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HK

Horizon Kinetics Holding Corp (HKHC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue rose to $19.801M, up from $12.131M in Q1 2024, driven by higher management and advisory fees ($18.9M, +58% YoY), while diluted EPS was $1.23 versus $2.27 a year ago . AUM increased to $10.8B (+10% QoQ; +54% YoY), supported by TPL +20% QoQ offset by GBTC −10% QoQ .
  • Investment income within consolidated investment products was a major tailwind ($73.2M), with $59.0M attributed to client redeemable NCI; consolidated “other income (expense), net” totaled $90.816M in the quarter .
  • Non-GAAP “adviser-only” view (excluding consolidated proprietary funds) shows stronger core revenue ($22.038M) and operating income ($4.601M), clarifying underlying advisory economics .
  • The Board declared a $0.056 dividend (payable June 16, 2025), down from $0.107 in Q4 2024, as management balances dividend policy with tax and liquidity planning amid incentive fee collections and private investment monetization scenarios .

What Went Well and What Went Wrong

What Went Well

  • Management and advisory fee revenue rose to $18.9M (+58% YoY), reflecting higher AUM and net inflows across SMAs, ETFs, mutual funds, and proprietary funds .
  • Strong investment results in consolidated investment products ($73.2M) translated to sizable “other income” for HKHC and clients, supporting net income attributable to HKHC of $22.841M .
  • Strategic distribution approach for ETFs: INFL >$1.2B AUM via traditional channels, while BCDF is scaled through direct, platform-fee-minimizing outreach; Japan Owner Operator ETF launched to focus on owner-operator opportunities .

What Went Wrong

  • Operating expenses rose with revenue/AUM (sales/distribution/marketing, commissions), plus ~$1.2M from Scott’s Liquid Gold integration in Q1 2025 .
  • GBTC declined 10% QoQ, partially offsetting TPL’s +20% contribution to AUM/fee dynamics .
  • Dividend reduced to $0.056 vs $0.107 in Q4 2024 as management prioritized tax-liquidity planning; platform fees and tax burden remained margin headwinds for advisory operations .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$15.368 $19.204 $19.801
Operating Income ($USD Millions)$1.350 $(14.703) $1.305
Net Income ($USD Millions)$(38.167) $75.760 $22.841
Diluted EPS ($USD)$(2.07) $4.07 $1.23
Total Operating Expenses ($USD Millions)$14.018 $33.907 $18.496
EBIT Margin %8.8% (calc from )−76.5% (calc from )6.6% (calc from )
Net Income Margin %−248.3% (calc from )394.5% (calc from )115.4% (calc from )

Year-over-Year (Q1 2024 vs Q1 2025)

MetricQ1 2024Q1 2025
Revenue ($USD Millions)$12.131 $19.801
Management & Advisory Fees ($USD Millions)$11.992 $18.908
Net Income Attributable ($USD Millions)$40.841 $22.841
Diluted EPS ($USD)$2.27 $1.23
AUM ($USD Billions)$7.0 (implied by +54% to $10.8B) $10.8

Revenue Breakdown

MetricQ3 2024Q4 2024Q1 2025
Management & Advisory Fees ($USD Millions)$14.933 $18.209 $18.908
Other Income & Fees ($USD Millions)$0.435 $0.995 $0.893

KPIs

KPIQ3 2024Q4 2024Q1 2025
AUM ($USD Billions)$8.3 $9.8 $10.8
Dividend per Share ($USD)$0.053 $0.107 $0.056
Incentive Fees ($USD Millions)$23.3 unearned $51.7 earned $51.7 collected
Cash & Cash Equivalents ($USD Millions)$18.071 $14.446 $34.872

Non-GAAP “Adviser-Only” View (Q1 2025)

MetricConsolidated Q1 2025Adviser-Only (ex-CIPs) Q1 2025
Management & Advisory Fees ($USD Millions)$18.908 $21.145
Total Revenue ($USD Millions)$19.801 $22.038
Operating Income ($USD Millions)$1.305 $4.601
Net Income Attributable ($USD Millions)$22.841 $22.841

