Executive Summary

Q3 delivered clean beats with diluted EPS of $0.81 vs S&P Global consensus of $0.78 and revenue of $141.7M vs $138.8M; operating margin expanded meaningfully QoQ on stable fee rate and disciplined G&A, with as-adjusted operating margin at 36.1% (GAAP 34.5%). Bold drivers included positive net flows and a sharp build in the institutional pipeline to multi-year highs . Consensus values marked with an asterisk are from S&P Global and reflect a small sample size (EPS: 1 estimate; revenue: 2 estimates). Values retrieved from S&P Global.
Flows improved: firmwide net inflows of $233M, with open-end funds posting their fifth consecutive quarter of positive net flows; ending AUM rose to $90.9B on market appreciation and net inflows .
Strategic progress: active ETFs surpassed $200M AUM with top-tier peer rankings since launch; UTF executed a $353M rights offering, adding >$500M of investable “dry powder” with leverage for infrastructure opportunities .
2025 guidance fine-tuned: compensation ratio trimmed to 40.25% (from 40.5% previously), effective tax rate guided to 25.1% (from 25.3%); 2025 G&A growth lifted to ~9% (from 7–8%), with 2026 G&A growth expected to moderate to mid-single-digits .
Setup into Q4: margin trajectory benefits from revenue growth outpacing expenses and a stable 59 bps fee rate, while the $1.75B one-but-unfunded pipeline (largest since 4Q21) and continued ETF launches position for incremental flow catalysts .

What Went Well and What Went Wrong

What Went Well
- Margin execution: revenue growth (+4% QoQ) and lower G&A drove as-adjusted operating margin expansion to 36.1% (GAAP 34.5%), with the compensation ratio trending down YTD to 40.25% .
- Flows and pipeline: fifth straight quarter of open-end inflows and a multi-year high $1.75B institutional pipeline; CEO: “We believe we have transitioned to a net positive position on the institutional flow front” .
- Product momentum: active ETFs outperformed peers since inception; management: “Our real estate ETF…number one…preferred ETF…number one…resource equities…outperformed by 490 bps” .
What Went Wrong
- Institutional softness: institutional advisory and subadvisory posted net outflows of $455M and $82M, respectively, reflecting client rebalancings/structural changes despite solid performance .
- Strategy relative returns: several equity strategies (ex resource equities at +10.7%) lagged the S&P 500; U.S. REITs returned 1.4% and ranked 9th of 11 S&P industry groups in the period .
- Near-term preferreds demand: management continues to see some hesitancy from investors in preferreds versus broader fixed income, though portfolios have performed well; mix shifts weigh on category flows at times .

Financial Results

Income statement and profitability

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Millions)	$133.2	$136.1	$141.7
Operating Income ($USD Millions)	$44.9	$43.3	$48.9
Operating Margin (GAAP)	33.7%	31.8%	34.5%
Operating Margin (As Adjusted)	35.7%	33.6%	36.1%
Net Income ($USD Millions)	$39.7	$36.8	$41.7
Diluted EPS ($)	$0.77	$0.72	$0.81

Consensus vs Actual (Q3 2025)

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$138.8*	$141.7	+$2.9 (~+2%)
Diluted EPS ($)	$0.78*	$0.81	+$0.03 (~+4%)

Consensus counts: EPS (1), Revenue (2). Values retrieved from S&P Global.

Revenue mix (fees), QoQ

Fee Revenue ($USD Thousands)	Q2 2025	Q3 2025
Open-end funds	$70,613	$74,240
Institutional accounts	$32,854	$33,210
Closed-end funds	$25,078	$26,178
Distribution & service fees	$7,166	$7,513
Other	$415	$579
Total Revenue	$136,126	$141,720

AUM and flows KPIs

KPI	Q2 2025	Q3 2025
Ending AUM ($B)	$88.9	$90.9
Average AUM ($B)	$87.2	$89.7
Net Flows ($M)	-$131	+$233
Open-end Net Flows ($M)	+$285	+$768
Institutional Net Flows ($M)	-$519	-$537
Subadvisory Net Flows ($M)	-$107	-$82
Effective Fee Rate (bps)	59	59
Liquidity ($M)	$323	$364
Effective Tax Rate (%)	24.7	25.0
Compensation Ratio (YTD, %)	—	40.25
One-but-unfunded Pipeline ($B)	0.776	1.75
Active ETF AUM ($M)	$133 (incl. seed)	>$200
UTF Rights Offering Proceeds ($M)	—	$353

AUM by strategy (QoQ)

Strategy AUM ($B)	Q2 2025	Q3 2025	Change
U.S. Real Estate	$44.0	$44.2	+0.4%
Preferred Securities	$17.9	$18.4	+3.0%
Global/International Real Estate	$14.0	$14.5	+3.9%
Global Listed Infrastructure	$10.1	$10.5	+4.7%
Other	$3.0	$3.3	+7.6%
Total	$88.9	$90.9	+2.2%

Non-GAAP adjustments (Q3): As-adjusted results exclude seed investment impacts, accelerated RSU vesting, rights offering costs, and FX; as-adjusted EPS remained $0.81 and as-adjusted operating margin was 36.1% .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Compensation Ratio	FY 2025	~40.5% (as-adjusted)	40.25% (as-adjusted)	Lowered
G&A Growth	FY 2025 vs FY 2024	+7–8%	~+9%	Raised
Effective Tax Rate	FY 2025 (as-adjusted)	~25.3%	25.1%	Lowered
G&A Growth	FY 2026	—	Mid-single-digit %	New color
Dividend per Share	Q4 2025	—	$0.62 declared (payable Nov 20)	Declared

