Executive Summary

Q1 2025 EPS of $0.83 beat S&P Global consensus of $0.75; revenue of $277.1M was modestly below the $278.8M consensus. Sequential declines were driven by the expected absence of Q4 performance fees and two fewer calendar days; YoY growth reflected higher average AUM. Bolded: EPS beat, slight revenue miss* (consensus values from S&P Global*).
AUM ended at $162.4B (+1% QoQ, +1% YoY) with net client outflows of $(2.84)B, including a $1.2B mid-cap growth separate account rebalance; equity outflows were partly offset by continued positive flows in fixed income and alternatives (11th straight quarter of positive fixed-income flows) .
GAAP operating margin compressed to 31.2% (from 36.7% in Q4 2024), with adjusted margin at 32.1% (from 36.8%); drivers included the lapse of performance fees and seasonal compensation, partly offset by variable comp declining with revenue .
Dividend declared: $0.68 per share (~80% of quarterly cash generation), down from $0.84 variable plus $0.50 special in Q4 given lower performance fees; management reiterated an ~80% variable quarterly payout policy and expects to refinance $60M of senior notes maturing in Aug-2025 .
Strategic progress: launched two new strategies (Franchise; Global Special Situations), strengthened wealth-intermediated channel (now ~60% of AUM), and accelerated fixed income/alternatives traction (EMsights net inflows ~$304M in Q1; 11th consecutive quarter of positive FI flows) .

What Went Well and What Went Wrong

What Went Well

Fixed income and alternatives momentum: “First quarter of 2025 marks the 11th consecutive quarter of positive fixed income flows”; EMsights strategies raised ~$304M net inflows year-to-date and will benefit from 3-year records hitting in 2025 .
New product launches and platform expansion: “We launched two new investment strategies, the Artisan Franchise strategy and the Artisan Global Special Situations strategy,” broadening degrees of freedom and wealth-channel appeal .
Wealth channel strategy gaining traction: Approximately $97B of AUM sourced from intermediated wealth (~60% of total) with 172 relationships >$50M and 117 using 3+ strategies; management is reorienting distribution to the channel .

What Went Wrong

Revenue and margin down sequentially: Revenue fell 7% QoQ to $277.1M as Q4’s $14.7M performance fees rolled off and two fewer days reduced revenue by ~$5.4M; GAAP operating margin fell to 31.2% from 36.7% .
Net outflows and a large rebalance: Net client outflows of $(2.84)B included a single $1.2B DC-plan rebalance in Mid-Cap Growth; base equity flows remain pressured even as FI and alternatives offset .
Compensation/seasonality and LTI dynamics: Seasonal Q1 comp (retirement/health/payload taxes), LTI expense (including retirement acceleration and market valuation changes) lifted operating expenses QoQ despite lower incentive comp on revenues .

Financial Results

Headline P&L vs prior periods and estimates

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($M)	$264.4	$297.0	$277.1
GAAP Operating Income ($M)	$77.7	$109.1	$86.5
GAAP Operating Margin (%)	29.4%	36.7%	31.2%
Adjusted Operating Income ($M)	$81.6	$109.3	$89.0
Adjusted Operating Margin (%)	30.9%	36.8%	32.1%
GAAP Net Income to APAM ($M)	$59.5	$69.7	$61.1
GAAP Diluted EPS ($)	$0.84	$0.97	$0.82
Adjusted Net Income ($M)	$61.6	$85.2	$67.0
Adjusted EPS ($/Adj. Share)	$0.76	$1.05	$0.83
Performance Fees ($M)	$0.0	$14.7	$0.0

Consensus vs actuals (S&P Global data; asterisk denotes SPGI values):

Revenue: Q1 2025 consensus $278.8M*, actual $277.1M → slight miss .
EPS: Q1 2025 consensus $0.75*, actual $0.83 → beat.
Estimate count: EPS (4); Revenue (1). (Values retrieved from S&P Global)

