which excludes income tax expense/benefit and adds back net income/loss attributable to convertible non-controlling interest, providing a supplemental view of performance - Adjusted pre-tax income (loss) is a non-GAAP measure representing net income (loss) attributable to Cohen & Company Inc., excluding income tax expense (benefit) and adding back net income (loss) attributable to the convertible non-controlling interest[20] - This non-GAAP measure is used to evaluate performance without the effects of certain GAAP calculations that may not have a direct cash or recurring impact on current operating performance, and to assess enterprise operations[21] Reconciliation of Adjusted Pre-Tax Income (Loss) (in thousands) | Metric | Three Months Ended 6/30/25 (in thousands) | Three Months Ended 3/31/25 (in thousands) | Three Months Ended 6/30/24 (in thousands) | Six Months Ended 6/30/25 (in thousands) | Six Months Ended 6/30/24 (in thousands) | | :--------------------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net income (loss) attributable to Cohen & Company Inc. | 1,408 | 329 | (2,349) | 1,737 | (326) | | Addback (deduct): Income tax expense (benefit) | 771 | 139 | (205) | 910 | 293 | | Addback (deduct): Net income (loss) attributable to the convertible non-controlling interest | 3,361 | 782 | (6,028) | 4,143 | (815) | | Adjusted pre-tax income (loss) | 5,540 | 1,250 | (8,582) | 6,790 | (848) | | Fully diluted adjusted pre-tax income (loss) per share | $0.94 | $0.22 | ($1.51) | $1.15 | ($0.15) | Additional Information This section provides details on the Q2 2025 conference call, outlines cautionary notes regarding forward-looking statements and quarterly results, and lists contact information Conference Call Details Cohen & Company hosted a conference call on July 31, 2025, to discuss the Q2 2025 financial results, with webcast and dial-in options available, and a replay for three days - A conference call was hosted on July 31, 2025, at 10:00 a.m. ET to discuss the results[8] - Access was available via webcast on the company's website or by dialing (877) 524-8416 (domestic) or +1 (412) 902-1028 (international)[8] - A replay of the call was available for three days by dialing (877) 660-6853 or (201) 612-7415, with passcode 13755190[8] Forward-looking Statements The report contains forward-looking statements subject to various known and unknown risks and uncertainties, including economic conditions, market volatility, competition, and specific business risks related to SPACs and investments - The communication contains forward-looking statements based on underlying assumptions and expectations, subject to known and unknown risks, uncertainties, and assumptions[12] - Key risk factors include declines in general economic conditions, unfavorable market conditions, losses from third parties, lack of liquidity, ability to attract personnel, litigation, reputational harm, competitive pressure, and risks related to SPAC investments and business combinations[12] Cautionary Note Regarding Quarterly Financial Results The company advises that quarterly revenue and operating results may fluctuate materially due to the nature of its business, and annual results are generally a more meaningful gauge for investors - Revenue and operating results may fluctuate materially from quarter to quarter, and any particular quarter's results may not be indicative of future performance[13] - Employee compensation arrangements are largely incentive-based and will fluctuate with revenue, meaning compensation expense in one quarter may not be indicative of future periods[13] - Annual results are suggested as the most meaningful gauge for investors in evaluating business performance[13] Contact Information Contact details for investor and media inquiries are provided - Investors can contact Joseph W. Pooler, Jr., Executive Vice President and CFO, at 215-701-8952 or investorrelations@cohenandcompany.com[22] - Media inquiries can be directed to Joseph Sala or Zach Genirs at Joele Frank, Wilkinson Brimmer Katcher, at 212-355-4449[22]