Bridge Investment (BRDG) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements This section highlights that the quarterly report contains forward-looking statements regarding operations, taxes, earnings, financial performance, and dividends, cautioning that these are not guarantees of future performance and are subject to known and unknown risks, assumptions, and uncertainties, advising readers not to place undue reliance on them - The report contains forward-looking statements about operations, taxes, earnings, financial performance, and dividends, which are not guarantees of future performance[9] - Readers are cautioned that actual results may differ materially from expectations due to difficult-to-predict risks, assumptions, and uncertainties[9] - The company does not plan to publicly update or revise any forward-looking statements unless required by applicable law[11] Certain Definitions This section provides definitions for key terms used throughout the quarterly report, including 'assets under management' (AUM), 'fee-earning AUM', and specific entity names, as well as details regarding the 'Merger Agreement' with Apollo Global Management, Inc - Assets Under Management (AUM) includes the fair value of managed funds/vehicles, uncalled capital commitments, and fair value of managed REITs, not reduced by indebtedness[14] - Fee-earning AUM refers to assets from which the company earns management fee or other revenue[15] - The Merger Agreement, dated February 23, 2025, outlines the acquisition of the Company by Apollo Global Management, Inc. in an all-stock transaction valued at approximately $1.5 billion, expected to close in Q3 2025[15][16][48] Part I. Financial Information This part presents the company's unaudited condensed consolidated financial statements, management's discussion and analysis, and disclosures on market risk and controls Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Bridge Investment Group Holdings Inc. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, comprehensive income (loss), changes in equity, and cash flows, along with detailed accompanying notes Condensed Consolidated Balance Sheets The condensed consolidated balance sheets provide a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets Summary | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $72,819 | $90,599 | $(17,780) | -19.6% | | Total assets | $1,177,964 | $1,247,382 | $(69,418) | -5.6% | | Total liabilities | $723,658 | $741,482 | $(17,824) | -2.4% | | Total equity | $454,306 | $505,900 | $(51,594) | -10.2% | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations present the company's revenues, investment income (loss), expenses, and net income (loss) for the three and six months ended June 30, 2025, and 2024, highlighting a significant decrease in net income and a net loss for the six-month period in 2025 Condensed Consolidated Statements of Operations Summary | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Total revenues | $96,539 | $104,760 | $192,844 | $207,549 | | Total investment income (loss) | $6,338 | $25,596 | $(1,360) | $(23,106) | | Total expenses | $96,759 | $87,098 | $212,475 | $184,027 | | Net income (loss) | $2,792 | $27,494 | $(34,810) | $(9,305) | | Net (loss) income attributable to Bridge Investment Group Holdings Inc. | $(482) | $(2,431) | $(12,657) | $7,387 | | Basic EPS | $(0.01) | $(0.11) | $(0.38) | $0.18 | | Diluted EPS | $(0.01) | $(0.11) | $(0.38) | $0.07 | Condensed Consolidated Statements of Comprehensive Income (Loss) The condensed consolidated statements of comprehensive income (loss) detail the net income (loss) and other comprehensive income (loss) components, primarily foreign currency translation adjustments, for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Comprehensive Income (Loss) Summary | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net income (loss) | $2,792 | $27,494 | $(34,810) | $(9,305) | | Other comprehensive (loss) income—foreign currency translation adjustments, net of tax | $(129) | $78 | $(141) | $27 | | Total comprehensive income (loss) | $2,663 | $27,572 | $(34,951) | $(9,278) | | Comprehensive (loss) income attributable to Bridge Investment Group Holdings Inc. | $(611) | $(2,353) | $(12,798) | $7,414 | Condensed Consolidated Statements of Changes in Equity This section outlines the changes in shareholders' equity for the three and six months ended June 30, 2025, and 2024, reflecting net income/loss, exchanges of Class A Units for Class A common stock, capital contributions, share-based compensation, and distributions Condensed Consolidated Statements of Changes in Equity Summary | Metric | Balance as of December 31, 2024 (in thousands) | Net loss (in thousands) | Exchange of Class A Units for Class A common stock (in thousands) | Share-based compensation, net of forfeitures (in thousands) | Distributions (in thousands) | Dividends on Class A Common Stock/Units (in thousands) | Balance as of June 30, 2025 (in thousands) | | :------------------------------------------------- | :------------------------------------------- | :---------------------- | :------------------------------------------------ | :------------------------------------------------ | :--------------------------- | :------------------------------------------------ | :------------------------------------------- | | Class A Common Stock | $417 | — | $24 | $25 | — | — | $466 | | Class B Common Stock | $793 | — | $(20) | — | — | — | $773 | | Additional Paid-In Capital | $104,397 | — | $(4,558) | $9,643 | — | — | $113,471 | | Accumulated Deficit | $(22,449) | $(12,657) | — | — | — | $(4,889) | $(39,818) | | Accumulated Other Comprehensive Income (Loss) | $265 | — | — | — | — | — | $124 | | Non-controlling interests in Bridge Investment Group Holdings LLC | $248,365 | $(11,243) | — | $190 | $(8,283) | — | $229,361 | | Non-controlling