Q2 2025 Abacus Global Management Inc Earnings Call

Speaker #3: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Abacus Global Management second quarter of 2025 earnings conference call. All participants will be in a listen-only mode.

Speaker #3: Ensure you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Speaker #3: To ask a question, you may press star, then one on your telephone keypad. And to withdraw a estion, please press star, then two. Please also note that this event is being recorded today.

Speaker #3: I'd now like to turn the call over to Robert Phillips, Abacus Global Management's senior vice president of investor relations and corporate affairs. Please go ahead, sir.

Speaker #4: Thank you, operator. And thank you, everyone, for joining Abacus Global Management's second quarter 2025 earnings call. Here with me today are Jay Jackson, chairman and chief executive officer; Elena Plesko, chief capital officer; and Bill McCauley, chief financial officer.

Speaker #4: This afternoon at 4:15 PM Eastern Time, Abacus Global Management released its second quarter 2025 results. This afternoon's call will allow participants to ask questions about our results.

Speaker #4: Before we begin, Abacus Global Management refers participants on this call to the Investor webpage, ir.abacusgm.com, for the press release, investor information, and filings with the SEC for a ussion of the risks that can affect the business.

Speaker #4: Abacus Global Management specifically refers participants to the presentation furnace today on Form 8K with the Securities and Exchange Commission and to remind listeners that some of the comments today may contain forward-looking statements and, as such, will be subject to risks and uncertainties which, if they materialize, could materially affect results.

Speaker #4: For more information on the risks, uncertainties, and assumptions relating to forward-looking statements, please refer to Abacus Global Management's public filings. During the call, we will reference certain non-GAAP financial measures.

Speaker #4: Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized meanings under US generally accepted accounting principles or GAAP.

Speaker #4: Please see our filings for additional information regarding our non-GAAP financial measures including references to comparable GAAP measures. With that, I'd now like to turn the call over to Jay Jackson, chief executive officer.

Speaker #5: Thank you, Rob. And thank you to yone joining us today for your interest in Abacus Global Management. Welcome to our second quarter 2025 earnings call.

Speaker #5: After Elena, Bill, and I have concluded our prepared remarks, we'll open the floor to your questions. We delivered another excellent quarter of record profitable growth.

Speaker #5: While continuing to execute our strategic initiatives to position Abacus as a leading alternative assets and wealth management platform, for the second quarter of 2025, we almost doubled total revenue year over year to $56.2 million, while increasing adjusted net income to $21.9 million and adjusted EBITDA to $31.5 million.

Speaker #5: Our strong performance was driven by robust demand for less correlated investments and policyholder liquidity solutions, broadening our competitive moat and driving our future growth.

Speaker #5: Our asset management offerings continue to gain traction with new AUM inflows of approximately $142 million, additionally our ETFs manage strong momentum in asset flows, increasing total gross AUM to nearly $3.3 billion.

Speaker #5: Our strong first-half execution driven by our resilient business model has enabled us to raise our full year 2025 outlook. We now expect adjusted net income to be between $74 million and $80 million, which implies strong year-over-year growth of 59% to 72%.

Speaker #5: Bill will discuss our second quarter financial performance in greater detail shortly. As we continue to evolve and scale, I'd like to take a moment to provide a refresher on our business model and revenue generation.

Speaker #5: Particularly, as it relates to other major players in the private credit space. At our core, we're an originator and market maker that controls its own destiny through our ability to lead price discovery driven by genuine market demand.

Speaker #5: Similar to the largest private credit companies, we originate high-quality assets and sell a portion of those assets at prevailing market prices. Determined by actual investor demand, our own managed funds are beneficiaries of our originations, each of which operates with distinct investment policies and independent investment objectives tailored to their specific investor base.

Speaker #5: We then syndicate the remaining assets to institutional third-party investors at the same market-driven prices. This dual approach allows us to maximize the value of our origination capabilities while serving diverse investor needs.

Speaker #5: With pricing that reflects current market dynamics, our investors come to Abacus specifically to access our investment management expertise and proprietary investment products. Most importantly, they want to invest in Abacus originated assets, not assets originated by other companies.

Speaker #5: This direct relationship between our origination capabilities and investor demand is fundamental to our value proposition and competitive advantage. Our origination platform represents a valuable and unique proposition that differentiates us from other industry players.

