Abacus Global Management, Inc. Q3 FY2024 earnings call

• ABL Tech initiative: Went live with external clients in April, signed public pension and large union pension fund clients, won 4 out of 5 RFPs, serves 21 clients with 23 others in commitment or negotiation, expects to exceed one million lives tracked by Q1 2025.
• Acquisitions: Announced Carlisle Management Company SCA and FCF Advisors, adding ~$2.6 billion in assets under management, expected to close by end of Q4 subject to regulatory approval.
• New executives: Corey McLaren joined as Managing Director of Capital Markets, Rob Phillips as Senior Vice President of Investor Relations and Corporate Affairs.
• Product initiatives: Partnered with Lorisco to launch PREADISAN, a health prediction and actuary technology tool in beta testing.
• Capital position: Balance sheet liquidity strong, deployed $92 million equity capital, reviewing capital options for additional financing.

In the third quarter of 2024, Abacus Life grew total revenue by 33% year-over-year to $28.1 million. Adjusted EBITDA grew 54% year-over-year to $16.7 million, and adjusted net income increased 65% year-over-year to $14.9 million or $0.20 per diluted share. Capital deployed was $93.2 million in Q3 2024 compared to $56.4 million in the prior-year period, and policies purchased grew by 53% to 278. As of September 30, 2024, the company had cash and cash equivalents of $19.4 million, balance sheet policy assets of $274.4 million, and outstanding long-term debt of $166.5 million.

• Q4 trends: Historically, Q4 has stronger origination due to policyholders planning year-end transactions, and the trend continues with bullish outlook for origination.
• Growth outlook: Committed to sustaining momentum, leveraging product innovation and prudent execution for long-term profitable growth, excited about opportunities in ABL Tech and acquisitions integration.

Participants are referred to Abacus Life’s public filings for discussion of risks affecting the business, as some comments contain forward-looking statements subject to risks and uncertainties that could materially affect results.

Q: Can you talk about trends in the fourth quarter so far and seasonality?

A: Yes, the trend of stronger Q4 origination continues as policyholders look to conclude transactions prior to year-end, and Q4 is shaping up similarly to historical trends.

Q: What was the originated face value in the third quarter?

A: It was $471.6 million.

Q: Talk about active management revenue trends and portfolio servicing/origination revenue?

A: Active management revenue is strong with continued demand, servicing revenue may ebb/flood based on portfolio activity, and origination revenue may decrease as more policies are held on balance sheet instead of originating for fees.

Q: Update on competitive environment and top priorities for 2025?

A: Competitive landscape is tight, giving run room, top priorities include expanding education/awareness, expanding business model into adjacent industries like servicing and valuation, and continuing growth in ABL Tech division.