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Earnings Call Insights: Silvercrest Asset Management Group Inc. (SAMG) Q3 2025

Management View

• Richard Hough, CEO, President & Chairman, reported that discretionary assets under management (AUM) increased $687 million during the third quarter, attributing the growth primarily to beneficial equity markets. New client account flows were highlighted, with $46.4 million added in organic new client accounts during the quarter and $564 million year-to-date through Q3. Hough stated, “Discretionary AUM now stands at $24.3 billion, which is a 3% sequential quarterly increase and an increase of 8% year-over-year.” He further noted, “Total AUM at the end of the third quarter did hit a new high for the firm at $37.6 billion.”

• Hough emphasized, “Silvercrest has embarked on significant strategic investments to promote growth opportunities,” with a focus on intellectual capital and headcount, which has led to substantially lower earnings and adjusted EBITDA in the near-term.

• He announced an ongoing $25 million buyback program, stating, “As of the end of the third quarter of 2025, we have repurchased approximately $16 million worth of shares.” He also referenced a dividend of $0.21 per share set to be paid in December and plans to distribute equity incentives to professionals in the near future.

• CFO Scott Gerard reported, “Revenue for the quarter was $31.3 million and reported consolidated net income for the quarter was $1.1 million.” Gerard added, “Expenses for the quarter increased year-over-year by $4 million or 15.4%, primarily driven by increased compensation and benefits expense and general and administrative expenses.”

Outlook

• Hough indicated that, “Assuming supportive markets and continued business development, we hope discretionary AUM will exceed all-time highs in the coming quarters.” He also described a plan to adjust nondiscretionary AUM reporting in 2026 to provide clearer business metrics.

• Management expects the compensation ratio to remain elevated for the foreseeable future due to ongoing investments in personnel and global marketing.

• The firm’s pipeline remains “robust, in particular with regards to our new global value equity strategy.” Hough highlighted, “We could see even some reasonable allocations in the fourth quarter or first quarter coming up here… which would obviously cover about 6 months.”

Financial Results

• Gerard reported, “Revenue for the quarter increased $0.9 million or 2.9% year-over-year.” Compensation and benefits expense rose $3.1 million or 16.8% year-over-year, influenced by both merit-based increases and new hires, and an increase in the accrual for bonuses.

• General and administrative expenses climbed $0.9 million or approximately 11.9% year-over-year, attributed to professional fees, occupancy, and recruiting costs.

• Reported net income attributable to Class A shareholders for the quarter was $0.6 million or $0.07 per basic and diluted Class A share. Adjusted EBITDA was $4.5 million or 14.5% of revenue for the quarter. Adjusted net income was $2.4 million or $0.19 per adjusted basic and diluted earnings per share.

• As of September 30, total assets stood at $157.6 million, with cash and cash equivalents at $36.1 million. No borrowings were reported, and total Class A stockholders’ equity was $58.9 million. The company repurchased $4.6 million worth of Class A shares during the quarter.

Q&A

• Christopher Marinac, Janney Montgomery Scott: “Do we think about this as maybe an 18-, 24-month time frame? Or is it any way to kind of give visibility on that?” Hough responded that the bulk of investments have been recent and that, “you’re looking at a longer time horizon of 18 to 24 months,” but also expects shorter-term flows in the next 6 to 12 months from the global value equity strategy.

• Marinac: “Are any of those [professional fees] temporary? Or will you have new professional fees to kind of cover in future periods?” Gerard replied, “Some of them are temporary, especially related to some of our global initiatives.”

• Marinac: “Does the EBITDA margin get recast because it’s now going to be a different company with a different broader focus?” Hough answered, “You look out further and it gets back to where it was barring any other new investments.”

• Sandy Mehta, Evaluate Research: “Can you just give us a little bit more color on what you’re seeing from a marketing perspective, the pipeline and what clients are saying or consultants are saying, what do you see out there on Global?” Hough described the pipeline as “very large” in international and global areas and noted, “our new centralized institutional marketing team and process has been highly engaged both with very significant sovereign pools of capital.”

• Mehta: “Is most of the hiring done at this point of the senior people that you were hiring? Is that pace of incremental hires? Is that going to slow down?” Hough responded that most hiring for new equity strategy and institutional team is complete but further hires are expected for Europe, Asia, and domestically.

• Mehta: “Where are you in terms of OCIO assets, currently?” Hough reported, “OCIO is almost $2.2 billion and has a very strong pipeline.”

• Mehta: “Do you disclose what price you bought the stock?” Hough stated, “We don’t disclose it. I will say that it has been, from our thinking, a very, very favorable price.”

Sentiment Analysis

• Analysts’ tone was generally neutral to slightly positive, focusing on the timing of returns from investments, the sustainability of professional fees, and the scale of hiring. Follow-up questions probed operating leverage and the trajectory of margins but did not express skepticism or overt concern.

• Management maintained a confident tone, emphasizing the potential payoff from recent investments: “The potential is very large. And I’m quite confident that it is going to pay off and that we will be able to report meaningful progress soon.” Hough acknowledged the longer time horizon but was optimistic about near-term flows and future profitability.

• Compared to the previous quarter, the current call reflected continued confidence in strategic initiatives, with management reiterating optimism about organic growth while acknowledging ongoing expense pressures and a longer investment payback period.

Quarter-over-Quarter Comparison

• Guidance continues to anticipate future record AUM levels, with management expecting discretionary AUM to exceed all-time highs in coming quarters, similar to the positive outlook last quarter.

• Strategic focus remains on organic growth through international expansion, global value equity strategies, and headcount investments. The firm has moved from announcing new strategic hires to discussing the absorption and expected payoff of those investments.

• Analysts’ questions shifted slightly from pipeline measurement and the pace of buybacks (Q2) to the timing of investment returns, margin recovery, and hiring trajectory (Q3), reflecting growing interest in when strategic investments will convert to earnings growth.

• Key metrics reflect moderate sequential growth in AUM and revenue, but a noticeable decline in net income and EBITDA margin due to higher compensation and G&A expenses.

• Management’s confidence level is steady, with ongoing emphasis on the size and quality of the pipeline and the robustness of international initiatives.

Risks and Concerns

• Management highlighted elevated compensation and G&A expenses as ongoing challenges, tied to strategic hires and global expansion.

• Analysts inquired about the possibility of continued high professional fees and whether the pace of hiring would slow, indicating concern about expense management relative to revenue realization.

• Hough acknowledged that the timeline for investment returns is variable, with most hiring complete for current initiatives but further additions expected internationally and domestically.

Final Takeaway

Silvercrest Asset Management Group continues to invest heavily in its global and institutional capabilities, with discretionary AUM and total AUM both reaching new highs. Management is confident that recent investments in talent and international expansion will result in accelerated organic growth over the next 18 to 24 months, with a robust pipeline supporting future revenue. Expense pressures are expected to remain elevated in the near term, but the firm anticipates a return to higher margins as new business flows materialize. Investors should watch for updates on realized flows from global strategies and continued progress in international markets as key drivers for future earnings and AUM growth.

Read the full Earnings Call Transcript