Executive Summary

Q4 2024 delivered record ENI EPS of $1.30 and GAAP diluted EPS of $1.13 as total revenue rose to $167.8M, driven by higher management and performance fees; ENI margin improved to 42% and GAAP operating margin to 39% .
AUM ended at $117.3B with net client cash flows of +$0.9B in Q4; sequentially, AUM declined from $120.3B in Q3 due to market depreciation despite positive flows .
2025 guidance frameworks: ENI Operating Expense Ratio expected at ~47–49% (narrowed from 46–50% in Q3), Variable Compensation Ratio at 44–48% (lowered from 46–50%), and Acadian LLC key employee distribution ratio maintained at 7–8%; dividend maintained at $0.01/share .
Management underscored first standalone AAMI earnings and a valuation gap narrative (9x 2024 ENI EPS vs ~14x peer average) as potential re-rating catalysts, alongside robust pipeline, record gross sales ($21B in 2024), and new products (Credit, Equity Alternatives) gaining traction .

What Went Well and What Went Wrong

What Went Well
- Record quarterly ENI EPS ($1.30) and strong GAAP EPS ($1.13); Adjusted EBITDA rose to $72.8M, reflecting operating leverage as ENI margin improved to 42% .
- Positive net flows (+$0.9B) and highest-ever annual gross sales ($21B) with breadth across strategies; pipeline described as “incredibly robust” entering 2025 .
- Long-term performance leadership: 94%, 93%, and 94% of strategies by revenue outperformed over 3-, 5-, and 10-year periods; 5-year annualized excess returns of +4.4% revenue-weighted .
What Went Wrong
- Sequential AUM decline (Q3 → Q4) due to market depreciation (-$3.9B), partially offset by positive net flows .
- Operating expenses rose year over year driven by higher sales-based compensation, variable compensation, and equity plan liability increases (though expense ratio improved), requiring continued discipline as growth scales .
- Fee-mix headwind potential: management noted systematic credit fee rates may be lower than the corporate average (offset by higher-fee equity alternatives), implying future revenue yield depends on mix ramp .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($M)	$109.0	$123.1	$167.8
GAAP Diluted EPS ($)	$0.29	$0.45	$1.13
Net Income Attributable to Controlling Interests ($M)	$11.0	$16.9	$42.5
GAAP Operating Margin (%)	19%	22%	39%
ENI Revenue ($M)	$108.3	$122.2	$166.7
ENI Diluted EPS ($)	$0.45	$0.59	$1.30
ENI Operating Margin (%)	31.2%	35.4%	42%
Ending AUM ($B)	$112.6	$120.3	$117.3
Net Flows ($B)	$0.0	$0.5	$0.9

Estimates comparison: S&P Global consensus (EPS, revenue) was unavailable at time of request due to data limits; comparison vs. Street estimates could not be retrieved.

Segment/Revenue Mix (Management and Performance Fees)

Fee Component	Q2 2024	Q3 2024	Q4 2024
Management Fees ($M)	$105.5	$112.1	$111.3
Performance Fees ($M)	$2.8	$10.1	$55.4

KPIs and Operating Efficiency

KPI	Q2 2024	Q3 2024	Q4 2024
Adjusted EBITDA ($M)	$31.9	$44.7 (Acadian Segment)	$72.8
ENI Operating Expense Ratio (% of Management Fees)	48.8%	n/a	51.2%
Variable Compensation Ratio (%)	48.2%	n/a	35.7%

Notes: Q3 Adjusted EBITDA reflects Acadian segment as disclosed; Q4 reflects company-level .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
ENI Operating Expense Ratio (% of management fees)	FY 2025	~46%–50% (Q3 2024)	~47%–49% (Q4 2024)	Narrowed
Variable Compensation Ratio	FY 2025	~46%–50% (Q3 2024)	~44%–48% (Q4 2024)	Lowered
Acadian LLC Key Employee Distribution Ratio	FY 2025	~7%–8% (Q3 2024)	~7%–8% (Q4 2024)	Maintained
Dividend per Share	Quarterly	$0.01 (Dec 27, 2024)	$0.01 (Mar 28, 2025)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Distribution momentum and pipeline	Q2: platform expansion; net flows flat; strong long-term performance underpinning demand . Q3: net flows +$0.5B; pipeline and performance remained strong .	Record $21B gross sales in 2024; pipeline “incredibly robust,” strong near-term funding expectations across enhanced and extensions .	Improving
Enhanced Equity and Extensions	Q2/Q3: positioned as growth levers; extensions seeded; capacity with demand .	Continued momentum; notable new accounts in extensions; enhanced equity central to sales breadth .	Scaling
Systematic Credit	Q2/Q3: seeded U.S./Global HY and U.S. IG strategies; building track records .	First external client assets onboarded in Credit in Q4; long runway in $3T addressable market .	Commercializing
Equity Alternatives	Q2/Q3: seeded in Q4’22; good track record .	Gathering external assets; higher fee opportunity with low correlation .	Scaling
Investment performance	Q2: 86%/92%/93% (3/5/10yr by revenue) . Q3: 85%/93%/94% .	94%/93%/94%, strong relative performance; diversified signal contributions .	Improving
Capital allocation/leverage	Q2: buybacks; revolver seasonal use, paid down by year-end . Q3: cash $53.6M; revolver paid down .	Cash ~$95M; net leverage ~1.0x; continuing buybacks and organic growth funding .	Consistent
Fees/mix	Q3: not detailed in Q&A.	Credit fee rates lower than average; equity alternatives higher; mix will drive blended yield .	Mixed-move

