AssetMark(US:AMK)2021-11-14 07:47Financial Data and Key Metrics Changes - Platform assets reached a record $86.8 billion, up 29% year-over-year, driven by record net flows of $2.8 billion [19] - Net revenue increased by 38% year-over-year to $101.5 million, marking the first quarter with net revenue exceeding $100 million [6][21] - Adjusted EBITDA rose by 53% year-over-year to $44.8 million, with an adjusted EBITDA margin of 32%, up 460 basis points year-over-year [29] - Adjusted net income increased by over 60% to $29.9 million, or $0.40 per share [30] Business Line Data and Key Metrics Changes - Asset-based net revenue grew by 36% to $95.5 million, with additional revenue from Voyant contributing $3.5 million [21][22] - The introduction of the Pooled Employer Plan (PEP) aims to enhance retirement offerings, accounting for approximately $1.6 billion in platform assets [13] - A suite of separately managed accounts (SMAs) was launched, generating over 1,500 proposals amounting to approximately $375 million since its introduction [15] Market Data and Key Metrics Changes - The company added 201 new producing advisers, bringing total engaged advisers to 2,729, an increase of 351 advisers year-over-year [20] - Year-to-date annualized net flows as a percentage of beginning of year assets stood at 12.5% [20] Company Strategy and Development Direction - The company focuses on five key components of growth strategy, including catering to varying adviser affiliations and delivering a holistic experience [8][10] - The acquisition of Voyant is aimed at enhancing financial wellness solutions and expanding capabilities for advisers [11][12] - The company is actively pursuing M&A opportunities to enhance its service offerings and expand its market presence [17][70] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the market outlook due to macroeconomic uncertainties but is optimistic about strong organic growth [20] - For 2022, the company expects organic growth of over 10% and net revenue growth in the high teens to low 20% range [32] - The company anticipates a modest impact from inflation in 2022 but remains focused on disciplined expense management [26][33] Other Important Information - The company ended the quarter with over $50 million in cash and $135 million available on its revolving line of credit, positioning it well for future M&A opportunities [30] - The company is investing in new product initiatives and enhancing its technology platform to better serve advisers [56] Q&A Session Summary Question: How would you characterize the deal pipeline right now? - The deal pipeline is good, but valuations are high, and there is competition for acquisition opportunities. The company is a disciplined buyer [37] Question: How is the company thinking about interest rate sensitivity? - The company assumes no interest rate increases in its 2022 outlook but expects to benefit from any future increases [40] Question: Can you walk us through the growth in the RIA market relative to IBD? - The RIA segment is growing faster than other segments, driven by demand for independent fee-based advice and regulatory changes [44] Question: What are the expected contributions from Voyant in 2022? - Voyant is expected to contribute about three to four percentage points to both revenue and EBITDA growth in 2022 [60] Question: What steps have been taken to reduce asset-based expenses? - The company has renegotiated contracts with providers to reduce asset-based expenses, which will positively impact future guidance [57]