Patria(PAX) - 2025 Q2 - Quarterly Report

Unaudited Condensed Consolidated Financial Statements Unaudited Condensed Consolidated Statement of Financial Position As of March 31, 2025, total assets increased to $1.33 billion from $1.21 billion, with liabilities rising to $777.8 million and equity to $556.2 million, driven by intangible assets and financial instruments Condensed Consolidated Statement of Financial Position (in thousands of US$) | Account | 03/31/2025 | 12/31/2024 | | :--- | :--- | :--- | | Total Assets | 1,333,992 | 1,206,107 | | Total Current Assets | 397,236 | 372,679 | | Total Non-current Assets | 936,756 | 833,428 | | Total Liabilities | 777,822 | 715,175 | | Total Current Liabilities | 410,813 | 397,390 | | Total Non-current Liabilities | 367,009 | 317,785 | | Total Equity | 556,170 | 490,932 | | Equity attributable to owners | 545,525 | 481,078 | | Non-controlling interests | 10,645 | 9,854 | Unaudited Condensed Consolidated Statement of Profit or Loss Net revenue from services increased to $79.6 million in Q1 2025, but higher expenses reduced net income before tax to $14.6 million, with net income for the period slightly rising to $16.6 million Statement of Profit or Loss Highlights (in thousands of US$) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue from services | 79,567 | 63,908 | | Personnel expenses | (29,068) | (18,445) | | Financial expense | (18,704) | (10,538) | | Net income before income tax | 14,604 | 20,073 | | Net income for the period | 16,558 | 15,853 | | Basic earnings per share (US$) | 0.09903 | 0.10289 | | Diluted earnings per share (US$) | 0.09791 | 0.10153 | Unaudited Condensed Consolidated Statement of Comprehensive Income Total comprehensive income for Q1 2025 was $44.1 million, a significant turnaround from a $2.3 million loss in Q1 2024, driven by positive currency translation adjustments Comprehensive Income Summary (in thousands of US$) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income for the period | 16,558 | 15,853 | | Currency translation adjustment | 27,530 | (18,161) | | Total comprehensive income for the year | 44,088 | (2,308) | Unaudited Condensed Consolidated Statement of Changes in Equity Total equity increased to $556.2 million from $490.9 million, driven by net income, positive cumulative translation adjustments, and capital issuance, partially offset by dividends declared Key Changes in Equity in Q1 2025 (in thousands of US$) | Item | Amount | | :--- | :--- | | Balance on December 31, 2024 | 490,932 | | Net income for the period | 16,558 | | Cumulative translation adjustment | 27,530 | | Capital issuance | 52,784 | | Dividends declared | (23,589) | | Balance on March 31, 2025 | 556,170 | Unaudited Condensed Consolidated Statement of Cash Flows Net cash from operating activities rose to $100.1 million in Q1 2025, while investing activities used $9.4 million and financing activities had a $90.1 million outflow, resulting in a $2.7 million increase in cash Cash Flow Summary (in thousands of US$) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | 100,072 | 41,935 | | Net cash provided/(used) by investing activities | (9,433) | (52,768) | | Net cash (used)/provided in financing activities | (90,113) | 22,525 | | Increase/(Decrease) in cash and cash equivalents | 2,652 | 10,934 | Notes to the unaudited condensed consolidated interim financial statements Note 1: General information Patria Investments Limited, a Cayman Islands-domiciled public holding company, operates as a global private markets investment firm, expanding its product offerings through strategic acquisitions in various asset classes - The company completed its IPO on January 21, 2021, and its common shares trade on NASDAQ under the symbol "PAX" - As of March 31, 2025, the parent company, Patria Holdings Limited, held 52.23% of the Company's common shares[17] - The Group has expanded its investment products through several key acquisitions in recent years, including Tria Energy (energy), Aberdeen Plc (global private market solutions), Moneda (credit), VBI, PAM, CSHG, and Nexus (real estate), and Igah and Kamaroopin (venture capital)[17][18] Note 8: Accounts receivable Total accounts receivable decreased to $178.5 million from $233.5 million, primarily due to the collection of $59.7 million in performance fees, with $71.2 million in postponed management fees expected to be recovered Accounts Receivable Breakdown (in thousands of US$) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current | 159,362 | 217,132 | | Non-current | 19,170 | 16,402 | | Total | 178,532 | 233,534 | - Current accounts receivable as of December 31, 2024, included $59.7 million in performance fees from Patria Infrastructure Fund III, which was received on February 28, 2025[42] - A receivable of $71.2 million from PBPE Fund IV relates to postponed management fees. Management expects recovery within the next twelve months and has not recorded any allowance for uncollectible accounts[42] Note 12: Investments The company's investments, categorized as short-term, long-term, and other financial instruments, totaled $69.3 million, $59.1 million, and $98.0 million (assets) respectively, with energy trading contracts driving significant fair value increases Short-term investments Short-term investments increased to $69.3 million, primarily comprising securities and funds held in the PLAO SPAC trust account, which are restricted for business combinations or share redemption Short-term Investments Breakdown (in thousands of US$) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Securities | 14,569 | 4,956 | | Investments held in trust account | 54,740 | 54,053 | | Total | 69,309 | 59,009 | Long-term investments Long-term investments increased to $59.1 million, with significant holdings in Patria Infrastructure Fund V, L.P. and KMP Growth Fund II, primarily located in Brazil Long-term Investments Breakdown (in thousands of US$) | Investment | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Lavoro Agro Limited | 7,172 | 11,337 | | KMP Growth Fund II | 20,525 | 20,525 | | Patria Infrastructure Fund V, L.P. | 21,729 | 8,479 | | Other investments | 9,665 | 7,575 | | Total | 59,091 | 49,216 | Other financial instruments Other financial instruments, primarily energy trading contracts, saw significant expansion in Q1 2025, with asset fair value growing to $98.0 million and liabilities to $87.8 million Other Financial Instruments Fair Value (in thousands of US$) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Energy trading contracts | 94,440 | 25,169 | | Tria call option | 3,591 | 3,578 | | Total Assets | 98,031 | 28,747 | | Liabilities | | | | Warrants - SPAC | 7,245 | 6,143 | | Energy trading contracts | 80,511 | 17,686 | | Total Liabilities | 87,756 | 23,829 | Note 14: Intangible assets and goodwill Net intangible assets increased to $777.1 million, primarily driven by a $60.4 million addition to goodwill from business combinations and positive translation adjustments, with goodwill reaching $424.1 million Intangible Assets Breakdown (Net, in thousands of US$) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Goodwill | 424,115 | 355,958 | | Contractual rights | 239,014 | 232,603 | | Non-contractual customer relationships | 76,049 | 74,825 | | Placement agents | 21,640 | 19,981 | | Other | 16,328 | 17,499 | | Total Intangible Assets, Net | 777,146 | 700,866 | - A deferred tax liability of $58.2 million was recognized with a corresponding increase in goodwill, related to fair value adjustments on intangible assets from business combinations including Moneda, VBI, GPMS, and Nexus[70] - Goodwill adjustments in Q1 2025 included a $1.1 million increase for GPMS, a $1.0 million decrease for Nexus, and a $2.2 million increase for Tria[66][67][68] Note 16: Loans Total loans decreased to $192.3 million from $228.0 million, with $55.4 million in new credit facilities incurred and $91.0 million repaid, while the Group remained compliant with all financial covenants Loan Movement in Q1 2025 (in thousands of US$) | Item | Amount | | :--- | :--- | | Opening balance (Dec 31, 2024) | 227,971 | | Credit facilities incurred | 55,396 | | Credit facilities repaid | (91,011) | | Interest and other adjustments | (155) | | Closing balance (Mar 31, 2025) | 192,260 | - The Group is subject to financial covenants, including maintaining a Total Debt to Fee Related Earnings (FRE) ratio not exceeding 2.5:1.0 and a minimum Assets Under Management (AUM) of $20 billion[92] Note 21: Commitments The Group's commitments include $159.6 million in acquisition consideration payable, a $54.8 million SPAC commitment, and $22.4 million in gross obligations under put options Consideration payable on acquisition Total consideration payable from acquisitions decreased to $159.6 million, primarily due to the settlement of Moneda deferred consideration via Class A common shares, with remaining payables for VBI, GPMS, and Bancolombia Consideration Payable on Acquisition (in thousands of US$) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Liabilities | 54,569 | 101,986 | | Non-current Liabilities | 104,986 | 121,238 | | Total | 159,555 | 223,224 | - On January 31, 2025, the Group settled the deferred consideration payable to Moneda partners by issuing 2,423,546 Class A common shares[116] SPAC commitment subject to possible redemption The SPAC commitment for possible redemption increased to $54.8 million, representing a financial liability for shares redeemable in cash upon business combination completion Movement in SPAC Commitment (in thousands of US$) | Item | Amount | | :--- | :--- | | Balance on December 31, 2024 | 54,053 | | Interest earned on trust account | 551 | | Deposits | 205 | | Balance on March 31, 2025 | 54,809 | Gross obligation under put option Gross obligation under put options increased to $22.4 million, primarily related to non-controlling shareholders in Igah GP IV and Tria, with the VBI put option derecognized in 2024 Gross Obligation Under Put Option (in thousands of US$) | Entity | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | VBI | - | - | | Igah IV | 2,510 | 2,503 | | Tria | 19,841 | 15,755 | | Total | 22,351 | 18,258 | Note 22: Net revenue