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Previous Mentions (Q2 2025)	Current Period (Q3 2025)	Trend
AI/power demand and infrastructure	Emphasized real assets’ resilience vs tariffs; beginning of rotation narrative	—	Multi-year AI CapEx boom ($4–$5T) supports electric utilities and infrastructure; real assets diversification case reiterated	Increasing strategic focus
Tariffs/macro	Tariffs “Liberation Day” shock; recession watch; liquidity value; diversification	Lingering impacts; flows mixed by strategy	Focus on sticky inflation, dovish Fed bias, broadening earnings in 2026; less tariff-centric	Stabilizing macro narrative
Product performance (Active ETFs)	Launch underway; rationale and distribution plan	Early inflows ($54M), strong performance; plan to add more ETFs	Outperformance versus peers across ETFs; AUM >$200M; two more ETFs planned in Q4	Scaling positively
Regional/strategy flows	Global listed infrastructure strength; U.S. REITs outflows	U.S. REIT inflows offset by preferreds outflows; pipeline rebuilt	Open-end inflows across strategies; pipeline skewed 66% to U.S. REITs; some EU reallocations	U.S. REIT demand improving; global interest present
Retirement/401(k) & vehicles	Advocacy for listed real assets as 401(k) diversifiers	—	Strong case against private illiquidity in retirement plans; push for listed real assets	Consistent advocacy
Private real estate	CNS REIT top-performing non-traded REIT; building distribution	—	Private real estate revenue begins; RE Opportunities Fund final close at $236M	Execution momentum

Management Commentary

CFO Raja Dakkuri: “Earnings of $0.81 per share…Revenue for Q3 increased 4.2%…Our effective fee rate was 59 bps…operating margin increased meaningfully to 36.1% (as adjusted)…ending AUM increased to $90.9 billion…liquidity totaled $364 million…compensation ratio to remain at 40.25% for the full year” .
President & CIO Jon Cheigh: “Exceptional performance since launch of our three active ETFs…real estate ETF…number one…preferred ETF…number one…resource equities ETF…outperformed by 490 bps” and “We are only in year two of a $4–$5 trillion AI-driven investment cycle” .
CEO Joe Harvey: “We had net inflows of $233 million…our one unfunded pipeline grew substantially to $1.75 billion…We priced an equity rights offering for UTF…raised $353 million…provid[ing] over $500 million in dry powder” .

Q&A Highlights

Wealth channel demand for U.S. REITs: Management expects continued strength as rates drift lower and fundamentals broaden; REIT earnings seen accelerating into 2026–2027 as supply normalizes .
Institutional flows and pipeline composition: Predominantly North America; a mix of retirement and annuity providers; some European reallocation toward European real estate; notable nuclear decommissioning entity evaluating global real estate .
Cash redeployment as rates fall: Anticipated rotation from cash into real assets (real estate, infrastructure, diversified real assets) and into shorter-duration preferreds as the curve steepens; potential rotation out of private credit at lower SOFR .
2026 comp ratio/margin balance: Hiring timing shifting some adds into 2026; new initiatives (private real estate, ETFs) moving from cost to revenue contribution, supporting margin expansion while investing in growth .

Estimates Context

Revenue/EPS beat: Q3 revenue $141.7M vs $138.8M consensus; EPS $0.81 vs $0.78. Limited estimate depth (EPS: 1, Revenue: 2), so consensus quality is modest; nevertheless, both lines beat. Values retrieved from S&P Global.

Key Takeaways for Investors

Margin momentum is real: As-adjusted operating margin expanded 250 bps QoQ to 36.1% on stable 59 bps fee rate and tighter G&A; comp ratio guided to 40.25% for FY25 supports incremental margin leverage if revenue continues to outpace expense growth .
Flows inflecting: Fifth consecutive quarter of open-end inflows and a robust $1.75B pipeline (largest since 4Q21) position CNS for potential net flow acceleration into 2026 as REIT earnings recover and infrastructure tailwinds build .
Product catalysts: Active ETFs are scaling with strong peer rankings and more launches slated for Q4; UTF’s $353M rights offering adds meaningful deployable capital to infrastructure strategies .
Exposure mix favorable for the macro: A portfolio tilted to inflation-sensitive real assets (REITs, infrastructure, preferreds) aligns with management’s view of sticky inflation and a dovish Fed bias; potential rotation from cash/private credit may be a medium-term inflow tailwind .
Dividend continuity: The Board declared a $0.62/share cash dividend for Q4 2025, reinforcing capital return alongside growth investments .
Watch items: Institutional outflows remain a swing factor as clients rebalance; preferreds demand is still normalizing; relative strategy returns vs S&P can influence wealth channel momentum near term .
Near-term trading lens: Clean top- and bottom-line beats with visible pipeline and margin expansion are supportive; incremental data points to monitor include monthly AUM/flows (already positive in October with $1.1B net inflows despite market depreciation) and execution on ETF launches and pipeline conversions .

Notes on non-GAAP: As-adjusted results exclude seed investment impacts, accelerated RSU vesting, rights offering costs, and FX; as-adjusted EPS equaled GAAP in Q3, while as-adjusted operating margin rose to 36.1% vs GAAP 34.5% .

Other relevant press releases (Q3 context): Preliminary AUM for September ($90.9B) and October ($90.6B); dividend declaration; UTF rights offering completion .

COHEN & STEERS, INC. (CNS)·Q3 2025 Earnings Summary