interests in Bridge Investment Group Holdings Inc. | $174,112 | $(10,910) | — | $11,397 | $(20,263) | — | $149,929 | | Total Equity | $505,900 | $(34,810) | $(4,554) | $21,255 | $(28,546) | $(4,889) | $454,306 | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows provide a summary of cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024, showing a net decrease in cash for the current period Condensed Consolidated Statements of Cash Flows Summary | Metric | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash provided by operating activities | $18,058 | $68,043 | | Net cash (used in) provided by investing activities | $(2,956) | $11,469 | | Net cash used in financing activities | $(33,480) | $(61,866) | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(18,378) | $17,646 | | Cash, cash equivalents and restricted cash - end of period | $84,053 | $84,906 | Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures that are an integral part of the condensed consolidated financial statements, covering the company's organization, significant accounting policies, revenue breakdown, investment details, debt obligations, equity changes, and other financial commitments and contingencies Note 1. Organization This note describes Bridge Investment Group Holdings Inc. as a leading alternative investment manager, its organizational structure, the impact of its IPO, and the details of the pending merger with Apollo Global Management, Inc., which was approved by stockholders on June 17, 2025 - Bridge Investment Group Holdings Inc. is a leading alternative investment manager diversified across specialized asset classes, with a nationwide operating platform[37] - The Company's principal asset is a controlling financial interest in Bridge Investment Group Holdings LLC (the 'Operating Company'), holding approximately 33% economic interest as of June 30, 2025[38] - On February 23, 2025, the Company entered into a Merger Agreement with Apollo Global Management, Inc., valued at approximately $1.5 billion, which was approved by stockholders on June 17, 2025, and is expected to close in Q3 2025[48][56] Note 2. Significant Accounting Policies This note outlines the significant accounting policies used in preparing the condensed consolidated financial statements, including the basis of presentation, principles of consolidation for VIEs and voting interest entities, fair value measurements, revenue recognition methods for various fee types, and the impact of recently issued accounting standards - Financial statements are prepared in accordance with GAAP for interim information, consolidating entities where the Company has a controlling financial interest (VIEs or voting interest entities)[57][59][61] - Fair value measurements are categorized into a three-level hierarchy (Level 1, 2, 3) based on market price observability, with the fair value option elected for General Partner Notes Payable[69][71][72] - Revenue is recognized when performance obligations are satisfied, with detailed policies for fund management fees, property management, construction, development, transaction, fund administration fees, insurance premiums, and performance allocations[91][92][93][94][95][96][97][98][101] - The Company adopted ASU 2023-07 (Segment Reporting) retrospectively as of December 31, 2024, and is evaluating ASU 2023-09 (Income Tax Disclosures) and ASU 2024-01 (Profits Interest)[124][125][126] Note 3. Revenue This note disaggregates the company's revenues by significant product offerings for the three and six months ended June 30, 2025, and 2024, and discusses deferred revenues and credit losses, particularly those related to the commercial office sector Revenue Breakdown | Revenue Type | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Fund management fees | $58,465 | $61,453 | $117,773 | $122,558 | | Property management and leasing fees | $16,693 | $17,763 | $33,686 | $37,700 | | Construction management fees | $1,705 | $1,814 | $2,994 | $3,511 | | Development fees | $1,038 | $828 | $2,084 | $1,659 | | Transaction fees | $4,816 | $6,404 | $8,009 | $13,204 | | Fund administration fees | $4,845 | $4,579 | $9,705 | $9,636 | | Insurance premiums | $5,811 | $6,405 | $11,597 | $11,102 | | Other asset management and property income | $3,166 | $5,514 | $6,996 | $8,179 | | Total revenues | $96,539 | $104,760 | $192,844 | $207,549 | - Deferred revenues were $11.5 million as of June 30, 2025, down from $17.3 million as of December 31, 2024, with $15.7 million recognized as revenue during the six months ended June 30, 2025[128] - Credit losses of $1.9 million were recognized for the six months ended June 30, 2025, primarily related to Bridge Office Fund LP (BOF I) and Bridge Office Fund II LP (BOF II), due to unfavorable market conditions in the commercial office sector[129] Note 4. Marketable Securities This note summarizes the company's marketable securities, which primarily consist of investments in exchange-traded funds and mutual funds held by BIGRM, reported at fair value Marketable Securities Summary | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | Common shares in publicly traded company | $51 | $73 | | Exchange traded funds | $1,440 | $3,157 | | Mutual funds | $13,187 | $17,889 | | Total marketable securities | $14,678 | $21,119 | Note 5. Investments This note details the company's investments, including accrued performance allocations and partnership interests in company-sponsored and third-party funds, which are generally valued using the Net Asset Value (NAV) of the respective vehicles Investments Summary | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Accrued performance allocations | $328,616 | $339,560 | | Partnership interests in Company-sponsored funds | $145,222 | $153,181 | | Investments in third-party partnerships | $16,132 | $15,364 | | Other | $13,403 | $12,615 | | Total