Cohen & Steers, Inc. (CNS) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call revealed several concerning factors: a slight EPS decline, net outflows, and a drop in operating margin. While there are positive aspects like revenue growth and liquidity increase, the Q&A highlighted uncertainties in wealth management and strategic execution risks. The net outflows and competition pressures further indicate challenges. Given the market cap of $3.57 billion, these factors suggest a negative sentiment, likely resulting in a stock price decrease of -2% to -8% over the next two weeks.
Key Financial Performance
Earnings per share (EPS) $0.73 per share compared to $0.75 sequentially. The slight decrease was not elaborated upon in the transcript.
Revenue $135 million for Q2, a 1.1% increase from the prior quarter. This increase was driven by higher average AUM and day count.
Operating margin 33.6% compared to 34.7% in the prior quarter. The decline was not specifically explained.
Ending Assets Under Management (AUM) $88.9 billion as of Q2 compared to $87.6 billion at the prior quarter end. The increase was attributed to market appreciation during the quarter.
Total expenses Increased by 2.9% from the prior quarter. This was driven by higher compensation and benefits, travel, business development activities, and talent acquisition costs.
Compensation ratio 40.5%, unchanged from the prior quarter, aligning with the sequential increase in revenue.
Liquidity $323 million at quarter end, compared to $295 million in the prior quarter. The increase was not elaborated upon.
Net inflows and outflows Net outflows of $131 million after 3 consecutive quarters of inflows. This was due to outflows in preferred securities and account rebalancing, partially offset by inflows in U.S. real estate and open-end funds.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Active ETFs: Launched three active ETFs in February 2025, focusing on real estate, preferreds, and natural resource equities. Achieved $54 million in net inflows during the first full quarter, with total AUM reaching $133 million.
Tactical Listed and Private Real Estate Strategy: Introduced a new strategy combining listed and private real estate allocations, aiming for higher returns, reduced risk, and improved liquidity. Partnered with IDR Investment Management for this initiative.
Market Expansion in Private Real Estate: Expanded distribution capabilities for private real estate strategies, gaining access to platforms like Schwab, Pershing, and Fidelity, and approval for distribution at a regional broker-dealer and enterprise wealth platform.
Global Real Estate and Infrastructure: Continued positive trends in global real estate and infrastructure categories, with offshore CCAVs achieving the second-highest flow quarter ever.
AUM Growth: Ending AUM increased to $88.9 billion in Q2 2025, up from $87.6 billion in Q1, driven by market appreciation and positive net flows in open-end funds.
Expense Management: Total expenses rose by 2.9% in Q2 due to talent acquisition, travel, and business development activities, including the active ETF launch. G&A expenses are expected to grow by 7%-8% in 2025.
Private Real Estate Initiative: Cohen & Steers' Income Opportunities REIT outperformed peers with a 12.2% return for the year ended May 2025. Focused on open-air shopping centers.
Distribution Investments: Invested in expanding distribution capabilities, particularly in the RIA and multifamily office segments, and enhancing data analysis for growth.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Market Volatility: Escalating trade tensions and geopolitical uncertainty led to sharp declines in equities and heightened bond market volatility in early Q2, impacting investor confidence and market stability.
Net Outflows: The company experienced net outflows of $131 million in Q2 after three consecutive quarters of inflows, driven by rebalancing, tactical adjustments, and redemptions from older, less competitive strategies.
Expense Growth: Total expenses increased by 2.9% in Q2, driven by higher compensation, talent acquisition costs, and business development activities, including the launch of active ETFs. Full-year G&A expenses are expected to grow by 7%-8% in 2025, potentially pressuring margins.
Real Estate Market Risks: While private real estate prices have bottomed, some funds are still working through portfolios built at peak valuations, particularly in multifamily and industrial sectors, which could lag in performance.
Interest Rate Environment: Higher long-term interest rates, while stabilizing, could continue to impact valuations and investor sentiment, particularly in real estate and fixed income markets.
Competitive Pressures: The company faces competition in attracting flows, particularly in categories like preferred securities, where a large fund was removed from a model by a private wealth allocator.
Pipeline and Redemptions: While the unfunded pipeline has grown to $776 million, known redemptions of $500 million could offset these gains, creating uncertainty in net flows.
Strategic Execution Risks: The company is investing heavily in new strategies, such as active ETFs and integrated real estate strategies, which require significant resources and may take time to yield results.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Active ETFs Launch: Cohen & Steers launched its first three active ETFs in February, focusing on real estate, preferreds, and natural resource equities. The company plans to launch more active ETFs in the coming months based on early success and market trends.
Private Real Estate Initiative: The company continues to make progress with its private real estate initiative, with its Income Opportunities REIT being the best-performing non-traded REIT for the year ended May. The strategy focuses on open-air shopping centers and aims to integrate listed and private real estate strategies.
Distribution Capabilities: Investments are being made in expanding distribution capabilities, including talent acquisition in the RIA and multifamily office segments, as well as data and data analysis. This is aimed at supporting growth in ETFs, offshore funds, and institutional teams.
Compensation Ratio: The compensation ratio for 2025 is expected to remain at 40.5%, consistent with prior guidance.
General and Administrative (G&A) Expenses: Full-year G&A expenses for 2025 are expected to increase by 7% to 8% compared to 2024, driven by talent acquisition, travel, business development activities, and expenses related to the active ETF launch. Annual G&A changes are expected to moderate to mid-single-digit percentage growth after 2025.
Effective Tax Rate: The effective tax rate for 2025 is expected to remain at 25.3% on an as-adjusted basis.
