Executive Summary

Q2 delivered strong advisory fee growth but a GAAP loss: management and advisory fees rose 66% YoY to $18.8M while consolidated total revenue was $19.8M; net loss attributable to HKHC was $(10.5)M or $(0.56)/sh, driven by investment losses largely tied to a 20% decline in Texas Pacific Land (TPL) during the quarter .
Advisor-only profitability improved materially: “Advisor-only” operating income (ex-CIP consolidation effects) was $4.4M vs. $1.5M in Q2’24, reflecting stronger underlying fee economics even as CIP fair value marks pressured GAAP results .
AUM momentum intact; dividend raised: AUM reached $10.5B (+7% YTD; +43% YoY) and the Board declared a $0.071/share dividend (payable Sep 15, 2025) .
Key swing factors: consolidated investment products (CIPs) fair value and equity method marks (TPL, private placements, digital assets) remain the principal volatility drivers; management highlighted digital assets unrealized gains (+$3.4M) as a partial offset to broader unrealized losses .

What Went Well and What Went Wrong

What Went Well
- Fee revenue and advisor-only economics: Management and advisory fees grew 66% YoY to $18.8M; advisor-only operating income was $4.4M, reflecting robust underlying asset-based fees as AUM rose across SMAs, ETFs, mutual funds and private funds .
- AUM growth and flows: AUM reached $10.5B, +7% vs. Dec 31, 2024 and +43% YoY; the company cited both market appreciation (notably prior TPL/GBTC strength) and net cash inflows with increased customer accounts .
- Digital assets tailwind in-quarter: Unrealized gains on digital assets of $3.4M provided a partial offset to broader investment losses in the quarter .
What Went Wrong
- Investment marks turned negative: Investment and other losses of consolidated investment products were $(15.5)M; equity losses were $(4.6)M, and unrealized losses on investments were $(15.4)M, primarily due to a ~20% decline in TPL during Q2 .
- GAAP net loss despite higher fees: Consolidated “other income” turned to a loss of $(29.9)M (vs. +$42.3M in Q2’24), driving a net loss attributable to HKHC of $(10.5)M (vs. +$14.0M in Q2’24) .
- Consumer products drag and impairment: Q2 included ~$0.9M in operating expenses and a $0.9M non-cash goodwill impairment tied to the consumer products asset group (Scott’s Liquid Gold legacy), with no comparable amounts in Q2’24 .

Financial Results

Sequential trend (oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenue ($M)	$19.204	$19.801	$19.761
Operating Income ($M)	$(14.703)	$1.305	$2.506
Net Income Attrib. to HKHC ($M)	$75.760	$22.841	$(10.489)
Diluted EPS ($)	$4.07	$1.23	$(0.56)

Year-over-year comparison (Q2 2024 vs Q2 2025)

Metric	Q2 2024	Q2 2025	YoY Δ
Total Revenue ($M)	$11.442	$19.761	+$8.319
Operating Income ($M)	$(0.665)	$2.506	+$3.171
Net Income Attrib. to HKHC ($M)	$14.038	$(10.489)	$(24.527)
Diluted EPS ($)	$0.78	$(0.56)	$(1.34)

Revenue composition

Revenue Component	Q1 2025 ($M)	Q2 2025 ($M)	Q2 2024 ($M)
Management & Advisory Fees	$18.908	$18.798	$11.323
Other Income & Fees	$0.893	$0.963	$0.119
Total Revenue	$19.801	$19.761	$11.442

Advisor-only (non-GAAP) operating view

Metric	Q1 2025	Q2 2025	YoY (Q2)
Advisor-only Revenue ($M)	$22.038	$21.497	vs. $13.005 in Q2’24
Advisor-only Operating Income ($M)	$4.601	$4.450	vs. $1.458 in Q2’24

Key P&L volatility drivers (Q2 2025)

Item	Q2 2025 ($M)
Investment & Other Losses of CIPs, net	$(15.533)
Equity Earnings (Losses), net	$(4.561)
Unrealized Gain (Loss) on Investments, net	$(15.422)
Unrealized Gain (Loss) on Digital Assets, net	$3.428

KPIs

KPI	Q4 2024	Q1 2025	Q2 2025
AUM (Period-End)	$9.8B	$10.8B	$10.5B
Cash & Cash Equivalents (Consolidated, $M)	$14.446	$34.872	$38.854
Dividend per Share	$0.107 (declared Mar 3, 2025)	$0.056 (declared May 13, 2025)	$0.071 (declared Aug 8, 2025)

Estimates vs. Actuals (Q2 2025)

S&P Global consensus estimates for Revenue, EPS, EBITDA were unavailable for HKHC’s Q2 2025; therefore, no estimate comparison could be made. Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Share	Q3 2025 payout	N/A	$0.071/sh payable Sep 15, 2025 (record Aug 21, 2025)	Announced
Revenue/EPS/Margins	FY/Q3 2025	None provided	None provided	Maintained “no formal guidance”

Note: Company did not issue quantitative revenue/earnings guidance; commentary emphasized AUM drivers, platform fee impacts, and CIP consolidation effects .

