GAMCO INVESTORS, INC. ET AL (GAMI)·Q3 2022 Earnings Summary

Executive Summary

• Q3 2022 revenue was $61.9M, down 18.4% year over year (Q3 2021: $75.9M) and down 5.6% sequentially from Q2 2022 ($65.6M), with diluted EPS of $0.36 versus $1.09 a year ago and $0.66 in Q2; average AUM fell to $30.0B and end-of-period AUM to $27.6B .
• Operating income declined to $18.0M (from $40.7M in Q3 2021), partly impacted by a $1.5M compensation expense from accelerated RSAs; cash and investments ended the quarter at $141.0M with no debt, providing balance sheet flexibility .
• Management pre-announced Q3 diluted EPS guidance of $0.33–$0.38; the actual EPS of $0.36 landed within the range, and the board declared a $0.04 quarterly dividend payable on December 27, 2022 .
• A structural catalyst: the company filed Form 15 on October 6 (suspending SEC periodic filings) and moved to trade on OTCQX under “GAMI” effective October 7, which may alter coverage and liquidity dynamics while the firm continues publishing audited reports to OTC Markets and its website .

What Went Well and What Went Wrong

What Went Well

• Strong liquidity and no leverage: ended Q3 with $141.0M in cash and investments (ex-seed) and no debt, preserving optionality for buybacks and dividends .
• Capital returns: repurchased 491,093 shares for $8.8M at an average price of $17.81 and paid a $0.04 quarterly dividend; the board declared another $0.04 dividend payable in late December .
• SICAV revenues grew YoY to $2.2M from $1.9M, partially offsetting declines elsewhere .

Management quote:

• “Operating income was $18.0 million versus $40.7 million in the third quarter of 2021. We note, on a comparable basis, the acceleration of RSAs during the third quarter of 2022 resulted in an additional $1.5 million of compensation expense.”

What Went Wrong

• Market-driven top-line pressure: revenue fell to $61.9M (–18.4% YoY) as equity market declines reduced fee-bearing AUM; end-of-period AUM dropped to $27.6B (from $33.5B YoY) and average AUM to $30.0B (from $34.6B) .
• Advisory fee compression across channels: fund revenues fell to $38.8M (from $48.0M), and Institutional/Private Wealth revenues declined to $15.2M (from $19.2M) given billing on beginning-of-quarter portfolio values .
• Profitability headwinds: operating income more than halved to $18.0M and diluted EPS fell to $0.36 (from $1.09), reflecting lower revenues and higher compensation expense due to RSA acceleration .

Financial Results

Segment breakdown (YoY):

KPIs and capital return:

Guidance Changes

Earnings Call Themes & Trends

No earnings call transcript was found for Q3 2022; management provided commentary via press releases. Trend tracking references press release disclosures.

Management Commentary

• “On October 6, 2022, GAMCO filed Form 15, which suspended the requirement to file Forms 10-Q, 10-K, and 8-K with the SEC… On October 7, 2022, the Company’s shares started trading on the OTCQX under the symbol ‘GAMI’.”
• “Operating income was $18.0 million versus $40.7 million in the third quarter of 2021… the acceleration of RSAs during the third quarter of 2022 resulted in an additional $1.5 million of compensation expense.”
• “During the quarter, GAMCO paid a dividend of $0.04 per share… and purchased 491,093 shares for $8.8 million at an average price of $17.81 per share… On November 7, 2022, GAMCO’s board of directors declared a regular quarterly dividend of $0.04 per share.”
• “Revenues for the third quarter of 2022 were $61.9 million compared with $75.9 million in the third quarter of 2021… Investment advisory fees were $56.2 million… Fund revenues were $38.8 million… Institutional and Private Wealth Management revenues were $15.2 million… SICAV revenues were $2.2 million.”

Q&A Highlights

No Q3 2022 earnings call transcript was available; management communications were via press releases and event announcements .

Estimates Context

• S&P Global/Capital IQ consensus estimates for GAMI were not available in our dataset due to missing CIQ mapping for the OTCQX ticker; consequently, we benchmarked results against the company’s pre-announced EPS range ($0.33–$0.38) and historical sequential/YoY trends .

Key Takeaways for Investors

• Revenue and EPS declines reflect market-driven AUM pressure; fee-based channels (funds, institutional/private wealth) saw broad-based softness tied to lower equity values at quarter start .
• EPS landed within the company’s pre-announced range, but operating income fell sharply YoY, with RSA-related compensation acceleration adding $1.5M to expenses—watch for normalization in subsequent quarters .
• Balance sheet strength (no debt; $141.0M cash/investments) supports continued buybacks and dividends, partially offsetting market-driven earnings volatility .
• Structural listing change (OTCQX) may reduce sell-side coverage and liquidity; the company commits to continued audited reporting via OTC Markets and its website—IR access shifts accordingly .
• Traders should anchor near-term moves to equity market performance (AUM sensitivity) and monitor capital return cadence; the $0.04 dividend and opportunistic repurchases provide downside support .
• Longer-term, fee mix and net flows across funds vs. institutional/private wealth will drive margin trajectory; SICAV growth is a modest positive but insufficient to offset broad declines today .
• Absent a transcript, continue to track press releases and event commentary (Automotive and Healthcare symposia) for strategic positioning and client engagement signals .