Sign in

You're signed outSign in or to get full access.

AC

Associated Capital Group, Inc. (AC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue fell to $2.1M from $3.0M YoY and $5.2M in Q4 2024, reflecting lower average AUM and mix effects; diluted EPS was $0.36 vs $0.64 YoY and $0.20 in Q4 2024 .
  • Net investment and other non-operating income was $15.8M (vs $22.6M YoY) with performance driven by merger arbitrage partnerships; effective tax rate rose to 26.3% (vs 21.5% YoY) .
  • AUM ended at $1.27B, up $21M QoQ on market appreciation and FX, offset by $25M net outflows; book value rose to $42.51 from $42.14 at year-end .
  • Board declared a semi-annual dividend of $0.10 per share (payable 6/26/2025); AC repurchased 39,018 Class A shares in Q1 at $36.32 average price, signaling continued capital returns .
  • No Wall Street consensus EPS/Revenue estimates were available for comparison; limited coverage implies results may not drive estimate-revision catalysts near term [MarketBeat Q1 2025 page: https://www.marketbeat.com/earnings/reports/2025-5-8-associated-capital-group-inc-stock/].

What Went Well and What Went Wrong

What Went Well

  • Merger Arbitrage strategy delivered strong returns: +3.77% gross and +2.81% net in Q1 2025, supported by robust global M&A activity (+15% YoY to $890B) .
  • AUM increased QoQ by $21M on $33M market appreciation and $13M favorable FX, despite net outflows of $25M, indicating asset resilience amid flows pressure .
  • Management reiterated strategic focus on deploying capital, acquisitions/alliances, and the private equity initiative (GPEP), and maintained shareholder returns via dividend and buybacks .
  • Quote: “The prospects for Associated Capital Group remain strong and we are well positioned to grow value in the face of an uncertain environment.” – Interim CEO Patrick Huvane .

What Went Wrong

  • Core revenues declined to $2.1M (from $3.0M YoY), with SICAV fees at $0.9M vs $1.7M prior-year due to lower average AUM; operating loss before management fee widened to $(4.185)M from $(2.988)M .
  • Net investment and other non-operating income decreased to $15.8M (from $22.6M YoY), partly reflecting lower interest income due to lower average interest rates in Q1 2025 .
  • Expense pressures: $0.9M mark-to-market on phantom RSAs (linked to higher AC share price) raised OpEx, partly offset by $0.6M lower SICAV variable sales/marketing .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$3.011 $5.154 $2.129
Net Income ($USD Millions)$13.821 $4.280 $7.669
Diluted EPS ($)$0.64 $0.20 $0.36
EBITDA Margin %-162.1%*-60.2%*-244.2%*
Net Income Margin %459.0%*83.0%*360.2%*

Values with asterisk retrieved from S&P Global.

Results vs Estimates (Wall Street Consensus – S&P Global):

MetricQ1 2025 ConsensusQ1 2025 Actual
Revenue ($USD Millions)N/A*$2.129
EPS ($)N/A*$0.36

Values with asterisk retrieved from S&P Global. No consensus coverage was available for Q1 2025 [MarketBeat Q1 2025 page: https://www.marketbeat.com/earnings/reports/2025-5-8-associated-capital-group-inc-stock/].

Segment/Revenue Breakdown:

Revenue Component ($USD Millions)Q1 2024Q4 2024Q1 2025
Investment advisory & incentive fees$2.907 $5.049 $2.004
Other revenues$0.104 $0.105 $0.125
Total$3.011 $5.154 $2.129

KPIs and Operating Metrics:

KPIQ1 2024Q4 2024Q1 2025
AUM – end of period ($USD Billions)$1.549 $1.248 $1.268
AUM – average ($USD Billions)$1.556 $1.291 $1.261
Book value per share ($)$42.80 $42.14 $42.51
Management fee ($USD Millions)$1.982 $0.134 $1.103
Operating loss before management fee (Non-GAAP, $USD Millions)$(2.988) $(3.059) $(4.185)
Merger Arb return (Gross %)1.33% 0.95% 3.77%
Merger Arb return (Net %)0.87% 0.57% 2.81%

AUM by Strategy ($USD Millions):

StrategyMar 31, 2024Dec 31, 2024Mar 31, 2025
Merger Arbitrage$1,262 $1,003 $1,012
Long/Short Value$251 $209 $221
Other$36 $36 $36
Total$1,549 $1,248 $1,269

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidance (Revenue/EPS/Margins)Q2–FY25None provided None provided Maintained (no guidance)
Dividend per shareSemi-annual (paid Jun 26, 2025)$0.10 declared in Nov-2024 for Dec-2024 payment $0.10 declared May 7, 2025 (record Jun 12; paid Jun 26) Maintained
Tax rate commentaryQ1 2025FY24 tax rate 15.8% Q1 effective tax rate 26.3% (actual, not guidance) N/A (reported actual)

Note: AC does not provide forward quantitative guidance; capital return actions (dividends/buybacks) are disclosed as Board decisions .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript is available in our document set; MarketBeat listed a call schedule, but transcript access is unavailable at this time [MarketBeat Q1 2025 page: https://www.marketbeat.com/earnings/reports/2025-5-8-associated-capital-group-inc-stock/].

