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HA

HENNESSY ADVISORS INC (HNNA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered outsized YoY growth: Revenue $9.708M (+58%), Net Income $2.834M (+136%), Diluted EPS $0.36 (+125%) .
  • Dividend maintained at $0.1375 per share; implied 4.6% annualized yield based on $12.00 closing price on Feb 12, 2025 .
  • Sequential EPS improved versus Q4 2024 ($0.36 vs $0.30, +20%), reinforcing earnings momentum as AUM scaled .
  • AUM inflected higher on performance and flows: average AUM $4.824B (+59% YoY), period‑end AUM $4.779B (+46% YoY), and cash net of debt $24.729M (+28% YoY) supporting ongoing dividends and optionality .
  • No formal quantitative guidance; management tone confident on market resilience and product performance, with an additional near‑term strategic catalyst from ETF expansion announced in March 2025 .

What Went Well and What Went Wrong

What Went Well

  • Broad product strength: “all 17 Hennessy Funds posted positive returns for the year… all 16 Hennessy Funds with at least 10 years of operating history achieved positive returns for both the five‑year and ten‑year periods” .
  • Scale benefits driving financials: average AUM $4.824B (+59% YoY) and total AUM $4.779B (+45.7% YoY) underpinned revenue uplift (+58%) and EPS expansion (+125%) .
  • Liquidity and profitability improved: “cash position net of debt continues to strengthen—up nearly 30% in the last twelve months—and… triple‑digit percentage increase in net income,” enabling continued dividends .

What Went Wrong

  • Guidance transparency: no formal ranges for revenue/margins/OpEx; press release did not provide quantitative guidance beyond dividend .
  • Macro volatility acknowledged by management (“While periods of volatility may arise…”), which can pressure flows/AUM mix and sequential revenue cadence in subsequent periods .
  • Limited Street estimate visibility: third‑party platforms show “No Data” for consensus estimates, constraining beat/miss analysis relative to expectations .

Financial Results

Quarterly P&L comparison (oldest → newest)

MetricQ3 2024Q1 2025Q2 2025
Revenue ($)$7,784,523 $9,707,818 $9,275,783
Net Income ($)$2,029,527 $2,834,223 $2,582,979
Diluted EPS ($)$0.26 $0.36 $0.33
Net Income Margin (%)26.1% (2,029,527/7,784,523) 29.2% (2,834,223/9,707,818) 27.8% (2,582,979/9,275,783)

EPS sequential snapshot (prior quarter vs current)

MetricQ4 2024Q1 2025
Diluted EPS ($)$0.30 $0.36

KPIs

KPIQ3 2024Q1 2025Q2 2025
Average AUM ($)$3,893,131,722 $4,824,051,149 $4,746,380,124
Total AUM ($)$4,027,830,779 $4,778,981,545 $4,255,690,493
Cash & Equivalents, net of gross debt ($)$21,767,015 $24,728,893 $27,311,927
Weighted Avg Diluted Shares7,732,068 7,862,881 7,912,156

Note: No segment reporting disclosed in the press releases .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ1 2025$0.1375 (ongoing) $0.1375 (payable Mar 6, 2025) Maintained
RevenueQ1 2025N/AN/ANo formal guidance
MarginsQ1 2025N/AN/ANo formal guidance
OpEx / OI&E / Tax rateQ1 2025N/AN/ANo formal guidance

Earnings Call Themes & Trends

Note: No earnings call transcript found for Q1 2025; themes below reflect press releases.

TopicPrevious Mentions (Q-2: Q3 2024)Previous Mentions (Q-1: Q4 2024)Current Period (Q1 2025)Trend
Macro backdropOptimism on lower inflation, earnings growth, possible rate cuts; GDP 2.3% estimate Post‑election and initial Fed rate cuts; strong fundamentals (low unemployment, robust earnings/cash flows) Record market highs, mild inflation, strong consumer spending; resilience with potential volatility Positive tone, consistent confidence
Product performanceSolid recent and long‑term fund returns Strong multi‑period returns across fund lineup All 17 funds positive in 2024; long‑term strength reiterated Sustained strength
AUM/flowsGrew AUM by ~$1B (acquisitions, net inflows, performance) Avg AUM +23% YoY; YE AUM $4.6B (+53%) Avg AUM $4.824B (+59%), total AUM $4.779B (+46%) Accelerating scale
Capital allocation/dividendsDividend $0.1375; yield 6.6% at $8.34 Dividend history and support by earnings/cash flow Dividend $0.1375; 4.6% yield at $12.00 Maintained payout, yield varies with price
Strategic initiatives (ETF)——Subsequent quarter: definitive agreement to acquire two ETFs (~$220M AUM) Expansion optionality building

Management Commentary

  • Neil Hennessy (CEO): “I am confident that investors are carrying that positive sentiment into 2025… With robust corporate profits across multiple sectors and mild inflation, I believe positive market momentum will continue… we remain confident that corporate America will continue to adapt… sustaining growth” .
  • Neil Hennessy (CEO): “All 17 Hennessy Funds posted positive returns for the year… all 16… with at least 10 years of operating history achieved positive returns for both the five‑year and ten‑year periods” .
  • Teresa Nilsen (President & COO): “Strong product performance… consistent business model and effective distribution and marketing strategies… driven a nearly 50% increase in total assets under management… cash position net of debt continues to strengthen—up nearly 30%… triple‑digit percentage increase in net income” .
  • Subsequent strategic step: “signed a definitive agreement with STF Management, LP to expand our ETF offerings,” adding ~$220M ETFs (TUG, TUGN) with expected closing in Q3 2025 .

Q&A Highlights

  • No earnings call transcript was available for Q1 2025; no Q&A disclosures found in the press release or 8‑K .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable at the time of retrieval; therefore, no comparison to consensus is provided. Values retrieved from S&P Global were unavailable due to system limits; consensus also absent on third‑party tracker pages (“No Data”) .

Key Takeaways for Investors

  • Momentum and operating leverage: Broadly higher AUM and strong fund performance translated into outsized YoY growth in revenue (+58%) and EPS (+125%) in Q1 2025 .
  • Sequential earnings strength: EPS rose to $0.36 from $0.30 in Q4 2024, signaling continued profitability as assets scaled and cost structure supported margins .
  • Capital returns supported: Cash net of debt grew to $24.729M (+28% YoY), underpinning a consistent $0.1375 quarterly dividend policy .
  • Resilient macro posture: Management emphasizes fundamentals (consumer spending, corporate profits, mild inflation) while acknowledging potential volatility—suggesting steady long‑term positioning .
  • Strategic optionality: Pending ETF acquisitions (~$220M AUM) offer incremental distribution channels and product breadth; monitor execution and closing milestones in Q3 2025 .
  • Watch sequential revenue/AUM cadence: Subsequent quarter showed modest revenue step‑down versus Q1 amid tariff‑related volatility; track net flows and market beta sensitivity .
  • Limited Street coverage: With estimates sparse, price reaction is more likely to hinge on disclosed AUM trends, dividend stability, and strategic announcements rather than beat/miss optics .