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JANUS HENDERSON GROUP PLC (JHG)·Q4 2024 Earnings Summary

Executive Summary

  • Adjusted results accelerated: Adjusted revenue rose to $567.6M, adjusted operating margin expanded to 36.1%, and adjusted diluted EPS reached $1.07 (+18% q/q, +30% y/y) on stronger average AUM, performance fees and operating leverage .
  • Net inflows inflected positively and broadened: Q4 net inflows were $3.3B (third straight positive quarter), led by $5.2B in fixed income (26% annualized organic growth), while equities remained in outflows (-$2.5B) .
  • Performance fees were seasonally strong: GAAP performance fees were $67.5M, with call detail noting ~$74M crystallized at 12/31 partially offset by -$6M from U.S. mutual funds .
  • Guidance and capital returns: 2025 adjusted comp ratio guided to 43–44% (vs. 44% in 2024), tax rate guided to 23–25%, non-comp expenses mid- to high single-digit growth; dividend maintained at $0.39 and ~$53M of Q4 buybacks under $200M authorization .
  • Watch catalysts: sustained ETF momentum (JAAA-led fixed income flows), institutional pipeline fundings (10 mandates of $100–$500M), and integration of NBK/VPC/Tabula driving diversification; market/FX headwinds reduced ending AUM q/q despite inflows .

What Went Well and What Went Wrong

What Went Well

  • Net flows breadth and quality improved across regions and capabilities, with Q4 intermediary net inflows of $3.5B and fixed income ETFs contributing $4.9B (led by JAAA), supporting resilient net management fee rate (48.6 bps FY) .
  • Operating leverage delivered: adjusted operating income +20% q/q and adjusted EPS +18% q/q, driven by higher average AUM, performance fees and disciplined cost management (Q4 comp-to-revenue 42.4%) .
  • Strategic execution in ETFs and alternatives: “We’re now the eighth largest provider of active ETFs…and third largest provider of active fixed income ETFs,” with European ETF launches via Tabula (including JCL0) and acquisitions in private credit (NBK, Victory Park) broadening growth drivers .

Quotes:

  • Ali Dibadj: “We ended 2024 with solid fourth quarter results, delivering improvements in net flows, operating revenues, operating income, and EPS.”
  • Roger Thompson: “Adjusted diluted EPS was $1.07…a 30% increase compared to the same period a year ago.”
  • Ali Dibadj on ETFs: “There will be more launched on the equity side…bringing that to clients in a form factor that clients appreciate.”

What Went Wrong

  • Equity capability still challenged: Q4 equity net outflows of $2.5B; five-year investment performance ticked lower primarily due to U.S. mid-cap growth relative returns under narrow market leadership .
  • Ending AUM declined 1% q/q to $378.7B as adverse markets and FX offset inflows; market/FX impact of -$10.1B in Q4 .
  • Adjusted non-comp costs accelerated (+15% q/q) on expected higher marketing/G&A and consolidation of VPC/NBK/Tabula; adjusted operating expenses +14% q/q to $362.9M .

Financial Results

Headline P&L and AUM

MetricQ4 2023Q3 2024Q4 2024
Revenue (GAAP, $M)$568.5 $624.8 $708.3
Revenue (Adjusted, $M)$455.2 $488.1 $567.6
Operating Income (GAAP, $M)$143.7 $164.7 $197.5
Operating Margin (GAAP, %)25.3% 26.4% 27.9%
Operating Income (Adjusted, $M)$156.2 $170.5 $204.7
Operating Margin (Adjusted, %)34.3% 34.9% 36.1%
Diluted EPS (GAAP, $)$0.74 $0.17 $0.77
Diluted EPS (Adjusted, $)$0.82 $0.91 $1.07
Performance Fees (GAAP, $M)$41.7 $8.6 $67.5
Ending AUM ($B)$334.9 $382.3 $378.7
Net Flows ($B)($3.1) $0.4 $3.3
Net Mgmt Fee Margin (bps)——48.6 bps (FY); slight q/q increase

Notes:

  • Q3 GAAP EPS impacted by $111.9M non-cash FX translation release; Q4 impacted by $42.6M release; both excluded from adjusted results .

Segment/Capability Breakdown

Q4 2024 Flows by Capability

CapabilitySales ($B)Redemptions ($B)Net Flows ($B)
Equities$8.1 ($10.6) ($2.5)
Fixed Income$9.3 ($4.1) $5.2
Multi-Asset$2.0 ($1.9) $0.1
Alternatives$1.0 ($0.5) $0.5
Total$20.4 ($17.1) $3.3

Average AUM by Capability

CapabilityQ4 2023 ($B)Q3 2024 ($B)Q4 2024 ($B)
Equities$224.7 $229.6 $235.5
Fixed Income$75.6 $78.5 $81.4
Multi-Asset$51.6 $52.1 $53.8
Alternatives$10.2 $9.7 $13.5
Total$362.1 $369.9 $384.2