other investments | $174,757 | $181,160 | - The Company recognized income of $4.5 million and losses of $10.7 million related to accrued performance allocations and other investments for the three and six months ended June 30, 2025, respectively[133] - Accrued performance allocations and partnership interests are generally valued using the NAV of the respective vehicle, with managed funds reported on a three-month lag[132][135] Note 6. Notes Receivable from Affiliates This note provides details on the company's notes receivable from affiliated funds and employees, including outstanding balances, weighted-average interest rates, and the recognition of credit loss expenses related to certain office funds Notes Receivable from Affiliates Summary | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | Bridge Office Fund II | $18,375 | $15,800 | | Bridge Office Holdings LLC | $12,254 | $15,000 | | Bridge Single-Family Rental Fund IV | $8,454 | $4,924 | | Bridge Workforce and Affordable Housing Fund III LP | $0 | $200 | | Total notes receivable from affiliates | $39,083 | $35,924 | | Notes receivable from employees | $4,326 | $5,954 | | Total notes receivable from affiliates (overall) | $43,409 | $41,878 | - A credit loss expense of $2.7 million (principal) and $0.7 million (interest and fees) was recognized during the three and six months ended June 30, 2025, related to the Bridge Office Holdings LLC notes receivable[139] - Interest on notes receivable from affiliates accrued at a weighted-average fixed rate of 5.39% as of June 30, 2025[138] Note 7. Fair Value Measurements This note details the company's fair value measurements, classifying assets and liabilities into a three-level hierarchy based on market price observability and explaining the valuation methods used for various financial instruments, including the use of NAV as a practical expedient for certain investments Fair Value Measurements Summary | Category | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Measured at NAV (in thousands) | Total (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------------------------- | :------------------- | | June 30, 2025 Assets: | | | | | | | Common shares in publicly traded company | $51 | — | — | — | $51 | | Exchange traded funds | $1,440 | — | — | — | $1,440 | | Mutual funds | $13,187 | — | — | — | $13,187 | | Accrued performance allocations | — | — | — | $328,616 | $328,616 | | Partnership interests | — | — | — | $161,354 | $161,354 | | Other investments | — | — | $13,403 | — | $13,403 | | Total assets at fair value | $14,678 | — | $13,403 | $489,970 | $518,051 | | June 30, 2025 Liabilities: | | | | | | | General Partner Notes Payable | — | — | — | $2,222 | $2,222 | - Accrued performance allocations and partnership interests are generally valued using the NAV per share equivalent as a practical expedient[147] - Fair values of private notes are estimated by discounting expected future cash outlays at interest rates between 6.02% and 7.91% as of June 30, 2025[153] Note 8. Insurance Loss Reserves and Loss and Loss Adjustment Expenses This note describes the insurance policies provided by BIGRM, a wholly-owned captive insurance subsidiary, and details the company's insurance loss reserves for property and casualty claims and self-insurance reserves for employee health benefits - BIGRM provides insurance policies for multifamily and commercial properties, covering risks like lease security deposit fulfillment, lessor legal liability, workers' compensation, property, and general liability deductibles[154][158] - Insurance loss reserves were $25.3 million as of June 30, 2025, and $21.3 million as of December 31, 2024, based on estimated costs for reported and unreported claims[156] - Medical self-insurance reserves for employee health benefits were $1.9 million as of June 30, 2025, and $2.8 million as of December 31, 2024, with stop-loss coverage for individual claims over $225,000[157] Note 9. General Partner Notes Payable This note details the General Partner Notes Payable, which satisfy General Partner commitments to specific funds (BSH I GP and BMF III GP) and are measured at fair value, reflecting the related GP Lender's net asset value in the fund General Partner Notes Payable Summary | Fund | Commitment (in thousands) | Fair Value June 30, 2025 (in thousands) | Fair Value December 31, 2024 (in thousands) | | :-------------------------- | :------------------------ | :--------------------------------------- | :--------------------------------------- | | Bridge Seniors Housing Fund I | $4,775 | $2,125 | $2,681 | | Bridge Multifamily Fund III | $9,300 | $97 | $101 | | Total | $14,075 | $2,222 | $2,782 | - The Company elected the fair value option for General Partner Notes Payable, with changes in value recorded in unrealized gains (losses)[159] Note 10. Line of Credit This note provides information on the Operating Company's Credit Facility, including its $150.0 million revolving commitments, variable interest rates, financial covenants, and the fact that there was no outstanding balance as of June 30, 2025 - The Operating Company has a Credit Facility with $150.0 million in revolving commitments, maturing on June 3, 2026[162] - Borrowings bear interest based on a pricing grid over Term SOFR (approximately 6.69% as of June 30, 2025) and are subject to a quarterly unused commitment fee[163][166] - As of June 30, 2025, there was no outstanding balance on the Credit Facility, and the Company was in full compliance with all debt covenants[166][168] Note 11. Notes Payable This note describes the company's Private Placement Notes, consisting of three tranches issued in 2020, 2022, and 2023, totaling $450.0 million, with various maturity dates and financial covenants - The Operating Company has $450.0 million in Private Placement Notes, issued in three tranches (2020, 2022, 