P10, Inc. Q4 FY2024 earnings call

• Luke Sarsfield noted 2024 was a transformational year with strong financial performance, exceeding 2024 guidance. - Acquired Qualitas Funds, a European private equity fund of funds manager, on track to close in Q1 2025. - Long-term vision to double fee paying AUM to $50 billion by 2029. - Key imperatives: optimizing leadership team (hiring key professionals, elevating governance), driving organic growth, reaccelerating M&A (acquisition of Qualitas), generating operational efficiencies, and enhancing shareholder communications. - In 2024, repurchased 6.6 million shares, and the Board authorized an additional $40 million for share repurchases.

In the fourth quarter of 2024, fee paying assets under management were $25.7 billion, a 10% year-over-year increase. Revenue in Q4 was $85 million, a 35% increase from Q4 2023, and full-year 2024 revenue was $296.4 million, up 23% year-over-year. Adjusted EBITDA in Q4 2024 was $42.9 million, a 40% increase from Q4 2023, and full-year 2024 adjusted EBITDA was $144.5 million, up 17% year-over-year. FRE margin in Q4 2024 was 50.2%, and full-year 2024 FRE margin was 48.8%. For the full year 2024, gross fundraising was $3.8 billion, with Bonaccord Capital Partners closing Fund II at a record $1.6 billion. Fee paying AUM grew 10%, revenues increased 23%, adjusted EBITDA rose 17%, and fee related revenue grew 14% excluding catch-up fees effects, with full-year FRE margins at 48.8%.

• 2025 gross fundraising target is at least $4 billion, a 60% increase from 2024's $2.5 billion, excluding Qualitas' $1 billion. - 19 commingled funds expected in market in 2025, including 4 from Qualitas. - Step downs and expirations of fee paying AUM expected 5%-7%. - Revenue expected double-digit growth excluding catch-up fees, including revenue from Qualitas once closed. - FRE margins expected in the mid-40s% in 2025, with Qualitas slightly pressing margins down.

• Forward-looking statements are inherently uncertain due to risks and uncertainties detailed in SEC filings. - Catch-up fees are episodic and not repeatable, which can temporarily impact margin. - Investments in human capital and distribution take time to show ROI, which could affect margins if not managed properly. - Mix shift in portfolio strategies can impact FRE margins.

Q: As we look ahead to the next couple of quarters, where is your sales team focusing? So what are the bigger funds in market?

A: Luke Sarsfield mentioned there will be 19 funds in market in 2025, 4 from Qualitas, with focus on RCP strategies, TrueBridge's various strategies, and momentum in Bonaccord.

Q: Update on SMA fundraising and M&A pipeline.

A: Luke Sarsfield and Arjay Jensen discussed focusing on product offerings including SMAs, and an active M&A pipeline in private credit, direct lending, and asset backed areas.

Q: Why expected average fee rate to go down?

A: Amanda Coussens explained catch-up fees were elevated in 2024 due to specific funds, expected to be lower in 2025, with core fee rate ex catch-up fees stable at 103 basis points.

Q: Thoughts on FRE margin trajectory.

A: Luke Sarsfield stated FRE margins are expected to be in the mid-40s% in the near term, impacted by investments in distribution and mix shift in portfolio, but expecting accretion to closer to 50% in the out years.

Q: Qualitas integration and Bonaccord III.

A: Luke Sarsfield discussed Qualitas integration opportunities in data, distribution, and NAV lending, and Bonaccord III expected to come to market with momentum from the strong performance of Bonaccord II.