Silvercrest Asset Management Group Inc. Q2 FY2025 earnings call

• Discretionary AUM increased $1 billion in the second quarter, with $80 million in organic new client accounts added, and $0.5 billion in the first half of 2025. Discretionary AUM now stands at $23.7 billion, total AUM at $36.7 billion.
• Strategic investments continue to promote growth, and earnings/adjusted EBITDA reflect investment in long-term priorities.
• Optimistic about securing organic flows in 2025-2026 as investments bear fruit.
• Continues to invest in talent across the firm. New business pipeline is robust.
• Completed a $12 million stock repurchase program in the second quarter and announced a new $25 million buyback program.
• Board approved a 5% increase in quarterly dividend to $0.21 per share of Class A common stock.

Discretionary assets under management (AUM) increased to $23.7 billion, a 4.4% sequential quarterly increase and 9.7% year-over-year. Total AUM at the end of the second quarter was $36.7 billion. Revenue for the quarter was $30.7 million, with reported consolidated net income of $3.1 million. Revenue decreased year-over-year by $0.3 million (1%) due to a mix in AUM. Expenses increased year-over-year by $0.9 million (3.7%) due to higher compensation and benefits and G&A expenses. Adjusted EBITDA for the quarter was approximately $5.7 million (18.7% of revenue). For the first half of the year, revenue increased 1.3% year-over-year, expenses increased 6.3% year-over-year. Adjusted EBITDA for the first half was $12.2 million (19.7% of revenue).

• Highly optimistic about securing more significant organic flows over 2025-2026 as investments bear fruit.
• Will continue to monitor and adjust interim compensation ratio to match business investments.
• Strong balance sheet supports ongoing capital returns and growth initiatives.
• Looking for opportunities to return capital to shareholders, including through buybacks and dividends.

• Forward-looking statements are subject to risks and uncertainties as actual results may differ from projections.
• Market volatility could impact AUM and revenue.

Q: Can you talk about the pipeline and the Global Value Composite performance?

A: The Global Value team has been built out over a year, with ongoing investments in distribution and hiring. The pipeline for measurable capabilities is about $200 million, doubled since last quarter, with potential for more. The Global Value Composite performance is good and should lead to inflows.

Q: Can you mention the average price of the stock buyback?

A: The average price of the stock bought back is below current trading levels, but exact average isn't announced.

Q: Any outlook on acquisitions or team hiring?

A: Always in conversations with potential partners, but not commenting on specific M&A likelihood. Active in looking at opportunities, including lift-outs and compatible firms. Increased dividend is one way to return value, with buybacks also a possibility if price is compelling.

Q: About OCIO business pipeline?

A: The OCIO pipeline has come down a bit but has potential. There are finals for a $100 million mandate coming up, and the OCIO team won a $300 million family office a few quarters ago, with progress expected.