2023), with maturities ranging from July 2025 to March 2033[169][170][171][174] Private Placement Notes Maturity Schedule | Year | Amount (in thousands) | | :--- | :-------------------- | | 2025 | $75,000 | | 2026 | — | | 2027 | $75,000 | | Thereafter | $300,000 | | Total | $450,000 | - The Private Placement Notes contain financial covenants requiring maintenance of a debt to EBITDA ratio, minimum liquidity, and minimum quarterly/trailing four fiscal quarters EBITDA[172] Note 12. Realized and Unrealized Gains (Losses) This note summarizes the net realized and unrealized gains and losses on investments and other financial instruments for the three and six months ended June 30, 2025, and 2024, including those from General Partner Notes Payable Net Realized and Unrealized Gains (Losses) Summary (3 Months) | Category | 3 Months Ended June 30, 2025 (Net Realized) | 3 Months Ended June 30, 2025 (Net Unrealized) | 3 Months Ended June 30, 2024 (Net Realized) | 3 Months Ended June 30, 2024 (Net Unrealized) | | :-------------------------------- | :------------------------------------------ | :-------------------------------------------- | :------------------------------------------ | :-------------------------------------------- | | Investment in Company sponsored funds | $149 | $(2,484) | $962 | $(1,358) | | Investment in third-party partnerships | $(119) | $218 | $(117) | $(2,857) | | Other investments | $0 | $14 | $0 | $0 | | General Partner Notes Payable | $0 | $405 | $0 | $98 | | Total realized and unrealized gains (losses), net | $30 | $(1,847) | $845 | $(4,117) | Net Realized and Unrealized Gains (Losses) Summary (6 Months) | Category | 6 Months Ended June 30, 2025 (Net Realized) | 6 Months Ended June 30, 2025 (Net Unrealized) | 6 Months Ended June 30, 2024 (Net Realized) | 6 Months Ended June 30, 2024 (Net Unrealized) | | :-------------------------------- | :------------------------------------------ | :-------------------------------------------- | :------------------------------------------ | :-------------------------------------------- | | Investment in Company sponsored funds | $6 | $(9,637) | $(850) | $(8,688) | | Investment in third-party partnerships | $(194) | $82 | $(262) | $208 | | Other investments | $0 | $14 | $0 | $1,785 | | General Partner Notes Payable | $0 | $403 | $0 | $0 | | Total realized and unrealized losses, net | $(188) | $(9,138) | $(1,112) | $(6,695) | Note 13. Income Taxes This note explains the company's income tax accounting, including its status as a corporation for U.S. federal income tax purposes, the deferred tax asset and liability related to the Tax Receivable Agreement (TRA), and the use of the discrete effective tax rate method for interim reporting - The Company is taxed as a corporation for U.S. federal and state income tax purposes, while the Operating Company and most subsidiaries are treated as partnerships[178][179] - The deferred income tax asset related to the TRA was $76.8 million and the corresponding TRA liability was $78.2 million as of June 30, 2025, an increase from December 31, 2024[180] - The Company utilized the discrete effective tax rate method for the three and six months ended June 30, 2025, due to uncertainty in estimating the annual effective tax rate[182] Note 14. Shareholders' Equity This note details the changes in shareholders' equity, including the impact of the IPO, redemptions of non-controlling interests, activity in Class A and Class B common stock, and dividend declarations for Class A common stockholders - As of June 30, 2025, 46,570,329 shares of Class A common stock and 77,322,973 shares of Class B common stock were outstanding[190] - During the six months ended June 30, 2025, 2,483,658 Class A Units were redeemed for Class A common stock on a one-for-one basis[188] Dividends on Class A Common Stock/Units | Dividend Record Date | Dividend Payment Date | Dividend per Share of Common Stock | Dividend to Common Stockholders (in thousands) | | :------------------- | :-------------------- | :--------------------------------- | :------------------------------------------- | | March 14, 2025 | March 28, 2025 | $0.11 | $4,889 | | Total (H1 2025) | | $0.11 | $4,889 | | March 8, 2024 | March 22, 2024 | $0.07 | $2,582 | | May 31, 2024 | June 14, 2024 | $0.12 | $4,972 | | Total (H1 2024) | | $0.19 | $7,554 | Note 15. Commitments and Contingencies This note discloses the company's operating lease liabilities, potential clawback obligations for performance income, ongoing legal matters, standby letters of credit, and various indemnification and other guarantees Operating Lease Liabilities | Year | Amount (in thousands) | | :--- | :-------------------- | | 2025 (excluding the six months ended June 30, 2025) | $2,538 | | 2026 | $4,662 | | 2027 | $4,000 | | 2028 | $1,430 | | 2029 | $1,308 | | Thereafter | $4,275 | | Total lease liabilities | $18,213 | | Less: Imputed interest | $(2,630) | | Total operating lease liabilities | $15,583 | - If all existing investments were worthless, the performance income subject to potential repayment by Bridge GPs, net of tax distributions, would be approximately $203.2 million as of June 30, 2025, with $159.5 million reimbursable by certain professionals[201] - The Company is party to certain legal claims and has guaranteed standby letters of credit totaling $10.1 million for its self-insurance program and $0.4 million for an operating lease[202][203] Note 16. Variable Interest Entities This note explains the company's involvement with Variable Interest Entities (VIEs), its consolidation policies, and the maximum exposure to loss from unconsolidated sponsored private funds - The Company sponsors private funds as general partner, which are considered VIEs due to limited partners lacking substantive liquidation or kick-out rights[207] - The Company does not consolidate sponsored