• Revenue: $85 million in Q4 2024, a 35% increase over Q4 2023; full year revenue increased 23% to $296.4 million.
• Fee-Paying Assets Under Management (AUM): $25.7 billion, a 10% year-over-year increase.
• Gross Fundraising: $3.8 billion for the full year 2024; $905 million in Q4 2024.
• Adjusted EBITDA: $42.9 million in Q4 2024, a 40% increase from Q4 2023; $144.5 million for the full year, a 17% increase.
• Adjusted EBITDA Margin: 50.5% in Q4 2024; 48.7% for the full year.
• Adjusted Net Income (ANI): $35.3 million in Q4 2024, a 39% increase from Q4 2023; $120.2 million for the full year, an 18% increase.
• Fully Diluted ANI per Share: $0.30 in Q4 2024; $1 for the full year.
• Operating Expenses: $62.2 million in Q4 2024, an 8% increase year-over-year; $235.8 million for the full year, a 7% increase.
• GAAP Net Income: $5.7 million in Q4 2024; $19.7 million for the full year.
• Cash and Cash Equivalents: $67.5 million at the end of Q4 2024.
• Outstanding Debt: $325 million with no balance on the revolver.
• Share Repurchases: 815,327 shares repurchased in Q4 2024 at an average price of $12.72; 6,641,827 shares repurchased for the full year at an average price of $8.88.
• Dividend: Quarterly cash dividend of $0.035 per share declared.

• Warning! GuruFocus has detected 6 Warning Signs with CNDT.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• P10 Inc (NYSE:PX) exceeded its financial and operating guidance for 2024, achieving over $3.8 billion in gross fundraising and a 23% increase in revenues.
• The company successfully closed Bonaccord Capital Partners Fund II with a record $1.6 billion, marking its first fund to attract more than $1 billion in capital.
• Fee-paying assets under management increased by 10% year-over-year, reaching $25.7 billion.
• P10 Inc (NYSE:PX) announced the acquisition of Qualitas Funds, which is expected to add approximately $1 billion of incremental fee-paying assets.
• The company repurchased 6,641,827 shares in 2024, amounting to $59.1 million, and authorized an additional $40 million for share repurchases, demonstrating a commitment to returning capital to shareholders.

Negative Points

• The integration of Qualitas Funds is expected to put modest downward pressure on 2025 margins.
• The average fee rate is expected to decrease to 103 basis points in 2025, down from 107 basis points in 2024, due to fewer catch-up fees.
• Some of the newer and faster-growing strategies have lower core FRE margins, impacting overall margin expansion.
• Operating expenses increased by 8% in the fourth quarter and 7% for the full year 2024, driven by compensation and placement fees.
• The company faces challenges in maintaining FRE margins in the mid-40s percent range due to ongoing investments in human capital and distribution.

Q & A Highlights

Q: As we look ahead to the next couple of quarters, where is your sales team focusing? What are the bigger funds in the market, and which are most important for hitting your $4 billion target? A: Luke Sarsfield, CEO: We expect to have 19 funds in the market at different times in 2025, including four from Qualitas. Our focus includes RCP strategies like co-investment, secondary, and primary fund-of-funds, as well as TrueBridge's blockchain and seed micro strategies. Five Points will raise a new credit strategy, and Bonaccord will have updates later in the year. Our platform's diversity is a key strength, and we're excited about 2025's momentum.

Q: Can you update us on your goals to broaden across new vehicles and channels, and the investments planned for 2025? Also, any updates on SMA fundraising? A: Luke Sarsfield, CEO: We're focused on meeting clients' needs with diverse product offerings and appropriate wrappers, including SMAs and pooled vehicles. Under Sarita's leadership, we're exploring various client access methods, including RIAs and high net worth channels. While we won't disclose product-specific details quarterly, we'll highlight significant progress, especially regarding SMAs, as we advance in 2025.

Q: What does the M&A pipeline look like for 2025, and how are initiatives under Arjay progressing? A: Luke Sarsfield, CEO: We've developed a disciplined, programmatic approach to M&A, maintaining a robust pipeline. Feedback from potential partners is positive, and we're seen as an attractive partner. Arjay Jensen, EVP, Head of Strategy and M&A, adds that we're actively working on opportunities in private credit, direct lending, and asset-backed areas, with Qualitas opening up European interest.

Q: Why is the average fee rate expected to decrease from 107 to 103 basis points in 2025? A: Amanda Coussens, CFO: Catch-up fees in 2024 were elevated due to Bonaccord II's extraordinary results, which won't repeat. We expect catch-up fees of $4-5 million in 2025, with the core fee rate stabilizing at 103 basis points, consistent with historical levels.

Q: Can you elaborate on the FRE margin outlook for 2025 and beyond? A: Luke Sarsfield, CEO: Our guidance remains unchanged, with core FRE margins in the mid-40s in the near term, expanding to 50% in the future. Catch-up fees in 2024 temporarily boosted margins, but core business margins are expected to remain stable. Investments in distribution and a mix shift in strategies will impact margins, with Qualitas having a modest downward effect factored into guidance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.