CaliberCos Inc. Q4 FY2024 earnings call

• Adapted to market conditions by reducing operating costs, narrowing focus to multifamily residential, hospitality, and multi-tenant industrial asset classes, and launching new programs like the Qualified Opportunity Zone Fund Roll Up and Caliber 1031 exchange program.
• Project updates include acquisition of Canyon Corporate Plaza in Phoenix, progress on SP10 hotel conversion, and Pure Pickleball project in Scottsdale.
• Updates on Caliber Hospitality Trust (CHT) including Satori Collective contribution and issues with L.T.D. acquisition.
• Transparency initiatives such as publishing a financial supplement on platform performance and disclosing estimated performance allocations of $89 million.

Total fourth quarter platform revenue was $4.6 million, a 36.1% decrease compared to prior period due to carried interest from asset sales and lower development activity. Full year 2024 platform revenue was $21 million, a 1.9% increase primarily from asset management revenues of $20.6 million. Platform expenses in Q4 were $10.7 million, an increase of 24% mainly due to bad debt expense. Full year 2024 platform expenses were $33.1 million, a 9.4% increase. Managed capital was $492.5 million, a 12.5% increase compared to December 31, 2023. Consolidated revenue in Q4 was $8.7 million, down from $23.9 million the prior year, and consolidated expenses were $14 million, a 54.4% decrease. Full year 2024 consolidated revenue was $51.1 million, a 43.7% decrease, and consolidated expenses were $64.4 million, a 46.1% decrease.

• Expect to be profitable in 2025.
• Evaluating impact of L.T.D. on 2026 AUM target of $3 billion.
• Fundraising environment remains challenging but wholesale channel is picking up.
• SEC guidance on general solicitation simplifies fundraising process for Caliber.

• Fundraising softness, especially due to election disruption and L.T.D. result.
• Impact of governmental spending on CHT portfolio performance.
• Potential write-downs from selling assets earlier in development cycle.
• Managing $30.7 million of corporate debt maturing in next 12 months.

Q: What's your outlook for the fundraising environment going forward?

A: Feel good about fundraising as investors are moving back towards real estate, and the regional banking system is starting to get healthy, increasing lender activity.

Q: With the Satori Collective contribution, is the deal still confident to close?

A: The contribution agreement is already done; we're working on finalizing valuation of an eighth asset and will move towards closing.

Q: Are you still confident in operating income being positive in 2025 despite L.T.D. impact?

A: Operating income target is based on reducing expenses while growing revenues, and we're making progress, though the $3 billion AUM target related to CHT is still under analysis.