Revenue composition

Revenue Component ($M)	Q1 2024	Q4 2024	Q1 2025
Mgmt Fees – Funds (Artisan Funds & Global Funds)	$165.5	$178.4	$174.7
Mgmt Fees – Separate Accts & Other	$98.9	$103.9	$102.4
Performance Fees	$0.0	$14.7	$0.0
Total Revenues	$264.4	$297.0	$277.1

KPIs and balance sheet highlights

KPI	Q1 2024	Q4 2024	Q1 2025
Ending AUM ($B)	$160.4	$161.2	$162.4
Average AUM ($B)	$154.2	$165.4	$166.7
Net Client Flows ($B)	$(0.52)	$(0.82)	$(2.84)
“Distributions not reinvested” ($B)	$(0.085)	$(0.795)	$(0.116)
Investment returns & other ($B)	$10.83	$(5.01)	$4.14
Cash & Equivalents ($M)	—	$201.2	$212.9
Total Debt ($M)	—	$200.0	$200.0
Variable Dividend / Share ($)	—	$0.84 (plus $0.50 special)	$0.68
Weighted Avg Recurring Fee Rate (bps)	—	68 (ex perf fees)	68 (ex perf fees)

Guidance Changes

Metric/Item	Period	Previous Guidance	Current Update	Change
Fixed expenses (ex LTI)	FY 2025	Mid- to low-single-digit increase (Jan commentary)	Reiterated mid- to low-single-digit increase	Maintained
Long-term incentive amortization	FY 2025	~$75M (ex mark-to-market)	No change indicated in Q1 call (notes partial-quarter impact in Q1)	Maintained
Dividend policy	Ongoing	~80% of quarterly cash generation; year-end special from withheld 20%	Reiterated; declared $0.68 for Q1 2025	Maintained
Debt	Aug 2025	—	Expect to refinance $60M senior notes due Aug 2025	New color
Performance fees	Seasonality	Majority have Dec measurement; minimal in other quarters	Q1 had $0; seasonality reiterated	Seasonal

Earnings Call Themes & Trends

Topic	Q3 2024 (prior-2)	Q4 2024 (prior-1)	Q1 2025 (current)	Trend
Fixed income/alternatives growth	Emphasis on alpha/dispersions; FI/alt strategies strong; pipeline building	Two credit franchises raised $3.6B in 2024; performance fees contributed; FI/alt momentum	11th consecutive FI inflow quarter; EMsights +$304M inflows YTD; ramp marketing at 3-year marks	Positive and accelerating
Intermediated wealth channel	Framing shift toward wealth demand; toolkit expansion	~26% non-U.S. clients; continued wealth focus	Wealth channel ~60% of AUM ($97B); 172 relationships >$50M; distribution realignment	Growing strategic focus
Capacity management	Managing IV and other mature strategies; prioritize performance	Continue capacity discipline; foundational assets impacting fee rate mix	Some soft-closes remain; potential for selective capacity reopening; large-cap strategies have room	Disciplined; selective openings
Performance fees seasonality	Mostly Dec; small overall share	~$17M in Q4; ~3% AUM subject to performance fees	None in Q1; reiterated annual seasonality	Seasonal; Q4-centric
Expenses & margins	Operating leverage as newer teams scale	2025 LTI ~$75M; fixed costs modestly up; Q4 margins improved	Fixed costs guidance maintained; seasonal Q1 comp and LTI nuances; margins compressed QoQ	Stable guidance; seasonal variability
M&A / lift-outs	Evaluating opportunities; private markets interest	Strong pipeline; foundational capital supports new teams	Active pipeline; “no-brainer” filter; later-stage real estate conversations	Active, disciplined

Management Commentary

Strategy and resilience: “Our discipline and long-term approach are competitive advantages… we have built our firm to operate consistently and predictably through all environments.”
Product launches: “In the first quarter, we launched two new investment strategies, the Artisan Franchise strategy and the Artisan Global Special Situations strategy.”
Wealth channel focus: “Of our $162 billion in AUM at quarter end, approximately $97 billion was sourced from the intermediated wealth channel.”
Fixed income traction: “First quarter of 2025 marks the 11th consecutive quarter of positive fixed income flows.”
Succession: “Jason Gottlieb, our President, will succeed me as Chief Executive Officer effective in June… I will remain… as Executive Chair.”

