Abacus Global Management, Inc. Q2 FY2025 earnings call

• Revenue Growth: Total revenue in Q2 2025 was $56.2 million, a 93% year-over-year increase. Adjusted net income was $21.9 million, and adjusted EBITDA was $31.5 million.
• Business Model: Abacus is an originator and market maker that controls price discovery through genuine market demand. It originates high-quality assets, sells some to managed funds, and syndicates the remaining to third-party investors at market-driven prices.
• New KPIs: Elena Plesco discussed KPIs such as portfolio turnover, velocity, strategic portfolio aging, health portfolio (with 15% of portfolio value in policies held over 365 days), and unit economics (average realized gain on sale in Q2 2025 was 26.3%).
• Share Repurchase: Board authorized a $20 million share repurchase program effective June 5, 2025, running for up to 18 months.
• Warrant Exchange: Completed an exchange offer and consent solicitation, tendering 88% of warrants at 0.23 per warrant, with the remaining 12% to be converted at 0.207 shares per warrant on August 14.

Life Solutions: In the second quarter of 2025, realized gain was $58.3 million. Capital deployed increased 16% to $121.8 million compared to the prior year. Syndicated 399 policies in Q2 2025 with fair value of $208.4 million and total realized gains of $58.3 million. As of June 30, 2025, Abacus held 600 policies on the balance sheet with a value of $387.3 million. Asset Management: Generated $8.8 million in revenue in Q2 2025, representing the second full quarter of fees from acquisitions closed in late 2024. Revenue contribution: Life Solutions is the primary revenue driver, with Asset Management contributing a smaller portion.

• Raised full-year 2025 adjusted net income outlook to between $74 million and $80 million, up from the prior range of $70 million to $78 million. This implies strong year-over-year growth of 59% to 72% compared to 2024's adjusted net income of $46.5 million.

Q: Patrick Davitt asked about the mix of sales between related party funds and third parties, and the percentage of revenue from related party transactions.

A: Jay Jackson responded that related party transactions were 29% of total revenue in Q2 and 17% year-to-date.

Q: Crispin Love asked about unrealized gains and second half earnings expectations.

A: Jay Jackson and Bill McCauley responded that unrealized gain was $17 million and expected growth in the second half.

Q: Andrew Kligerman asked about turnover ratio, realized gain percentage, and G&A expenses.

A: Jay Jackson and Bill McCauley responded on turnover ratio being in the 1.5 to 2x range, realized gain being price paid vs received, and G&A growing with revenue.

Q: Randy Binner asked about related party transaction breakdown and Asset Management fees.

A: Jay Jackson responded that related party transactions were on total revenue and Asset Management fees were expected to grow.

Q: Mike Grondahl asked about sequential growth in the back half.

A: Jay Jackson responded on historical stronger Q3/Q4 and momentum continuing.

Q: Patrick Davitt asked about AUM flows being gross or net.

A: Jay Jackson responded that flows were gross, net ETF flows were $11 million, and demand expected to continue.