Ares Acquisition Corporation II (AACT) Financials

Ares Acquisition Corporation II (NYSE: AACT) has reported financial results and statements from Q3 2022 through Q4 2024. Here is an analysis of the key trends and notable points based on the last four years of data:

• The company has consistently generated net income from continuing operations since Q2 2023, with quarterly net incomes ranging from approximately $3.5 million in early 2023 to about $6.9 million in recent quarters (Q4 2023 to Q4 2024).
• Diluted earnings per share (EPS) improved significantly from near zero in early 2023 to around $0.20-$0.22 per share in 2024 quarters, reflecting steady profitability and efficient share management with a stable weighted average diluted shares outstanding at 62.5 million.
• Interest and investment income is the primary income source, consistently exceeding $6.5 million per quarter in 2024, which strongly boosts pre-tax income and net income.
• The company has no reported total revenue or cost of revenue, implying it may primarily operate as a special purpose acquisition company (SPAC) or investment vehicle focusing on interest and investment income rather than operating revenue-generating business units.
• Selling, General & Administrative (SG&A) expenses are steady, ranging between $370K and $500K quarterly in 2024, showing disciplined expense management relative to income levels.
• Operating income remains negative each quarter due to SG&A expenses and no operating revenue, but these losses are substantially offset by interest and investment income.
• The balance sheet shows large noncurrent operating assets valued above $500 million in 2023 and 2024, reflecting significant invested capital likely generating the reported interest & investment income.
• Total liabilities have remained stable around $23 million, comprised mainly of long-term debt ($5 million) and other noncurrent operating liabilities ($17.5 million), indicating a manageable debt structure compared to assets.
• The company shows a substantial negative total common equity (around -$21 to -$22 million) and total equity & noncontrolling interests negative by approximately $20 to $21 million across the 2023-2024 period, indicating that redeemable noncontrolling interests at over $500 million significantly impact equity calculations likely related to SPAC structure or preferred instrument classification.
• Net cash flows from operating activities are negative but modest (about -$200K to -$260K per quarter), reflecting timing and adjustments between net income and actual cash collection/spending, which is typical in investment-focused companies.

Summary: Ares Acquisition Corporation II appears to be a well-capitalized investment or acquisition holding company with stable and growing investment income driving profitability in 2023 and 2024. Without operating revenue, the company relies on investment returns but has managed expenses well. The substantial redeemable noncontrolling interests and negative equity positions reflect the specialized corporate structure typical of acquisition vehicles. Retail investors should consider the lack of traditional operating revenues and focus on investment income performance when evaluating AACT.