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
M&A environmentPE activity strong; Tech/Energy/Financials lead; supportive backdrop Worldwide M&A +10% YoY; regulatory changes likely to facilitate deals Global M&A +15% YoY to $890B; accommodative antitrust and pent-up demand supportive Improving deal backdrop
AUM flows/mixAUM down YoY due to net outflows and FX; SICAV revenue recognition changed in Dec 2023 AUM -$343M vs 2023 driven by net outflows (esp. UCITS) QoQ AUM +$21M; net outflows $25M offset by market and FX Stabilizing QoQ; flows still pressured
Shareholder returnsSpecial $2.00 dividend + $0.10 semi-annual; buybacks continued Dividends $2.20/share in 2024; buybacks continued $0.10 dividend declared; buybacks of 39,018 shares in Q1 Ongoing capital return
Leadership/strategyN/AN/ACEO transition to Interim CEO Patrick Huvane; focus on capital deployment, PE, acquisitions Leadership change; strategy maintained
Tax rateQ3 ETR 22.9% (vs 60.8% prior year due to deferred tax effects) FY24 ETR 15.8% (deferred tax benefits) Q1 ETR 26.3%; lower interest income affected non-op mix Normalizing higher ETR
Non-GAAP opsNon-GAAP operating loss before mgmt fee disclosed Continued use; mgmt fee accrual tied to pre-tax income Non-GAAP operating loss widened; mgmt fee $1.1M Worsening operating loss

Management Commentary

  • “The prospects for Associated Capital Group remain strong and we are well positioned to grow value in the face of an uncertain environment. I am privileged to take on this opportunity to serve AC shareholders.” – Interim CEO Patrick Huvane .
  • Strategy focus: accelerate capital use through acquisitions/alliances, broaden product offerings/distribution; continue building Private Equity (GPEP) and direct investments .
  • Operating dynamics: Revenues decline tied to lower average AUM; OpEx increased by $0.9M due to mark-to-market on phantom RSAs; management fee $1.1M per incentive formula .
  • Market context: Robust global M&A activity and PE “dry powder” (~$3T) supportive of merger arbitrage returns .

Q&A Highlights

  • No Q1 2025 earnings call transcript available; no Q&A observed. MarketBeat listed a call schedule, but transcript not accessible [MarketBeat Q1 2025 page: https://www.marketbeat.com/earnings/reports/2025-5-8-associated-capital-group-inc-stock/].
  • Investor-relevant clarifications from the release: SICAV fees down on lower average AUM; interest income declined vs prior year; effective tax rate detail provided .

Estimates Context

  • S&P Global consensus coverage for Q1 2025 EPS and revenue was not available; therefore, beats/misses vs Street cannot be assessed. Values retrieved from S&P Global.*
  • Actuals: Revenue $2.129M, EPS $0.36 (reported) .
  • Given limited coverage and AC’s non-traditional revenue profile (significant non-operating investment income), Street models likely focus on AUM/fee trajectory and investment income variability rather than quarterly EPS precision .

Key Takeaways for Investors

  • Revenue headwinds from lower average AUM persisted, but QoQ AUM ticked up and merger arbitrage performance strengthened; watch for continued deal activity tailwinds to drive non-operating income and fees .
  • Operating loss before management fee widened due to higher mark-to-market compensation; monitor expense discipline and phantom RSA impacts relative to share price movements .
  • Capital return framework intact with $0.10 dividend and ongoing buybacks; this supports downside protection and could underpin book value compounding (book value per share up to $42.51) .
  • Leadership transition to Interim CEO Huvane with continued emphasis on private equity and acquisitions; execution on deploying capital could be a medium-term rerating catalyst .
  • Tax rate normalized higher (26.3%) vs prior-year quarter; effective rate volatility may continue given non-operating income mix and deferred tax dynamics .
  • Limited Street estimate coverage reduces near-term “beat/miss” trading catalysts; focus on AUM flows, merger arbitrage returns, and investment income drivers for positioning [MarketBeat Q1 2025 page: https://www.marketbeat.com/earnings/reports/2025-5-8-associated-capital-group-inc-stock/].
  • Preliminary Q1 book value range ($42.42–$42.62) was confirmed with actual $42.51, reinforcing balance sheet strength heading into Q2 .

Additional document references:

  • Q1 2025 Form 8-K Item 2.02 and Exhibit 99.1 (press release) .
  • Prior quarters: Q4 2024 8-K (press release and tables) ; Q3 2024 8-K (press release and tables) .