Cohen & Steers, Inc. (CNS) Earnings

Management highlights

### Financial Performance - Adjusted earnings per share for Q2 2026 was $0.85, up from $0.79 in Q1 2026 and $0.73 in Q2 2025 - Total AUM increased ~8% to over $100 billion, driven by positive market performance and strong net inflows of $1.3 billion, one of the strongest quarterly flow results in recent company history - GAAP net income was $44 million, an 8% increase quarter-over-quarter and 18% increase year-over-year - Total revenue increased 5% quarter-over-quarter to $152 million, driven by higher average AUM from market gains and net inflows; total operating expenses increased 3% to $97 million, resulting in an expanded operating margin of 36.3% - Ended the quarter with $219 million in cash held in U.S. Treasuries, plus $136 million in liquid seed investments, for a strong liquidity position supporting capital priorities and growth initiatives ### Investment Performance - Over 3-year and 5-year horizons, 91% and 97% of AUM respectively has outperformed benchmarks - Lower 1-year outperformance (41% of AUM) is isolated to U.S. REIT positioning in cell tower REITs, impacted by a post-5G buildout carrier spending slowdown and exaggerated satellite displacement fears; management expects a reversion to the historical 200 bps alpha average - Global listed infrastructure outperformed benchmarks by 370 bps over the last year; U.S.-listed real estate returned 10.7% in Q2 2026 (14.9% YTD), global real estate returned 9.6% YTD, and real assets outperformed both the S&P 500 and a 60/40 portfolio YTD - The company's non-traded REIT (CNSREIT) has generated a 12.3% annualized total return since its 2024 inception, outperforming peer averages by 760 bps ### Strategic Growth Initiatives - Active ETF platform surpassed $1 billion AUM, led by the U.S. real estate ETF at $450 million AUM; the Future of Energy strategy was converted from an open-end fund to an ETF (ticker CSEN) during the quarter, with a 43% 1-year return; a seventh ETF (multi-strategy real assets) is expected to launch by fall 2026 - Offshore SICAV fund initiative reached $2 billion AUM, with record quarterly net inflows of $326 million led by multi-strategy real assets and global listed infrastructure, with growing traction in the Southeast Asian wealth market - The Tactical Real Estate LP fund (TREF, launched July 2025), which combines listed and private real estate, is the second-largest strategy by AUM in the company's institutional pipeline - A rights offering for the closed-end Cohen & Steers Quality Income Fund (RQI) raised $154 million, increasing AUM by $220 million, marking the second closed-end fund rights offering in the past year - New internal operational roles were created to support growth: a Chief Operating Officer for distribution to improve efficiency, and a dedicated lead for global sub-advisory growth, with untapped opportunity across the U.S., Canada, Australia, New Zealand, and Korea

Guidance

- Management maintained existing full-year expense guidance: compensation and benefits expenses are expected to equal approximately 40% of total annual revenues - G&A expenses are projected to see mid-single-digit percentage growth relative to 2025 - The pro forma effective tax rate is projected to land between 25% and 26% - Management expects continued strong demand for U.S. real estate strategies driven by recent strong performance, with a sustained institutional pipeline and healthy funding velocity supporting ongoing inflows - Management forecasts that double-digit annual returns will be a sustainable long-term outlook for listed real estate strategies, even if interest rates rise modestly from current levels

Segment performance

By Investment Vehicle: Open-end funds (including mutual funds, ETFs, and SICAVs) drove the majority of the quarter's $1.3 billion total net inflows. The advisory business recorded modest outflows stemming from institutional client rebalancing. The sub-advisory business generated slight net inflows, as $500 million in new mandates was partially offset by client redemptions. By Strategy: U.S. real estate was the largest contributor to net inflows with $833 million, complemented by strong demand for preferred securities and global listed infrastructure strategies. With the exception of global real estate, all strategies recorded net inflows. The multi-strategy Real Assets portfolio added $380 million in net inflows, bringing its total AUM to $3 billion (29% CAGR since 2021). Global listed infrastructure recorded its sixth consecutive quarter of inflows. Preferred securities (total AUM $18 billion) recorded its second consecutive quarter of inflows, led by its low-duration preferred strategy.

Risks & headwinds

- Short-term U.S. REIT underperformance is concentrated in cell tower REIT positioning, exposed to post-5G carrier spending slowdowns and unsubstantiated but market-priced satellite displacement risks - The Japan market is facing current headwinds from rising domestic bond yields and strong investor appetite for domestic and global equities, which has pressured near-term inflows - The real estate IPO pipeline faces ongoing impediments from relatively lower listed real estate valuations compared to current private market marks, which could limit public market exits for private real estate - Active ETF growth depends on continued benchmark outperformance to gain market share from much larger passive real estate ETF category ($100 billion industry AUM, versus $3 billion for active real estate ETFs overall) - Forward-looking performance and flow outcomes are subject to material uncertainty from unforeseen macroeconomic, market, and geopolitical factors that could differ from management's current projections

Analyst Q&A

• Q: Given improving real estate performance and expectations of higher rates, what is the 12-24 month demand outlook for U.S. and global real estate across wealth and institutional channels, and how sustainable is the current institutional pipeline? /

  A: U.S. real estate has led inflows in both wealth and institutional channels this year, with a solid backlog of prospective clients. Strong recent REIT performance has drawn increased investor attention to the improving fundamental backdrop, and management expects demand for U.S. REIT strategies to continue improving. The won/unfunded pipeline has held near $1.7 billion for four straight quarters, a big jump from post-interest rate regime change levels, with healthy quarterly funding velocity and the broadest geographic and strategy diversification in company history, including first-time wins in new Asian markets that supports long-term sustainability.

• Q: Where is the firm seeing the most traction for international distribution, and what needs to happen for non-U.S. sales to become a larger organic growth contributor? /

  A: The three core international growth pillars are Luxembourg-domiciled SICAV wealth vehicles, core institutional mandates, and global sub-advisory. SICAVs have seen the strongest flows this year in the U.K., Japan, and South Africa, led by multi-strategy real assets, global listed infrastructure, and global real estate. The institutional pipeline has mandates across a broad set of countries spanning New Zealand, Canada, multiple Asian markets, Germany, and Saudi Arabia. The newly prioritized sub-advisory business is targeting new allocations and underperformer takeaways across global markets. Growth is already accelerating from macro tailwinds for real assets and deliberate distribution investments, with more progress expected over coming quarters.

• Q: What is the current adoption progress for the firm's active ETF platform, and what impact will growing ETF scale have on fee rates and margins? /

  A: The ETF platform has progressed rapidly from seeding to early RIA adoption, with strong performance driving early traction. Onboarding to major wirehouse platforms has already started for the largest U.S. real estate and preferred ETFs. ETFs are priced at a slight discount to the firm's lowest-cost open-end share classes, but net fee rates remain comparable to the firm's overall average fee level (near 58-59 bps), so margin impact is neutral to positive. The firm plans to add a multi-strategy real assets ETF by end of summer 2026 to complete its initial core strategy ETF lineup, then focus on scaling existing funds before adding new products.

• Q: What led to the conversion of the Future of Energy open-end mutual fund to an ETF, and will the firm pursue more conversions in the future? /

  A: The small $170 million open-end fund was struggling to gain distribution attention and was at risk of being removed from major wirehouse platforms, with very few 401(k) assets that would be lost in a conversion. The conversion was seen as a way to revitalize the strong-performing strategy, and reception has been very positive: the major wirehouse planning to delist it instead increased its recommendation after the conversion. The firm will consider similar conversions for other appropriate small under-distributed open-end funds going forward.