P10, Inc. (NYSE: PX) (the “Company”), a leading private
markets solutions provider, today reported financial results
for the fourth quarter and year ended December 31, 2023.
Fourth Quarter 2023 Financial
Highlights
-
Revenue: $63.1 million, an 8% increase year over year.
-
Fee-Paying Assets Under Management: $23.3 billion, a 10%
increase year over year.
-
GAAP Net Income (Loss): $(1.9) million compared to $4.8
million in the prior year.
-
Adjusted EBITDA: $30.7 million compared to $30.8 million in
the prior year.
-
Adjusted Net Income: $25.5 million, a 7% decline year over
year.
-
Fully diluted GAAP EPS: $(0.01) compared to $0.04 in the prior
year.
-
Fully diluted ANI per share: $0.21, a 5% decline year over
year.
Fiscal Year End 2023 Financial
Highlights
-
Revenue: $241.7 million, a 22% increase year over year.
-
GAAP Net Income (Loss): $(7.8) million, compared to $29.4
million in the prior year.
-
Adjusted EBITDA: $123.6 million, a 16% increase year over
year.
-
Adjusted Net Income: $102 million, a 4% increase year over
year.
-
Fully diluted GAAP EPS: $(0.06), compared to $0.24 in the
prior year.
-
Fully diluted ANI per share: $0.82, a 2% increase year over
year.
A presentation of the quarterly financials may be
accessed here and is available on the Company’s
website.
“P10 advanced key operational and investment initiatives in 2023
while generating double-digit asset growth and strong top line
growth to close the year,” said Luke Sarsfield, P10 Chief Executive
Officer. “We are capitalizing on the attractive middle market
opportunity that the current operating environment is offering in
the alternatives sector. In 2024, P10 will execute on strategic
priorities and make key investments in our platform that will both
continue our near-term growth trajectory and set us up for
accelerated organic and inorganic growth in future years. The
fundamentals of our business are strong. We are a world-class
platform that has momentum across each of our strategies. P10 is
committed to optimizing our organizational and capital structure in
the year ahead to deliver long-term value for our managers, clients
and investors.”
Strategic Executive Leadership Update
P10 has made the following appointments to support optimizing
the firm’s organizational structure and invest in future
growth.
On February 27, 2024, P10 appointed Arjay Jensen to the newly
formed role of EVP, Head of Strategy and M&A. Mr. Jensen will
oversee P10’s corporate strategy and lead its corporate development
and M&A activities. Mr. Jensen, who most recently served as a
Managing Director on the Financial Institutions Group’s M&A
team at Goldman Sachs, brings over 20 years of dealmaking expertise
with other previous experience at Guggenheim Securities and Perella
Weinberg Partners. Mr. Jensen has built a distinguished M&A
track record and brings extensive transactional, team management
and financial markets experience to P10.
Also, on February 27, 2024, Mark Hood was promoted to the role
of Chief Administrative Officer, in addition to continuing his
current role of EVP of Operations. Mr. Hood will oversee P10’s
operations, data and technology, human resources, public relations,
communications, and will continue oversight of the investor
relations function. He joined P10 in October of 2021 to serve as
the Company’s Director of Investor Relations before adding the
position of Executive Vice President of Operations to his
responsibilities in April of 2022. Mr. Hood has over 30 years of
experience in capital markets and business operations, holding
various leadership roles at both public and private entities.
The go-forward corporate-level organizational structure at P10
will have four key functional areas, each led by a senior,
Executive Vice President-level leader, reporting directly to Luke
Sarsfield, P10 Chief Executive Officer. Management will provide
further updates on the Company’s earnings conference call.
Additional Stock Repurchase
Authorization
On February 27, 2024, the P10 Board of Directors approved a
stock repurchase program under which P10 may repurchase up to $40
million of its common stock in the open market from time to time.
This amount is incremental to the previously approved program which
has $10.6 million remaining in its authorization. Between both
programs, P10 has more than $50 million authorized for share
repurchases.
Declaration of Dividend
The Board of Directors of the Company has declared a quarterly
cash dividend of $0.0325 per share on Class A and Class B
common stock, payable on March 26, 2024, to the holders of record
as of the close of business on March 11, 2024.
Conference Call Details
The Company will host a conference call at 5:00 p.m.
Eastern Time on Thursday, February 29, 2024. All
participants must register prior to joining the event.
- To join and view the live webcast,
please register here.
- To join by telephone, please
register here.
For those unable to participate in the live event, a replay will
be made available on P10’s investor relations page
at www.p10alts.com.
About P10
P10 is a leading multi-asset class private markets solutions
provider in the alternative asset management industry. P10’s
mission is to provide its investors differentiated access to a
broad set of investment solutions that address their diverse
investment needs within private markets. As of December 31,
2023, P10 has a global investor base of more than 3,600 investors
across 50 states, 60 countries, and six continents, which includes
some of the world’s largest pension funds, endowments, foundations,
corporate pensions, and financial institutions.
