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GCM Grosvenor Inc. (GCMG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was a strong quarter: GAAP revenue rose 10% YoY to $135.0M, Fee-Related Earnings (FRE) up 18% YoY to $47.0M, Adjusted EBITDA up 16% YoY to $56.0M, and Adjusted Net Income per share reached $0.19, up 19% YoY .
  • Wall Street consensus was exceeded on revenue, EPS (Primary), and EBITDA: $135.0M vs $126.7M, $0.19 vs $0.172, and $56.0M vs $50.5M; management guided Q4 management fees to be ~$1M higher than Q3 (implying momentum) .
  • AUM reached a record $87.0B; FPAUM and CNYFPAUM increased to $70.2B and $9.2B, respectively; gross unrealized carried interest rose to $941M, with firm share ~$472M, supporting future earnings power .
  • Board increased the quarterly dividend to $0.12/share payable Dec 15, 2025, and management highlighted a path to double 2023 FRE to >$280M and drive 2028 Adjusted NI per share to >$1.20, reinforcing capital-return and growth narratives .

What Went Well and What Went Wrong

What Went Well

  • Record AUM and broad performance: “We ended the quarter with a record $87 billion of assets under management…our fee-related earnings margin for the quarter was 45%” .
  • Fundraising and product innovation: Closed a $490M collateralized fund obligation (private credit secondaries), recognized $2M transaction fees, and expect recurring management fees going forward .
  • Strategic confidence and long-term targets: “Path to double 2023 fee-related earnings to more than $280 million by 2028 and to drive 2028 adjusted net income per share to more than $1.20 per share” .

What Went Wrong

  • Incentive fees still seasonally concentrated and muted overall: Performance fees were $1.3M in Q3 (down vs prior periods), with carry seasonality highest in Q3; realizations timing remains uncertain .
  • ARS net flows remain cautious: Despite strong investment performance and improved pipeline, management maintained flat ARS flow budgeting assumptions pending sustained inflows .
  • Expense normalization coming in Q4: Non-GAAP G&A expected to return to earlier-year levels (higher than Q3’s $20M), partially offset by slightly lower FRE compensation in Q4 .

Financial Results

Consolidated Results and Margins (older → newer)

MetricQ1 2025Q2 2025Q3 2025
Total Operating Revenues ($USD Millions)$125.846 $119.657 $134.967
GAAP Diluted EPS (Class A)$(0.02) $0.05 $0.16
Adjusted Net Income per Share ($)$0.18$0.16 $0.19
Adjusted EBITDA ($USD Thousands)$53,376$49,516 $56,044
Fee-Related Earnings ($USD Thousands)$46,657$41,617 $47,031
FRE Margin (%)44% 43% 45%

YoY Q3 Performance

MetricQ3 2024Q3 2025YoY Change
Total Operating Revenues ($USD Millions)$122.931 $134.967 +9.8%
GAAP Net Income attributable to GCMG ($USD Millions)$4.156 $10.495 +153%
FRE ($USD Thousands)$39,828$47,031+18%
Adjusted EBITDA ($USD Thousands)$48,380$56,044+16%
Adjusted NI per Share ($)$0.16 $0.19 +19%

Segment Management Fees (Private Markets vs ARS)

MetricQ3 2024Q2 2025Q3 2025
Private Markets Mgmt Fees ($USD Thousands)$57,904$60,148$62,116
Absolute Return Strategies Mgmt Fees ($USD Thousands)$37,160$38,334$39,235

KPIs and Balance Sheet Levers

KPIQ1 2025Q2 2025Q3 2025
AUM ($USD Billions)$82.0 $85.9 $87.0
FPAUM ($USD Billions)$66.4 $69.1 $70.2
CNYFPAUM ($USD Billions)$8.2 $8.7 $9.2
Gross Unrealized Carried Interest ($USD Millions)$865 $909 $941
Firm Share of Unrealized Carried Interest ($USD Millions)$415 $451 $472

Results vs Wall Street Consensus (Q3 2025)

MetricConsensusActualResult vs Est
Revenue ($USD Millions)$126.7*$134.967 Bold Beat
EPS (Primary) ($)$0.172*$0.19 Bold Beat
EBITDA ($USD Millions)$50.5*$56.044Bold Beat

