AssetMark(US:AMK)2022-11-07 16:00Financial Performance - Total revenue for the quarter ended September 30, 2022, was $154.7 million, an increase of $15.0 million, or 10.7%, from $139.7 million for the same quarter in 2021[88] - Net income for the quarter ended September 30, 2022, was $30.1 million, or $0.41 per share, compared to $12.3 million, or $0.17 per share, for the same quarter in 2021[88] - Adjusted EBITDA for the quarter ended September 30, 2022, was $52.7 million, compared to $44.8 million for the same quarter in 2021[88] - Net income increased by $64.3 million, or 483.1%, from $13.3 million in the nine months ended September 30, 2021 to $77.7 million in the nine months ended September 30, 2022[179] - Total revenue increased by $67.5 million, or 17.4%, from $386.7 million in the nine months ended September 30, 2021 to $454.2 million in the nine months ended September 30, 2022[164] Revenue Breakdown - Asset-based revenue for the quarter ended September 30, 2022, was $128.2 million, down $6.0 million, or 4.5%, from $134.2 million for the same quarter in 2021[88] - Spread-based revenue for the quarter ended September 30, 2022, was $21.2 million, up $19.9 million, or 1,613.4%, from $1.2 million for the same quarter in 2021[88] - Subscription-based revenue decreased from $3.2 million in Q3 2021 to $3.1 million in Q3 2022, primarily due to currency weakness[150] - Asset-based revenue increased by $34.8 million, or 9.3%, from $374.7 million to $409.5 million[165] - Spread-based revenue surged by $23.8 million, or 364.7%, from $6.5 million to $30.3 million in the same period[166] Operating Expenses - Total operating expenses decreased by $1.1 million, or 0.9%, from $116.8 million in Q3 2021 to $115.7 million in Q3 2022[151] - Employee compensation decreased by $2.5 million, or 5.6%, from $44.1 million in Q3 2021 to $41.6 million in Q3 2022[155] - General and operating expenses increased by $2.9 million, or 15.3%, from $18.8 million in Q3 2021 to $21.7 million in Q3 2022[156] - Interest expense increased by $0.5 million, or 47.0%, from $1.1 million in Q3 2021 to $1.6 million in Q3 2022 due to higher interest rates[159] Assets and Advisers - Platform assets were $79.4 billion as of September 30, 2022, down 8.6% from $86.8 billion as of September 30, 2021[89] - The number of engaged advisers on the platform was 2,601 as of September 30, 2022, down 5.4% from 2,749 as of September 30, 2021[89] - The number of new producing advisers for the period was 20, contributing to the growth of platform assets[110] Cash Flow and Investments - Cash provided by operating activities increased by $1.7 million to $95.6 million for the nine months ended September 30, 2022, compared to $93.9 million in the same period of 2021[185] - Cash used in investing activities decreased by $115.3 million to $37.9 million for the nine months ended September 30, 2022, primarily due to a significant acquisition in the prior year[187] - Cash provided by financing activities decreased by $37.3 million to $2.8 million for the nine months ended September 30, 2022, mainly due to a net drawdown from the revolving credit facility in the previous year[188] Compliance and Risk - The company was in compliance with all applicable covenants as of September 30, 2022, maintaining a Total Leverage Ratio below 3.5 to 1.0 and an interest coverage ratio above 4.0 to 1.0[182] - A 1% decrease in the aggregate value of assets on the platform would have led to a 1% decline in total revenue and a 3.1% decline in pre-tax income, equating to a $3.0 million impact[194] - An increase of 100 basis points in interest rates under the 2022 Credit Agreement would result in a decrease in income before income taxes of approximately $1.2 million annually[195] Technology and Development - The company invested $55.9 million in technology development during the nine months ended September 30, 2022[93] - The company expects to continue making substantial investments to support growth and expand sales capacity[94] - The company plans to enhance technology, services, and investment solutions to continue growing platform assets, which are seen as a key indicator of business momentum[103]