Abacus Global Management, Inc. Q4 FY2024 earnings call

• Successfully completed acquisitions of Carlisle Management Company, SCA, and FCF Advisors in Q4 2024, adding ~$2.6 billion in assets under management.
• Rebranded FCF Advisors to Abacus FCF Advisors and launched the Abacus FCF Small Cap Leaders ETF (ABLS).
• Announced management fee reductions and an 18-month fee waiver on certain ETFs.
• Strong financial results for Q4 and full year 2024 with significant growth in revenue, net income, and EBITDA.
• Enhanced balance sheet through raising $181.7 million in equity and a $150 million debt facility.
• Initiated 2025 outlook with adjusted net income guidance between $70 million and $78 million.

For the fourth quarter of 2024, total revenue grew by 40% year over year to $33.2 million. Adjusted net income grew by 126% to $13.4 million and adjusted EBITDA by 51% to $16.6 million. For the full year 2024, total revenue increased by 69% to $111.9 million, adjusted net income grew by 58% to $46.5 million, and adjusted EBITDA by 57% to $61.6 million. Policy originations increased by 63% to 1,034 in 2024, and over $344 million in capital was deployed. The company has four segments: Abacus Life Solutions provides liquidity for life insurance assets; Abacus Asset Group serves institutional investors; ABL Wealth offers customized financial plans; ABL Tech leverages technology for life planning.

• Management initiated full-year 2025 outlook for adjusted net income to be between $70 million and $78 million, implying growth of 51% to 68% from 2024's $46.5 million.
• Growth driven by continued policy origination, capital deployment, expanding institutional relationships, and integrated business segments.

Risks affecting the business are referenced in Abacus Global Management's public filings, including those related to forward-looking statements, market uncertainties, and operational risks that could materially affect results.

Q: Could you give color on the key swing factors in your assumptions between the high and low end of the 2025 adjusted net income guidance?

A: Key swing factors include origination rates, integration of acquired segments (Carlisle and FCF), and additional capital deployment. The high end assumes full draw of remaining capital and continued success in asset management offerings.

Q: How much of the November equity capital raise and December debt offering was deployed in Q4 and Q1 to date?

A: A significant amount of capital was deployed, with the company having $131 million in cash at year-end 2024. Capital deployment is ongoing, supporting Q1 results and the 2025 guidance.

Q: Discuss your strategy of holding policies on the balance sheet. Should it naturally trend higher as you grow?

A: Policies on the balance sheet typically have an average time of 4-6 months, targeting two turns per year. As the company grows, it will continue to buy more policies than sell, with the balance sheet amount expected to trend higher.

Q: Are you seeing any change in behavior from individuals life settling their policies due to the economic environment?

A: Volatile markets can increase origination interest as individuals seek liquidity, and investors seek alternative assets, positively impacting life settlement activity.

Q: How is the integration of FCF Advisors progressing, particularly with lead generation?

A: Lead integration is ongoing. The ABL Wealth division, focused on financial advising, will create opportunities to manage inquiries and utilize in ETF products.