Earnings Call Themes & Trends

Topic	Q4 2024 (Prior-2)	Q1 2025 (Prior-1)	Q2 2025 (Current)	Trend
Advisor-only vs. GAAP (CIP consolidation)	Detailed explanation of consolidation, performance fees below operating line, and redeemable NCI mechanics	Reinforced advisor-only view and cash/incentive fee dynamics	CFO reiterated $19.8M revenue and advisor-only operating income; emphasized presentation differences (per transcript coverage)	Consistent focus
ETFs/product efforts	ETFs >$1.1B AUM; new Japan ETF planned	Launched Japan Owner Operator ETF; BCDF “go-direct” marketing to minimize platform fees	Management emphasized ETF launches and growth initiatives (per Q2 call coverage)	Expanding
Digital assets/crypto mining	Consensus Mining path to public listing; mining economics and indirect mining discussed	131 BTC held directly; mining strategy to accrete coins while generating cash	Continued crypto expansion cited; digital asset gains of $3.4M in Q2	Building
Platform fees/margins	Platform fees compress margins; tax considerations and long-term orientation	“Go-direct” ETF approach to reduce platform costs	Management continued to highlight fee structure and expense scaling (per Q2 call coverage)	Margin-aware
Macro/tariffs/data centers	Tariffs benign to portfolio; AI/high-order computation driving power/water demand opportunities	Reinforced long-term positioning and capital efficiency	Continued themes; investment marks swing on TPL and private placements	Thematic continuity

Management Commentary

“Management and advisory fee revenue of $18.8 million for the quarter ended June 30, 2025, a 66% increase from the second quarter of 2024.”
“Operating income for the second quarter of 2025 was $2.5 million… Advisor only Operating income… was $4.4 million for the second quarter of 2025, an increase of $3.0 million from 2024.”
“The Company experienced unrealized losses on investments of $15.4 million… primarily the impact of a 20% decline in the fair value of TPL during the quarter… partially offset by the unrealized gains of $3.4 million from its digital asset holdings.”
On Q1 call, CEO on ETF distribution strategy: avoiding platform fees via “go-direct” efforts for BCDF to improve profitability and asset stability .
On capital/taxes (Q4/Q1 calls): performance fees accrue late-year; cash/tax planning necessary given C-Corp status and potential private investment monetizations .

Q&A Highlights

Product strategy and fees: Emphasis on ETF channel mix (INFL vs. BCDF “go-direct”) to mitigate platform fees and improve operating leverage .
Crypto strategy and holdings: 131 BTC held directly; preference for mining to accrete coins and generate cash over simply purchasing BTC; discussed mechanics of halving and indirect mining .
FRMO revenue share/uplisting: 4.2% revenue share to FRMO; uplisting alternatives discussed (volume constraints, potential offering, reverse merger path) .
Q2 call focus (external transcript coverage): reiterated revenue growth, advisor-only operating income, and continued ETF/crypto expansion; dividend increase recognized .

Estimates Context

Wall Street consensus from S&P Global was unavailable for HKHC’s Q2 2025 (Revenue, EPS, EBITDA). Values retrieved from S&P Global.*
Implication: Absent formal consensus, trading reaction is likely to anchor on advisor-only profit trajectory, AUM growth, and investment mark commentary (TPL/privates/digital assets) rather than a classic beat/miss construct .

Key Takeaways for Investors

Underlying fee engine is strong: 66% YoY management/advisory fee growth and improved advisor-only operating income demonstrate scalable core economics despite GAAP volatility from CIPs and investment marks .
Results hinge on marks to TPL/privates/digital assets: A ~20% TPL decline and private placement marks swung Q2 GAAP to a loss; digital assets provided a countervailing gain; expect continued quarter-to-quarter variability .
AUM and distribution strategy are catalysts: Sustained inflows and ETF innovations (e.g., “go-direct” marketing) can compound advisor-only profitability and reduce platform fee drag over time .
Dividend progression continues with balance-sheet prudence: $0.071/sh declared in Q2 after $0.056 in Q1 and $0.107 in Q4; management balances cash for taxes/performance-fee timing with shareholder returns .
4Q remains the pivotal performance-fee quarter: Expect seasonality with crystallization of incentive fees in Q4; interim quarters (Q1–Q3) reflect run-rate fees plus investment marks .
Focus for the next quarter: advisor-only margin trajectory, AUM updates, crypto/Consensus Mining disclosures, and any monetization or valuation changes across private placements (potential future incentive fees) .

Sources and Notes:

Q2 2025 8-K and press release (includes financial tables, AUM, dividend, drivers) .
Q1 2025 8-K and call transcript (trend and strategic context) -.
Q4 2024 8-K and call transcript (trend and structural context) - -.
Q2 2025 earnings call transcript coverage: Seeking Alpha, Investing.com, Yahoo/Quartr .

*Values retrieved from S&P Global.

Horizon Kinetics Holding Corp (HKHC)·Q2 2025 Earnings Summary