Speaker #5: This platform ensures we maintain control while offering access to a unique asset class experiencing high demand from investors seeking private credit instruments. Looking at the broader market, while the near-term macro environment remains dynamic, Abacus's unique business model and operational acumen ensure we remain strongly positioned to navigate current conditions.

Speaker #5: More specifically, our origination volumes continue to increase as policyholders seek additional liquidity solutions, while simultaneously demand for our assets has grown as institutional asset managers and investors pursue less correlated yield opportunities.

Speaker #5: This durable model of serving both liquidity-seeking consumers and yield-seeking investors creates strategic advantages across market cycles, supported by our robust financial foundation, including 74.8 million in cash and cash equivalents, and $387.3 million in balance sheet policy assets as of June 30, 2025.

Speaker #5: In our life solutions business, we posted a realized gain of 58.3 million dollars in the quarter, which demonstrates the strength of investor demand and validates our market-making approach.

Speaker #5: These realized gains reflect the premium that market participants place on our originated assets, validating that our mark-to-market approach to value is driven by real-time market dynamics.

Speaker #5: This underscores the effectiveness of our origination-focused strategy and our ability to capture true market value. To provide investors with greater transparency into our business model and strategic execution, we are introducing additional key performance indicators that Elena Plesko, our chief capital officer, will highlight in her remarks.

Speaker #5: These metrics will give ou deeper insight into how we're executing on our overall business initiatives and specifically on how we manage our balance sheet.

Speaker #5: Along with our strong second quarter results, we expanded our brand recognition, including the launch of a new corporate-focused commercial campaign on June 12, 2025, at our Investor Day and Longevity Summit held at NASDAQ in New York City.

Speaker #5: The event centered around Abacus's positioning as a visionary leader in longevity-based asset management. The feedback we've continued to receive on our new branding remains encouraging.

Speaker #5: As prudent stewards of capital, in early June, our board of directors authorized a new $20 million share repurchase program effective June 5, 2025, running for up to 18 months.

Speaker #5: Additionally, in late July, we completed an exchange offer and consent solicitation related to our outstanding warrants as we continue to simplify our capital structure.

Speaker #5: We were able to tender 88% of the warrants at 0.23 per warrant, with the remaining 12% to be converted at 0.207 shares per warrant on August 14th.

Speaker #5: Looking ahead, we're building on our excellent first-half achievements and growing brand recognition. Which is driving greater policy originations, increased interest in our asset management offerings, and our expansion into wealth management, all of which resulted in us raising our full year adjusted net income target.

Speaker #5: We remain steadfast in our mission to establish Abacus as the go-to player in alternative assets and wealth management. Our distinct market approach paired with access to non-correlated assets creates a powerful competitive advantage.

Speaker #5: This foundation enables us to not only weather market uncertainty but to capitalize on it and build an even more resilient business. With that, I'll now hand it over to our chief capital officer, Elena Plesko.

Speaker #5: Who joined the Abacus team a little over a year ago from KKR, where she served as co-head of specialty finance. Elena will discuss the additional KPIs that will provide further insight and increased transparency into our business performance.

Speaker #6: Thanks, Jay. As Jay mentioned, I'd like to highlight some of our existing and new KPIs. Which we believe are important to understand our balance sheet efficiency and capital deployment.

Speaker #6: First, we pay close attention to portfolio turnover and velocity metrics. In financial services, turnover ratio is a fundamental tool for measuring balance sheet velocity and capital efficiency.

Speaker #6: Specifically, how quickly we cycle invested capital and realized returns. In Q2 2025, annualized turnover ratio was 2.3 times. Due to stronger demand post-liberation day, the ratio is slightly elevated as compared to our iously stated long-term average target of 1.5 to 2.x.

Speaker #6: During Q2, we purchased $250 new policies while selling $399 policies. Resulting in a sale-to-purchase ratio of 1.6 times. Indicating accelerated velocity. This compares favorably to the prior quarter, where we experienced a 0.69 times sales-to-purchase ratio on the back of $171 purchases and $118 sales in the quarter.

Speaker #6: This highlights our increased selective selling activity following a period of aggregation on the balance sheet. Second, we also focus on strategic portfolio aging and inventory management.

