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AM

AFFILIATED MANAGERS GROUP, INC. (AMG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 Economic EPS was $6.10, up 27% year-over-year, on Adjusted EBITDA of $250.9M (+17% YoY) and strong alternative strategy inflows; diluted GAAP EPS was $6.87, with GAAP net income benefitting from the Peppertree transaction gain excluded from non-GAAP metrics .
  • Results vs S&P Global consensus: EPS (Primary) beat ($6.10 vs $5.88*) while revenue missed ($528.0M vs $544.6M*); beat driven by higher equity-method income, performance fees, and share repurchases, while consolidated revenue was modestly above Q2 and up ~2% YoY .
  • Organic growth improved: firmwide net client cash inflows were ~$8.9B in Q3 (>$17B YTD), led by a record $14B in liquid alts and $4B in private markets; period-end AUM rose to ~$803.6B from $771.0B in Q2 .
  • Outlook/catalysts: Q4 guide raised on performance fees (Adj. EBITDA $325–$370M, E-EPS $8.10–$9.26; perf fees $75–$120M), buybacks lifted to “at least $500M” in 2025, and strategic BBH Credit Partners collaboration expands structured/alternative credit in U.S. wealth .
  • Capital returns: repurchased $77M in Q3 ($350M YTD), declared $0.01 dividend for the quarter; balance sheet supported by Peppertree ($260M pre-tax proceeds) and anticipated Comvest ($$285M) proceeds .

What Went Well and What Went Wrong

  • What Went Well

    • Alternative strategies momentum: “$9 billion in net inflows in the quarter… further accelerating the evolution of our business profile,” with liquid alts posting the strongest quarterly net flows in company history ($14B) and private markets raising $4B .
    • Operating leverage and mix: Management highlighted 17% YoY Adjusted EBITDA growth and 27% YoY Economic EPS growth, supported by higher-fee alts, rising equity-method income, and repurchases .
    • Strategic expansion: New BBH collaboration to deliver structured/alternative credit in U.S. wealth; management underscored strong 2026 earnings potential from full-year contributions of 2025 investments and alts mix-shift .
    • Quote: “We anticipate a meaningful increase in our full-year economic earnings per share in 2026” .

  • What Went Wrong

    • Revenue below consensus: Consolidated revenue was $528.0M versus $544.6M* expected; YoY growth was modest (+2.2%), with much of the earnings upside coming from equity-method income and performance fees rather than revenue .
    • Active equities outflows: ~$9B in equity outflows offset by alt inflows; long-only remains an industry headwind near term .
    • GAAP/Non-GAAP complexity: GAAP results benefited from a $127.6M affiliate transaction gain tied to Peppertree (excluded from non-GAAP); investors must parse non-GAAP to assess underlying performance .

Financial Results

P&L and AUM (chronological: Q3’24 → Q2’25 → Q3’25)

MetricQ3 2024Q2 2025Q3 2025
Consolidated Revenue ($M)$516.4 $493.2 $528.0
Net Income (Controlling Interest, $M)$123.6 $84.3 $212.4
Diluted EPS ($)$3.78 $2.80 $6.87
Adjusted EBITDA (Controlling Interest, $M)$214.1 $219.7 $250.9
Economic EPS ($)$4.82 $5.39 $6.10
AUM at Period End ($B)$728.4 $771.0 $803.6

Key Operating Metrics (chronological: Q3’24 → Q2’25 → Q3’25)

KPIQ3 2024Q2 2025Q3 2025
Average AUM ($B)711.7 736.6 786.9
Net Client Cash Flows ($B)(2.8) 8.1 8.9
Aggregate Fees ($M)1,157.1 1,173.5 1,346.0
Adjusted EBITDA Margin % (Adj. EBITDA / Rev)41.5% (214.1/516.4) 44.6% (219.7/493.2) 47.5% (250.9/528.0)

Q3 2025 Actual vs S&P Global Consensus

MetricConsensusActualSurprise
EPS (Primary)5.8813*6.10 +3.7%
Revenue ($M)544.6*528.0 -3.1%

Note: Asterisks (*) denote S&P Global Market Intelligence (SPGI) consensus; values retrieved from S&P Global.

Strategy Mix and Flows

  • AUM by Strategy (End of Period) | Strategy | Q2 2025 AUM ($B) | Q3 2025 AUM ($B) | |---|---:|---:| | Alternatives – Private Markets | 149.4 | 147.7 | | Alternatives – Liquid Alternatives | 181.7 | 204.8 | | Differentiated Long-Only – Equities | 321.0 | 326.6 | | Differentiated Long-Only – Multi-Asset & FI | 118.9 | 124.5 | | Total | 771.0 | 803.6 |

  • Net Client Cash Flows (Q3 2025, $B): Private Markets +4.1; Liquid Alts +14.0; Equities (9.3); Multi-Asset & FI +0.1; Total +8.9 .

  • Equity-method income increased to $88.5M vs $52.6M in Q3’24, supporting EPS outperformance .

Non-GAAP reconciliation highlights: Economic EPS $6.10 (adjustments include intangible amortization/impairments, intangible-related deferred taxes, affiliate transaction effects, and other economic items); Adjusted EBITDA $250.9M .

