Acadian Asset Management Q4 FY2025 earnings call

• Delivered breakthrough results across assets under management and profitability, with AUM reaching a record high of $177.5 billion as of December 31, 2025.
• Q4 2025 US GAAP net income attributable to controlling interest was down 18%, but ENI diluted EPS was up 2% due to share repurchases. Adjusted EBITDA was up 1%.
• Full-year 2025 US GAAP net income attributable to controlling interest was down 6%, but adjusted EBITDA was up 9% driven by recurring management fees growth. ENI total revenue grew 9%, ENI margin expanded over two percentage points to 35.5%, and gross leverage was reduced to one times.
• Investment performance track record remained strong with 95% of strategies by revenue outperforming benchmarks across three, five, and ten-year periods. Net flows were positive, with $5.4 billion in Q4 2025 and $29 billion in 2025, and eight consecutive quarters of positive net flows.
• Completed refinancing of senior notes in Q4 2025, reducing gross debt by $75 million, lowering gross leverage to one times and net leverage to 0.5 times. Announced an interim dividend of 10¢ per share.

In Q4 2025, management fees were $140 million, up 32% from Q4 2024, reflecting a 43% increase in average AUM due to strong positive net flows and market appreciation. Total ENI revenue in Q4 2025 was $170 million, up 2% from Q4 2024, driven by recurring base management fee growth partially offset by a decline in performance fees. For the full year 2025, ENI total revenue grew to nearly $549 million, up 9% from 2024. AUM surged to $177.5 billion as of December 31, 2025, making a record high. The firm generated $29 billion in net client cash flows in 2025, with $5.4 billion in Q4 2025, representing 3% of beginning period AUM.

• Expect continued positive momentum in net flows in 2026 as the pipeline remains robust.
• Continue to generate strong free cash flow and return excess capital to shareholders through dividends and share repurchases.
• Confident in delivering earnings, generating free cash flow, self-funding organic investments with the stronger recurring revenue base entering 2026.

• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from projected.
• Risks related to market conditions, changes in valuation of equity and profit interest which could impact net income and EPS.

Q: Could you give a flavor of the composition of the institutional pipeline and the cadence of timing expected in 2026?

A: The pipeline is very robust and diverse by product type, geographies, and vehicle. Interest in enhanced, extension strategies, and EM continues. It's diverse across various areas and continues the themes seen in 2025.

Q: Any changes in fixed expense line items to think about in the year?

A: Focus on scaling the business with investments in areas like systematic credit, technology, and data including AI. Confident in self-funding investments with ongoing margin improvement.

Q: How do you think about share repurchases in the context of capital returns?

A: Share repurchases are a priority, balance sheet is durable, business is generating strong free cash flow. Paused repurchases in Q4 2025 due to refinancing, now active and athletic with plans to be active in 2026.

Q: What was the composition of net flows in the fourth quarter?

A: Net flows were diverse across strategies, including enhanced, extensions, and EM. No one big dominant mandate, balanced between international and US clients, and various vehicle types.