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Ashford Inc. (AINC)·Q2 2023 Earnings Summary

Executive Summary

  • Q2 2023 delivered solid top-line growth with revenues excluding cost reimbursement up 14.7% year over year to $87.8M, while GAAP diluted EPS was $(2.56) and adjusted diluted EPS was $1.57 .
  • Adjusted EBITDA was $17.8M, roughly flat sequentially (Q1: $17.6M) and down versus Q4: $19.4M; strength in Remington and RED offset softer INSPIRE profitability vs prior year .
  • Management highlighted lodging industry stabilization with corporate and group strength and modest leisure softening, while Ashford Securities surpassed $500M in cumulative capital raised—supporting AUM growth in future periods .
  • No explicit quantitative guidance was issued; the focus remains on growing third‑party businesses and assets under management across advised platforms .
  • Wall Street consensus estimates via S&P Global were unavailable for AINC this quarter, so beats/misses to estimates cannot be assessed [SpgiEstimatesError].

What Went Well and What Went Wrong

  • What Went Well

    • Excluding cost reimbursements, revenue rose to $87.8M (+14.7% YoY), driven by Advisory and Products & Services growth; adjusted EPS of $1.57 reflected continued profitability on an “as converted” basis .
    • Remington and RED posted healthy profitability (Remington adjusted EBITDA $6.7M; RED adjusted EBITDA $2.3M), aided by lodging recovery and leisure activities demand .
    • Ashford Securities hit >$500M cumulative capital raised and expanded broker-dealer/RIA distribution, a key strategic enabler for AUM growth; CEO emphasized ongoing AUM expansion and third‑party growth focus: “Moving forward, we will continue to focus on growing our third‑party business… and growing our assets under management” .

  • What Went Wrong

    • GAAP diluted EPS remained negative at $(2.56), reflecting preferred dividends and corporate/other losses; consolidated net loss to common was $(7.5)M .
    • INSPIRE revenue rose (+15% YoY), but adjusted EBITDA ($5.1M) was below the prior year’s $9.0M, indicating margin pressure versus Q2 2022 despite robust activity .
    • Total loans increased to $122.4M, corporate cash declined to $21.9M, and AUM ticked down to ~$7.9B versus Q1’s ~$8.1B, tightening balance sheet flexibility near-term .

Financial Results

MetricQ4 2022Q1 2023Q2 2023
Total Revenues ($USD Millions)$178.4 $185.1 $192.7
Revenues ex. Cost Reimbursement ($USD Millions)$76.6 $80.9 $87.8
GAAP Diluted EPS ($USD)$(3.65) $(2.59) $(2.56)
Adjusted Diluted EPS (“as converted”) ($USD)$1.65 $1.67 $1.57
Adjusted EBITDA ($USD Millions)$19.36 $17.61 $17.83
Base Advisory Fees ($USD Millions)$12.0 $12.11 $11.92
Ashford Trust Base Advisory Fees ($USD Millions)$8.60 $8.47 $8.25
Braemar Base Advisory Fees ($USD Millions)$3.36 $3.64 $3.67

Segment breakdown (Products & Services):

SubsidiaryRevenue Q2 2022 ($USD Millions)Revenue Q2 2023 ($USD Millions)Adj. EBITDA Q2 2022 ($USD Millions)Adj. EBITDA Q2 2023 ($USD Millions)
Remington$90.8 $106.2 $8.98 $6.68
Premier$7.09 $10.40 $1.12 $2.31
INSPIRE$36.0 $41.4 $8.98 $5.07
RED$7.69 $9.82 $2.39 $2.32
OpenKey$0.41 $0.42 $(0.72) $(0.72)
Other (Pure Wellness, Lismore Capital, Marietta L.P.)$3.98 $1.54 $1.51 $0.69

KPIs and balance sheet:

KPIQ4 2022Q1 2023Q2 2023
Gross Assets Under Management ($USD Billions)~$8.2 ~$8.1 ~$7.9
Corporate Cash ($USD Millions)$31.7 $24.6 $21.9
Total Loans ($USD Millions)$99.1 $120.0 $122.4
Fully Diluted Shares (Millions)8.0 8.0 8.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company guidance (revenue, margins, OpEx, tax rate, segment guidance)FY/Q3 2023N/ANo formal quantitative guidance disclosed in Q2 materialsMaintained “no explicit guidance”; focus on AUM and third‑party growth

