Executive Summary

Q4 2024 delivered sequential revenue growth and margin expansion: total revenue $139.8M (+4.9% QoQ) and GAAP operating margin 35.3% (vs 33.7% in Q3) with diluted EPS $0.89 and as-adjusted EPS $0.78 .
Second consecutive quarter of firm-wide net inflows ($860M), though ending AUM fell to $85.8B (-6.5% QoQ) on market depreciation; average AUM rose to $89.4B, supporting fee revenue growth .
Management highlighted Q4 headwinds (risk-free yields up; listed real assets down) but reiterated long-term outperformance and sees multiple catalysts: active ETFs launching in Q1 2025, distribution alpha focus, and improving pipeline activity despite expected $800M redemptions in H1 2025 .
2025 guidance: compensation ratio ~40.5%, G&A +6–7% YoY, effective tax rate ~25.3%; liquidity ended Q4 at ~$361M; board raised quarterly dividend to $0.62 in Q1 2025 (from $0.59) as a positive capital return signal .

What Went Well and What Went Wrong

What Went Well

Second straight quarter of net inflows ($860M), led by ~$1.2B open-end fund inflows, with fee-bearing average AUM up to $89.4B; net inflows helped revenue and margin expansion despite market pressure .
Management emphasized durable performance: 95%/96%/97%/99% of AUM outperforming benchmarks over 1/3/5/10-year periods and strong excess returns, supporting share gains and stable fee rates (~58bps) .
Strategic momentum: launch of three active ETFs in Q1 2025 across U.S. REITs, Preferreds, and Natural Resources; focus on growing distribution alpha and RIA channel penetration .

Selected quotes:

“We expect to launch 3 active ETFs in the first quarter of this year… Our initial distribution focus will be with RIAs” — Joseph Harvey .
“Our operating margin was 35.5%… revenue for Q4 increased 4.9% sequentially to $139.9 million” — Raja Dakkuri (as-adjusted) .
“We are delivering alpha consistently for our clients” — Joseph Harvey .

What Went Wrong

Ending AUM declined to $85.8B (-6.5% QoQ) on ~$6.1B market depreciation and ~$697M distributions; regional strategy weakness in global/international real estate (-12.9% QoQ) and institutional AUM (-9.0% QoQ) .
Q4 listed real assets fell: U.S. REITs -8.2% and global listed infrastructure -5.7% as real rates rose; outperformance batting average softened in the quarter .
Non-operating income fell sharply vs Q3 (+$6.4M in Q4 vs $22.7M in Q3) driven by investment losses and FX; GAAP effective tax rate printed 21.7% due to discrete items, creating a gap to guided operational tax rate (25.3%) .

Financial Results

GAAP Results (Income Statement)

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenue ($USD Millions)	$119.2	$133.2	$139.8
Operating Income ($USD Millions)	$37.9	$44.9	$49.3
Operating Margin (%)	31.8%	33.7%	35.3%
Net Income Attributable to Common ($USD Millions)	$29.8	$39.7	$45.8
Diluted EPS ($USD)	$0.60	$0.77	$0.89

Key drivers:

Sequential revenue +4.9% and operating margin expansion to 35.3% on higher average AUM and $1.4M performance fees .
Non-operating income declined ($6.4M in Q4 vs $22.7M in Q3) on lower investment gains and favorable FX in Q4 .

As-Adjusted Results (Non-GAAP)

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$119.0	$133.4	$139.9
Operating Income ($USD Millions)	$41.3	$47.6	$49.7
Operating Margin (%)	34.7%	35.7%	35.5%
Net Income Attributable to Common ($USD Millions)	$33.4	$39.7	$40.4
Diluted EPS ($USD)	$0.67	$0.77	$0.78

Adjustments include seed investment impacts, FX, accelerated RSU vesting, lease transition costs, and discrete tax items .

