Hamilton Lane(US:HLNE)2026-02-03 21:18Financial Performance - Total revenues for the three months ended December 31, 2025, increased by $31.1 million to $198.589 million compared to $168.261 million for the same period in 2024, driven by increases in management and advisory fees and incentive fees [155]. - Management and advisory fees rose by $26.9 million for the three months ended December 31, 2025, totaling $153.177 million, with specialized funds revenue contributing $22.8 million of this increase [156]. - Incentive fees increased by $4.2 million for the three months ended December 31, 2025, reaching $45.375 million, primarily due to higher performance fees from evergreen-related funds [157]. - For the nine months ended December 31, 2025, total revenues increased by $47.0 million to $565.427 million compared to $514.991 million for the same period in 2024 [158]. - Management and advisory fees for the nine months ended December 31, 2025, increased by $43.0 million, totaling $429.000 million, with specialized funds revenue contributing $35.3 million of this increase [159]. - Fee Related Earnings (FRE) for the three months ended December 31, 2025, was $93.8 million, compared to $66.0 million for the same period in 2024 [207]. - Adjusted EBITDA for the three months ended December 31, 2025, was $107.5 million, an increase from $92.7 million in the prior year [207]. - Non-GAAP EPS for the three months ended December 31, 2025, was $1.55, up from $1.25 in the same period of 2024 [209]. - Adjusted net income for the three months ended December 31, 2025, was $84.5 million, compared to $68.0 million for the same period in 2024 [209]. Assets and Management - As of December 31, 2025, the company had $98.1 billion in assets under management (AUM) from customized separate accounts and $48.0 billion from specialized funds [119]. - The company reported $871.5 billion in assets under advisement (AUA) as of December 31, 2025 [119]. - Fee-earning AUM reached $79.142 billion by the end of the nine months ended December 31, 2025, reflecting contributions and market value changes [190]. - Fee-earning AUM increased by $2.7 billion for the three months ended December 31, 2025, primarily due to contributions from customized separate accounts and specialized funds [193]. - Customized separate accounts fee-earning AUM rose by $0.3 billion, with contributions of $1.3 billion and distributions of $1.1 billion for the same period [194]. - Specialized funds fee-earning AUM increased by $2.4 billion, with contributions of $2.7 billion and distributions of $0.8 billion for the three months ended December 31, 2025 [195]. - For the nine months ended December 31, 2025, fee-earning AUM increased by $7.1 billion, driven by contributions from customized separate accounts and specialized funds [196]. - Customized separate accounts contributions totaled $4.3 billion for the nine months ended December 31, 2025, with distributions amounting to $2.9 billion [197]. - Specialized funds contributions reached $6.1 billion for the nine months ended December 31, 2025, with distributions of $2.0 billion [199]. Expenses and Income - Total expenses for the three months ended December 31, 2025, increased by $19.8 million to $112.583 million compared to $92.539 million for the same period in 2024 [163]. - Compensation and benefits expenses rose by $16.0 million for the three months ended December 31, 2025, totaling $77.944 million, driven by increased salary expenses and annual bonus plan accruals [164]. - Total expenses increased by $39.0 million for the nine months ended December 31, 2025, compared to the same period in 2024, driven by increases in both compensation and benefits and general, administrative and other expenses [166]. - Compensation and benefits expenses rose by $29.1 million for the nine months ended December 31, 2025, with base compensation and benefits increasing by $26.6 million due to additional headcount and a stronger annual bonus plan accrual [167]. - Net income attributable to Hamilton Lane Incorporated for the three months ended December 31, 2025, was $58.372 million, compared to $52.972 million for the same period in 2024 [153]. - The company reported a net gain on investments of $19.681 million for the three months ended December 31, 2025, compared to $3.082 million for the same period in 2024 [153]. - Net income attributable to non-controlling interests increased by $9.9 million for the three months ended December 31, 2025, due to an increase in overall net income during the period [183]. Strategic Partnerships and Investments - A long-term strategic partnership was established with The Guardian Life Insurance Company, involving oversight of a nearly $5 billion private equity portfolio and a commitment of approximately $500 million per year for the next 10 years [124]. - The company has utilized available cash and borrowings to make strategic investments in technology-driven private markets data and wealth management solutions [226]. - HLA plans to evaluate opportunities for strategic investments in technology-driven private markets data and wealth management solutions [236]. Debt and Financing - The company amended its credit facility, reducing the borrowing capacity from $75 million to $50 million [122]. - HLA issued $100 million of 5.28% senior notes due October 15, 2029, with interest payable semi-annually starting April 15, 2025 [227]. - As of December 31, 2025, HLA had an outstanding balance of $84 million under the Term Loan Agreement, which has a maturity date of July 1, 2029 [229]. - The 2020 Multi-Draw Term Loan Agreement has an outstanding balance of $98 million as of December 31, 2025, with a fixed interest rate of 3.50% and a maturity date of April 1, 2030 [231]. - HLA's net cash provided by operating activities for the nine months ended December 31, 2025, was $321,944 thousand, an increase from $261,539 thousand in the same period of 2024 [243]. - The company used $345,020 thousand in investing activities for the nine months ended December 31, 2025, compared to $67,949 thousand in 2024 [243]. - HLA had $143.1 million in availability under the Loan Agreements as of December 31, 2025 [233]. - The company is required to maintain approximately $7.8 million in liquid net assets for regulatory net capital and capital adequacy requirements as of December 31, 2025 [239]. - HLA intends to continue paying cash dividends on a quarterly basis, subject to funds being legally available [240]. - The company has authorized a Stock Repurchase Program to repurchase up to 6% of its outstanding shares, not to exceed $50 million, with no shares repurchased to date [237]. Market Conditions and Future Outlook - The company anticipates that future market conditions may be less favorable for generating positive performance compared to previous periods [214]. - Historical returns are primarily driven by earlier funds, while future returns will increasingly depend on newer funds [214]. - Newly-established funds may experience lower returns during their initial capital deployment phase [214]. Risk Management - The company limits counterparties in financial transactions to reputable financial institutions to minimize credit risk [263]. - Availability of financing from financial institutions may be uncertain due to market events, impacting access to financing markets [263]. - Currency exposure related to investments in foreign currency assets is limited to the general partner interest, typically one percent of total capital commitments [260]. - Changes in exchange rates are not expected to materially impact the company's financial statements [260]. - The company does not possess significant assets in foreign countries or engage in material transactions in currencies other than the U.S. dollar [260].