Artisan Partners Asset Management (APAM) Q3 2024 earnings summary

Executive summary

• Since IPO in 2013, $36.47 per share in dividends have been returned, with an annualized total shareholder return of 12.38%, outperforming major indices.

• Achieved 12% year-over-year revenue growth and 17% increase in adjusted operating income for YTD 3Q24, with adjusted net income up 19% and adjusted EPS up 18%.

• Assets under management (AUM) rose to $167.8B as of September 30, 2024, up 6% sequentially and 23% year-over-year, driven by $9.9B in market appreciation, partially offset by $0.8B net client outflows and $0.2B in non-reinvested distributions.

• Five-year total shareholder return (TSR) of 18.56% outperformed S&P 500, ACWI, and Russell 2000 indices.

• Investments in new talent and strategies are funded from operating cash flows, balancing growth and shareholder distributions.

Financial highlights

• Q3 2024 revenues were $279.6M, up 12% year-over-year; adjusted operating income was $97.8M, up 21% year-over-year.

• Adjusted net income for Q3 2024 was $74.5M, with adjusted EPS of $0.92, both up 23% year-over-year.

• AUM ended the quarter at $167.8B, up 6% from last quarter and 23% from the prior year.

• Net client cash outflows were $743M for Q3 2024, an improvement from $1.3B outflows in Q3 2023.

• Weighted average management fee was 68.5 bps in Q3 2024, down from 69.5 bps in Q3 2023 due to strategy mix.

Outlook and guidance

• Q4 2024 is expected to see approximately $600M in net client cash outflows from mutual fund distributions not reinvested.

• Management expects continued investment in new strategies and growth areas, with a focus on maintaining high-value-added active management.

• Performance fee revenue anticipated in Q4, though it remains a small portion of total revenues.

• Expense growth expected to pause, with only inflationary increases and some costs for new talent.

• Dividend policy targets payout of ~80% of quarterly cash generation, with special dividends considered annually.