Abacus Global Management, Inc. (ABL)·Q3 2025 Earnings Summary

Executive Summary

• Q3 revenue was $62.98M with diluted EPS $0.07; Life Solutions and Asset Management drove 124% YoY revenue growth, while net income was $7.08M, down sequentially versus Q2 due to higher interest expense and operating costs .
• The company raised FY2025 Adjusted Net Income guidance to $80–$84M (from $74–$80M in Q2 and $70–$78M in Q1), reflecting stronger visibility and momentum; management emphasized the tenth consecutive quarter of earnings growth and robust demand for longevity-based assets uncorrelated to markets .
• Post-quarter, Abacus completed a $50M securitization of life insurance assets via an above-investment-grade rated collateralized note—establishing a scalable funding mechanism—and acquired AccuQuote to expand digital origination .
• Capital return catalysts: the Board approved an annual cash dividend of $0.20 per share and a $10M share repurchase program, citing record balance sheet strength and recurring earnings; the plan targets up to 25% of adjusted net income or 55% of recurring revenue for dividends over time .

What Went Well and What Went Wrong

What Went Well

• Life Solutions revenue nearly doubled YoY to $54.12M, driven by higher realized gains and institutional demand for uncorrelated assets; Q3 average realized gain reached 37% vs 26.3% in Q2, with Turnover Ratio at 2.0x supporting capital efficiency .
• Asset Management revenue scaled to $8.63M vs $0.12M YoY, reflecting Carlisle/FCF contributions and expanding fee streams; management highlighted “tenth consecutive quarter of earnings growth” and increased FY guidance .
• Strategic milestones: $50M securitization and AccuQuote acquisition broaden funding and origination, underpinning scalability and recurring revenue mix .

Management quotes:

• “The third quarter represents our tenth consecutive quarter of earnings growth... we are once again increasing our full-year 2025 expectations for adjusted earnings...” — Jay Jackson, CEO .
• “Our balance sheet and cash generation are at record levels... Abacus has more than enough cash to meet increasing origination demand, pursue acquisitions, while returning capital to shareholders.” — Jay Jackson .

What Went Wrong

• Interest expense rose to $9.74M in Q3 (vs $8.75M in Q2), reflecting higher debt load (Fixed Notes and secured credit facility), pressuring net income margins sequentially .
• General & Administrative (incl. SBC) at $24.71M, +59.5% YoY, driven by legal/professional fees and payroll tied to acquisitions; Technology Services posted a negative gross profit in Q3 .
• Cost of revenue increased to $7.66M (incl. retrocession fees), and convertible note holdings saw a credit loss allowance of $0.62M during Q3’s AFS evaluation, adding to expense burden .

Financial Results

Segment revenue breakdown:

KPIs and non-GAAP:

Guidance Changes

Earnings Call Themes & Trends

Note: Q3 2025 earnings call transcript was not available; themes reflect management’s Q3 press release, Q2 press release, shareholder letter, and 10-Q narratives.

Management Commentary

• “We are once again increasing our full-year 2025 expectations for adjusted earnings, now projecting year-over-year growth of 72 to 81%... our acquisition of AccuQuote... and $50 million in securitized life insurance assets...” — Jay Jackson, CEO .
• “The decision to initiate an annual dividend marks a defining moment... with recurring revenues expected to approach 70% of total revenue over time...” — Jay Jackson .
• “We delivered another excellent quarter... enabling us to raise our full year outlook...” — Jay Jackson (Q2) .

Q&A Highlights

Drawn from the Shareholder Letter FAQs (Sept 25, 2025):

• Valuation methodology: Fair value based on market participant pricing and discounted cash flow with discount rates calibrated to historical realized gains by risk category; Q2 reported historical gains 22% and discount rate 16% (illustrative) .
• Revenue recognition: Realized gains capture the premium investors pay over carrying value, demonstrating tangible value creation; historically realized gains meet or exceed marks .
• Related-party transactions: ~29% of Q2 revenue and 17% of 1H25 were related-party; purchases require at least one third-party bid and funds obtain third-party actuarial valuation for NAV .
• Rationale for Carlisle: Vertically integrates investment management (AIFM in Luxembourg), servicing synergies, and global distribution for uncorrelated products .

Estimates Context

• Wall Street consensus via S&P Global was unavailable for ABL’s Q3 2025 EPS and revenue; therefore, estimate comparisons and beat/miss assessment could not be presented.
• Management’s guidance framework was raised sequentially (Q1 → Q2 → Q3), indicating stronger internal trajectory .

Key Takeaways for Investors

• Life Solutions operational momentum is intact: higher realized gains (37%) and efficient turnover (2.0x) support strong gross profitability despite sequential net income compression from interest costs .
• Asset Management flywheel is scaling: Carlisle/FCF fee streams plus AccuQuote’s digital origination should increase recurring revenue mix—management targets recurring revenues approaching 70% over time .
• Funding evolution is a catalyst: the $50M securitization introduces lower-cost, repeatable institutional capital—monitor size/frequency of future issuances .
• Watch leverage and interest expense: Q3 interest expense at $9.74M reflects higher debt balances (Fixed Notes, SSCF); track debt service profile and potential funding cost reductions .
• Capital returns are now part of the story: annual dividend ($0.20) and $10M buyback provide support for total shareholder return; payout tied to adjusted net income/recurring revenue .
• Monitor LMAIS II March 31, 2026 redemption window and liquidity plan; management indicates sufficient liquidity via cash and active policy sale market .
• Narrative driver: Continued transparency on valuation inputs and related-party processes (third-party bids/valuations) should alleviate investor concerns raised earlier in 2025 .