Management Commentary

“For the fourth quarter of 2024, the Company produced another record ENI earnings per share of $1.30… ENI for the fourth quarter of 2024 was $49.0 million… The 50.3% increase in ENI… was primarily driven by higher management fee revenue and incentive fees… Our ENI margin also improved to 42%…” – Kelly Young, CEO .
“We reported net inflows of $0.9 billion for the fourth quarter of 2024 driven by strong gross sales of $5.5 billion… highest ever sales year with $21 billion of gross sales in 2024.” – Kelly Young .
“While Q4 saw most equity markets giving back, our relative performance was particularly strong, adding over 300 bps in active performance in our core benchmark-oriented strategies.” – Brendan Bradley, CIO .
“At the end of the fourth quarter 2024, we have $95 million in cash and $90 million in seed investments… debt to Adjusted EBITDA ratio was 1.5x… net leverage ratio was just 1.0x.” – Melody Huang, Finance & IR .
“We’re the only stand-alone publicly traded systematic manager… AAMI is currently trading at around 9x 2024 earnings, while our peers average ~14x.” – Kelly Young .

Q&A Highlights

Flows breadth: Q4 and 2024 sales were broad-based with particular strength in Enhanced and Extensions, alongside core strategies where AAMI is gaining share .
New platforms’ runway and fee rates: Systematic Credit opportunity is substantial but likely at a somewhat lower blended fee than the corporate average; Equity Alternatives carry higher fees versus traditional strategies .
Capital deployment and debt: Strong FCF supports organic growth, buybacks, and prudently managing leverage; the 2026 senior note will be evaluated for refinancing with a focus on shareholder value .
Pipeline: “Incredibly robust” unfunded pipeline expected to fund over the next 1–2 quarters, with continued focus on Enhanced, Extensions, and popular core niches like small cap .

Estimates Context

S&P Global consensus (EPS and revenue) for Q4 2024 could not be retrieved due to data access limits at the time of analysis; as a result, we cannot provide a “vs. estimates” comparison for this quarter. We will update once access is restored.
Management did not provide explicit EPS or revenue guidance; operating model guardrails (expense/comp/distribution ratios) were updated and are shown above .

Key Takeaways for Investors

Operating leverage strengthened: ENI operating margin rose to 42% and the ENI operating expense ratio improved y/y (51.2% vs. 55.8%), underpinning record ENI EPS .
Mix tailwinds from higher performance fees: Performance fees increased to $55.4M in Q4, augmenting revenue alongside solid management fees; sustainability will hinge on continued investment outperformance and fee-cycle seasonality .
AUM dynamics: Despite market depreciation (-$3.9B), positive net flows (+$0.9B) support the case for continued AUM resilience heading into 2025 .
New growth vectors now monetizing: First external Credit assets onboarded and Equity Alternatives gathering assets position AAMI for incremental AUM and potential higher-fee mix (alternatives), even as credit fees trend lower than average .
Capital allocation is supportive: Cash ~$95M, net leverage ~1.0x, undrawn revolver, ongoing buybacks, and a maintained dividend provide flexibility and shareholder returns .
Narrative catalyst: First standalone earnings, record 2024 sales, and management’s emphasis on a valuation gap (9x vs. ~14x peers) frame a potential re-rating path if growth and performance persist .
Watch items: Fee-rate mix as Credit scales, expense discipline as hiring and sales-based comp rise, and market beta/alpha sensitivity given performance fee dependence .

Acadian Asset Management Inc. (AAMI)·Q4 2024 Earnings Summary