private funds where it has insignificant direct equity interests, accounting for them under the equity method[208] - The maximum exposure to loss from unconsolidated private funds was $161.4 million as of June 30, 2025[208] Note 17. Related Party Transactions This note details the company's related party transactions, including receivables from affiliates for various fees and reimbursements, notes receivable from affiliates and employees, and payables due to affiliates in connection with the Tax Receivable Agreement (TRA) Receivables from Affiliates | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------------- | :----------------------------- | :------------------------------- | | Fees receivable from non-consolidated funds | $12,716 | $35,246 | | Payments made on behalf of and amounts due from non-consolidated entities | $22,999 | $19,066 | | Total receivables from affiliates | $35,715 | $54,312 | - Total notes receivable from affiliates were $43.4 million as of June 30, 2025[215] - Accrued due to affiliates was $78.2 million as of June 30, 2025, primarily in connection with the Tax Receivable Agreement (TRA)[216] Note 18. Share-Based Compensation and Profits Interests This note describes the company's share-based compensation plans, including Restricted Stock, Restricted Stock Units (RSUs), and profits interests awards, detailing their vesting schedules, valuation methods, and the associated compensation expense - The 2021 Incentive Award Plan reserved 6,600,000 shares of Class A common stock, increasing to 16,918,559 shares as of January 1, 2025, with 5,700,455 shares remaining available for future grants[218] Share-Based Compensation Expense | Category | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Profits interests award shares | $2,305 | $2,721 | $4,638 | $5,879 | | Restricted Stock and RSUs | $7,700 | $10,011 | $16,617 | $18,663 | | Total share-based compensation | $10,005 | $12,732 | $21,255 | $24,542 | - As of June 30, 2025, the aggregate unrecognized compensation cost for all unvested Restricted Stock, RSU, and profits interests awards was $57.6 million, expected to be recognized over a weighted-average period of 1.8 to 2.0 years[223][225][226] Note 19. (Loss) Earnings Per Share This note presents the calculation of basic and diluted earnings (loss) per share for Class A common stock, considering net income (loss) attributable to Bridge Investment Group Holdings Inc. and the impact of participating securities Earnings Per Share Summary | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net (loss) income attributable to Bridge Investment Group Holdings Inc. | $(482) | $(2,431) | $(12,657) | $7,387 | | Basic EPS | $(0.01) | $(0.11) | $(0.38) | $0.18 | | Diluted EPS | $(0.01) | $(0.11) | $(0.38) | $0.07 | | Weighted-average shares of Class A common stock outstanding (Basic) | 35,889,995 | 32,461,347 | 35,602,217 | 31,902,163 | | Weighted-average shares of Class A common stock outstanding (Diluted) | 35,889,995 | 32,461,347 | 35,602,217 | 128,679,597 | - Basic and diluted EPS for Class A common stock were $(0.01) for the three months ended June 30, 2025, and $(0.38) for the six months ended June 30, 2025[228] Note 20. Segment Reporting This note states that Bridge operates as a single reportable and operating segment, an alternative investment manager, and provides a breakdown of consolidated expenses reviewed by the chief operating decision maker - The Company operates as one reportable and operating segment: an alternative investment manager[231] - The chief operating decision maker (executive chairman) uses a consolidated approach to assess financial performance and allocate resources[231] Note 21. Subsequent Events This note discloses significant events occurring after June 30, 2025, including the repayment of $75.0 million on 2020 Private Placement Notes, a change in management fee basis for Bridge Multifamily Fund V, the signing of the One Big Beautiful Bill Act (OBBBA), and the granting of RSUs to management - On July 22, 2025, $75.0 million of principal on the 2020 Private Placement Notes was repaid using proceeds from the Credit Facility[234] - Bridge Multifamily Fund V's management fee basis converted from committed to invested capital in July 2025, expected to reduce quarterly fund management fees by approximately $2.0 million[234] - On August 5, 2025, 2,575,429 RSUs were granted to certain management members, vesting over four years post-merger closing[236] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, including an overview of the business, recent events, trends affecting the business, key financial measures, operating metrics, and a detailed comparative analysis of financial performance for the three and six months ended June 30, 2025, and 2024 Overview The overview introduces Bridge Investment Group as a leading alternative investment manager with approximately $50.2 billion in AUM as of June 30, 2025, diversified across specialized asset classes, and highlights its vertically integrated structure and growth driven by strong investment returns - Bridge Investment Group is a leading alternative investment manager with approximately $50.2 billion of AUM as of June 30, 2025[238] - The company is diversified across specialized asset classes including real estate, credit, renewable energy, and secondaries strategies, utilizing a nationwide operating platform[238] Business Segment This section reiterates that the company operates as a single, fully integrated alternative investment manager, with the executive chairman serving as the chief operating decision maker who uses a consolidated approach to assess financial performance - The Company operates as one business segment, a fully integrated alternative investment manager[239] Recent Events This section highlights the significant recent event of the Merger Agreement with Apollo Global