Cohen & Steers Inc (CNS) Q2 2025 Earnings Call Highlights: Navigating Market Volatility ...
Revenue: Increased by 1.1% from the prior quarter to $135 million.
Operating Margin: 33.6%, compared to 34.7% in the prior quarter.
Ending Assets Under Management (AUM): $88.9 billion, up from $87.6 billion in the prior quarter.
Effective Fee Rate: 59 basis points, consistent with the prior quarter.
Total Expenses: Increased by 2.9% from the prior quarter.
Compensation Ratio: Remained at 40.5%.
Effective Tax Rate: 25.3% for the quarter.
Liquidity: $323 million at quarter end, compared to $295 million in the prior quarter.
Net Flows: Net outflows of $131 million after three consecutive quarters of inflows.
Open-End Fund Inflows: $285 million, marking the fourth consecutive quarter of inflows.
Unfunded Pipeline: Increased to $776 million from a low of $61 million.
Warning! GuruFocus has detected 5 Warning Signs with CNS.
Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Cohen & Steers Inc (NYSE:CNS) reported a slight increase in revenue for Q2 2025, up 1.1% from the prior quarter to $135 million.
The company experienced higher average assets under management (AUM) compared to the prior quarter, with ending AUM increasing to $88.9 billion.
Cohen & Steers Inc (NYSE:CNS) achieved strong investment performance, with 89% of AUM outperforming benchmarks in Q2 and 94% on a one-year basis.
The company launched a new tactical listed and private real estate strategy, which is expected to offer higher returns and improved liquidity.
Cohen & Steers Inc (NYSE:CNS) reported positive net inflows into open-end funds for the fourth consecutive quarter, totaling $285 million in Q2.
Negative Points
Earnings per share decreased slightly to $0.73 from $0.75 sequentially.
Operating margin declined to 33.6% from 34.7% in the prior quarter.
The company experienced net outflows of $131 million after three consecutive quarters of inflows.
Total expenses increased by 2.9% from the prior quarter, driven by higher compensation and benefits costs.
Institutional net outflows offset the positive net inflows into open-end funds.
Q & A Highlights
Q: Can you provide some insights into the Wealth Management channel's appetite for gross sales and which strategies are currently in favor? Also, do you expect any seasonality in the second half of the year? A: The Wealth channel is crucial for us, especially with the growth in the RIA segment. We're making progress in gaining allocations with sophisticated RIAs in real estate, multi-strategy real assets, and infrastructure. Gross sales were about 10% lower in Q2, partly due to seasonality and market volatility. However, we remain optimistic about driving real asset allocations, especially with our active ETFs and non-traded REITs.
Q: How are the early days of marketing and selling your active ETFs going? Are they attracting new investors or existing ones? A: We're off to a strong start with active ETFs, attracting both new investors, like RIAs who only allocate to ETFs, and existing ones converting from open-end funds. This motivates us to continue launching new active ETFs in our core strategies to retain and grow assets.
Q: What caused the decline in global listed infrastructure flows in Q2, and what are your views on the strategy for Q3? A: The decline was due to large redemptions from institutional investors rebalancing their allocations. Despite this, infrastructure remains a popular asset class, and we're investing in additional vehicles, including active ETFs, to capitalize on this interest.
Q: Flows in global real estate were stronger than US real estate in Q2. Is this demand from US or international investors, and has there been a shift away from US real estate? A: There is growing interest in global strategies, partly due to international markets underperforming the US. Our pipeline includes more global allocators, and while there have been some concerns about US policy, it's not a broad trend.
Q: Can you discuss geographical demand differences, particularly in the advisory side, and provide an update on the US advisory effort? A: The US remains the largest and most active market, with growing activity in Asia. Europe is slower, and while the Middle East was active a few years ago, it's less so now, though opportunities still exist.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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