Speaker #6: A key indicator of our balance sheet management efficiency is our ability to monetize seasoned policies at optimal timing. In the second quarter of 2025, our sold policies averaged $243 days held, compared to $229 days for owned positions.

Speaker #6: Underscoring our ability to efficiently rotate mature inventory while preserving overall portfolio quality. This 14-day delta for sold policies while narrower than the first quarter of 2025's exceptional 82-day delta, $294 versus $212 days, continues to validate our proactive approach of realizing gains on well-seasoned positions rather than engaging in reactive selling.

Speaker #6: This metric highlights our ability to exit older policies and clearly demonstrates that we're managing the balance sheet strategically rather than simply turning newer acquisitions.

Speaker #6: Third, our health portfolio is a strong indicator of our best ideas. Our commitment to retaining our highest conviction positions is evidenced by our policies held over $365 days which represent approximately 15% of our total portfolio value including cash holdings.

Speaker #6: These seasoned holdings maintain a weighted average grade reflective of their low risk, weighted average life expectancy of 50 months, and weighted average age of 85 years.

Speaker #6: Underscoring the quality of our long-term hold decisions. This concentration in our best ideas reflects our disciplined approach to portfolio construction, and our confidence in our underwriting capabilities.

Speaker #6: Finally, we also closely monitor our unit economics performance. Our policy-level unit economics validate the effectiveness of our active management strategy and operational discipline. Realized gain on sale represents the difference between what Abacus paid to originate a policy and the actual sales price received when that policy is sold to investors who use their own valuation data to assess the market value of the asset.

Speaker #6: Our average realized gain on sale is 26.3% for Q2 2025. And you can find that information in our audited financial statements. Our last year and a half, this number has consistently stayed above 20%.

Speaker #6: Which demonstrates our capacity to generate consistent returns through strategic balance sheet management while maintaining rigorous cost discipline through our operations. We will continue to provide updates on these additional and historical KPIs in the quarters ahead.

Speaker #6: With that, I'll now hand it over to our CFO, Bill McCauley, to discuss the specifics of our second quarter results.

Speaker #7: Thanks, Elena. And hello, yone. As Jay mentioned, we had another excellent quarter of top-line growth and profitability. Total revenue in the second quarter of 2025 grew by 93% to $56.2 million, compared to $29.1 million in the prior year period.

Speaker #7: Our venue increase was primarily driven by greater life solutions, formerly active management and origination revenues, as well as significant contributions from asset management fees.

Speaker #7: The key driver of our life solutions performance continues to be our highly efficient origination platform and our trading division. Capital deployed increased 16% to $121.8 million, in Q2 2025, compared $104.7 million in the prior year.

Speaker #7: In addition to our capital deployment, we had a very successful quarter monetizing originations. Abacus syndicated $399 policies to 15 different counterparties, in Q2 2025, which represented $208.4 million in fair value and total realized gains of $58.3 million.

Speaker #7: With the growth in policy origination and capital deployment, as of June 30th, 2025, Abacus holds $600 policies with a value of $387.3 million on the balance sheet.

Speaker #7: We're very excited about the contributions from the asset management business, as this is the second full quarter of asset management fees from our quisitions that closed in late 2024.

Speaker #7: Q2 2025 had $8.8 million in revenue in that business segment. Turning expenses, total operating expenses excluding unrealized and realized gains and losses on investments, and the change in fair value of debt for second quarter of 2025 were approximately $27.4 million, compared $20.1 million in the prior year.

Speaker #7: The increase from the prior year period was primarily driven to greater depreciation and amortization; the incorporation of operating expenses of the companies that were acquired in Q4 2024; as well as increased marketing to support our growth profile.

Speaker #7: The company typically realizes the benefit of marketing spend within 90 to 120 days. On an adjusted basis, excluding non-cash stock compensation, business acquisition costs, amortization, and change in fair value of warrant liability, net income for the second quarter of 2025 increased by 87% to $21.9 million, compared to $11.7 million in the prior year.

Speaker #7: Adjusted EBITDA for the quarter grew to $31.5 million, compared to $16.7 million in the prior year, which represents an 89% increase. Adjusted EBITDA margin was 56.1% for the quarter, compared to 57.5% in the prior year.