KPIs and Cash/Capital

KPIQ4 2023Q3 2024Q4 2024
Adjusted Comp/Revenue Ratio (%)—43.3% 42.4%
Cash & Equivalents ($M)$1,152.4 $1,483.8 $1,217.2
Operating Cash Flow ($M)$441.6 FY $228.5 Q3 $247.3 Q4; $694.6 FY
Dividend per share ($)$0.39 (declared) $0.39 (declared) $0.39 (declared)
Buybacks ($M)—$40 in Q3 ~$53 in Q4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Compensation RatioFY 2025—43%–44% (vs. 44% in FY 2024 actual) New initial 2025 guide; modest improvement vs 2024
Adjusted Non-Comp Expense GrowthFY 20252024 expected at higher end of mid–high single-digit Mid–high single-digit growth in 2025 Maintained similar growth profile into 2025
Tax Rate on Adjusted Net IncomeFY 2025—23%–25% New guidance
Performance Fees (U.S. mutual funds)FY 2025—Negative high-single-digit $M implied improvement vs -$39M FY 2024 Directional improvement expected
DividendQ4 2024$0.39 (Q3) $0.39 declared (pay 2/27/25) Maintained
Share Repurchase Authorization2024–2025Raised to $200M (10/30/24) Program remains $200M; ~$53M Q4 repurchases Maintained; ongoing execution

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Active ETFs momentumQ2: Tabula closed; building European ETFs . Q3: positive ETF flows; multi-ETF >$1B; planning more launches .Eighth largest active ETF provider; third in active fixed income; European launches incl. JCL0; more equity ETFs planned .Strengthening, geographic expansion
Fixed income performance/flowsQ3: Fixed income +$2.2B; JAAA-led .Fixed income +$5.2B; fixed income ETFs +$4.9B (JAAA-led); broad strategies contributing .Accelerating
Fee rate resilienceQ2/Q3: Stable net mgmt fee margin; slight decline y/y .Net mgmt fee margin 48.6 bps (FY), slight q/q increase; fee rate broadly flattish outlook .Stable to slightly improving
Institutional pipelineQ3: rebuilding; outflows; leading indicators improving .Institutional net inflows $0.9B; 10 fundings of $100–$500M; pipeline creation underway .Improving
Private markets (NBK/VPC)Q3: VPC closed 10/1; NBK Sep; diversifying into asset-backed lending .Leveraging VPC/NBK; 2025 outlook includes full-year consolidation impacts on expenses .Integration underway; building
Technology/AI usageQ3: Tokenized treasury partnership (Anemoy/Centrifuge); U.S. brand/tech investments .Generative AI tools (RFP), AI-powered distribution intelligence; internal “ChatJHI” .Expanding use cases
Tokenization/blockchainQ3: Anemoy/Centrifuge partnership to manage tokenized T-bill fund .Strategic rationale to learn and lead in DLT; client use case for yield on tokenized balances .Strategic exploration continues
Multi-Asset/balancedQ3: improving but still outflows .First positive quarter since Q4’21; +$0.1B; balanced and global adaptive drove result .Turnaround signs

Management Commentary

  • Strategic progress: “We are executing our strategic vision…Protect & Grow, Amplify, and Diversify…we believe our strategy has us on the path to deliver organic revenue growth consistently.”
  • ETF strategy: “We’re taking things that are unique and differentiated…not clones…bringing that to clients in a form factor that clients appreciate.”
  • Fixed income strength: “These teams…performed extraordinarily well…3, 5, 10-year beating benchmark…We still see opportunities…securitized marketplace.”
  • Operating leverage outlook: “There is leverage in this business…positive markets…you would expect…comp ratio coming down and op margin going up.”
  • Innovation and AI: “Technologies like AI will help our people…Human plus AI is better than AI alone…less than a handful of [use cases] are in production.”

Q&A Highlights

  • Active ETF expansion: Management plans to broaden equity ETFs in 2025 and scale Europe via Tabula; maintains differentiation (no “clones”) .
  • Expense and leverage sensitivity: 2025 comp ratio guided lower; leverage to rising markets in comp ratio and operating margin; non-comp to grow mid–high single-digit with strategic investments .
  • Fixed income drivers: Broad-based performance beyond security selection (asset class and regional allocation); strong ETF suite (JAAA, JBBB, JMBS, etc.) .
  • Privacore and alternatives: Active dialogue on potential to increase stake beyond 49%; platform onboarding marquee managers and building wirehouse/BD/RIA distribution .
  • Fee rate outlook: Broadly flattish, with mix effects; alternative growth (VPC) may lift fee rate over time .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at time of analysis due to data access limits; therefore, comparisons versus consensus could not be provided. We will update estimate comparisons once S&P Global data is accessible.

Key Takeaways for Investors

  • Earnings quality improved with clear operating leverage; adjusted EPS up 30% y/y and 18% q/q, with margin expansion and seasonally strong performance fees—supports multiple expansion if sustained .
  • Flow momentum is broadening beyond ETFs into institutional and multi-asset, reducing reliance on a single product; watch fixed income ETF inflows durability as rates evolve .
  • Fee rate resilience (48.6 bps FY) and focus on profitability over headline AUM is differentiating amid industry fee pressure; mix shift toward alternatives could be accretive .
  • 2025 guide implies margin continuity: comp ratio 43–44% and tax rate 23–25% provide modeling anchors; non-comp growth is targeted and ROI-driven (marketing/tech/integration) .
  • Strategic optionality: Integration of NBK/VPC and Tabula, plus Privacore’s open-architecture alternatives distribution, creates new growth vectors (Europe ETFs, private credit) .
  • Near-term trading implications: Seasonal performance fees may normalize post-crystallization; equity outflows and market/FX swing can pressure AUM prints; monitor monthly ETF flow tapes (JAAA, suite) .
  • Medium-term thesis: Transition to consistent organic growth via diversified channels/capabilities, disciplined capital return ($0.39 dividend; buybacks), and technology-enabled distribution should support earnings durability and valuation re-rating if execution continues .