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Management FeesQ4 2025n/a~+$1M vs Q3 2025Provided upward cadence
FRE CompensationQ4 2025“Just over $37M” in Q3 2025Slightly lower vs Q3 2025Lowered
Non-GAAP G&A and OtherQ4 2025$20M in Q3 2025Return to Q1–Q2 levelsRaised (vs Q3)
Dividend per ShareQ4 2025$0.11 (prior quarter) $0.12 payable Dec 15, 2025Raised
Share Repurchase Authorization RemainingAs of Q3 2025$57M at Q2 $86M remainingIncreased capacity

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Macro/tariffs/tax policyVisibility cautious; tariff/tax uncertainty slowing deployment Carry seasonality high in Q3; realization timing uncertain Persistent caution; gradual improvement expected
ARS performance/flowsFlat budgeting but improving pipeline; strong performance 3% Q3 returns; pipeline “best in years,” flows still conservative (flat budgeting) Improving backdrop; conservative guidance maintained
Individual investor (RIAs)Launch of Grove Lane JV; interval fund strategy Rapid relationship growth; interval fund raising daily via RIA channels Scaling distribution; early traction
Private creditStrong demand; structured products (CFO) Not seeing private credit slowdown; insurers productive; CFO recurring fees Robust demand; product innovation
Carried interestFirm share up (Q1 $415M; Q2 $451M) Gross $941M; firm share ~$472M; Q3 carry realizations highest seasonally Growing embedded value
Japan partnershipStrategic partner; $50M equity raise Continued focus; non-exclusive, broader Asia opportunity Long-term channel expansion

Management Commentary

  • “We are pleased to report another strong quarter…fee-related earnings, adjusted EBITDA, and adjusted net income were up 18%, 16%, and 18%…fee-related earnings margin…45%…record $87 billion of AUM” — Michael Sacks .
  • “Our path to double 2023 fee-related earnings to more than $280 million by 2028 and to drive 2028 adjusted net income per share to more than $1.20 per share” — Michael Sacks .
  • “The CFO is absolutely a regular recurring management fee…we will earn an annual management fee…and hopefully carry” — Michael Sacks on the $490M private credit CFO .
  • “Insurance clients accounted for ~14% of capital raised over the last 12 months and 40% of Q3 capital raised” — Jon Levin .
  • “Given strong ARS investment performance year-to-date, we have approximately $33 million in unrealized performance fees” — Pam Bentley .

Q&A Highlights

  • Structured CFO vehicle: One-time $2M transaction fee in Q3; ongoing recurring management fees and potential carry; expectation to launch other fund obligations over time .
  • ARS flows seasonality: Despite strong returns and interest, management is keeping budgeting assumptions flat until flows clearly inflect; Q4 seasonality not determinative .
  • Carry realizations: Q3 seasonally strongest due to tax carry distributions; diversification makes timing hard to predict; firm owns a higher share of more recent vintages .
  • Private credit concerns: Management not seeing a slowdown; allocation growth expected; insurers productive even excluding the CFO transaction .
  • Share count/dilution: <3% cumulative dilution over 5 years, actively managed via buybacks; $86M authorization remaining .

Estimates Context

  • Q3 2025 actuals vs S&P Global consensus: Revenue $134.967M vs $126.7M*, Primary EPS $0.19 vs $0.172*, EBITDA $56.044M vs $50.5M* — all beats. Management’s guidance for Q4 management fees being ~$1M higher than Q3 supports near-term upward momentum in estimates .
  • Target price consensus stood at $15.5*; consensus recommendation text unavailable*. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Beat across headline metrics with expanding FRE margin (45%) and durable revenue base; management sees Q4 management fees ~+$1M vs Q3, indicating near-term strength .
  • Embedded earnings power growing: gross unrealized carry at $941M and firm share ~$472M; Q3 saw >$24M carry realizations and ~50% firm share on newer vintages .
  • Fundraising diversified and robust ($9.5B LTM; $1.9B in Q3), with infrastructure and credit leading; ARS pipeline strengthens on multi-strategy performance .
  • Product innovation via structured CFOs creates recurring fees and carry optionality; expect additional structured solutions over time .
  • Capital allocation supports shareholder returns: dividend increased to $0.12 and $86M repurchase capacity remains; dilution actively managed .
  • Strategic horizon compelling: management targets doubling 2023 FRE (> $280M) and Adjusted NI/share > $1.20 by 2028, supported by private markets scale and RIA/Asia channels .
  • Near-term watch items: ARS flow inflection vs flat budgeting, Q4 non-GAAP G&A normalizing upward, and carry realization cadence into 2026 .