Speaker #7: GAAP net income attributable to stockholders for the quarter was $17.6 million, compared to $0.7 million in the prior year. Primarily driven by higher revenues and the gain on the change in the fair value of warrant liability, partially offset by increased operating costs from our quisitions.

Speaker #7: Now, turning to our balance sheet metrics, for the second quarter of 2025, adjusted return on equity was 21%, and adjusted return on invested capital was 22%.

Speaker #7: Both reflecting our highly profitable business model. As of June 30th, 2025, the company had cash and cash equivalents of $74.8 million, balance sheet policy assets of $387.3 million, and outstanding long-term debt of $357 million.

Speaker #7: As Jay mentioned in his remarks, given our strong first half and our confidence in ur business momentum, we are raising our full year 2025 outlook for adjusted net income to between $74 million and $80 million, up from our prior range of $70 to $78 million.

Speaker #7: The new range, implies growth of between $59 to $72 percent, compared to the full year 2024 adjusted net income of $46.5 million. In summary, we are pleased to maintain our momentum of continued record growth on our top line, as well as significantly growing profitability.

Speaker #7: I will now turn it back to our CEO, Jay Jackson, for closing comments.

Speaker #8: Thanks, Bill. Before we open it up for questions, we felt that it would be useful to highlight and explain two specific areas that we get asked about with some frequency.

Speaker #8: First, revenue measurement on policy sales. We've been asked about how we measure or track revenue on policy sales. Within Abacus's vertically integrated business model, value creation occurs at multiple points, including policy origination, policy servicing, and the policy sale.

Speaker #8: Rather than solely deriving value from policy maturities or marking the portfolio through forecasted discount rates using life expectancy estimates. Realized gain on sale captures the immediate economic value created when a policy transaction is completed and allows investors to track how we successfully convert the majority of our assets into cash within a year's period.

Speaker #8: This metric provides a clear picture of our operational performance because it reflects the actual market value of our origination platform creates. Unlike theoretical valuations, realized gain on sale demonstrates the tangible premium that investors are willing to pay for our originated assets in real-time market transactions.

Speaker #8: We track gain on sale on a historical basis, which informs our view where newly originated assets could be transacted at and, as a result, marked to reflect the most up-to-date economic reality.

Speaker #8: Our average realizations have historically met or exceeded the marks at which we carry assets on our balance sheet. Further, in addition to the average realized gain on sale, you will now be able to track a number of other velocity-based KPIs that Elena discussed earlier.

Speaker #8: Providing you with comprehensive transparency into our business performance and market validation of our approach. Second, Abacus managed funds versus third-party syndication. We get asked about what percentage of policies are sold from our balance sheet to Abacus managed funds compared to syndicating them to third parties.

Speaker #8: As I mentioned earlier, this dual method is no different than any other leading private credit asset manager. Specifically, we originate high-quality assets and then sell some of these assets at prevailing market prices determined by actual investor demand, a portion is originated for funds managed by Abacus and the balance is syndicated to other institutional third parties at the same market-driven prices.

Speaker #8: This direct relationship between our origination, market-making capabilities, and investor demand is fundamental to our value proposition and competitive advantage. Our investors come to Abacus specifically to access our proprietary originations.

Speaker #8: Policy servicing and valuation expertise and our investment products. The amount we originate for related party funds can vary quarter to quarter based on capital availability and other investor demand.

Speaker #8: The year-to-date related party transactions are reported quarterly in the 10-Q and the related party transaction section. We hope this provides additional clarity into our business.

Speaker #8: In conclusion, our record second quarter and first half performance continue to validate our resilient and differentiated business model. We're strategically positioned to thrive despite current market uncertainties.

Speaker #8: Thanks to our distinctive value proposition that resonates with both policyholders and investors looking for non-correlated assets. The market opportunity ahead of us is substantial, and we're energized about leveraging our 20-year track record of consistent financial performance to drive sustainable, profitable expansion over the long term.

Speaker #8: Again, thank you all for joining us today, and we appreciate your interest in Abacus Global Management. With that, we look forward to your questions.

Speaker #8: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker #8: And to withdraw a estion, please press star, then two. At this time, we will pause just momentarily to assemble our roster. And our first question here will come from Patrick David with Autonomous Research.

Speaker #8: Please go head.

Speaker #9: hey, good evening, everyone. I appreciate the, the color at the end there on, on how you think originating policies for your own funds versus third parties.

