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01/11 16:22
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company's strong financial performance, including significant growth in fee-earning AUM and earnings, positive guidance, and strategic shareholder return plans, indicates a positive sentiment. The Q&A highlighted confidence in exceeding targets and strategic deployment of capital. The dividend increase and share buyback program further support a positive outlook. Despite some uncertainties in performance fee realizations, the overall sentiment is positive, suggesting a stock price increase of 2% to 8% over the next two weeks.
Assets Under Management (AUM) Exceeded $50 billion as of the end of the third quarter, over 3.5x higher than at the time of IPO in 2021. This growth is attributed to organic fundraising, strong investment performance, and acquisitions.
Organic Fundraising Surpassed $1.5 billion in the third quarter and $6 billion year-to-date, with a total of $6.9 billion over the last 12 months. This reflects strong performance in infrastructure and credit businesses and lower redemption rates (30% less than last year).
Fee-Earning Assets Under Management (Fee AUM) Grew to $38.8 billion in the third quarter, up 4% sequentially and 14% year-over-year. Growth driven by organic net inflows, strong investment performance, and acquisitions.
Fee-Related Earnings (FRE) Reported $49.5 million in the third quarter, representing 7% sequential growth and 22% year-over-year growth. Growth driven by fee-earning AUM growth and margin expansion.
Distributable Earnings (DE) Generated $46.9 million in the third quarter, or $0.30 per share, up 22% sequentially and 31% year-over-year. Growth driven by strong fee-related earnings.
Management Fee Rate Averaged 94 basis points over the last trailing 4 quarters. Expected to trend towards 90 basis points due to diversification of business and new investment strategies.
Operating Expenses Totaled approximately $34.4 million in the third quarter, flat versus the second quarter and prior year. Reflects focus on controlling expenses and capturing operating efficiency.
Net Debt Totaled approximately $108 million as of the end of the third quarter, with a net debt to FRE ratio of 0.6x, well below the long-term guidance of 1x.
Effective Tax Rate 3.3% in the third quarter, reflecting credits related to U.K. operations. Expected to hover around 10% annually over the coming years.
Infrastructure Fund V: Final close at $2.9 billion, 40% higher than the previous vintage, making it the largest dedicated infrastructure fund focused on Latin America.
Credit Business: Surpassed total 2024 fundraising by almost 15%, reaching $1.6 billion in 2025.
Fundraising: Raised $1.5 billion in Q3 2025, totaling $6 billion year-to-date, and expected to exceed the $6.6 billion full-year target.
Global Interest in Latin America: Increased global interest in Latin American infrastructure investments, benefiting Patria as the leading infrastructure investor in the region.
Assets Under Management (AUM): Exceeded $50 billion, over 3.5x higher than at the time of IPO in 2021.
Fee-Earning AUM: Grew to $38.8 billion in Q3 2025, up 4% sequentially and 14% year-over-year.
Fee-Related Earnings: Reported $49.5 million in Q3 2025, up 22% year-over-year, with a margin of 58.5%.
Fundraising Targets: On track to exceed the $6.6 billion 2025 target and confident in surpassing the $7 billion 2026 target, with a combined 2025-2026 target of $14 billion.
Diversification and Growth: Strategy to diversify and grow both organically and inorganically is yielding results, with strong momentum in fundraising and operational performance.
Currency Depreciation: The depreciation of the United States dollar against other currencies could impact revenues, as a 10% variance in soft currencies against the dollar impacts fee-related earnings by about 2%.
Economic Uncertainty and Volatility: Increased global uncertainty and volatility could pose challenges to achieving fundraising and financial targets.
Redemption Rates: Although redemptions have been trending lower, any reversal in this trend could negatively impact net organic growth and fee-earning assets under management.
Interest Rate Environment: Persistent inflation and high interest rates globally could affect investment performance and fundraising dynamics.
Fee Rate Evolution: The management fee rate is expected to trend towards 90 basis points, which could impact revenue depending on the mix of investment strategies and product structures.