Management, Inc., which was approved by stockholders on June 17, 2025, and is expected to close in the third quarter of 2025 - On February 23, 2025, the Company entered into a Merger Agreement with Apollo Global Management, Inc. for an all-stock transaction valued at approximately $1.5 billion[240] - Stockholders approved the Merger Proposal on June 17, 2025, and the Mergers are expected to close in the third quarter of 2025[240][241] Trends Affecting Our Business This section discusses various factors affecting the company's business, including global economic conditions, financial markets, and regulatory policies, emphasizing the importance of attracting new capital, generating strong returns, sourcing attractive investments, and maintaining a data advantage - Business performance is affected by financial markets, economic, and political conditions, with future performance dependent on attracting new capital, generating strong returns, sourcing attractive investments, and offering appealing products[244][245][249] - Ongoing economic headwinds, particularly in the commercial office sector (2% of AUM), have led to the cessation of fund management fees for Bridge Office Fund LP (BOF I) and reserving fees for Bridge Office Fund II LP (BOF II)[245] - The company recognized a credit loss expense of $2.7 million (principal) and $0.7 million (interest and fees) during Q2 2025 related to an unsecured loan to a subsidiary of BOF I[245] Key Financial Measures This section defines and explains the company's key financial and operating measures, including various revenue streams (fund management, property management, construction, development, transaction, fund administration, insurance premiums, other asset management, performance fees) and expense categories (employee compensation, performance allocations compensation, loss and loss adjustment, third-party operating, general and administrative, depreciation and amortization, other income/expense, interest income/expense, income tax expense, net income attributable to non-controlling interests) - Fund management fees are generally based on a defined percentage of total commitments, invested capital, or NAV, with a weighted-average management fee of 1.34% as of June 30, 2025[250] - Performance fees include incentive fees and performance allocations (carried interest), with approximately $18.0 billion of carry-eligible fee-earning AUM across 58 funds as of June 30, 2025[257] - Employee compensation and benefits include salaries, bonuses, share-based compensation (Restricted Stock, RSUs, profits interests), and related benefits[262][263] - General and administrative expenses cover professional services, occupancy, travel, communication, information services, and transaction costs[267] Operating Metrics This section presents key operating metrics, including Assets Under Management (AUM), Fee-Earning AUM, and Undeployed Capital, along with a summary of historical investment performance for closed-end funds by platform Assets Under Management (AUM) Evolution | Metric | 3 Months Ended June 30, 2025 (in millions) | 3 Months Ended June 30, 2024 (in millions) | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :-------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | AUM as of beginning of period | $49,350 | $48,029 | $49,845 | $47,702 | | New capital / commitments raised | $471 | $302 | $687 | $455 | | Distributions / return of capital | $(600) | $(431) | $(1,131) | $(770) | | Change in fair value and acquisitions | $1,010 | $1,025 | $830 | $1,538 | | AUM as of end of period | $50,231 | $48,925 | $50,231 | $48,925 | | Increase % | 1.8% | 1.9% | 0.8% | 2.6% | Fee-Earning AUM Evolution | Metric | 3 Months Ended June 30, 2025 (in millions) | 3 Months Ended June 30, 2024 (in millions) | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :-------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Fee-earning AUM as of beginning of period | $21,982 | $21,953 | $22,306 | $21,703 | | Increases (capital raised/deployment) | $209 | $127 | $606 | $502 | | Changes in fair market value | $5 | $10 | $11 | $33 | | Decreases (liquidations/other) | $(292) | $(605) | $(1,019) | $(753) | | Fee-earning AUM as of end of period | $21,904 | $21,485 | $21,904 | $21,485 | | Decrease % | (0.4)% | (2.1)% | (1.8)% | (1.0)% | - As of June 30, 2025, the company had $3.2 billion of undeployed capital, with $1.5 billion currently fee-earning and $1.7 billion becoming fee-earning upon deployment[286] Results of Operations This section provides a detailed comparative analysis of the company's financial performance, including revenues, investment income (loss), expenses, and other income (expense), for the three and six months ended June 30, 2025, versus the corresponding periods in 2024 Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024 For the three months ended June 30, 2025, total revenues decreased by 8% to $96.5 million, total investment income decreased by 75% to $6.3 million, and total expenses increased by 11% to $96.8 million, resulting in a net income of $2.8 million, down from $27.5 million in the prior year - Total revenues decreased by $8.2 million (8%) to $96.5 million for Q2 2025, primarily due to decreases in fund management fees, property management and leasing fees, transaction fees, and other asset management income[294] - Total investment income decreased by $19.3 million (75%) to $6.3 million, driven by a $17.1 million decrease in unrealized performance allocations, reflecting underlying market fundamentals[301][303] - Total expenses increased by $9.7 million (11%) to $96.8 million, largely due to an $8.8 million (94%) increase in general and administrative expenses, including $4.7 million in merger-related transaction costs and a $3.5 million credit loss write-off[304][308] Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024 For the