Speaker #9: It makes sense, but I think given everything that happened last quarter, could still raise some eyebrows. So especially, uld you give a little bit more specifics around the, the mix of sales between the two and three-Q?

Speaker #9: And then more broadly, how do we in skeptics, I guess, get more comfortable that those funds truly are buying the policies at the market bid?

Speaker #9: That your third parties are paying. I guess, in other words, what are the kind of compliance walls and/or security selection processes that ensure that there is no conflict of interest there?

Speaker #9: Thank ou. Sure. Thank ou, Patrick. and I'll start with the second part of that question first. And, and those funds are independent in a sense.

Speaker #9: And what I mean by that is that they all have each have their own policy statement, their own asset management, and, and their own, objectives, investment objectives related to the duration and time period of those funds.

Speaker #9: In addition to that, each fund is required to get a third-party actuarial market valuation of the underlying assets that it purchases. Again, on a quarterly basis for its own NAV.

Speaker #9: that's not something that Abacus has any control of, and, and in addition to that, that's also validates where those policies are being priced at and where those policies are priced at specifically for that fund's objective.

Speaker #9: So, you know, in addition to that, again, we put a third party, we have a third-party valuation firm coming on a quarterly basis, and value the assets of those underlying funds.

Speaker #9: So to help validate and give additional comfort to those who are concerned where the pricing is on those policies, that's also something that we bring a third party in to review for each and every fund.

Speaker #9: the, the other part of that question is, well, at were the actual percentages? And if we break that down, and you'll find this in the upcoming queue, as a percent of total revenue in Q2, that, what we would call related party transactions consisted of 29%, of the, total revenue in Q2.

Speaker #9: And year to date, that would equate to 17%. And that would include the Carlyle funds in Luxembourg and all longevity funds that we have.

Speaker #9: So to be specific, Q2, that would be 29% of total revenue. And just 17% total for the year. So I, I hope that offers you some additional clarity on that.

Speaker #8: Yeah, helpful. Thanks a lot. and a quick follow-up, it looks like ou repurchased around $5 million shares. But the average share count barely budged.

Speaker #8: So I guess that came very late in the quarter. So I guess first, am I reading that right? And then looking forward, I guess that would suggest then you, ou've kind of fully offset the warrant exchange as we model into three-Q.

Speaker #8: Thank you.

Speaker #9: That's, yeah, that's, 's correct, Patrick. We, when we looked at the pricing, of, of the, of the stock, we, looked at it the same way you did, and, and when we also considered the, the warrant exchange, it, it with the buyback that we had in place, including insider buying, we felt very comfortable that, the additional kind of dilution that you might face with the warrant conversion was offset by all that buyback, by, by the buyback that took place, almost, in fact, we had more shares in the buyback than, than the warrant exchange.

Speaker #9: So it, you know, you could, I mean, I could argue it wasn't that accretive, but I'm not gonna make that argument at this point.

Speaker #8: Yeah. Yeah. Thanks a ot.

Speaker #9: Thank ou.

Speaker #8: And our next question will come from Kristen Love with Piper Sandler. Please go head.

Speaker #10: Thanks. Good afternoon. Jay, you commented on $58 million of realized gains in the quarter. Can you share what first unrealized gains were in the quarter?

Speaker #10: And then just on the $58 million realized, I assume those were primarily converted from unrealized in the past couple of quarters. So if you're le to just share the, the net gain loss, if, if that makes sense.

Speaker #9: Sure. I'll have Bill address the second piece. But on the $58 million, you're exactly right. y-you know, we were realizing, a, a good portion of that were realized through, the, unrealized gains from the prior quarter, which I think, in, speaks loudly on, you know, where our valuation had these policies at.

Speaker #9: Because remember, you know, one of the things that Elena highlighted in, in her comments was that in Q2, the average trade spread recognized was 26%.

Speaker #9: which was, you ow, higher than our historical average of 22%. and, volumes to the demand for the, for the policies and the underlying assets that, that we had.

Speaker #9: I'll have Bill touch on the unrealized piece. Yeah, the unrealized gain for the quarter was about $17 million.

Speaker #8: Perfect. thank you. That's helpful. And then just all of the guidance, you increase it, but to, to oversimplify, if you just run rate the first half of the year, to the second half, you get to around $78 million for just illustrative purposes.