from services Net revenue from services increased by 24.5% to $79.6 million in Q1 2025, driven by higher management fees, with the Cayman Islands as the largest revenue source and significant growth in the United Kingdom Net Revenue from Services Breakdown (in thousands of US$) | Revenue Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue from management fees | 76,575 | 62,604 | | Net revenue from incentive fees | 264 | - | | Net revenue from performance fees | 767 | - | | Net revenue from advisory and other | 1,961 | 1,304 | | Total Net Revenue | 79,567 | 63,908 | Note 29: Equity The Group's equity details dual-class shares, with additional paid-in capital increasing from 4.5 million Class A share issuances for acquisitions and bonuses, a declared dividend of $0.1492 per share, and basic EPS of $0.09903 Capital and Additional Paid-in Capital The company's capital structure includes Class A and Class B common shares, with 158.1 million total shares outstanding and 4.5 million new Class A shares issued in Q1 2025 for acquisition settlements and employee bonuses - In Q1 2025, the company issued 2.4M shares for Moneda deferred consideration, 1.2M shares for the VBI option exercise, and 0.8M shares for employee bonuses[158] Dividends The company declared and paid a Q1 2025 dividend of $0.1492 per share, totaling $23.6 million, a decrease from Q1 2024, with a portion funded by transferring $6.9 million from additional paid-in capital Dividends Declared (per share in US$) | Share Class | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Class A | 0.1492 | 0.3974 | | Class B | 0.1492 | 0.3974 | | Total Paid (in thousands) | 23,589 | 59,903 | Share based incentive plans The company operates multiple long-term incentive plans (LTIPs) issuing PSUs and RSUs, with a new LTIP launched in 2024 authorizing 5.38 million shares, and 61,404 RSUs from Grant C vesting in Q1 2025 - A new LTIP was approved on February 26, 2024, authorizing up to 5,380,000 shares for grants[162] - Share-based incentive plan expense for Q1 2025 was $3.6 million, up from $0.4 million in Q1 2024[174] Earnings per share (basic and diluted) Basic EPS for Q1 2025 was $0.09903 and diluted EPS was $0.09791, a decrease from Q1 2024, primarily due to an increase in weighted average shares from issuances for acquisitions and compensation Earnings Per Share | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income attributable to Owners (thousands) | 15,664 | 15,449 | | Basic weighted average shares | 158,167,095 | 150,157,792 | | Basic EPS (US$) | 0.09903 | 0.10289 | | Diluted weighted average shares | 159,987,993 | 152,165,829 | | Diluted EPS (US$) | 0.09791 | 0.10153 | Note 30: Business combinations This note details 2024 business combinations, including Tria, GPMS, CSHG Real Estate, and Nexus Capital, which were accounted for under the acquisition method, recognizing significant goodwill and intangible assets - Acquired a 66.67% interest in Tria, an energy trading company, for a cash consideration of $19.8 million[198][203] - Acquired a private equity carve-out from Aberdeen Plc to form the Global Private Markets Solutions (GPMS) vertical, with total consideration of $135.4 million[199][203] - Acquired 100% of Credit Suisse's Real Estate business in Brazil (CSHG) for a total consideration of $128.6 million[201][203] - Completed a 100% acquisition of Nexus Capital, a real estate asset manager in Colombia, for a total consideration of $21.0 million[202][203] Note 31: Financial instruments This note provides an overview of the Group's financial instruments, their classification, fair value measurement, and associated credit, liquidity, and market risks, including sensitivity analyses for interest rate and currency fluctuations Risk management The Group manages credit, liquidity, and market risks through diversification, with credit risk considered low, and sensitivity analysis indicating a $4.8 million impact from interest rate changes and a $3.7 million negative impact from a 10% foreign exchange decline - Credit risk is considered low as the customer base consists of fund investors obligated to meet capital calls[231] - A 10% increase in the price of Level 2 Long-term investments would increase net profit before tax by $5.2 million[241] - A 10% decline in foreign exchange rates against the US dollar would have a net negative impact of $3.7 million on the company's financial position[247] Note 33: Events after the reporting period Subsequent to the reporting period, Patria announced strategic Real Estate acquisitions, sold a $65.6 million receivable, diluted its Tria holding, settled and renewed a $75 million loan, and paid a $0.15 per share Q1 2025 cash dividend - Announced three acquisitions in the Real Estate sector: six funds from Genial Investimentos, Vectis Gestao in Brazil, and AgroFibra REIT in Mexico[261][263][264] - On June 25, 2025, sold a $65.6 million receivable from PBPE Fund IV to Banco Santander for a discounted amount of $58.4 million[265] - A cash dividend of $0.15 per share for Q1 2025, totaling $23.7 million, was paid on June 12, 2025[268]