DIAMOND HILL INVESTMENT GROUP, INC. REPORTS RESULTS FOR SECOND QUARTER 2024 AND DECLARES QUARTERLY DIVIDEND
Diamond Hill Investment Group (Nasdaq: DHIL) released unaudited financial results for Q2 2024, reporting notable growth and some areas of concern. Assets under management (AUM) and assets under advisement (AUA) reached $31.1 billion, up from $27.9 billion YoY. Revenue increased to $36.7 million, a 10% rise compared to Q2 2023. However, net income attributable to common shareholders decreased 14% to $8.1 million, with EPS falling to $2.93 from $3.18. Despite a net operating profit margin rise to 33%, investment income turned into a loss of $0.7 million compared to a gain of $6.3 million previously. Additionally, the company declared a quarterly dividend of $1.50 per share, payable on September 13, 2024. CEO Heather Brilliant highlighted growth in fixed income strategies and strong equity markets as key performance drivers.
Diamond Hill Investment Group (Nasdaq: DHIL) ha rilasciato i risultati finanziari non auditati per il secondo trimestre del 2024, evidenziando una crescita significativa ma anche alcune aree di preoccupazione. Gli attivi in gestione (AUM) e gli attivi in consulenza (AUA) hanno raggiunto $31,1 miliardi, in aumento rispetto ai $27,9 miliardi dell'anno precedente. I ricavi sono aumentati a $36,7 milioni, con un incremento del 10% rispetto al secondo trimestre del 2023. Tuttavia, il reddito netto attribuibile agli azionisti ordinari è diminuito del 14%, scendendo a $8,1 milioni, mentre l'EPS è calato a $2,93 da $3,18. Nonostante un aumento del margine operativo netto al 33%, il reddito da investimenti si è trasformato in una perdita di $0,7 milioni rispetto a un guadagno di $6,3 milioni in precedenza. Inoltre, l'azienda ha dichiarato un dividendo trimestrale di $1,50 per azione, pagabile il 13 settembre 2024. Il CEO Heather Brilliant ha sottolineato che la crescita delle strategie a reddito fisso e dei mercati azionari solidi sono stati i principali motori di performance.
Diamond Hill Investment Group (Nasdaq: DHIL) publicó los resultados financieros no auditados del segundo trimestre de 2024, reportando un crecimiento notable y algunas áreas de preocupación. Los activos bajo gestión (AUM) y los activos en asesoría (AUA) alcanzaron los $31,1 mil millones, un aumento respecto a los $27,9 mil millones del año anterior. Los ingresos aumentaron a $36,7 millones, un incremento del 10% en comparación con el segundo trimestre de 2023. Sin embargo, el ingreso neto atribuible a los accionistas comunes disminuyó un 14% a $8,1 millones, con un EPS cayendo a $2,93 desde $3,18. A pesar de un aumento en el margen de ganancia neta operativa al 33%, el ingreso por inversiones derivó en una pérdida de $0,7 millones en comparación con una ganancia de $6,3 millones anteriormente. Además, la compañía declaró un dividendo trimestral de $1,50 por acción, pagadero el 13 de septiembre de 2024. La CEO Heather Brilliant destacó el crecimiento en estrategias de ingresos fijos y mercados de capitales sólidos como los impulsores clave del rendimiento.
다이아몬드 힐 투자 그룹 (Nasdaq: DHIL)은 2024년 2분기 비감사 재무 결과를 발표하며 주목할 만한 성장을 보고했지만 우려되는 부분도 일부 있다. 운용 자산 (AUM)과 자문 자산 (AUA)는 311억 달러에 달했으며, 이는 전년 279억 달러에서 증가한 수치다. 수익은 3,670만 달러로, 2023년 2분기 대비 10% 증가했다. 그러나 순이익은 보통주 주주에게 귀속되는 금액이 14% 감소해 810만 달러로 줄어들었고, EPS는 3.18달러에서 2.93달러로 하락했다. 순영업이익률은 33%로 상승했음에도 불구하고, 투자 수익은 이전의 630만 달러의 이익에서 70만 달러의 손실로 전환됐다. 또한, 회사는 주당 1.50달러의 분기 배당금을 발표했으며, 2024년 9월 13일에 지급된다. CEO 헤더 브릴리언트는 고정 수입 전략과 강력한 주식 시장이 주요 성과 드라이버라고 강조했다.
