Silvercrest Asset Management Group Inc (SAMG) Q2 2025 Earnings Call Highlights: Record AUM and ...
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Discretionary assets under management (AUM) increased by $1 billion during the second quarter, reaching $23.7 billion, a 4.4% sequential increase and a 9.7% year-over-year increase.
Total AUM hit a new high of $36.7 billion, indicating strong market performance and potential for future revenue growth.
Silvercrest added $80 million in organic new client accounts during the quarter and $500 million in new client accounts in the first half of 2025, marking strong organic growth.
The company completed a $12 million stock repurchase program and announced a new $25 million buyback program, demonstrating a commitment to returning capital to shareholders.
The board approved a 5% increase in the quarterly dividend, reflecting confidence in the company's financial health and commitment to shareholder returns.
Negative Points
Net flows were negative despite the increase in discretionary AUM, indicating challenges in retaining or attracting new client funds.
Revenue for the quarter decreased by $0.3 million or 1% year-over-year, primarily due to a decrease in the average annual management fee rate.
Expenses increased by 3.7% year-over-year, driven by higher compensation and benefits expenses, as well as general and administrative expenses.
The company experienced a decrease in cash and cash equivalents, from $68.6 million at the end of last year to $30 million as of June 30th.
The pipeline for the OCIO business has weakened, and the company acknowledges it could be stronger, indicating potential challenges in this segment.
Q & A Highlights
Warning! GuruFocus has detected 4 Warning Signs with SAMG.
Q: Can you talk about the pipeline and the global value composite performance numbers? A: Rick Huff, Chairman and CEO: We hired a team for the global value equity strategy about a year ago and have been building it out. We've added analysts, trading, and marketing support. The pipeline we can measure is about $200 million, which has doubled since last quarter, but the actual potential is much larger. The performance is excellent, and we are optimistic about future growth.
Q: Can you provide details on the $15.3 million stock buyback, such as the average price or number of shares? A: Rick Huff, Chairman and CEO: We have been more aggressive in repurchasing stock, completing $15.3 million in buybacks. We are happy with the prices at which we bought back shares, although we haven't disclosed the average price. The average price is below the current trading price.
Q: Are there any potential acquisitions or team hires on the horizon? A: Rick Huff, Chairman and CEO: We are always in discussions, but deals aren't done until finalized. The market is expensive, but we are looking for firms with an ultra-high-net-worth audience compatible with our culture. We are also considering lift-outs, which have become more feasible recently.
Q: How is the revenue mix shift affecting the business, and what are your expectations for operating leverage? A: Rick Huff, Chairman and CEO: The shift is mainly due to institutional mandates with lower AUM. We expect the basis points for AUM to decrease as we grow in the institutional market. Operating leverage will take time as we continue hiring and expanding, but we anticipate significant leverage once flows continue and hiring slows.
Q: How is the OCIO business pipeline, and will it contribute more to the overall mix? A: Rick Huff, Chairman and CEO: The OCIO pipeline has decreased but includes a $100 million final in the next quarter. We previously won a $300 million family office mandate. While the pipeline could be stronger, we are actively working to build it.
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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