Guidance Changes

Q4 2025 Outlook (current vs prior)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA (Controlling Interest)Q4 2025N/A$325M – $370M New
Net Performance FeesQ4 2025N/A$75M – $120M New
Economic EPSQ4 2025N/A$8.10 – $9.26 (28.9M adjusted diluted shares) New
Share RepurchasesFY 2025~$400M (7/31 guide) At least $500M Raised
DividendQ3 2025$0.01 declared $0.01 (declared for Q3 payout) Maintained

Q3 2025 Results vs Prior (Q2 call) Guidance

MetricQ3 2025 Prior Guide (7/31)Q3 2025 ActualResult
Adjusted EBITDA (Controlling Interest)$230M – $240M $250.9M Above range
Net Performance FeesUp to $10M ~$11M (net) Above
Economic EPS$5.62 – $5.87 $6.10 Above

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Alternatives momentum (liquid alts, private markets)Record $10B liquid alts inflows (Q1); $12B liquid alts and $8B private markets in Q2; alts >50% EBITDA $14B liquid alts (record), $4B private markets; alts ~55% of EBITDA run-rate Accelerating
AQR tax-aware strategiesAQR as leader; >$20B YTD liquid alts flows by June; tax-aware suite scaling Continued momentum; tax-aware flows key; AQR AUM grew to ~$166B by 9/30 from ~$100B at start of 2024 Strengthening
Private markets fundraisingOngoing strength across Pantheon, EIG, Comvest, etc.; U.S. wealth semi-liquid expansion $4B raised in Q3 (Pantheon, EIG, Abacus); substantial carry/perf fee potential Solid
Capital allocation~$700M growth investments and $173M buybacks (Q1); Q2 buybacks ~$100M; FY repurchase ~$400M planned YTD buybacks ~$350M; FY buybacks “at least $500M”; Q4 perf fees to lift results More return
Strategic partnershipsVerition, NorthBridge, Qualitas (Q1/Q2) BBH Credit Partners collaboration for U.S. wealth structured/alt credit Expanding
2026 outlookStep-up expected from 2025 investments, alts mix “Meaningful increase” in 2026 E-EPS expected Upbeat
Long-only equitiesIndustry headwinds persisted (outflows) ~$9B outflows in Q3 Ongoing headwind

Management Commentary

  • Strategy and earnings power: “We anticipate a meaningful increase in our full-year economic earnings per share in 2026” driven by strong organic growth in alternatives, margin expansion at affiliates like AQR and Pantheon, and capital deployment/repurchases .
  • Alts and wealth channel: “With $14 billion in net inflows, AMG posted the strongest quarterly net flows in liquid alternatives in our history,” reflecting client demand for tax-aware solutions and breadth across affiliates; private markets raised $4B with strength at Pantheon, EIG, and Abacus .
  • BBH Credit Partners: “This collaboration will bring… BBH’s structured and alternative credit expertise into the U.S. wealth marketplace” alongside AMG’s product development, distribution, and seed capital .
  • CEO tone: “Given the growing cash flow generation of our business… we have an outstanding opportunity to drive additional earnings growth and create meaningful long-term value for our shareholders” .

Q&A Highlights

  • Pipeline and capital deployment: Management targets mid-to-high teens returns on new investments, remains disciplined, and will return excess capital via buybacks if opportunities are limited; aims to lift alts to ~two-thirds of EBITDA over a few years .
  • AQR advantage and runway: First-mover position in tax-aware liquid alts, robust risk systems, and platform access create a moat; significant capacity and continued onboarding on major wealth platforms .
  • Private markets cadence and EBITDA impact: Mix-shift to higher-fee, longer-duration alts with carry/performance fee potential amplifies EBITDA beyond what base organic growth suggests .
  • 2026 framing: Full-year impact from 2025 investments, alts inflows, margin expansion at key affiliates, and repurchases underpin confidence in higher 2026 economic EPS .

Estimates Context

  • Q3 2025 vs S&P Global consensus: EPS (Primary) beat ($6.10 vs $5.88*), revenue miss ($528.0M vs $544.6M*). Outperformance on EPS owed to stronger equity-method income ($88.5M vs $52.6M in Q3’24), net performance fees (~$11M), and buybacks; revenue was modestly higher YoY but below consensus .
  • Q4 trajectory: CFO guided E-EPS to $8.10–$9.26 and net performance fees to $75M–$120M, bracketing SPGI Q4 EPS consensus of ~8.74*; guidance implies step-up driven by performance fees and recent investments .

Note: Asterisks (*) denote S&P Global Market Intelligence (SPGI) consensus; values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS quality and beat: Despite a revenue shortfall vs consensus, AMG beat on EPS (Primary) as alts mix, equity-method income, and performance fees expanded profitability; non-GAAP metrics exclude Peppertree gains and better reflect core earnings power .
  • Mix shift accelerates: Liquid alts and private markets continue to drive organic growth and fee-rate uplift; liquid alts posted a record $14B inflow in Q3 and private markets raised $4B .
  • FY25 exit velocity: Q4 guide (higher performance fees) and raised buybacks (“at least $500M”) position AMG for strong exit momentum into 2026 .
  • 2026 setup: Full-year contributions from 2025 investments (e.g., Verition, Montefiore) plus BBH Credit Partners collaboration and alts margin expansion at AQR/Pantheon support a higher 2026 earnings base .
  • Watch items: Continued outflows in active equities (~$9B) remain a drag; investors should focus on alts inflows’ durability, performance fee realization, and wealth-channel product launches .
  • Capital optionality: Proceeds from Peppertree ($260M pre-tax) and expected Comvest ($285M) plus long-dated debt and cash generation provide flexibility for new investments and repurchases .
  • Narrative/catalysts: Sustained alts inflows (especially tax-aware solutions at AQR), Q4 performance fees, and BBH product launches are near-term stock drivers; any slowdown in liquid alts or performance fees is the key risk to watch .

Appendix: Additional Relevant Press Releases (Q3 2025 timing)

  • Montefiore partnership (7/28/25): minority stake in leading European services-focused PE firm; expands private markets participation .
  • Comvest private credit stake sale (8/6/25): expected ~$285M proceeds; AMG retains certain carry/commitment interests .
  • Q3 dividend declaration: $0.01 per share; common repurchases of $77M in Q3 ($350M YTD) .