six months ended June 30, 2025, total revenues decreased by 7% to $192.8 million, total investment loss improved significantly from $(23.1) million to $(1.4) million, and total expenses increased by 15% to $212.5 million, resulting in a net loss of $(34.8) million, compared to a net loss of $(9.3) million in the prior year - Total revenues decreased by $14.7 million (7%) to $192.8 million for H1 2025, primarily due to decreases in fund management fees, property management and leasing fees, and transaction fees[314] - Total investment loss improved by $21.7 million (94%) to $(1.4) million, driven by a $32.2 million increase in unrealized performance allocations, reflecting underlying market fundamentals[321][323] - Total expenses increased by $28.4 million (15%) to $212.5 million, largely due to a $25.6 million (123%) increase in general and administrative expenses, including $22.8 million in merger-related transaction costs and a $3.5 million credit loss write-off[324][328] Non-GAAP Financial Measures This section explains the company's use of non-GAAP financial measures, including Distributable Earnings, Fee Related Earnings, Fee Related Revenues, and Fee Related Expenses, providing their definitions and reconciliations to the most directly comparable GAAP financial measures - Distributable Earnings is a key performance measure used by management, excluding depreciation, amortization, unrealized performance allocations, share-based compensation, and non-recurring items from GAAP net income before taxes[337][338] - Fee Related Earnings (FRE) assesses profitability from recurring fee-based revenues, adjusting Distributable Earnings to exclude realized performance allocations, net insurance income, investment earnings, and net interest[339] Non-GAAP Financial Measures Summary | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Total Fee Related Earnings attributable to the Operating Company | $27,970 | $35,883 | $52,538 | $69,827 | | Distributable Earnings attributable to the Operating Company | $25,725 | $35,487 | $42,704 | $67,660 | Liquidity and Capital Resources This section discusses the company's liquidity needs, sources of cash, and capital structure, including a summary of cash flows from operating, investing, and financing activities, and details regarding its corporate credit facilities and private placement notes Summary of Cash Flows This sub-section provides a summary table of the company's net cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Summary of Cash Flows | Metric | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash provided by operating activities | $18,058 | $68,043 | | Net cash (used in) provided by investing activities | $(2,956) | $11,469 | | Net cash used in financing activities | $(33,480) | $(61,866) | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(18,378) | $17,646 | Operating Activities Cash provided by operating activities was $18.1 million for the six months ended June 30, 2025, primarily driven by adjustments for non-cash items, offset by a net loss and cash used for operating assets and liabilities - Net cash provided by operating activities was $18.1 million for H1 2025, a decrease from $68.0 million in H1 2024[358][360] - H1 2025 operating cash flow was driven by $60.2 million in non-cash adjustments (including share-based compensation, unrealized performance allocations reversal, equity in income of investments, depreciation, and credit losses) offset by a $34.8 million net loss[360] Investing Activities Net cash used in investing activities was $3.0 million for the six months ended June 30, 2025, primarily due to issuances of notes receivable and purchases of investments, partially offset by collections on notes and marketable securities sales - Net cash used in investing activities was $3.0 million for H1 2025, compared to $11.5 million provided by investing activities in H1 2024[358][363] - H1 2025 investing activities included $17.3 million in notes receivable issuances and $9.0 million in investment purchases, partially offset by $11.3 million from notes receivable collections and $10.8 million from marketable securities sales[363] Financing Activities Net cash used in financing activities was $33.5 million for the six months ended June 30, 2025, primarily due to distributions to non-controlling interests and dividends paid on Class A common stock - Net cash used in financing activities was $33.5 million for H1 2025, compared to $61.9 million used in H1 2024[358][366] - H1 2025 financing outflows included $28.5 million in distributions to non-controlling interests and $4.9 million in dividends paid on Class A common stock[366] Corporate Credit Facilities This sub-section details the Operating Company's Credit Facility, including its $150.0 million revolving commitments, variable interest rates, and financial covenants, noting full availability as of June 30, 2025, and a subsequent $75.0 million draw for debt repayment - The Operating Company has a Credit Facility with $150.0 million in revolving commitments, bearing interest based on Term SOFR (approx. 