Diamond Hill Investment Group (Nasdaq: DHIL) a publié des résultats financiers non audités pour le deuxième trimestre 2024, rapportant une croissance notable et certaines zones de préoccupation. Les actifs sous gestion (AUM) et les actifs sous conseil (AUA) ont atteint 31,1 milliards de dollars, en hausse par rapport à 27,9 milliards de dollars d'une année sur l'autre. Les revenus ont augmenté à 36,7 millions de dollars, soit une hausse de 10 % par rapport au deuxième trimestre 2023. Cependant, le résultat net attribuable aux actionnaires ordinaires a diminué de 14 % pour s'établir à 8,1 millions de dollars, le BPA tombant à 2,93 dollars contre 3,18 dollars. Malgré une augmentation de la marge bénéficiaire nette d'exploitation à 33 %, le revenu d'investissement a enregistré une perte de 0,7 million de dollars, contre un gain de 6,3 millions de dollars précédemment. De plus, l'entreprise a déclaré un dividende trimestriel de 1,50 dollar par action, payable le 13 septembre 2024. La PDG Heather Brilliant a souligné que la croissance des stratégies de revenus fixes et des marchés boursiers solides étaient des moteurs clés de la performance.
Diamond Hill Investment Group (Nasdaq: DHIL) hat die ungeprüften Finanzzahlen für das zweite Quartal 2024 veröffentlicht und dabei ein bemerkenswertes Wachstum sowie einige besorgniserregende Bereiche festgestellt. Die Assets under Management (AUM) und die Assets under Advisement (AUA) erreichten 31,1 Milliarden Dollar, ein Anstieg von 27,9 Milliarden Dollar im Vergleich zum Vorjahr. Umsatz erhöhte sich auf 36,7 Millionen Dollar, was einem Anstieg von 10 % gegenüber dem zweiten Quartal 2023 entspricht. Der Nettoertrag für Stammaktionäre sank jedoch um 14 % auf 8,1 Millionen Dollar, während das EPS auf 2,93 Dollar von 3,18 Dollar fiel. Trotz eines Anstiegs der Netto-Betriebsgewinnmarge auf 33 %, verwandelte sich das Investitionseinkommen in einen Verlust von 0,7 Millionen Dollar im Vergleich zu einem Gewinn von 6,3 Millionen Dollar zuvor. Darüber hinaus erklärte das Unternehmen eine vierteljährliche Dividende von 1,50 Dollar pro Aktie, zahlbar am 13. September 2024. CEO Heather Brilliant hob das Wachstum bei festverzinslichen Strategien und robusten Aktienmärkten als wichtige Leistungstreiber hervor.
- AUM and AUA increased to $31.1 billion from $27.9 billion YoY.
- Revenue grew by 10% to $36.7 million.
- Net operating profit margin improved to 33% from 23% YoY.
- Net client inflows were $229.0 million, reversing the prior year's $103.0 million of net outflows.
- Net income attributable to common shareholders dropped by 14% to $8.1 million.
- EPS decreased from $3.18 to $2.93.
- Investment turned into a loss of $0.7 million from a gain of $6.3 million YoY.
Insights
Diamond Hill Investment Group's Q2 2024 results show positive momentum in several key areas. Assets under management (AUM) and assets under advisement (AUA) reached $31.1 billion, up from $27.9 billion a year ago, indicating strong growth. The company also reported net client inflows of $229 million, a significant improvement from the $103 million net outflows in Q2 2023.
Revenue increased by
The company's focus on fixed income strategies is paying off, contributing to the growth in AUM and revenue. This diversification could help buffer against potential volatility in equity markets. The board's approval of a
While the overall results are positive, investors should note the decline in earnings per share from
Diamond Hill's Q2 results reflect broader trends in the asset management industry. The significant increase in AUM and AUA, particularly in fixed income strategies, aligns with the current market environment where investors are seeking stability and income in the face of economic uncertainties.
The net client inflows of $229 million are particularly noteworthy, as they buck the trend of outflows seen in many active management firms. This suggests that Diamond Hill's investment strategies are resonating with clients, potentially due to their value-driven approach and long-term perspective.
The company's improved operational efficiency, as evidenced by the increased net operating profit margin, is important in an industry facing fee pressures and increasing competition from passive investment vehicles. However, the investment loss in Q2 2024 compared to a substantial gain in Q2 2023 highlights the volatility inherent in the company's own investment portfolio.
Looking ahead, Diamond Hill's focus on areas where they have "competitive advantages" could be a key differentiator. The growth in fixed income assets is particularly interesting, as it diversifies the company's revenue streams and could provide more stability in challenging market conditions.
