Executive Summary

Q2 FY2025 delivered strong year-over-year growth but modest sequential normalization: revenue rose 33.7% YoY to $9.28M, EPS increased 65% YoY to $0.33, and net income grew 67.7% YoY to $2.58M; sequentially, revenue declined 4.4% and EPS fell from $0.36 to $0.33 as markets turned volatile late in the quarter .
Average AUM rose 37.2% YoY to $4.75B, while period‑end AUM declined to $4.26B from $4.78B in Q1 FY2025 amid market selloffs tied to tariff headlines and macro uncertainty, pressuring sequential revenue and EPS .
Capital returns remained steady: the board declared a $0.1375 quarterly dividend (annualized $0.55), consistent with Q1 FY2025; cash and equivalents net of gross debt increased to $27.3M from $24.7M in Q1 .
Strategic expansion continues: HNNA signed a definitive agreement to acquire two ETFs from STF Management (~$220M AUM, expected to close in Q3 CY2025) and transitioned STNC to a fully transparent Hennessy Sustainable ETF, underscoring ETF growth as a medium‑term catalyst .

What Went Well and What Went Wrong

What Went Well

Strong YoY growth on higher AUM: Revenue up 33.7% YoY to $9.28M, EPS up 65% YoY to $0.33, and net income up 67.7% to $2.58M, driven by a 37.2% YoY increase in average AUM to $4.75B .
Strategic product moves: Signed a definitive agreement to acquire STF Management’s ETFs (TUG, TUGN; ~ $220M combined AUM) to expand ETF offerings; management cited alignment with long‑term growth-through-acquisition strategy .
Brand and product transparency: Transitioned the semi‑transparent STNC to a fully transparent Hennessy Sustainable ETF to enhance daily holdings visibility, supporting investor alignment and distribution narratives .

What Went Wrong

Sequential softness on macro shock: Period‑end AUM fell to $4.26B from $4.78B in Q1 FY2025, as market selloffs followed sweeping tariff headlines; revenue declined 4.4% QoQ to $9.28M and EPS slipped to $0.33 from $0.36 .
Revenue yield compression indicator: Average AUM declined slightly QoQ ($4.75B vs. $4.82B), but revenue fell more than AUM, implying a small mix/fee-rate headwind in the quarter (inferred from reported revenue and average AUM) .
No formal guidance provided: Apart from the dividend declaration, the company did not issue revenue/margin/OpEx guidance, limiting near‑term Street modeling clarity .

Financial Results

YoY comparison (Q2 FY2025 vs Q2 FY2024)

Metric	Q2 2024	Q2 2025
Revenue ($USD)	$6,939,977	$9,275,783
Net Income ($USD)	$1,539,823	$2,582,979
Diluted EPS ($)	$0.20	$0.33
Net Income Margin (%)	22.2% (calc. 1,539,823 / 6,939,977)	27.9% (calc. 2,582,979 / 9,275,783)
Average AUM ($USD)	$3,459,895,504	$4,746,380,124
Period‑End AUM ($USD)	$3,852,601,729	$4,255,690,493
Diluted Shares (WASO)	7,700,203	7,912,156

QoQ comparison (Q1 FY2025 vs Q2 FY2025)

Metric	Q1 2025	Q2 2025
Revenue ($USD)	$9,707,818	$9,275,783
Net Income ($USD)	$2,834,223	$2,582,979
Diluted EPS ($)	$0.36	$0.33
Net Income Margin (%)	29.2% (calc. 2,834,223 / 9,707,818)	27.9% (calc. 2,582,979 / 9,275,783)
Average AUM ($USD)	$4,824,051,149	$4,746,380,124
Period‑End AUM ($USD)	$4,778,981,545	$4,255,690,493
Diluted Shares (WASO)	7,862,881	7,912,156

Additional context (Q3 FY2024 snapshot for trend)

Metric	Q3 2024
Revenue ($USD)	$7,784,523
Net Income ($USD)	$2,029,527
Diluted EPS ($)	$0.26
Average AUM ($USD)	$3,893,131,722
Period‑End AUM ($USD)	$4,027,830,779
Cash & Equivalents, net of gross debt ($USD)	$21,767,015

KPIs (Balance sheet and capital return)

KPI	Q2 2024	Q1 2025	Q2 2025
Cash & Equivalents, net of gross debt ($USD)	$19,343,177	$24,728,893	$27,311,927
Quarterly Dividend per Share ($)	$0.1375	$0.1375	$0.1375

Note: No segment reporting/segment revenue breakdown disclosed in the Q2 FY2025 materials .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Next payment (payable Jun 4, 2025)	$0.1375 (declared for Mar 6, 2025)	$0.1375 (declared for Jun 4, 2025)	Maintained
Revenue/Margins/OpEx/OI&E/Tax	FY/Q3	Not provided	Not provided	N/A

Earnings Call Themes & Trends

Note: No Q2 FY2025 earnings call transcript was available in our document set; themes below reflect press releases.