Speaker #8: Can you discuss expectations for the second half from an earnings perspective? Do you expect to grow off of the first half, or are there certain puts and takes, worth calling out comparing, first and second half from an earnings perspective?

Speaker #8: Can you discuss expectations for the second half from an earnings perspective? Do you expect to grow off of the first half, or are there certain puts and takes, worth calling out

Speaker #9: Sure. We, we expect to grow in the second half the year. I think that when we were looking at the guidance number, we felt that, we were it made sense to increase the number.

Speaker #9: careful on a dollar-for-dollar basis just because, you know, there are some still unpredictable things in, in the overall economy out there y-you know, that, I think, speaks that we just wanted to be thoughtful of.

Speaker #9: and, and so when we looked at the guidance, we wanted to make re we felt very comfortable with the guidance that, that we were putting out with the expectation that, you know, we would continue to grow in the second half.

Speaker #9: but, you ow, potentially not exactly dollar-for-dollar as we did in first half.

Speaker #8: Great. sounds good, Jay. I appreciate the comments. Makes sense. Thank you.

Speaker #9: Great. Thank you, Kristen.

Speaker #8: And our next question will come from Andrew Cligerman with TD Cowan. Please go head.

Speaker #11: Great. Good afternoon. I like the, I like the two KPIs very much. just looking at the number of policies held, going down from $753 to $600 sequentially.

Speaker #11: And then, of course, that was a function of the, the annualized turnover ratio being at 2.3 times, well above the 1.5 to 2 times average.

Speaker #11: So I, I guess what I'm inking about is, you ow, where would you like to keep that average turnover in that 1.5 to 2 times?

Speaker #11: And where would you like to keep the average number of policies or the number of policies held on a kind of a consistent basis?

Speaker #9: Sure. Thank you for that, w. And, yeah, we, we put that range to give you some guidance, on that one and a half to two.

Speaker #9: And I, and I ink that's a fair range. And, and it can vary quarter to quarter just dependent on, you know, what is investor demand at that time period and/or what is our acquisition been like.

Speaker #9: For ample, if, if we have excess origination in that quarter, there might be, you know, some delay to the next quarter before you see then those, those policy sales.

Speaker #9: So, you know, you could see some fluctuation in the number of policies held, but thus, your turnover ratio in any given quarter. But that's why we felt very comfortable with that 1.5 to 2.

Speaker #9: it, , we think it makes total sense. as to where we were in Q2, we had excess demand in, in Q2, and we were able capitalize on that.

Speaker #9: as a trend going forward, we're, we're confidently seeing, similar types of demand and, and, you know, evolving Q3. And, and potentially through the rest of the year.

Speaker #9: But, you know, it, it, we won't really know until we towards the end of the quarter. But we feel really well-positioned where we are right now with the amount of capital that we are, excuse me, cash and cash equivalents that we have on our balance sheet to put money to work in these opportunistic times.

Speaker #9: So, you know, I don't know if there's a number that I would tell you on the of policies because, you know, it, it, it could be one quarter where we're buying some smaller policies and, and another quarter where we're uying larger policies.

Speaker #9: And so I don't know if I'd focus quite as much on the number of policies, a-as much as I would focus on the 1.5 to 2.

Speaker #8: That makes a lot of sense. And

Speaker #11: when I, when I think of the, the strong gain that you posted 26%, I just wanna make sure I'm clear. Is that purely the, the price you paid?

Speaker #11: it's the denominator with the numerator being what you received? It's not an annualized number? So that's.

Speaker #9: That's correct. Yeah, that's what happened in Q2. So we, you know, we performed above what we did initially. What our historical trade spreads had indicated was closer to 22.

Speaker #9: And, and if you look at the KPIs, y-you know, in the new deck, you'll actually see how we track that for you, where you look at that historical trade spread on a quarterly basis now.

Speaker #8: That's, that's pretty strong. And, and then just lastly on the G&A expenses at 18.9 million. How are you thinking that going forward? Is it gonna track with revenue or do ou think you're gonna keep it pretty steady?

Speaker #8: How, how are you inking about G&A going forward?

Speaker #9: So it, it will grow as, as revenue grows. It's not at the same percentage. I mean, I think we have, you know, a couple things going going through that, through that line item with additional, additional headcount to support growth.