Investors should keep an eye on the company's ability to maintain its improved margins and continue attracting inflows, especially if market conditions become less favorable. The ongoing share repurchase program, which reduced outstanding shares by
The following are selected highlights for the quarter ended June 30, 2024:
- Assets under management ("AUM") and assets under advisement ("AUA") combined were
$31.1 billion $29.2 billion $27.9 billion - Average AUM and AUA combined were
$31.1 billion $26.8 billion - Net client inflows were
$229.0 million $103.0 million - Revenue was
$36.7 million $33.4 million - Net operating profit margin was
33% , compared to23% for the second quarter of 2023. - Adjusted net operating profit margin1 was
31% , compared to30% for the second quarter of 2023. - Investment loss was
$0.7 million $6.3 million - Net income attributable to common shareholders was
$8.1 million $9.4 million - Earnings per share attributable to common shareholders - diluted was
$2.93 $3.18 - Adjusted earnings per share attributable to common shareholders - diluted2 was
$2.88 $2.35 - The Company returned a total of
$9.4 million $5.2 million $4.2 million $1.50
"We are pleased to see continued strong performance and growth in our fixed income strategies, which contributed to an increase in average assets under management and advisement in the first half," said Heather Brilliant, CEO. "This growth in fixed income combined with strong equity markets resulted in higher revenue. We remain committed to delivering great outcomes for clients in asset classes where we have competitive advantages."
_____________________________________________
1 Adjusts the financial measure calculated in accordance with |
2 Adjusts the financial measure calculated in accordance with GAAP for the impact of the Consolidated Fund(s) and investment income related to certain other investments. See the reconciliation to the comparable GAAP financial measure at the end of this earnings release. |
Dividend:
The Company's board of directors approved the payment of a regular quarterly cash dividend of
Selected Income Statement Data | |||||
Three Months Ended June 30, | |||||
2024 | 2023 | % Change | |||
Revenue | $ 36,661,333 | $ 33,350,637 | 10 % | ||
Compensation and related costs, excluding deferred compensation expense (benefit) | 18,330,666 | 17,399,350 | 5 % | ||
Deferred compensation expense (benefit) | (869,135) | 1,982,724 | NM | ||
Other expenses | 7,067,191 | 6,182,380 | 14 % | ||
Total operating expenses | 24,528,722 | 25,564,454 | (4) % | ||
Net operating income | 12,132,611 | 7,786,183 | 56 % | ||
Investment income (loss), net | (654,591) | 6,276,708 | NM | ||
Net income before taxes | 11,478,020 | 14,062,891 | (18) % | ||
Income tax expense | (3,352,180) | (3,893,942) | (14) % | ||
Net income | 8,125,840 | 10,168,949 | (20) % | ||
Net income attributable to redeemable noncontrolling interest | — | (736,470) | (100) % | ||
Net income attributable to common shareholders | $ 8,125,840 | $ 9,432,479 | (14) % | ||
Earnings per share attributable to common shareholders - diluted | $ 2.93 | $ 3.18 | (8) % | ||
Weighted average shares outstanding - diluted | 2,769,427 | 2,970,357 | (7) % | ||
Six Months Ended June 30, | |||||
2024 | 2023 | % Change | |||
Revenue | $ 72,956,263 | $ 67,341,140 | 8 % | ||
Compensation and related costs, excluding deferred compensation expense | 36,478,131 | 33,762,258 | 8 % | ||
Deferred compensation expense | 2,321,228 | 2,727,235 | (15) % | ||
Other expenses | 13,721,467 | 12,123,897 | 13 % | ||
Total operating expenses | 52,520,826 | 48,613,390 | 8 % | ||
Net operating income | 20,435,437 | 18,727,750 | 9 % | ||
