Silvercrest Asset Management Group Q1 Earnings Call Highlights

Key Points

• Silvercrest’s Q1 revenue was flat at $31.4 million, but earnings fell sharply as expenses rose 13.5% year over year. Net income was just $0.5 million, while adjusted EBITDA came in at $3.7 million.
• The firm is in the middle of a major investment push to expand global distribution, investment capabilities, and succession planning. Management said the strategy is weighing on margins now, but is intended to create a more durable and globally capable business.
• AUM declined sequentially to $23.1 billion in discretionary assets due mainly to institutional outflows, though total AUM still rose 1.1% year over year to $35.7 billion. Management said it sees a pipeline “in the billions of dollars” and remains optimistic about future inflows.

Silvercrest Asset Management Group NASDAQ: SAMG reported flat first-quarter revenue and sharply lower earnings as the firm continued what management described as the most significant investment program in its history, aimed at expanding its global distribution, investment capabilities and succession planning.

Chairman and CEO Rick Hough said Silvercrest entered its 25th year in business with “clear strategic momentum,” but acknowledged that first-quarter results reflected “near-term headwinds” that the company had previously anticipated. The firm’s discretionary assets under management, which Hough said primarily drive revenue, declined 3.7% to $23.1 billion as of March 31, 2026, from $24.0 billion at the end of 2025, primarily due to net institutional outflows.

Despite the sequential decline, Hough said discretionary AUM increased nearly 2% year over year from $22.7 billion at the end of March 2025. Total AUM rose 1.1% year over year to $35.7 billion from $35.3 billion.

Revenue Holds Steady, Expenses Rise

CFO Scott Gerard said first-quarter revenue was $31.4 million, essentially flat compared with the first quarter of 2025. Reported consolidated net income was $0.5 million, while net income attributable to Class A shareholders was approximately $0.2 million, or $0.03 per basic and diluted Class A share.

Adjusted EBITDA was approximately $3.7 million, or 11.8% of revenue. Adjusted net income was approximately $1.5 million, equal to $0.13 per adjusted basic share and $0.12 per adjusted diluted share.

Gerard said total expenses increased by $3.6 million, or 13.5%, year over year. Compensation and benefits expense rose by $2.3 million, or 12%, primarily due to salary and benefit increases, merit-based increases, new hires, new staff in Ireland and a higher bonus accrual. General and administrative expenses increased by $1.3 million, or 17.3%, driven by higher professional fees, occupancy costs and travel and entertainment expenses.

Hough said compensation and benefits expense totaled $21.1 million, representing 67.2% of revenue for the quarter, compared with $18.9 million, or 60.2% of revenue, in the prior-year period. He said the compensation ratio is expected to remain elevated while the firm’s growth investments mature and begin contributing to revenue.

Global Expansion Remains Central to Strategy

Hough said Silvercrest has been investing for roughly a year and a half in intellectual capital, headcount and distribution infrastructure intended to build “a more enduring and globally capable firm.” He said the company continued to execute on strategic priorities during the first quarter, including expansion in Europe, Oceania and Asia.

The company opened offices in Atlanta and Singapore during the first quarter. Hough said the Atlanta office has already begun producing business development activity, including inflows that will be reportable. Silvercrest has also reorganized its international business development effort and now has professionals in London and Australia dedicated to that work.

Hough said the firm’s Dublin office remains on track to open later in 2026, pending expected regulatory approval from the Bank of Ireland. That approval would allow Silvercrest to proactively market its capabilities in Europe. The company has also created investment trusts in Ireland and Australia, which Hough said materially expand its distribution opportunity across Europe and Oceania.

Management Points to Institutional Pipeline

During the question-and-answer session, Hough said Silvercrest is seeing strong interest in its global, international and emerging markets equity strategies, supported by what he described as top-tier investment performance. He said those performance records are visible to consultants and institutions through available databases and are helping generate interest from global institutional allocators.

Hough said a key institutional objective for 2026 is to convert the pipeline into consultant approvals and funded mandates. He noted that the process can be lengthy, as consultants and allocators conduct due diligence, meet investment teams and rate strategies before assets are committed.

“The pipeline we’re looking at is in the billions of dollars,” Hough said, while cautioning that the outcome can be binary and difficult to time. He said the company remains optimistic about showing progress in both AUM and revenue, but added that he could not give a firm forecast for 2026 inflows.

Asked about small-cap strategies, Hough said small-cap stocks have performed better since September 2025, helping Silvercrest preserve some AUM. However, he said the firm needs to demonstrate sustained better performance and continue through a transition period involving senior managers of those capabilities.

Balance Sheet, Buybacks and Dividend

Gerard said total assets were approximately $133.0 million at March 31, down from $166.6 million at the end of 2025. Cash and cash equivalents were approximately $11.6 million, compared with $44.1 million at year-end. Borrowings totaled approximately $10.0 million, and total Class A stockholders’ equity was approximately $46.9 million.

Silvercrest repurchased approximately $1.9 million of Class A shares during the quarter, completing its previously announced $25 million stock repurchase plan. Hough said the firm has returned capital through both dividends and buybacks and has repurchased approximately $87 million of stock over the past five years.

However, Hough said the company is likely to take “a slight pause” on capital returns while it waits for growth investments to show progress. He said the firm’s cash balance was lower after bonus compensation payments, but added that Silvercrest’s cash flow and credit facilities support both ongoing growth initiatives and capital returns.

The board declared a quarterly dividend of $0.21 per Class A share, payable on or about June 19, 2026, to stockholders of record as of June 12.

Outlook Focused on Investment Payoff

Hough said the first-quarter pressure on margins reflected deliberate investments in people, marketing, distribution and operating infrastructure. He said the firm has expanded its analyst team, trading, operations, administration and marketing functions, including rebuilding marketing capabilities and adding professionals in Australia and London.

In closing remarks, Hough said Silvercrest expects to see “substantial progress in the quarters to come” based on the investments made over the past year. He said the company is focused on creating “a much more enduring and profitable business” over the next 25 years.

About Silvercrest Asset Management Group NASDAQ: SAMG

Silvercrest Asset Management Group Inc, headquartered in New York City, is an independent registered investment adviser that specializes in delivering customized wealth and asset management solutions for high-net-worth individuals, family offices and institutional clients. Founded in 2002 by senior professionals from leading financial institutions, Silvercrest has built its reputation on a disciplined, research-driven investment process and a commitment to personalized client service.

The firm's core offerings include discretionary and non-discretionary portfolio management across equities, fixed income, hedge funds and alternative investments.

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