Real Estate Market Outlook: Private real estate prices have bottomed after a two-year downturn, with several property types beginning to appreciate. Rental growth is projected to normalize and return in 2025 and beyond, driven by stable long-term interest rates and improving rental growth.
Real Assets Outlook: The outlook for real assets remains favorable, with valuations at more attractive starting points than equities. The company emphasizes the need for strategic allocation to listed real assets before inflation risks become apparent.
New Real Estate Strategy: A new tactical listed and private real estate strategy has been launched, designed to integrate listed and private real estate allocations into a single portfolio. This strategy aims to provide higher returns, reduced risk, and improved liquidity compared to core private real estate alone.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you give some color on the temperature of the wealth management channel, appetite for gross sales, and strategies in and out of favor? Do you expect any seasonality in the next 6 months?
A:The wealth channel is important, particularly with the growth in the RIA segment. Progress is being made in gaining allocations in real estate, multi-strategy real assets, and infrastructure. Gross sales in Q2 were about 10% lower than recent levels, possibly due to seasonality. The team is optimistic about driving real asset allocations and offering more vehicles like active ETFs and non-traded REITs.
Q:How are you finding the early days of marketing and selling your suite of active ETFs? Are they being looked at by new or existing investors, and which segments are showing the best results?
A:The early days of active ETFs are promising, with flows starting to build. RIAs who only allocate to ETFs have made allocations, and advisers in wire houses are converting books from open-end 40 Act funds to ETFs. This motivates the team to launch new active ETFs in core strategies to retain and grow assets.
Q:What drove the weakening of global listed infrastructure flows in Q2, and what are your early views on the strategy in Q3?
A:GLI strategy was positive but at the lower end of trends. Two large redemptions from institutional investors occurred due to rebalancing and liquidity needs. Infrastructure remains a popular asset class, and the company plans to invest in additional vehicles, including active ETFs and combinations of private and listed infrastructure.
Q:Why were flows in global real estate stronger than U.S. real estate in Q2? Is the demand from U.S. or international investors, and has there been a shift away from U.S. real estate?
A:Global real estate flows were stronger due to increased interest in global strategies. The pipeline shows more global allocators. There has been minimal impact from U.S. policy concerns, and the removal of the revenge tax from regulations has helped clear uncertainties.
Q:Are there any geographical differences in demand, particularly on the advisory side? Can you update on the dynamics of the U.S. advisory effort?
A:The U.S. remains the largest and most active market. Asia shows growing activity, Europe is slower, and the Middle East, once very active, is currently less so but still offers opportunities.
Q:Review of Unclear Management Responses
A:Management avoided providing early views on Q3 trends for the GLI strategy, citing a policy of not commenting on early trends. Additionally, while discussing geographical demand, the response lacked specific data or detailed insights into the dynamics of the U.S. advisory effort.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AUM benchmark
Cohen Steers
Counsel
Dakkuri
GA change
IDR
President Chief
REITs estate
Research Division
Steers Conference
Today
VP
bond
cap
comp
cycle winner
digit
diversification
drawdowns
focus
gain SP
increase
market estate
need
office
opportunity investor
property type
rate supply
rate valuation
recovery
sale distribution
talent acquisition
tech
travel development
turning point
year interest
CNS Transcript
Cohen & Steers, Inc. (CNS) Q4 2025 Earnings Call Transcript
Positive1-23
The earnings call highlights strong financial performance with revenue and operating income growth, a decreased compensation ratio, and increased liquidity. The Q&A session reveals positive sentiment from analysts, with management addressing growth in private real estate and active ETFs, indicating potential for future growth. Despite slight AUM decline, net inflows remain strong. The company's strategic initiatives and optimistic outlook on real estate and ETFs further support a positive sentiment. Considering the market cap, the stock price is likely to react positively, within the 2% to 8% range.
Cohen & Steers, Inc. (CNS) Q3 2025 Earnings Call Transcript
Positive10-17
The earnings call reveals strong financial performance with increased EPS, revenue, operating margin, and AUM, alongside stable expenses and improved liquidity. The Q&A section highlights positive sentiment towards U.S. REITs and real asset strategies, with expectations of strong future performance. The market cap suggests moderate sensitivity to these positive developments. Despite some management ambiguity on long-term comp ratio guidance, the overall outlook is optimistic, leading to a positive stock price prediction of 2% to 8% over the next two weeks.
Cohen & Steers, Inc. (CNS) Q2 2025 Earnings Call Transcript
Unknown7-18
The earnings call revealed several concerning factors: a slight EPS decline, net outflows, and a drop in operating margin. While there are positive aspects like revenue growth and liquidity increase, the Q&A highlighted uncertainties in wealth management and strategic execution risks. The net outflows and competition pressures further indicate challenges. Given the market cap of $3.57 billion, these factors suggest a negative sentiment, likely resulting in a stock price decrease of -2% to -8% over the next two weeks.
Cohen & Steers, Inc. (NYSE:CNS) Q1 2025 Earnings Call Transcript
Unknown4-18
The earnings call presents mixed signals: while the company reports strong performance in certain segments like CNS REIT and AUM growth, EPS and operating margins have declined. The Q&A reveals concerns about market volatility and vague responses on key issues, which could worry investors. The launch of new ETFs and a focus on innovation are positives, but the decrease in net inflows and unfunded pipeline are negatives. Given the mid-cap status of the company, the stock price is likely to remain stable, resulting in a neutral sentiment.
CNS Slides
CNS Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
