Abacus Global Management, Inc. Q2 FY2024 earnings call

• Strong Q2 performance with over doubled revenue, 83% growth in adjusted EBITDA, and 75% growth in adjusted net income.
• Strategic initiatives: Acquired Carlisle Management Company (~$200M, $2B AUM) and FCF Advisors ($600M AUM).
• In June, closed an oversubscribed public offering of 11.5 million shares, raising over $90 million, deployed into life settlement policies and business strategy.
• Established national distribution relationship with Amcor, leveraging Amcor's network to offer protection and retirement solutions.
• Strong balance sheet metrics: Annualized adjusted return on equity and adjusted return on invested capital were both 18% as of June 30, 2024.

For the second quarter of 2024, Abacus Life achieved total revenue of $29.1 million, more than doubling year-over-year. Adjusted EBITDA grew 83% year-over-year to $16.7 million, and adjusted net income increased 75% to $11.8 million or $0.18 per diluted share. The company's product segments include life insurance policies and ABL Wealth. The acquisition of Carlisle Management Company for approximately $200 million adds ~$2 billion in assets under management, and the acquisition of FCF Advisors adds ~$600 million in assets under management. Revenue from active management more than doubled to $27 million. On the balance sheet, as of June 30, 2024, cash and cash equivalents were $91.3 million, balance sheet policy assets were $208.7 million, and outstanding long-term debt was $151.3 million.

• Expect to deploy majority of the $90 million raised in June public offering before year end, likely in Q3.
• Positive outlook for full year EBITDA, tying out to previous model numbers and feeling confident about numbers throughout the end of the year.
• Growth opportunities with ABL Wealth and ABL Tech, with ABL Tech continuing to grow and add new clients for recurring fee earnings.

Forward-looking statements are subject to risks, uncertainties, and assumptions, including those set forth in item 1A of the most recent 10-K, which could materially affect results. Historical data are not necessarily indicative of future results.

Q: Talk about deployment and capacity, when to expect full deployment of $90 million raised.

A: Expect to have a majority of the capital deployed before year end, probably sooner than that, could be as early as Q3.

Q: Discuss adjusted EBITDA cadence for the second half of the year.

A: Feel very good about the numbers throughout the end of the year based on capital raise and current business sustainability and profitability.

Q: Talk about active management revenue trending over the next year or two.

A: Sustainable and profitable, with return on equity maintained and significant cash balance sheet to put money to work in Q3, expecting to maintain modeling numbers.

Q: Talk about M&A and Abacus Tech progress.

A: Will continue to be opportunistic with M&A, integrating acquired companies and driving profitability; ABL Tech continues to grow with new clients and is a growth opportunity for recurring fee earnings.

Q: Talk about acquisition front, margins, pricing.

A: Seeing interesting opportunities, including acquiring policies outside of regular origination platform, with pent up demand and significant market opportunity, expecting to put more capital to work where opportunities lie; buyback is lumpy depending on transaction closings, but underlying business is strong; balance sheet is strong and considering potential debt capital and equity going forward