Silvercrest Asset Management Group Inc. (SAMG) Reports Mixed 2023 Financial Results Amid Market ...
Assets Under Management (AUM): Increased to $33.3 billion, with discretionary AUM up by 4.8% year-over-year.
Revenue: Decreased by 4.7% to $117.4 million for 2023, affected by market depreciation in prior years.
Net Income: Consolidated net income was $15.2 million, down from $30.8 million in the previous year.
Adjusted EBITDA: Dropped to $26.9 million or 22.9% of revenue, compared to $32.0 million or 26.0% in 2022.
Adjusted Diluted Earnings Per Share: Fell to $1.12 for 2023, from $1.35 in the prior year.
Liquidity: Cash and cash equivalents stood at $70.3 million at the end of 2023.
On March 7, 2024, Silvercrest Asset Management Group Inc (NASDAQ:SAMG) released its 8-K filing, detailing its financial performance for the fourth quarter and the full year ended December 31, 2023. The wealth management firm, which provides advisory services to ultra-high net-worth individuals and institutional investors, faced a challenging year marked by market volatility and economic uncertainty.
Performance and Challenges
Despite the broader market gains in the fourth quarter, Silvercrest's revenue for the year lagged behind the increase in AUM, primarily due to the market depreciation in prior years. The company's revenue decreased by $5.8 million, or 4.7%, to $117.4 million for 2023 from $123.2 million for 2022. The firm's financial results were further impacted by adjustments to total compensation, with total recurring cash compensation as a percentage of revenue rising to 59% from the typical interim accrual rate of 55%.
Financial Achievements
Despite the revenue decline, Silvercrest's discretionary AUM rose by $1.0 billion, or 4.8%, to $21.9 billion, and total AUM increased by 15.2%, or $4.4 billion, to $33.3 billion. The increase in AUM is a significant achievement for the asset management industry, as it indicates the firm's ability to attract and retain capital in a competitive market.
Key Financial Metrics
Adjusted EBITDA for 2023 was $26.9 million or 22.9% of revenue, down from $32.0 million or 26.0% of revenue in 2022. Adjusted Diluted Earnings per Share for 2023 was $1.12, down from $1.35 in 2022. For the fourth quarter, Adjusted EBITDA was $2.6 million or 9.0% of revenue, down from $4.4 million or 15.6% of revenue in the fourth quarter of 2022. Adjusted Diluted Earnings per Share for the fourth quarter was $0.07, down from $0.15 in the fourth quarter of 2022.
Outlook and New Initiatives
Looking ahead, Silvercrest anticipates a better environment in 2024, with AUM increases during the fourth quarter of 2023 and into the new year. The company's pipeline of new business opportunities has significantly improved, and it remains focused on new initiatives and investments to drive future growth.
For a more detailed analysis of Silvercrest Asset Management Group Inc's financial results and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Silvercrest Asset Management Group Inc for further details.
This article first appeared on GuruFocus.