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2022 and Q1 2023)Current Period (Q2 2023)Trend
Lodging demand mixQ4: REIT portfolios benefiting from strong demand; corporate/group rebounding; resort-heavy Braemar outperformed . Q1: Continued strong industry trends; growth led by INSPIRE, Premier, Remington .Industry stabilizing; corporate and group growing; leisure modestly softening after 2022 surge .Stabilization; mix shift toward corporate/group; leisure normalizes.
Capital raising (Ashford Securities)Q4: Launched/advanced non-traded preferred offerings; foundation for AUM growth . Q1: Syndicate expanding; pace accelerating .Passed $500M cumulative capital raised; 35 broker-dealers/RIA firms for AHT Series J/K .Positive momentum; distribution broadening; supports AUM.
Third‑party business expansionQ4: Remington/Premier focused on third‑party growth . Q1: Premier signed 61 third‑party engagements totaling $19.3M fees .Remington third‑party mix ~39%; Premier 76 third‑party engagements totaling $20.4M expected fees .Structural growth; expanding external revenue sources.
Regional/leisure trendsQ4: RED impacted by hurricanes but resilient leisure demand . Q1: RED expanded to Maui via Alii Nui/Maui Dive Shop acquisition .RED benefiting from leisure experiences; expanding in USVI/Caribbean/Hawaii/U.S. coastlines .Expansion and diversification; leisure still supportive though normalizing.
Balance sheet/liquidityQ4: Corporate cash $31.7M, loans $99.1M . Q1: Corporate cash $24.6M, loans $120.0M .Corporate cash $21.9M, loans $122.4M .Liquidity tighter; debt increased; monitor leverage.

Management Commentary

  • “The lodging industry is stabilizing as corporate and group business continues to grow and the leisure segment modestly softens after the 2022 surge… Ashford Securities has reached a milestone of $500 million of cumulative capital raised… we will continue to focus on growing our third‑party business… and growing our assets under management” — Monty J. Bennett, Chairman & CEO .
  • “Our growth in the quarter was led by INSPIRE, Premier, and Remington… Ashford Securities continues to accelerate the pace at which our advised platforms can raise capital to grow our AUM.” — Q1 commentary .
  • “REITs are well positioned… resort-heavy focus benefiting Braemar while urban hotels ramp as corporate transient and group demand rebound.” — Q4 commentary .

Q&A Highlights

  • The full Q2 2023 call transcript was not retrievable via the in‑app document reader; external sources hosting the transcript include Seeking Alpha and MarketScreener .
  • As a result, detailed Q&A themes and any guidance clarifications from live Q&A are not available in this report. The company’s Q2 materials emphasize AUM growth via Ashford Securities and third‑party expansion, as reflected in management statements above .

Estimates Context

  • S&P Global/Capital IQ consensus EPS and revenue estimates for AINC could not be retrieved due to missing CIQ mapping for the ticker, so we cannot assess beats/misses versus Street this quarter [SpgiEstimatesError].
  • Given the unavailability of consensus, investors should monitor future SPGI mapping updates and company disclosures to anchor estimate comparisons.

Key Takeaways for Investors

  • Ex cost reimbursement revenue rose to $87.8M (+14.7% YoY), while adjusted EPS was $1.57 and adjusted EBITDA $17.8M; sequential profitability was stable despite mixed subsidiary margin outcomes .
  • Balance sheet trends warrant attention: corporate cash declined to $21.9M and loans increased to $122.4M; continued debt management and liquidity discipline are key watch items .
  • Ashford Securities’ >$500M capital‑raising milestone strengthens the platform’s ability to grow AUM across advised REITs and products—an important multi‑year growth lever .
  • Segment mix is evolving: Remington and Premier benefited from third‑party growth; INSPIRE delivered revenue growth but lower YoY adjusted EBITDA—monitor cost structure and pricing in events/hospitality .
  • Management’s narrative points to lodging stabilization with corporate/group tailwinds and leisure normalization; exposure to corporate/group demand should support ongoing recovery .
  • No explicit quantitative guidance was provided; focus remains strategic (AUM and third‑party) rather than near‑term numeric targets—expect limited guidance‑driven catalysts in the short term .
  • Without SPGI consensus, trading on estimate surprise is constrained; near‑term catalysts include continued capital raising momentum, third‑party wins at Remington/Premier, and RED geographic expansion .