Abacus Life(ABL) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2024, total revenue grew by 40% year over year to $33.2 million, with adjusted net income increasing by 126$13.4 million and adjusted EBITDA rising by 51% to $16.6 million [9][10][24] - For the full year 2024, total revenue increased by 69$111.9 million, adjusted net income grew by 58% to $46.5 million, and adjusted EBITDA rose by 57$61.6 million [10][24][29] - Adjusted EBITDA margin for Q4 was 50%, compared to 47% in the prior year, while for the full year, it was 55%, down from 59% [27][29] Business Line Data and Key Metrics Changes - The company completed two strategic acquisitions, Carlisle Management Company and FCF Advisors, adding approximately $2.6 billion in assets under management [12][13] - Policy originations increased by 63$344 million [10][19] Market Data and Key Metrics Changes - The company reported a strong liquidity position with cash and cash equivalents of $128.8 million and outstanding long-term debt of$342.4 million as of December 31, 2024 [28] - The company anticipates a strong 2025, projecting adjusted net income between $70 million and$78 million, implying growth of 51% to 68% [11][29] Company Strategy and Development Direction - The company aims to solidify its position as a leader in the alternative asset management space, leveraging proprietary technology and data to capture market opportunities [21][32] - The rebranding to Abacus Global Management reflects the company's evolution and global market presence, enhancing its offerings to institutional investors [16][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities ahead, citing a favorable market environment for both policy origination and investor interest in unique assets [66][72] - The company is well-positioned for 2025, with a focus on integrating acquisitions and expanding its asset management capabilities [19][29] Other Important Information - The company raised $181.7 million in additional equity and secured a$150 million debt-financing facility to support growth initiatives [19][20] - The company has initiated a new ETF, the Abacus FCF Small Cap Leaders ETF, and reduced management fees across its ETFs [15][19] Q&A Session Summary Question: Key swing factors in guidance assumptions - Management clarified that the guidance range does not depend on a full draw of the remaining $50 million on the revolver, emphasizing strong origination and integration of asset management [34][36] Question: Update on direct channel metrics post-advertising shift - Management confirmed that advertising was not paused but targeted to non-swing states, resulting in continued positive impacts on policy origination [37][39] Question: Deployment of capital from recent equity and debt offerings - Management indicated significant deployment of capital in Q4 and a strong position for Q1, with expectations for continued positive results [42][44] Question: Strategy for holding policies on the balance sheet - Management stated that policies on the balance sheet are expected to hover around$370 million to $450 million, with a target of two turns per year on average [50][52] Question: Update on the carrier buyback program - Management reported ongoing expansion of the carrier buyback program and positive expectations for 2025 [57][60] Question: Changes in behavior of individuals life settling policies - Management noted that market volatility tends to increase interest in liquidity options, positively impacting origination [61][66] Question: Year-end AUM at Carlisle and FCF - Management expressed optimism about AUM growth for both entities, citing strong interest and favorable market conditions [69][72]