Investment income, net | 8,711,087 | 14,359,446 | (39) % | ||
Net income before taxes | 29,146,524 | 33,087,196 | (12) % | ||
Income tax expense | (8,004,751) | (8,815,200) | (9) % | ||
Net income | 21,141,773 | 24,271,996 | (13) % | ||
Net income attributable to redeemable noncontrolling interest | — | (2,131,965) | NM | ||
Net income attributable to common shareholders | $ 21,141,773 | $ 22,140,031 | (5) % | ||
Earnings per share attributable to common shareholders - diluted | $ 7.57 | $ 7.39 | 2 % | ||
Weighted average shares outstanding - diluted | 2,793,133 | 2,997,574 | (7) % | ||
Selected Assets Under Management and Assets Under Advisement Data | |||
Change in AUM and AUA | |||
For the Three Months Ended June 30, | |||
(in millions) | 2024 | 2023 | |
AUM at beginning of the period | $ 29,979 | $ 24,927 | |
Net cash inflows (outflows) | |||
Diamond Hill Funds | 117 | (200) | |
Separately managed accounts | (185) | (173) | |
Collective investment trusts | 247 | (134) | |
Other pooled vehicles | 50 | 404 | |
229 | (103) | ||
Net market appreciation (depreciation) and income | (917) | 1,242 | |
Increase (decrease) during the period | (688) | 1,139 | |
AUM at end of the period | 29,291 | 26,066 | |
AUA at end of period | 1,843 | 1,788 | |
Total AUM and AUA at end of period | $ 31,134 | $ 27,854 | |
Average AUM during the period | $ 29,206 | $ 25,056 | |
Average AUA during the period | 1,866 | 1,792 | |
Total average AUM and AUA during the period | $ 31,072 | $ 26,848 | |
Change in AUM and AUA | |||
For the Six Months Ended June 30, | |||
(in millions) | 2024 | 2023 | |
AUM at beginning of the period | $ 27,418 | $ 24,763 | |
Net cash inflows (outflows) | |||
Diamond Hill Funds | 209 | (89) | |
Separately managed accounts | (347) | (89) | |
Collective investment trusts | 417 | (116) | |
Other pooled vehicles | 68 | 276 | |
347 | (18) | ||
Net market appreciation and income | 1,526 | 1,321 | |
Increase during the period | 1,873 | 1,303 | |
AUM at end of the period | 29,291 | 26,066 | |
AUA at end of period | 1,843 | 1,788 | |
Total AUM and AUA at end of period | $ 31,134 | $ 27,854 | |
Average AUM during the period | $ 28,652 | $ 25,269 | |
Average AUA during the period | 1,833 | 1,818 | |
Total average AUM and AUA during the period | $ 30,485 | $ 27,087 | |
Net Cash Inflows (Outflows) Further Breakdown | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
(in millions) | 2024 | 2023 | 2024 | 2023 | |||
Net cash inflows (outflows) | |||||||
Equity | $ (345) | $ (237) | $ (722) | $ (716) | |||
Fixed Income | 574 | 134 | 1,069 | 698 | |||
$ 229 | $ (103) | $ 347 | $ (18) | ||||
About Diamond Hill:
Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment. An independent active asset manager with significant employee ownership, Diamond Hill's investment strategies include differentiated
Non-GAAP Financial Measures and Reconciliation
As supplemental information, the Company is providing certain financial measures that are based on methodologies other than GAAP ("non-GAAP"). Management believes the non-GAAP financial measures below are useful measures of the Company's core business activities, are important metrics in estimating the value of an asset management business, and help facilitate comparisons to Company operating performance across periods. These non-GAAP financial measures should not be used as a substitute for financial measures calculated in accordance with GAAP and may be calculated differently by other companies. The following schedules reconcile the differences between financial measures calculated in accordance with GAAP and non-GAAP financial measures for the three-month and six-month periods ended June 30, 2024 and 2023, respectively.
