AGF Management Ltd (AGFMF) Q2 2025 Earnings Call Highlights: Strong AUM Growth Amid Market ...
AUM and Fee Earning Assets: $53.5 billion at the end of Q2, up 12% year-over-year.
Mutual Fund AUM: $31 billion, up 15% year-over-year.
SMA and ETF AUM: Increased 54% year-over-year to $2.8 billion.
Adjusted Diluted EPS: $0.39 for the quarter.
Net Sales in Retail Mutual Fund Business: $65 million for the quarter.
Adjusted EBITDA: $40 million, $8 million lower than Q1, $3 million higher than the prior year.
SG&A Expenses: $60 million, $4 million lower than Q1.
Adjusted Net Income: $26 million for the quarter.
Free Cash Flow: $24 million for the quarter.
Dividend Declared: $0.125 per share for Q2 2025.
Net Debt: $50 million with $166 million available on the credit facility.
Share Buybacks: 237,000 shares repurchased for approximately $2.4 million.
Warning! GuruFocus has detected 2 Warning Signs with NG.
Release Date: June 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
AGF Management Ltd (AGFMF) reported a 12% year-over-year increase in AUM and fee-earning assets, reaching $53.5 billion.
The company's SMA and ETF business saw a significant 54% year-over-year growth in AUM, reaching $2.8 billion.
AGF Investments' retail mutual fund business outpaced the Canadian mutual fund industry with net sales of $65 million in the quarter.
The company was recognized as the Mutual Fund Provider of the Year at the 2025 Wealth Professional Awards, highlighting its innovative product lineup.
AGF Management Ltd (AGFMF) declared a $0.125 per share dividend for Q2 2025, demonstrating a commitment to returning capital to shareholders.
Average AUM was down 3% compared to Q1 due to market volatility.
Adjusted EBITDA for the quarter was $40 million, $8 million lower than Q1, primarily due to an outsized long-term investment gain in Q1.
Free cash flows for the quarter were $24 million, down $8 million from Q1, mainly due to higher distribution income in the previous quarter.
Net management fees were $1 million lower than the prior quarter, reflecting market volatility and shifts in asset allocation.
The company experienced a decrease in adjusted revenue from AGF Capital Partners by $9 million compared to the previous quarter, due to outsized revenues from long-term investments in Q1.
Q: Given the volatile markets in recent months, have you observed similar trends in your net flows, and which funds are seeing more momentum? A: Judy Goldring, President and Head of Global Distribution, noted that AGF saw similar trends as the industry, with $65 million in net sales for retail, marking the fourth consecutive quarter of positive retail sales. The Global Select and American growth mandates, along with the European equity mandate, have been key areas of interest. As of June, the momentum is essentially flat.
Q: How does the new US proposed rule section [899] regarding taxing dividends impact your US equity funds and strategies? A: Ken Tsang, CFO, explained that while the bill's passage remains uncertain, AGF's exposure is relatively muted due to their global fund nature and growth-oriented focus. Kevin McCreadie, CEO, added that AGF's minimal fixed income component further reduces potential impact.
Q: There was a noticeable increase in buybacks this quarter. What are your thoughts on future buyback activity and capital allocation priorities? A: Kevin McCreadie, CEO, stated that AGF maintains a balanced capital approach, recently focusing on growth investments. With a conservative dividend payout ratio, AGF may accelerate share repurchases, especially given the current industry pipeline.
Q: Can you elaborate on the lower management fees and how they fit into your basis point decline guidance? A: Ken Tsang, CFO, mentioned that the decline in management fees is partly due to outsized success fees from the previous year. The shift towards fee-based channels and growth in ETFs and SMAs, which have lower management fees but minimal marginal costs, has contributed to this trend.
Q: Why is severance consistently stripped out of SG&A adjustments, and when will adjusted SG&A not include these expenses? A: Kevin McCreadie, CEO, explained that severance is part of disciplined expense management and is not expected to disappear. Ken Tsang, CFO, added that severance is not a normal course item but varies with business operations.
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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