Foreign Exchange Volatility: Fee-related earnings have limited exposure to foreign exchange volatility, but fluctuations in currency values could still have a minor impact.
Pending Fee-Earning Assets: The level of pending fee-earning assets under management can vary over the short term, potentially affecting revenue predictability.
Debt Levels: Net debt levels, while currently low, could increase if there are significant M&A payments or other financial obligations.
Fundraising Targets: Patria expects to exceed the high end of its 2025 full-year fundraising target of $6.6 billion. The company anticipates raising $7 billion in 2026 and $8 billion in 2027, with a combined total of $14 billion for 2025 and 2026, surpassing the 3-year objective of $21 billion.
Fee-Related Earnings (FRE): Patria projects full-year 2025 FRE to be slightly above the entry level of its $200 million to $225 million target range. For 2026, the FRE target is set at $225 million to $245 million, reflecting approximately 15% year-over-year growth. The 2027 FRE target remains at $260 million to $290 million.
Performance-Related Earnings (PRE): The company expects approximately $15 million in PRE from Infrastructure Fund III in Q4 2025, with potential for additional monetizations. Infrastructure Fund III is expected to be the main source of PRE through 2026.
Fee-Earning Assets Under Management (AUM): Fee-earning AUM is projected to grow as fundraising increases, with $3.2 billion in pending fee-earning AUM. The company highlights the stickiness and predictability of its fee-earning AUM, with 22% in permanent capital vehicles and 90% in vehicles with no or limited redemption policies.
Dividend Guidance: The Board has approved an annual dividend of $0.60 per share for 2025 and $0.65 per share for 2026.
Macro Outlook and Market Trends: Patria anticipates continued investor interest in non-U.S. markets due to dollar depreciation and attractive valuations in regions like Latin America. This trend is expected to support fundraising efforts, particularly in infrastructure and credit investments.
Annual Dividend for 2025: $0.60 per share
Dividend Declared for Q3 2025: $0.15 per share
Annual Dividend for 2026: $0.65 per share
Share Repurchase Program Authorization: Authorization to repurchase up to 3 million shares
Total Return Swap (TRS): Entered a TRS with a financial institution to repurchase 1.5 million shares
Share Count Post-TRS: 158 million shares as of the end of Q3 2025
Future Share Count Expectation: Expected to average between 158 million and 160 million shares from 2025 to 2027, inclusive of additional share repurchases
The company's strong financial performance, including significant growth in fee-earning AUM and earnings, positive guidance, and strategic shareholder return plans, indicates a positive sentiment. The Q&A highlighted confidence in exceeding targets and strategic deployment of capital. The dividend increase and share buyback program further support a positive outlook. Despite some uncertainties in performance fee realizations, the overall sentiment is positive, suggesting a stock price increase of 2% to 8% over the next two weeks.
The earnings call summary and Q&A indicate strong financial performance with 14% YoY fee revenue growth, positive market strategies, and robust fundraising. Despite some uncertainty in specific timelines, the company's diversification and optimistic guidance, especially in infrastructure and real estate, support a positive outlook. The market cap suggests a moderate reaction, aligning with a 2% to 8% stock price increase.
Despite missing EPS expectations, the company demonstrated strong financial performance with record AUM growth and positive fee-related earnings. Optimistic guidance on fee earning AUM and potential benefits from geopolitical shifts in LatAm suggest growth potential. Share repurchase intentions and stable dividends indicate confidence in financial health. The Q&A revealed a well-positioned strategy to capitalize on geopolitical trends, though some responses lacked clarity. With a market cap of $1.8 billion, the stock is likely to react positively, within the 2% to 8% range.
The earnings call indicates strong financial performance with record fundraising, increased AUM, and improved earnings metrics. The intention to repurchase shares and the quarterly dividend are positive signals for shareholders. While there are concerns about competition and economic conditions, the company's strategic positioning in resilient sectors and potential benefits from geopolitical shifts are encouraging. The Q&A revealed some uncertainties about future targets, but overall, the financial health and growth prospects suggest a positive outlook, likely leading to a 2% to 8% stock price increase over the next two weeks.
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