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01/11 16:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Fundraising $3.2 billion, a record for the quarter, reflecting strong demand and the signing of several large customized investment accounts.
Fee Related Earnings (FRE) $42.6 million or $0.27 per share, up 21% and 16% year-over-year, driven by higher management fees due to increased fee earning AUM.
Distributable Earnings (DE) $37 million or $0.23 per share, up 12% year-over-year, driven by strong FRE growth.
Net Accrued Performance Fee Balance $368 million or $2.33 per share, rose 15% in the quarter, mainly due to the depreciation of the dollar.
Assets Under Management (AUM) $46 billion, grew 43% year-over-year and over 9% sequentially, driven by record fundraising and positive investment returns.
Fee Earning AUM $35 billion, rose 46% year-over-year and 6% sequentially, with $700 million of organic net inflows reflecting an 8.6% annualized growth rate.
Total Fee Revenue $77.3 million, up 28% year-over-year, driven by acquisitions and incremental inflows, despite a 17% sequential decline due to seasonal factors.
Operating Expenses $35 million, up 36% year-over-year, primarily due to acquisitions, with a sequential decline reflecting seasonal effects.
Net Debt $143 million, down from $190 million at year-end, with a net debt to FRE ratio well below one-time.
Effective Tax Rate 9.2%, an increase of 5.5 percentage points versus the prior quarter, mainly due to performance fees and jurisdiction mix.
Quarterly Dividend $0.15 per share, approved for 2025.
Record Fundraising: Fundraising totaled a record $3.2 billion in Q1 2025, contributing to a target of $6 billion for the year.
Customized Investment Accounts: The fundraising included several large customized investment accounts and SMAs, indicating a shift from product-centric to solutions-oriented asset management.
New Investment Strategies: The company is diversifying its investment strategies and product structures, which are key drivers of growth.
Market Positioning in Latin America: Patria is positioned as a go-to alternative manager for global investors in Latin America, benefiting from low geopolitical risk and strong demand for agricultural products.
Expansion Opportunities: The company sees potential for expansion in Mexico, despite current minimal exposure.
Increased Interest from Investors: There are early signs of increased interest from Asian, Middle Eastern, and European investors in Patria's infrastructure and other strategies.
Fee Related Earnings Growth: FRE of $42.6 million in Q1 2025, up 21% year-over-year, driven by higher management fees.
Organic Growth Rate: Generated over $700 million of organic net inflows into fee earning AUM, reflecting an annualized growth rate of over 8.6%.
Fee Earning AUM Growth: Fee earning AUM grew 46% year-over-year to $35 billion.
Diversification Strategy: The company is diversifying its platform to enhance resilience against global economic uncertainty.
Focus on Local Markets: Patria's investments are primarily oriented towards domestic consumption markets, minimizing exposure to export-focused businesses.
Global Economic Uncertainty: Increased global macro uncertainty and volatility could dampen investors' willingness to commit capital to new investments.
Regulatory Risks: Potential for tariffs imposed by the U.S. on trading partners creates challenges and headwinds for the business.
Supply Chain Challenges: The trade war between the U.S. and China may impact supply chains, affecting investment strategies.
Currency Volatility: While the company has a natural hedge against currency fluctuations, soft currency FX volatility can still impact fee-related earnings.
Market Competition: Increased competition for capital from local and international investors may affect fundraising efforts.
Dependence on Customized Accounts: The timing of large and complex customized investment contracts is difficult to predict, which may affect future fundraising.
Local Economic Conditions: High interest rates in Brazil have impacted demand for listed REITs, posing challenges for real estate investments.
Geopolitical Risks: Despite low geopolitical risk in Latin America, potential global recession poses challenges for investment performance.
Record Fundraising: Fundraising totaled a record $3.2 billion in Q1 2025, contributing to a $6 billion target for the year.
Organic Growth: Generated over $700 million of organic net inflows into fee earning AUM in Q1 2025, reflecting an annualized organic growth rate of over 8.6%.
Diversification Strategy: Increased diversification and expansion of investment capabilities are yielding robust fundraising and organic growth.
Customized Investment Accounts: Closed approximately $1 billion in commitments from Asian sovereign wealth funds for customized investment accounts.
Permanent Capital Vehicles: Approximately 20% of fee earning AUM are in permanent capital vehicles, a key long-term objective.
Resilience in Uncertainty: Positioned to thrive amid global economic uncertainty, with a focus on local consumption markets.
FRE Guidance: 2025 FRE per share guidance of $1.25 to $1.50, reflecting approximately 20% year-over-year growth.
Fundraising Target: On track to achieve a $6 billion fundraising target for 2025.
FRE Margin Guidance: Expect FRE margin to fall within the range of 58% to 60% as fee revenues grow.
Distributable Earnings Guidance: Expect distributable earnings of $200 million to $225 million for 2025.
Tax Rate Guidance: Expect tax rate to trend towards 10% by the end of the three-year target period in 2027.
Quarterly Dividend per Share: $0.15 for 2025
Share Repurchase Program: No shares were repurchased in the quarter, but there is an intention to repurchase shares over the course of 2025.
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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