Andersen Group Q3 Earnings Call Highlights

Key Points

• Andersen raised its 2026 outlook after third-quarter revenue grew 18.7% to about $337 million and adjusted EBITDA rose 18.8% to $154.5 million. It now expects 2026 revenue of $990 million to $1.01 billion and adjusted EBITDA of $255 million to $275 million.
• The company’s first 2027 forecast calls for revenue of $1.275 billion to $1.325 billion—about 30% growth—and adjusted EBITDA of $320 million to $340 million. The outlook includes acquisitions, but management did not disclose the organic and acquisition-related portions.
• Acquisitions are central to the expansion plan: Andersen has signed 24 deals since March, 16 of which had closed by the call, and expects the rest to close by early 2027. Organic revenue per hour rose 8.6% in the quarter, while GAAP net income fell year over year amid non-cash equity compensation and a non-comparable prior-year period.

Andersen Group NYSE: ANDG raised its 2026 revenue and adjusted earnings outlook after reporting third-quarter revenue growth of 18.7%, and issued a 2027 forecast that anticipates roughly 30% revenue growth as it expands through acquisitions.

Third-quarter revenue rose to approximately $337 million, up about $53 million from a year earlier, Chairman and CEO Mark Vorsatz said on the earnings call. Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, increased 18.8% to $154.5 million, with the adjusted EBITDA margin holding nearly steady at 45.8%, compared with 45.7% a year earlier.

Vorsatz said the third quarter is typically Andersen’s strongest because much of its recurring work is completed during that period. For the first nine months of 2026, revenue increased 19.1% to approximately $795 million, while adjusted EBITDA rose 27.8% to about $277 million.

Higher outlook and first 2027 guidance

Andersen increased its 2026 revenue guidance to $990 million to $1.01 billion, from a prior range of $980 million to $1 billion. It also raised its adjusted EBITDA forecast to $255 million to $275 million, from $225 million to $250 million.

For 2027, the company projected revenue of $1.275 billion to $1.325 billion and adjusted EBITDA of $320 million to $340 million. Vorsatz said the revenue range represented approximately 30% growth.

The 2027 forecast includes transactions that have closed or been signed, as well as a handful of additional deals the company expects to close by the end of 2026 or early in the first quarter of 2027, Vorsatz said. Management did not provide a breakdown of the forecast between organic and acquisition-related revenue or earnings.

Asked about the acquisition contribution to 2026 guidance, CFO Neal Livingston said Andersen had intentionally not guided to an organic and inorganic split. He said an analyst’s reference to a prior expectation of $25 million to $30 million in inorganic revenue would be “on the low side.”

Acquisitions and integration

Vorsatz said Andersen had signed 24 deals since March, including 16 that had closed by the time of the call. The company expects the remaining eight to close no later than the end of the first quarter of 2027.

He said demand from potential acquisition partners had exceeded his expectations, but identified managing growth and executing transactions as key challenges. Andersen has added resources to its deal team and shifted its expansion team toward integration, he said.

For the 12 months ended Sept. 30, Andersen completed eight acquisitions, including transactions in Canada and Switzerland during the third quarter, Livingston said. Those eight deals contributed $16.2 million in revenue to the company’s results during the period.

Andersen provided additional acquisition disclosures with its quarterly filing. Livingston said the company treats a transaction as inorganic for 12 months after closing and plans to continue the disclosures, though it does not plan to report a separate inorganic profit-and-loss statement.

On an internal pro forma basis that excludes the effects of acquisition accounting, margins for the eight inorganic transactions completed year to date averaged 15% to 25%, Livingston said. He said acquired firms can initially have lower margins because they are smaller, integration benefits take time to materialize and some acquired service lines have lower margins than Andersen’s organic U.S. tax business.

Productivity and reported earnings

All service lines and geographic regions contributed to third-quarter revenue growth, Livingston said. On an organic basis, revenue per hour increased 8.6% in both the quarter and the first nine months, while revenue per person rose 14.6% in the quarter and 13.1% year to date.

The revenue-per-hour measure includes the effect of a 3% technology surcharge on client contracts signed from the second quarter of 2026. Vorsatz said the surcharge will continue but will be included in the base for next year’s comparisons. Livingston said the company will continue reviewing rates twice a year and that the 3% surcharge will not necessarily be repeated.

Under generally accepted accounting principles, Andersen reported third-quarter net income of $68 million, compared with $111 million a year earlier. The net loss attributable to Andersen Group was $9 million, or 55 cents per basic and diluted Class A share, while net income attributable to non-controlling interests was $76.9 million.

Livingston cautioned that the year-over-year GAAP comparison was not like-for-like because the prior-year quarter preceded Andersen’s initial public offering and related reorganization. Third-quarter operating expenses included $40.4 million in non-cash equity-based compensation expense associated with vesting Class X Aggregator Units, with no comparable expense a year earlier.

Andersen ended September with $193.6 million in cash and equivalents and no borrowings under its $50 million revolving credit facility. Operating cash flow for the first nine months rose to $142.8 million from $101.9 million a year earlier, Livingston said.

About Andersen Group (NYSE:ANDG)

Andersen Group is a professional services firm providing tax, legal, valuation, financial advisory and consulting services to individuals, families and businesses. Its work includes tax planning and compliance, business and transaction advisory, and legal and valuation support. The firm traces its origins to WTAS, established in 2002 by former Arthur Andersen professionals. It later adopted the Andersen name and developed an international presence through the Andersen network of affiliated firms.

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