6.69% as of June 30, 2025)[370][371][373] - As of June 30, 2025, the Company had full availability on the Credit Facility and was in full compliance with all debt covenants[373][378] - On July 21, 2025, the Company drew $75.0 million from the Credit Facility to repay principal on the 2020 Private Placement Notes[373] Private Placement Notes This sub-section describes the Operating Company's $450.0 million in Private Placement Notes, issued in three tranches with varying interest rates and maturity dates, and outlines the associated financial covenants - The Operating Company has $450.0 million in Private Placement Notes, issued in 2020, 2022, and 2023, with maturities ranging from July 2025 to March 2033[374][375][376] - The notes carry fixed interest rates between 3.90% and 6.10% and are subject to covenants limiting indebtedness, liens, mergers, and requiring maintenance of specific debt to EBITDA and liquidity ratios[374][376][377] Debt Covenants This section confirms that the company was in full compliance with all debt covenants for both its Credit Facility and Private Placement Notes as of June 30, 2025, and December 31, 2024 - The Company was in full compliance with all debt covenants as of June 30, 2025, and December 31, 2024[378] Critical Accounting Estimates This section states that there have been no significant changes in the company's critical accounting estimates during the quarter ended June 30, 2025 - No significant changes in critical accounting estimates occurred during the quarter ended June 30, 2025[380] Recent Accounting Pronouncements This section refers readers to Note 2, 'Significant Accounting Policies,' for a discussion of new accounting pronouncements that have been recently adopted or are not yet adopted by the company - For a discussion of new accounting pronouncements, refer to Note 2, 'Significant Accounting Policies,' in the condensed consolidated financial statements[381] JOBS Act This section explains the company's status as an emerging growth company under the JOBS Act, which allows it to take advantage of an extended transition period for complying with new or revised accounting standards and other exemptions - The Company is an emerging growth company under the JOBS Act, allowing it to use an extended transition period for new or revised accounting standards[382] - The Company intends to rely on exemptions provided by the JOBS Act, including not complying with auditor attestation requirements of Section 404(b) of Sarbanes-Oxley[382] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to various financial market risks, including market risk, interest rate risk, credit and counterparty risk, liquidity risk, and foreign exchange rate risk, and how these risks are managed or mitigated - The company is exposed to market risk primarily through its role as general partner or investment manager for specialized funds, affecting equity in income of affiliates[385] - Interest rate risk is limited, with most cash in interest-bearing accounts and the Credit Facility bearing variable interest over Term SOFR; no derivative financial instruments are used for interest rate risk management[386] - Credit and counterparty risk is managed by limiting financial transactions to reputable financial institutions[387] - Foreign exchange rate risk is not expected to materially impact financial statements due to insignificant foreign assets or transactions in non-U.S. dollar currencies[388] Item 4. Controls and Procedures This section reports on the effectiveness of the company's disclosure controls and procedures, concluding they were effective at a reasonable assurance level as of June 30, 2025, and states that there have been no material changes in internal control over financial reporting - Management, with the participation of the principal executive and financial officers, concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[390] - There have been no material changes in internal control over financial reporting during the three months ended June 30, 2025[391] Part II. Other Information This part covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and a list of exhibits Item 1. Legal Proceedings This section discloses that the company is involved in various legal claims and proceedings in the ordinary course of business, including two lawsuits and eleven stockholder demands related to alleged omissions in the merger proxy statement, which the company addressed by filing supplemental information - The company is party to various claims and legal actions in the ordinary course of business, not expected to have a material adverse effect[394] - Two lawsuits and eleven stockholder demands were filed alleging material omissions or misstatements in the merger proxy statement, which the company addressed by filed supplemental information on June 11, 2025[395] Item 1A. Risk Factors This section states that there have been no material changes from the risk factors previously disclosed in the company's annual report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes from the risk factors previously disclosed in the annual report on Form 10-K for the fiscal year ended December 31, 2024[396] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports that there were no unregistered equity securities sold from April 1, 2025, to June 30, 2025, other than those previously disclosed in current reports on Form 8-K - No unregistered equity securities were sold from April 1, 2025, to June 30, 2025, beyond what was previously disclosed[397] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[398] Item 4. Mine Safety Disclosures This section indicates that the disclosure requirements for mine safety are not applicable to the company Item 5. Other Information This section states that there is no other information to report under this item Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including the Agreement and Plan of Merger, Amended and Restated Certificate of Incorporation and Bylaws, Second Amended and Restated Tax Receivable Agreement, and various certifications - Key exhibits include the Agreement and Plan of Merger (2.1), Amended and Restated Certificate of Incorporation (3.1) and Bylaws (3.2), Second Amended and Restated Tax Receivable Agreement (10.1), and CEO/CFO certifications (31.1, 31.2, 32.1, 32.2)[401] Signatures This section contains the required signatures of the Chief Executive Officer and Chief Financial Officer, certifying the Form 10-Q report as of August 8, 2025 - The report is signed by Jonathan Slager, Chief Executive Officer, and Katherine Elsnab, Chief Financial Officer, on August 8, 2025[407]