Q&A Highlights

Fixed income/alternatives expansion: Management sees multiple paths to grow FI/alt via degrees of freedom in existing teams and selective lift-outs/M&A; Global Unconstrained highlighted as a marquee liquid alternative for wealth clients .
Expenses and margins: Q1 G&A benefited from FX gains and lower travel; fixed expense growth guidance intact; LTI expensing was partial in Q1 due to late-January grant; variable comp flexes with revenue .
Capacity: Some strategies remain soft-closed; potential selective reopening as conditions permit; ample capacity in larger-cap/global strategies and EMsights .
M&A pipeline: Active evaluation across multiple asset classes; disciplined standards; later-stage conversations in private real estate noted .
Institutional vs wealth: Institutional business remains strong with growing EM debt opportunity as EMsights hits 3-year marks; wealth channel provides leverage via multi-strategy relationships .

Estimates Context

Q1 2025 consensus (S&P Global): Revenue $278.8M* vs actual $277.1M; EPS $0.75* vs actual $0.83 (beat). Estimate counts: EPS (4); Revenue (1). Values retrieved from S&P Global.
Implications: EPS likely benefits from higher non-operating gains vs Q4 (swing from $(3.6)M) to +$10.9M total investment gains and disciplined variable comp; revenue miss reflects performance-fee seasonality and two fewer days .

Key Takeaways for Investors

Seasonal dynamics matter: Expect slower Q1s absent performance fees and with seasonal comp; Q4 remains the primary performance-fee capture quarter .
Structural growth in FI/alts: 11 straight quarters of positive FI flows and EMsights momentum underpin medium-term mix shift and durable fee base expansion (albeit at a slightly lower blended fee rate) .
Wealth channel as catalyst: ~60% of AUM in intermediated wealth with deep multi-strategy relationships increases cross-sell potential and revenue durability .
Capacity discipline should support alpha: Ongoing soft closes and selective reopenings prioritize performance over asset gathering, supporting long-term compounding .
Capital returns remain robust and formulaic: Variable dividend at ~80% of cash generation with potential year-end special; Q1 variable dividend $0.68 reflects lower performance fees .
Balance sheet flexibility: $200M debt (0.5x leverage), $100M undrawn revolver; plans to refinance $60M notes due Aug-2025; cash $212.9M provides seed and payout capacity .
Watch for catalysts: EMsights 3-year track records (distribution opening), capacity adjustments, and potential lift-out/M&A in private real estate and other areas could accelerate flows and diversify earnings .

Appendix: Additional Data

AUM by Vehicle (selected)

($M)	Q1 2024	Q4 2024	Q1 2025
Ending AUM – Funds & Global Funds	$77,414	$77,614	$79,220
Ending AUM – Separate Accts & Other	$82,970	$83,594	$83,170
Average AUM – Funds & Global Funds	$74,590	$79,955	$80,446
Average AUM – Separate Accts & Other	$79,568	$85,437	$86,297

Notable items and one-offs

Q1 2025 included investment of $46.8M to economically hedge franchise capital awards; deconsolidation of a private fund following third-party contributions .
Q4 2024 included ~$17M of performance fees across 7 strategies; variable dividend $0.84 plus $0.50 special .

Footnote: All consensus estimate values marked with an asterisk (*) are sourced from S&P Global and are provided without document citations.

Artisan Partners Asset Management Inc. (APAM)·Q1 2025 Earnings Summary