Speaker #9: And then we've had, you know, a little bit of increased legal fees over the last, a couple of months. But, you know, from a, normalization standpoint, we, we expect to be south of that $18 million number on a quarterly basis.

Speaker #8: Thanks a lot.

Speaker #9: Awesome. Thank you, Andrew. Appreciate it.

Speaker #8: And our next estion will come from Randy Binner with BRiley. Please go head.

Speaker #10: hey, good evening. So, I have a question about the breakout, unrelated party transactions as a percentage of revenue. That's a helpful disclosure. Is that on, is it on, I assume, is it on life solution revenue or total revenue?

Speaker #10: Those percentages?

Speaker #9: Yeah, so on those percentages, that be on total revenue. But if you really break down, y-you ow, nearly all of our revenue is in life solutions right now.

Speaker #9: I mean. Certainly,

Speaker #8: Yeah.

Speaker #9: there's some in, in, asset management and, and some other areas. But, you know, we, focused on all the revenue against it just because primarily, that's been a key driver of our revenue on a percentage basis.

Speaker #8: Yep. Got it. And then, you know, kind of similar breakout, th-that, I'd be interested in. So for the, you know, for the policies I went to parties, can you, I, I think this will also be in the queue, but can you give us some color on the breakout of, kind insurance partners versus, financial.

Speaker #9: Yeah.

Speaker #8: investors?

Speaker #9: Sure. And, yeah, that’s a little more of a challenge to break out because what’s happening, Randy, is that we’re servicing a lot of those assets ultimately for them.

Speaker #9: And, y-you ow, breaking those out is, is sometimes a, a confidentiality, request. On,

Speaker #8: Mm-hmm.

Speaker #9: on, on their part. But, you know, I, I think in our deck, you can see that how we've increased the amount of policies that we serviced is, is pretty substantial.

Speaker #9: And we're continuing to expand the relationship, relationships rather, with our carrier partners as, as well as our reinsurers. And, we're, you know, we're ing on what I think is, is really interesting structures so that they can, participate in a more significant way.

Speaker #8: Okay. And then just one more, if I can, on, on asset management, the, the f you know, it's, it's kind of early days in that business, so maybe we were conservative.

Speaker #8: But the, the fee, the, the fees, to AUM were, h kind of higher than we forecasted.

Speaker #9: Yeah.

Speaker #8: Is that, you know, is there is there anything i-is that is this the right level? Is there anything unusual? it's, you know, it's, it's, even in about 27 basis points on AUM.

Speaker #8: Just wondering how predictive that is or if it's even gonna get better from here.

Speaker #9: Sure. Yeah, I we're gonna continue, I think, see improvement over time. and, and we're seeing a lot of interest in the asset management piece of our business, and we're continuing to, evolve, that, that, that segment of our business, I think, in a y significant way.

Speaker #9: And, obviously, we can't predict the future, but, we feel really good about where we are, where those numbers are now, and, and, and feel good that 's a lot of room to grow.

Speaker #8: All right. I'll leave it there. Thanks. Thanks for the responses. Appreciate .

Speaker #9: Sure. Thank you, Randy.

Speaker #8: And again, if you have a question, please press star and one to join the queue. Our next question will come from Mike Grondal with Northland Securities.

Speaker #8: Please go head.

Speaker #12: Hey, guys. Congratulations. kind following up o-on the question about the back half of the year, Jay, w-were you implying sequential growth for revenue and adjusted net income?

Speaker #12: I, I, you ow, it. As,

Speaker #9: Yeah.

Speaker #12: as, as you guys went through two-Q, you kind of had, you know, liberation day there early, a lot of volatility, a lot of uncertainty.

Speaker #12: You know, there's, there's part of me thinking that you just had pricing power at both ends. When you were sourcing policies and then when you were selling policies, and if ou lose just a little bit of that, that kind of cuts into margin.

Speaker #12: So I, I guess just help us think sequentially the next couple quarters.

Speaker #9: Sure. And part of what we can go to is, is that we can look back historically too. And, you ow, i-historically, sequentially, you know, Q3 and Q4 have always, historically been stronger quarters for us than the first half of the year.