Visit www.p10alts.com.
Forward-Looking Statements
Some of the statements in this release may constitute
“forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform
Act of 1995. Words such as “will,” “expect,” “believe,” “estimate,”
“continue,” “anticipate,” “intend,” “plan” and similar expressions
are intended to identify these forward-looking statements.
Forward-looking statements discuss management’s current
expectations and projections relating to our financial position,
results of operations, plans, objectives, future performance, and
business. The inclusion of any forward-looking information in this
release should not be regarded as a representation that the future
plans, estimates, or expectations contemplated will be achieved.
Forward-looking statements reflect management’s current plans,
estimates, and expectations, and are inherently uncertain. All
forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions and other important factors that may
cause actual results to be materially different, including risks
relating to: global and domestic market and business conditions;
successful execution of business and growth strategies and
regulatory factors relevant to our business; changes in our tax
status; our ability to maintain our fee structure; our ability to
attract and retain key employees; our ability to manage our
obligations under our debt agreements; as well as assumptions
relating to our operations, financial results, financial condition,
business prospects, growth strategy; and our ability to manage the
effects of events outside of our control. The foregoing list of
factors is not exhaustive. For more information regarding these
risks and uncertainties as well as additional risks that we face,
you should refer to the “Risk Factors” included in our annual
report on Form 10-K for the year ended December 31,
2022, filed with the U.S. Securities and Exchange Commission
(“SEC”) on March 27, 2023, and in our subsequent reports filed from
time to time with the SEC. The forward-looking statements included
in this release are made only as of the date hereof. We undertake
no obligation to update or revise any forward-looking statement as
a result of new information or future events, except as otherwise
required by law.
Use of Non-GAAP Financial Measures by
P10
The non-GAAP financial measures contained in this
press release (including, without limitation, Adjusted EBITDA,
Adjusted Net Income and fully-diluted ANI per share), are not GAAP
measures of the Company’s financial performance or liquidity and
should not be considered as alternatives to net income (loss) as a
measure of financial performance or cash flows from operations as
measures of liquidity, or any other performance measure derived in
accordance with GAAP. A reconciliation of
such non-GAAP measures is included in the presentation of
the results. The Company believes the presentation of
these non-GAAP measures provides useful additional
information to investors because it provides better comparability
of ongoing operating performance to prior periods. It is reasonable
to expect that one or more excluded items will occur in future
periods, but the amounts recognized can vary significantly from
period to period. You are encouraged to evaluate each adjustment
to non-GAAP financial measures and the reasons management
considers it appropriate for supplemental analysis. Our
presentation of these measures should not be construed as an
inference that our future results will be unaffected by unusual
or non-recurring items.
Key Financial & Operating Metrics
Fee-paying assets under management reflects the assets from
which we earn management and advisory fees. Our vehicles typically
earn management and advisory fees based on committed capital, and
in certain cases, net invested capital, depending on the fee terms.
Management and advisory fees based on committed capital are not
affected by market appreciation or depreciation.
Ownership Limitations
P10’s Certificate of Incorporation contains certain provisions
for the protection of tax benefits relating to P10’s net operating
losses. Such provisions generally void transfers of shares that
would result in the creation of a new 4.99% shareholder or result
in an existing 4.99% shareholder acquiring additional shares of
P10.
P10 Investor Contact:info@p10alts.com
P10 Media Contact:Josh
Clarksonjclarkson@prosek.com
Reconciliation of Non-GAAP Financial Measures |
|
|
|
Three Months
Ended |
|
Twelve
Months Ended |
Q4'23 vs
Q4'22 |
YTD'23 vs
YTD'22 |
|
|
December 31,
2023 |
December 31,
2022 |
|
December 31,
2023 |
December 31,
2022 |
(Dollars in thousands except share and per share amounts) |
|
|
|
GAAP
Net (Loss)/Income |
|
$ (1,893 |
) |
$ 4,836 |
|
|
$ (7,772 |
) |
$ 29,399 |
|
|
(139%) |
|
(126%) |
|
Adjustments: |
|
|
|
|
|
|
|
|
Depreciation & amortization |