Revenue Mix (Q4 vs Q3 2024)

Revenue Line ($USD Thousands)	Q3 2024	Q4 2024	Change ($)	Change (%)
Investment Advisory & Admin – Open-end Funds	$66,761	$70,161	$3,400	5.1%
Investment Advisory & Admin – Institutional Accounts	$32,956	$35,585	$2,629	8.0%
Investment Advisory & Admin – Closed-end Funds	$25,680	$25,994	$314	1.2%
Distribution & Service Fees	$7,244	$7,450	$206	2.8%
Other	$562	$593	$31	5.5%
Total Revenue	$133,203	$139,783	$6,580	4.9%

Expenses (Q4 vs Q3 2024)

Expense Line ($USD Thousands)	Q3 2024	Q4 2024	Change ($)	Change (%)
Employee Compensation & Benefits	$56,376	$56,504	$128	0.2%
Distribution & Service Fees	$14,739	$15,733	$994	6.7%
General & Administrative	$14,874	$15,784	$910	6.1%
Depreciation & Amortization	$2,341	$2,425	$84	3.6%
Total Expenses	$88,330	$90,446	$2,116	2.4%

Notes: Distribution and service fees rose with higher average AUM in U.S. open-end funds; G&A rose on travel and business development .

KPIs and AUM

KPI	Q3 2024	Q4 2024
Ending AUM ($USD Billions)	$91.8	$85.8
Average AUM ($USD Billions)	$86.2	$89.4
Firm-wide Net Flows ($USD Millions)	$1,284	$860
Performance Fees Recognized ($USD Millions)	—	$1.4
Effective Fee Rate (ex perf. fees) (bps)	58	58
Liquidity (cash, Treasurys, liquid seeds) ($USD Millions)	$348.4	$360.9

AUM drivers: $6.1B market depreciation and $697M distributions in Q4; net inflows offset part of market impact .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Compensation Ratio	FY 2025	~40.5% (Q4 preview)	~40.5%	Maintained
G&A Expense Growth	FY 2025 vs 2024	6–7% expected (Q4 preview)	6–7% YoY	Maintained
Effective Tax Rate	FY 2025	~25.3% (Q4 preview)	~25.3%	Maintained
Firm Redemptions Outlook	H1 2025	~$1.0B split Q4/Q1 previously	~$800M H1 2025 (≈$200M already occurred in Q4)	Lowered
Product Launch	Q1 2025	Active ETFs planned	3 active ETFs launching (CSRE, CSPF, CSNR)	Confirmed
Dividend	Q1 2025	$0.59 prior quarter	$0.62 (+5.1% QoQ)	Raised

Clarification: GAAP effective tax rate printed 21.7% in Q4 due to discrete items; operational guidance remains ~25.3% going forward .

Earnings Call Themes & Trends

Topic	Q2 2024 (Previous Mentions)	Q3 2024 (Previous Mentions)	Q4 2024 (Current Period)	Trend
AI/Data Centers & Power Demand	Rising power demand tailwind; data centers, utilities, midstream; launched Future of Energy fund	Continued optimism on listed infrastructure vs private; AI-driven power themes	Listed infra pulled back with rates; still sees attractive valuations; midstream gains; infrastructure complements private; AI/power demand remain key	Positive secular tailwind; cyclical rate sensitivity
Macro/Rate Cycle	Anticipated easing; asset classes lag equities; under-ownership opportunity	Turning point: strong Q3 listed real asset returns; Fed cuts; pipeline and flows inflect	Mixed Q4: real rates up; listed real assets down; second consecutive quarter of inflows; focus on multi-period regime change	Transition phase; volatility tied to rates
Distribution/RIA Strategy	Building wealth/RIA focus; seed capital, nontraded REIT momentum	Realigned U.S. wealth distribution; RIA focus; ETF launch plans	“Distribution alpha” initiative; RIA-led asset gathering; active ETFs confirmed	Strengthening channels; product breadth expanding
Japan/Asia Expansion	NISA reforms; early-stage traction in Asia ex-Japan	Pipeline and flows in Australia; Japan subadvisory modest outflows	Expanded offices (London, Tokyo, Hong Kong, Singapore); continued commitment; Japan Renaissance thesis intact	Gradual build; market-dependent
Preferreds vs Private Credit	Preferreds top-performing fixed income YTD; tailwind as rates fall	Preferred flows turned nominally positive; fee rate stability	Preferreds demand slower vs private credit; expect confidence to strengthen	Competitive pressure; medium-term recovery expected