Speaker #9: and, you know, i-it the risk that I think we step into a little bit is, is that w you're right. We, we had a terrific Q2, and, and what does it look like Q3 if we're sequentially higher in Q3 over, over Q2?

Speaker #9: and I'm oking at the consensus numbers and, and now that, you know, we're, we're, we're talking to all of our analysts, I mean, I would love for you not to raise consensus, but, you know, with that said, I'll, I'll, I'll kitting aside, you ow, the momentum that we've talked about, through Q2 is, you know, we, we feel good about.

Speaker #9: And it's continued. And, and, you ow, there are investors and there is demand for this asset, still meeting with the increase in origination. If you look at even our marketing spend increase, that's increased, quarter quarter.

Speaker #9: And, and not just broadening the message across, cross the board with Abacus, but our marketing spend, even on our origination, we're signing up new national account relationships.

Speaker #9: And so as, as this message is becoming, more validated and, and I would argue more normal, that's, that's continuing to improve our origination. And then supplementing the origination, though, is our servicing book, is our asset management fees, right?

Speaker #9: All of these things are beginning to build into smoothing out my, you know, some of that disparity that you might think is going to happen.

Speaker #9: And so I think that, you know, when you start to kind post these consistent results, like we're continuing to do, I think that gives investors and, and certainly shareholders a lot more comfort around what's coming next.

Speaker #8: Great. Okay. Hey, thank ou.

Speaker #9: Sure. Thanks, Mike.

Speaker #8: Our next question is a follow-up from Patrick David with Autonomous Research. Please go head.

Speaker #10: hey, thanks for follow-up. just a quick one on the, the $142 million flows. Is, is that gross or net? And if gross, could you give the net?

Speaker #10: And it's a very similar number to one-Q. So is that, like, a run rate that the business is at, or is there some lumpiness there as we look into second half?

Speaker #10: Thank you.

Speaker #9: Sure. Thank you, Patrick. yeah, that was gross. and then, you know, the net number, I e remember, it's not that much different, right? And the reason why is, is that, y-you know, these assets come in into you know, longer-term strategies.

Speaker #9: and so, if you look back, what's really interesting about the capital raise, let's kind of look at that maybe on an annualized basis. most of the capital in our kind of in within Q1 came in towards latter part of Q1, I , I would say, kind of the last two weeks of March.

Speaker #9: And then, you know, we started to see some kind of normalization here over the summer, with some potential expectations that could increase in the second half of the year.

Speaker #9: But if you think it, really over the last four months, we've, we've raised, you know, give or take approximately, almost, what, $240-plus million dollars.

Speaker #9: So, y-you ow, I, I don't wanna forecast and say, "Hey, that's be because these things can obviously, you know, cap rates can move." But, from what I can tell, y-y-you know, and, and the where, where we sit on this, we feel we feel good that this is that the capital raise starting to be pretty consistent.

Speaker #9: And demand is hopefully going to continue as we get into Q3 and Q4. The last thing I would add to that is, as we're adding additional products in the alt space, we should continue to see that number increase.

Speaker #9: oh, sorry. And, and one additional piece to that, Patrick, is that the only net is the ETFs, which is $11 million everything else is gross.

Speaker #9: Yeah.

Speaker #8: Oh, all right. Thank you.

Speaker #9: Sure.

Speaker #8: And this concludes our estion and answer session. I'd like to turn the call back over to Jay Jackson for any closing remarks.

Speaker #9: Terrific. I, I just wanna take a moment and, and thank everyone. we, we are, incredibly grateful for all of our shareholders, our estors, and who have taken the time to continue to expand and continue to learn and, and learn our story in a more granular way.

Speaker #9: And we are committed to continue delivering that story on a much more broader scale because, y-y-you know, we believe that this story is going to continue to grow as our company continues to grow and as you look at where our is, it's, you know, maybe in the earlier stages of potentially one of the next really large, private credit asset managers.

Speaker #9: And we are well on that path. And it's, it's a good time to take a look at Abacus because as we look out over the next year, two year, three years, four years, five years, we are we are definitely meeting and exceeding the expectations that, that we have set out for ourselves and will continue to do.

Speaker #9: So thank you very much for all of your support. Thank you for listening in on this call. And if you ever need to s to reach us or speak with us, we are certainly available to you.

Speaker #9: Thank you so much.