|
|
7,945 |
|
|
9,205 |
|
|
|
31,472 |
|
|
28,028 |
|
|
(14%) |
|
12% |
|
Interest expense, net |
|
|
5,792 |
|
|
4,237 |
|
|
|
21,872 |
|
|
9,505 |
|
|
37% |
|
130% |
|
Income tax expense |
|
|
1,826 |
|
|
(3,037 |
) |
|
|
4,632 |
|
|
6,064 |
|
|
(160%) |
|
(24%) |
|
Non-recurring expenses |
|
|
3,204 |
|
|
2,870 |
|
|
|
13,874 |
|
|
9,587 |
|
|
12% |
|
45% |
|
Non-cash stock based compensation |
|
|
5,252 |
|
|
2,584 |
|
|
|
21,519 |
|
|
9,587 |
|
|
103% |
|
124% |
|
Non-cash stock based compensation - acquisitions |
|
|
779 |
|
|
4,534 |
|
|
|
8,674 |
|
|
9,029 |
|
|
(83%) |
|
(4%) |
|
Non-cash stock based compensation - CEO transition |
|
|
4,225 |
|
|
- |
|
|
|
6,331 |
|
|
- |
|
|
N/A |
|
N/A |
|
Earn out related compensation |
|
|
3,597 |
|
|
5,612 |
|
|
|
22,992 |
|
|
5,612 |
|
|
(36%) |
|
310% |
|
Adjusted EBITDA |
$ 30,727 |
|
$ 30,841 |
|
|
$123,594 |
|
|
$ 106,811 |
|
|
0% |
|
16% |
|
Less: |
|
|
|
|
|
|
|
|
|
Cash interest expense, net |
|
|
(5,049 |
) |
|
(2,162 |
) |
|
|
(20,100 |
) |
|
(6,784 |
) |
|
134% |
|
196% |
|
Net cash paid on income taxes |
|
|
(206 |
) |
|
(1,376 |
) |
|
|
(1,539 |
) |
|
(2,114 |
) |
|
(85%) |
|
(27%) |
|
Adjusted Net
Income |
|
$ 25,472 |
|
$ 27,303 |
|
|
$ 101,955 |
|
$ 97,913 |
|
|
(7%) |
|
4% |
|
|
|
|
|
|
|
|
|
|
|
ANI Earnings per Share |
|
|
|
|
|
|
|
Shares outstanding |
|
|
116,299 |
|
|
115,373 |
|
|
|
116,104 |
|
|
116,751 |
|
|
1% |
|
(1%) |
|
Fully Diluted Shares outstanding |
|
|
124,163 |
|
|
122,916 |
|
|
|
124,063 |
|
|
121,655 |
|
|
1% |
|
2% |
|
ANI per share |
$ 0.22 |
|
$ 0.24 |
|
|
$ 0.88 |
|
$ 0.84 |
|
|
(8%) |
|
5% |
|
Fully diluted ANI per share(1) |
|
$ 0.21 |
|
$ 0.22 |
|
|
$ 0.82 |
|
$ 0.80 |
|
|
(5%) |
|
2% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
Total Revenues |
$ 63,067 |
|
$ 58,345 |
|
|
$ 241,734 |
|
|
$
198,360 |
|
|
8% |
|
22% |
|
Adjusted EBITDA |
|
30,727 |
|
|
30,841 |
|
|
|
123,594 |
|
|
106,811 |
|
|
0% |
|
16% |
|
Adjusted EBITDA Margin |
|
|
49 |
% |
|
53 |
% |
|
|
51 |
% |
|
54 |
% |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Reconciliation of Non-GAAP
Financial Measures
Above is a calculation of our unaudited non-GAAP financial
measures. These are not measures of financial performance under
GAAP and should not be construed as a substitute for the most
directly comparable GAAP measures, which are reconciled in the
table above. These measures have limitations as analytical tools,
and when assessing our operating performance, you should not
consider these measures in isolation or as a substitute for GAAP
measures. Other companies may calculate these measures differently
than we do, limiting their usefulness as a comparative measure.
We use Adjusted Net Income, or ANI, as well as Adjusted EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amortization) to
provide additional measures of profitability. We use the measures
to assess our performance relative to our intended strategies,
expected patterns of profitability, and budgets, and use the
results of that assessment to adjust our future activities to the
extent we deem necessary. ANI reflects our actual cash flows
generated by our core operations. ANI is calculated as Adjusted
EBITDA, less actual cash paid for interest and federal and state
income taxes.
In order to compute Adjusted EBITDA, we adjust our GAAP Net
Income for the following items:
- Expenses that typically do not require
us to pay them in cash in the current period (such as depreciation,
amortization and stock-based compensation);
- The cost of financing our
business;
- One-time expenses related to
restructuring of the management team including signing bonus,
severance, and placement/search fees;
- Acquisition-related expenses which
reflects the actual costs incurred during the period for the
acquisition of new businesses, which primarily consists of fees for
professional services including legal, accounting, and advisory, as
well as bonuses paid to employees directly related to the
acquisition; and
- The effects of income taxes.
Adjusted Net Income reflects net cash paid for federal and state
income taxes. In the Second Quarter of 2022, the Company received a
state tax refund of $353,000, thus increasing Adjusted Net Income.
In the Second Quarter of 2023, the Company received a state tax
refund of $327,000, thus increasing Adjusted Net Income.
Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided
by total GAAP revenues. We use Adjusted EBITDA Margin to provide an
additional measure of profitability.
(1) Fully Diluted ANI EPS calculations include the total of all
shares of common stock, stock options under the treasury stock
method, restricted stock awards, and the redeemable non-controlling
interests of P10 Intermediate converted to Class A stock as of each
period presented.
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