Management Commentary

Strategic positioning: “We believe macro conditions plus valuations should favor our asset classes… We see improvements in tax and regulatory conditions and underlying business confidence” — Joseph Harvey .
Capitalizing on trends: “We believe listed infrastructure complements private… access to themes such as AI, power generation and data centers” — Joseph Harvey .
Product roadmap: “We expect to launch 3 active ETFs in the first quarter… an active U.S. REIT, preferred stock, and natural resources equity strategy” — Joseph Harvey .
Operating discipline: “Our operating margin was 35.5%… effective fee rate… 58 basis points… Compensation ratio just below 40.5%” — Raja Dakkuri .
Outlook on flows/redemptions: “We have indicated redemptions now around $800 million… about $200 million already occurred before year-end” — Joseph Harvey .

Q&A Highlights

Wealth channel dynamics: Strong RIA-led interest in U.S. REITs; preferreds facing competition from private credit; expectation that rate sensitivity of flows will moderate over time .
Active ETFs rollout: Focused on RIAs initially; educational push leveraging high share in open-end REITs and preferreds; cautious on cannibalization risk .
Operating leverage: Margin progression contingent on markets and organic growth; investments for ETFs/private real estate embedded in 2025 comp/G&A guidance .
Redemptions clarity: ~$800M expected H1 2025; ~ $200M occurred in Q4; reflects reallocations to private and lineup changes .
International footprint: Expanded offices; targeting Asia ex-Japan adoption; ongoing support for Japan subadvisory partner .
M&A posture: Focus on organic growth; strong balance sheet to seed vehicles; acquisitions not core but could be opportunistic if strategically additive .

Estimates Context

S&P Global consensus estimates for CNS Q4 2024 EPS and revenue were unavailable to us at the time of analysis due to data access limitations (SPGI request limit exceeded). As a result, we cannot quantify beats/misses versus Street for this quarter [functions.GetEstimates error].
Given sequential revenue +4.9% and margin expansion, sell-side models may modestly raise forward revenue run-rate assumptions tied to average AUM and distribution fees, while non-operating items (investment/FX) likely introduce greater variance in EPS modeling .

Key Takeaways for Investors

Q4 delivered healthy sequential operating momentum: revenue +4.9% QoQ; GAAP margin up ~160 bps; as-adjusted EPS up 1c QoQ — supported by higher average AUM and performance fees .
Flows re-inflected: second straight quarter of net inflows ($860M), but market depreciation drove ending AUM down to $85.8B — monitor Q1 market path for AUM recovery .
Near-term headwind: ~$800M institutional redemptions expected in H1 2025; offset will depend on wealth/RIA inflows and ETF traction .
Catalysts: Launch of three active ETFs (REITs, Preferreds, Natural Resources) in Q1 2025 and dividend increase to $0.62 highlight product expansion and capital return confidence .
Expense discipline: 2025 comp ratio steady at ~40.5% and G&A +6–7% YoY underpin stable operating framework; FX/investment marks remain swing factors for EPS .
Strategic narrative: Management is leaning into distribution alpha, RIA channel penetration, and listed-plus-private real assets; secular themes (AI/data centers/power demand) support infrastructure and natural resources positioning .
Watchlist: Fee rate stability (~58bps), open-end fund inflows in U.S. REITs, preferreds competitiveness vs private credit, and Asia/Japan adoption trajectory .

COHEN & STEERS, INC. (CNS)·Q4 2024 Earnings Summary