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01/11 16:22
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Earnings Per Share (EPS) $0.23 EPS, down from $0.25 expectations.
Fee Related Earnings (FRE) $42.6 million or $0.27 per share, up 21% 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 dollar depreciation.
Assets Under Management (AUM) $46 billion, grew 43% year-over-year and over 9% sequentially, driven by record fundraising of $3.2 billion and positive investment returns.
Fee Earning AUM $35 billion, rose 46% year-over-year and 6% sequentially, driven by strong net organic inflows of over $700 million.
Total Fee Revenue $77.3 million, up 28% year-over-year, driven by acquisitions and incremental inflows.
Operating Expenses $35 million, up 36% year-over-year, primarily due to acquisitions.
Net Debt $143 million, down from $190 million at year-end.
Effective Tax Rate 9.2%, up 5.5 percentage points versus the prior quarter, mainly due to performance fees.
Quarterly Dividend $0.15 per share 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: Patria is diversifying its investment strategies and product structures, which are key drivers of growth.
Market Positioning in Latin America: Latin America is becoming a more attractive destination for capital amidst global economic uncertainty, with Patria positioned as a go-to alternative manager.
Expansion in Mexico: While current exposure in Mexico is minimal, it remains an attractive potential market for future expansion.
Increased Interest from Global Investors: Recent trade actions by the U.S. have led to increased interest from Asian, Middle Eastern, and European investors in Patria's infrastructure and other strategies.
Fee Related Earnings Growth: Fee related earnings (FRE) grew 21% year-over-year to $42.6 million, reflecting strong management fees from higher fee earning AUM.
Organic Growth Rate: Generated over $700 million of organic net inflows into fee earning AUM, reflecting an annualized organic growth rate of over 8.6%.
Management Fee Revenue: Total fee revenue reached $77.3 million, up 28% year-over-year, driven by acquisitions and net inflows.
Diversification Strategy: Patria's strategy to diversify and grow its business both organically and inorganically is yielding better organic growth and growing FRE.
Resilience in Economic Uncertainty: The diversified business model enhances resilience against global economic volatility, positioning Patria to thrive in challenging conditions.
Earnings Expectations: Patria Investments Limited missed earnings expectations with a reported EPS of $0.23, below the expected $0.25.
Global Economic Uncertainty: The company highlighted rising global uncertainty and increased volatility in economies and markets, which could dampen investors' willingness to commit capital to new investments.
Regulatory and Trade Risks: Potential for increased economic uncertainty and volatility due to proposed tariffs by the U.S. on trading partners, which could impact investment flows.
Currency Fluctuations: While the company has a natural hedge against currency movements, fluctuations in soft currencies can still impact fee-related earnings, with an estimated 2% impact for every 10% change.
Market Competition: Increased competition in the investment management space could pose challenges to maintaining growth and attracting new capital.
Dependence on Customized Accounts: The timing of closing large and complex customized investment contracts is difficult to predict, which may affect future fundraising results.
Local Economic Conditions: High interest rates in Brazil have impacted demand for listed REITs, posing challenges for capital raising in that sector.
Geopolitical Risks: While Latin America is seen as a more attractive destination for capital, geopolitical risks remain a concern, particularly in relation to trade wars.
Investor Sentiment: Economic uncertainty may lead to a home country bias among local investors, affecting their willingness to invest in alternative strategies.
Record Fundraising: Fundraising totaled a record $3.2 billion in Q1 2025, contributing to a $6 billion target for the year.
Fee Related Earnings (FRE) Growth: FRE of $42.6 million or $0.27 per share, representing 21% year-over-year growth.
Organic Growth: Generated over $700 million of organic net inflows into fee earning AUM, reflecting an annualized growth rate of over 8.6%.
Diversification Strategy: Expanded investment and product capabilities leading to robust fundraising and organic growth.
Permanent Capital Vehicles: Approximately 20% of fee earning AUM are in permanent capital vehicles, enhancing revenue stability.
Customized Investment Accounts: Closed approximately $1 billion in commitments from Asian sovereign wealth funds.
2025 FRE Guidance: Expecting FRE per share guidance of $1.25 to $1.50, reflecting approximately 20% year-over-year growth.
2025 Fundraising Target: On track to achieve a $6 billion fundraising target for the year.
FRE Margin Guidance: Expecting FRE margin to fall within the range of 58% to 60%.
Net Debt Guidance: Net debt totaled approximately $143 million, with a net debt to FRE ratio below one-time.
Tax Rate Guidance: Expecting tax rate to trend towards 10% by 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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