Loading...
01/11 03:09
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Earnings per share (EPS) $0.81 per share, an increase of 11.6% compared to $0.73 in Q2. The increase was driven by meaningful revenue growth, higher AUM, stable effective fee rate, and disciplined expense management.
Revenue for Q3 $141 million, a 4.2% increase from the prior quarter. This was driven by higher average AUM and an additional day during the period.
Operating margin 36.1%, an increase from 33.6% in Q2. This was due to higher average AUM and effective expense management.
Ending AUM $90.9 billion as of Q3, positively impacted by market appreciation and net inflows.
Total expenses during Q3 Essentially flat compared to the prior quarter. G&A expenses decreased due to lower talent acquisition and travel costs, while compensation and benefits increased but at a rate lower than revenue growth.
Compensation ratio 40.25% year-to-date, driven by lower compensation ratio in Q3 due to revenue growth outpacing compensation increases.
Effective tax rate 25.1% year-to-date, with a lower effective rate in Q3.
Liquidity at the end of Q3 $364 million, an increase from $323 million in the prior quarter.
Net inflows during Q3 $233 million, bringing year-to-date inflows to $325 million. This was driven by net inflows into open-end funds, partially offset by institutional net outflows.
Active ETFs: Launched 3 active ETFs in real estate, preferreds, and natural resource equities. These ETFs have shown strong performance, with the real estate ETF outperforming peers by 217 basis points, preferred ETF by 124 basis points, and resource equities ETF by 490 basis points. Two more ETFs in preferred stock and listed infrastructure categories are planned for Q4.
Private Real Estate Initiatives: Finalized the first closed-end drawdown fund, raising $236 million. The non-traded REIT focused on open-air shopping centers has industry-leading performance. Targeting RIA channels for additional capital and strategic partnerships.
Institutional Pipeline Growth: The institutional pipeline grew to $1.75 billion, the largest since Q4 2021, driven by confidence in the interest rate cycle and reallocations from underperforming managers.
Closed-End Fund Rights Offering: Raised $353 million in equity for the Cohen & Steers Infrastructure Fund, providing over $500 million in dry powder for global infrastructure opportunities.
Revenue and AUM Growth: Revenue increased by 4.2% to $141 million, driven by higher average AUM, which ended at $90.9 billion. Operating margin improved to 36.1% from 33.6% in Q2.
Expense Management: G&A expenses decreased, particularly in talent acquisition and travel costs. Compensation ratio for the quarter was lower, contributing to a year-to-date ratio of 40.25%.
Focus on Real Assets: Emphasizing strategic allocation to real assets like infrastructure, natural resources, and real estate due to their inflation sensitivity and diversification benefits.
AI Investment Cycle: Anticipating a $4-5 trillion AI-driven investment cycle over the next 5 years, focusing on sectors like electric utilities, natural gas infrastructure, and data centers.
Market Performance and Investor Interest: U.S. real estate strategies experienced net outflows, contrasting with inflows in global and international real estate. This indicates challenges in maintaining investor interest in U.S. real estate.
Institutional Advisory Outflows: Two account terminations totaling $269 million and net outflows from existing client accounts totaling $186 million were reported, reflecting potential challenges in retaining institutional clients.
Economic and Market Conditions: The market is experiencing a k-shaped economy with narrow drivers of growth, such as AI investment and high-end consumer spending, while other segments remain sluggish. This uneven growth could pose risks to broader economic resilience.
Inflation and Federal Reserve Policies: Elevated inflation and the Federal Reserve's focus on cutting rates may create a challenging environment for managing non-wage inflation and balancing economic growth.
AI Investment Cycle Risks: While AI-driven investments are expected to boost GDP growth, there is a risk of underperformance for initial CapEx investors due to challenges in transitioning spending to revenue collection.
Real Estate and Infrastructure Challenges: Power constraints and the potential for underperformance in CapEx cycles could impact profitability in real estate and infrastructure sectors.
Client Allocation Preferences: Allocators continue to favor private real estate over listed REITs despite the latter's historical outperformance, limiting growth opportunities in listed markets.
Compensation Ratio for 2025: Expected to remain at 40.25% for the full year.
General and Administrative (G&A) Expenses for 2025: Expected to increase by around 9% compared to full year 2024, primarily driven by talent acquisition and business development costs incurred in the first half of the year, as well as marketing and related costs for the Active ETF launch.
General and Administrative (G&A) Expenses for 2026: Expected to moderate to mid-single-digit percentage growth compared to 2025.
Effective Tax Rate: Expected to remain at 25.1% on an as-adjusted basis for the full year 2025.
Economic Growth and Corporate Profits: Expected to remain resilient with a broadening foundation of growth supported by monetary and fiscal stimulus. Sectors like real estate, energy, and materials are forecasted to accelerate in 2026.
Federal Reserve Rate Cuts: Anticipated to cut rates at least once or twice more in 2025, creating a positive backdrop for real assets.
AI-Driven Investment Cycle: Expected to last at least the next 5 years, amounting to $4 trillion to $5 trillion in investments, driving healthy GDP growth and corporate profits.
Real Assets and Infrastructure: Expected to benefit from elevated inflation, dovish Federal Reserve policies, and significant investment cycles. Infrastructure companies with inflation-linked pricing models are highlighted as attractive investments.
Active ETFs: On track to launch two more ETFs in the fourth quarter of 2025 in the preferred stock and listed infrastructure categories.
Private Real Estate Business: Focused on driving strategic initiatives to profitability, with progress in capital raising and investment fronts.
The selected topic was not discussed during the call.
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.
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.
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.
Despite strong investment performance and a record high AUM, there are concerns about decreased net inflows, a volatile wealth management channel, and uncertainties in future allocations. The Q&A revealed management's unclear responses and concerns about the low pipeline. However, the launch of new ETFs and strong REIT performance are positive signs. Given the mixed signals and the company's market cap, the stock price is likely to remain neutral within the next two weeks.
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.
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.
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.
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.
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.