Guidance Changes

MetricPeriodPrevious Guidance/PolicyCurrent Guidance/PolicyChange
Dividend per share ($USD)Q1 2025$0.107 (Q4 2024 dividend) $0.056 (declared May 13; payable Jun 16) Lowered
Revenue/EPS GuidanceQ1 2025None provided in prior quarter releases/calls None provided; forward-looking statements only Maintained (no formal guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4)Current Period (Q1 2025)Trend
Consolidation of proprietary funds and NCI presentationTransition to consolidated reporting; incentive fees recorded below operating income; large deferred tax liability; NCI represents client interests CFO reiterated GAAP consolidation and adviser-only supplemental view; Q1 “other income” impact and NCI split emphasized Ongoing clarity; consistent framework
ETF strategy and distribution (INFL, BCDF)INFL >$1.1B AUM; new Japan ETF planned; economy-of-scale vs indexing INFL >$1.2B; BCDF built via direct distribution to minimize platform fees; Japan Owner Operator fund launched Expanding product set; focus on capital-efficient distribution
Cryptocurrency mining/Consensus MiningDirect listing “on the verge”; mining economics and indirect mining rationale; halving dynamics Consensus Mining expected to be quoted/traded on OTC Markets “in ~10 days” Near-term listing catalyst
Taxes/liquidity and dividend policyLarge Q4 incentive fees led to tax cash needs; dividend calibrated to operating income after taxes Dividend reduced in Q1 amid continued tax-liquidity planning and potential private investment monetization Conservative cash posture; flexibility maintained
Uplisting considerationsDiscussed prerequisites (volume, potential offering, reverse merger paths) Uplisting still exploratory; volume constraints; potential share sales or offering; reverse merger considered Monitoring; no near-term action
Tariffs/macro exposureLimited exposure due to portfolio composition; minimal import/export reliance No material update; philosophy unchanged Neutral

Management Commentary

  • “Our supplementary schedule indicated… quarterly revenues of $22,000,000 [adviser-only],… a meaningful increase from the $14,000,000 [prior year]” .
  • “We are pushing $11,000,000,000 in assets under management” and “being a patient long term investor has enormous advantages” .
  • “INFL is now over $1,200,000,000 in AUM… BCDF… go direct… avoid… platform fees” .
  • “Consensus Mining… is going to be quoted and traded on OTC Markets [in ~10 days]” .
  • “Cash balance… now $34,000,000… we felt it’s appropriate… to build up a more sizable cash balance… to pay taxes on performance fees” .

Q&A Highlights

  • ETF distribution strategy: INFL scaling via platforms; BCDF via direct distribution to minimize platform fees; Japan Owner Operator ETF launched .
  • Bitcoin holdings: HKHC holds 131 BTC directly, mined rather than purchased; mining strategy aims to grow coins and generate cash to refresh rigs .
  • FRMO revenue share: FRMO entitled to 4.2% of HKHC gross revenue prior to commission sharing; historical structuring explained .
  • Uplisting: Requires higher trading volume; options include shareholder sales, offering, or reverse merger; no decision yet .
  • Operating leverage and costs: Commissions variable with performance fees; base costs relatively stable; bonuses paid in strong years .

Estimates Context

  • Wall Street consensus (S&P Global) for HKHC appears unavailable; our attempt to retrieve EPS, revenue, EBITDA, target price, and recommendation showed no active coverage for near-term quarters. As a result, no formal beat/miss analysis vs consensus can be provided at this time. Values retrieved from S&P Global.*
MetricQ1 2025Q2 2025
Revenue Consensus Mean ($USD Millions)N/A*N/A*
Primary EPS Consensus Mean ($USD)N/A*N/A*
EBITDA Consensus Mean ($USD Millions)N/A*N/A*

Key Takeaways for Investors

  • Core advisory momentum: Management/advisory fees grew +58% YoY; adviser-only operating income rose to $4.601M, indicating solid underlying advisory economics despite consolidation optics .
  • AUM trajectory and fee visibility: AUM reached $10.8B (+10% QoQ; +54% YoY), with TPL strength offsetting GBTC weakness; higher AUM supports recurring fee base .
  • Consolidation mechanics matter: Significant “other income” from consolidated investment products and NCI allocations can skew net income margins; use adviser-only view to assess operating profitability .
  • Dividend reset near term: Cut to $0.056 reflects prudent tax/liquidity management post large incentive fees and ahead of potential private monetizations; expect policy to align with post-tax operating income .
  • Near-term catalysts: Potential OTC quotation of Consensus Mining; continued ETF product build (Japan Owner Operator); Annual Meeting on June 17 could provide updates on listing, capital allocation, and product roadmap .
  • Risks: Platform fees and tax burden compress margins; volatility from digital assets and consolidated investment product results can drive wide net income margins quarter-to-quarter .
  • Analytical approach: In absence of consensus estimates, anchor on adviser-only financials and AUM trends; monitor incentive fee crystallization cadence (~Q4 events) and subsequent cash tax implications .





*Values retrieved from S&P Global.