Topic	Previous Mentions (Q-2: Q3 FY2024; Q-1: Q1 FY2025)	Current Period (Q2 FY2025)	Trend
Macro/tariffs/mkt volatility	Q3 FY2024: constructive macro and strong fund returns/flows . Q1 FY2025: bullish tone on corporate profits/consumer spending .	CEO cited sweeping tariff headlines triggering sharp selloffs; uncertainty around taxes, inflation, rates, spending cuts; message: focus on fundamentals .	Deteriorated near‑term vs Q1; cautious but long‑term constructive.
Flows/AUM drivers	Q3 FY2024: AUM +$1B YTD (acquisitions, net inflows, performance) . Q1 FY2025: average AUM +59% YoY; strong product performance .	Average AUM +37% YoY; period‑end AUM down QoQ amid volatility; profitability remains strong .	Mixed: strong YoY base, softer QoQ endpoint.
ETF strategy	N/A in Q3 FY2024 release .	N/A in Q1 FY2025 release .	Signed deal to acquire two ETFs (~$220M AUM); moved STNC to fully transparent structure (Hennessy Sustainable ETF) .
Regulatory/legal	No specific issues noted .	No specific issues noted .	Stable.
Technology/AI	Not discussed in releases .	Not discussed in releases .	N/A.

Management Commentary

CEO Neil Hennessy on macro backdrop: “The first quarter of 2025 was marked by heightened volatility… sweeping new tariffs… Ongoing uncertainty surrounding potential tax changes, inflation, interest rate policy, and government spending cuts… Markets should eventually stabilize… fundamentals appear to remain solid” .
CEO on investment posture: “Our commitment to long-term investing has never wavered… disciplined, forward-looking approach will continue to deliver solid long-term results” .
President/COO Teresa Nilsen on capital deployment and growth: “We were… proud to announce the signing of a definitive agreement with STF Management, LP to expand our ETF offerings… a strong example of how we are deploying our cash position in meaningful ways” .
On ETF strategy specifics: HNNA signed a definitive agreement to acquire STF Management’s TUG and TUGN ETFs (~$220M AUM), with reorganizations into Hennessy Funds Trust and portfolio manager Jonathan Molchan joining .
On product transparency: STNC transitioned to a fully transparent, renamed Hennessy Sustainable ETF to disclose holdings daily, aligning with investor needs .

Q&A Highlights

No Q2 FY2025 earnings call transcript was available in our document set; therefore, no Q&A themes or clarifications can be summarized from a call transcript [List: 0 transcripts found; see earnings press release and 8‑K for commentary] .

Estimates Context

S&P Global consensus for EPS and revenue for HNNA in Q2 FY2025 was unavailable; accordingly, no beat/miss versus Street can be determined. Values retrieved from S&P Global.*
Actuals: Revenue $9.276M and Diluted EPS $0.33 .

Metric	S&P Global Consensus	Actual
Revenue ($USD)	N/A*	$9,275,783
Diluted EPS ($)	N/A*	$0.33

Note: S&P Global consensus fields marked N/A* indicate data was not available via our S&P Global feed for this micro‑cap asset manager at the quarter level. Values retrieved from S&P Global.*

Key Takeaways for Investors

Quality YoY growth continued despite a volatile tape: double‑digit YoY increases in revenue, EPS, and net income, supported by materially higher average AUM; sequential softness reflects macro/tariff shock rather than company‑specific deterioration .
Dividend durability: quarterly dividend maintained at $0.1375; cash (net of gross debt) rose sequentially to $27.3M, reinforcing capital return capacity .
ETF expansion as catalyst: the STF Management ETF acquisition and transparency repositioning of STNC should broaden the product suite and distribution narrative into 2H CY2025 .
Watch AUM trajectory: sequential decline in period‑end AUM and slight dip in average AUM suggest near‑term earnings sensitivity to markets; stabilization could re‑accelerate revenue/EPS given operating leverage .
Modeling caution: absent formal guidance and with limited Street coverage, estimates may vary widely; focus on AUM drivers (flows, market performance) and product pipeline execution (ETF integration) for near‑term modeling inputs .
Tactical implications: in the short term, shares may react to market direction and tariff/macro headlines given revenue’s direct AUM sensitivity; medium‑term thesis hinges on sustained AUM growth, ETF expansion, and disciplined capital return .

Sources: Q2 FY2025 earnings press release and 8‑K (Item 2.02, Exhibit 99.1) , standalone press release ; Q1 FY2025 press release ; Q3 FY2024 press release ; Q2 FY2024 press release ; ETF acquisition press release ; ETF transparency/name change press release .

HENNESSY ADVISORS INC (HNNA)·Q2 2025 Earnings Summary