Three Months Ended June 30, 2024 | |||||||||||||
(in thousands, except percentages and per share data) | Total operating expenses | Net operating income | Total non-operating income (loss) | Income tax expense(4) | Net income attributable to common shareholders | Earnings per share attributable to common shareholders - diluted | Net operating profit margin | ||||||
GAAP Basis | $ 24,529 | $ 12,133 | $ (655) | $ 3,352 | $ 8,126 | $ 2.93 | 33 % | ||||||
Non-GAAP Adjustments: | |||||||||||||
Deferred compensation liability(1) | 869 | (869) | 869 | — | — | — | (2) % | ||||||
Other investment income(3) | — | — | (214) | (62) | (152) | (0.05) | — | ||||||
Adjusted Non-GAAP basis | $ 25,398 | $ 11,264 | $ — | $ 3,290 | $ 7,974 | $ 2.88 | 31 % | ||||||
Three Months Ended June 30, 2023 | |||||||||||||
(in thousands, except percentages and per share data) | Total operating expenses | Net operating income | Total non-operating income (loss) | Income tax expense(4) | Net income attributable to common shareholders | Earnings per share attributable to common shareholders - diluted | Net operating profit margin | ||||||
GAAP Basis | $ 25,564 | $ 7,786 | $ 6,277 | $ 3,894 | $ 9,432 | $ 3.18 | 23 % | ||||||
Non-GAAP Adjustments: | |||||||||||||
Deferred compensation liability(1) | (1,983) | 1,983 | (1,983) | — | — | — | 7 % | ||||||
Consolidated Funds(2) | — | 110 | (2,393) | (452) | (1,095) | (0.37) | — | ||||||
Other investment income(3) | — | — | (1,901) | (555) | (1,346) | (0.46) | — | ||||||
Adjusted Non-GAAP basis | $ 23,581 | $ 9,879 | $ — | $ 2,887 | $ 6,991 | $ 2.35 | 30 % | ||||||
Six Months Ended June 30, 2024 | |||||||||||||
(in thousands, except percentages and per share data) | Total operating expenses | Net operating income | Total non-operating income (loss) | Income tax expense(4) | Net income attributable to common shareholders | Earnings per share attributable to common shareholders - diluted | Net operating profit margin | ||||||
GAAP Basis | $ 52,521 | $ 20,435 | $ 8,711 | $ 8,005 | $ 21,142 | $ 7.57 | 28 % | ||||||
Non-GAAP Adjustments: | |||||||||||||
Deferred compensation liability(1) | (2,321) | 2,321 | (2,321) | — | — | — | 3 % | ||||||
Other investment income(3) | — | — | (6,390) | (1,757) | (4,633) | (1.66) | — | ||||||
Adjusted Non-GAAP basis | $ 50,200 | $ 22,756 | $ — | $ 6,248 | $ 16,509 | $ 5.91 | 31 % | ||||||
Six Months Ended June 30, 2023 | |||||||||||||
(in thousands, except percentages and per share data) | Total operating expenses | Net operating income | Total non-operating income (loss) | Income tax expense(4) | Net income attributable to common shareholders | Earnings per share attributable to common shareholders - diluted | Net operating profit margin | ||||||
GAAP Basis | $ 48,613 | $ 18,728 | $ 14,359 | $ 8,815 | $ 22,140 | $ 7.39 | 28 % | ||||||
Non-GAAP Adjustments: | |||||||||||||
Deferred compensation liability (1) | (2,727) | 2,727 | (2,727) | — | — | — | 4 % | ||||||
Consolidated Funds(2) | — | 209 | (7,418) | (1,447) | (3,630) | (1.21) | — | ||||||
Other investment income(3) | — | — | (4,214) | (1,201) | (3,013) | (1.01) | — | ||||||
Adjusted Non-GAAP basis | $ 45,886 | $ 21,664 | $ — | $ 6,167 | $ 15,497 | $ 5.17 | 32 % | ||||||
(1) This non-GAAP adjustment removes the compensation expense resulting from market valuation changes in the Company's deferred compensation plans' liability and the related net gains/losses on investments designated as an economic hedge against the related liability. Amounts deferred under the deferred compensation plans are adjusted for appreciation/depreciation of investments chosen by participants. The Company believes it is useful to offset the non-operating investment income or loss realized on the hedges against the related compensation expense and remove the net impact to help readers understand the Company's core operating results and to improve comparability from period to period.
(2) This non-GAAP adjustment removes the impact that the Consolidated Fund has on the Company's GAAP consolidated statements of income. Specifically, the Company adds back the operating expenses and subtracts the investment income of the Consolidated Fund. The adjustment to net operating income represents the operating expenses of the Consolidated Fund, net of the elimination of related management and administrative fees. The adjustment to net income attributable to common shareholders represents the net income of the Consolidated Fund, net of redeemable non-controlling interests. The Company believes removing the impact of the Consolidated Fund helps readers understand its core operating results and improves comparability from period to period.
(3) This non-GAAP adjustment represents the net gains or losses earned on the Company's non-consolidated investment portfolio that are not designated as economic hedges of the deferred compensation plans' liability, non-consolidated seed investments, and other investments. The Company believes adjusting for these non-operating income or loss items helps readers understand the Company's core operating results and improves comparability from period to period.
(4) The income tax expense impacts were calculated and resulted in the overall non-GAAP effective tax rates of
The Company does not recommend that investors consider non-GAAP financial measures alone, or as a substitute for, financial information prepared in accordance with GAAP.
Cautionary Note Regarding Forward-Looking Statements
Throughout this press release, the Company may make "forward-looking statements" within the meaning of the
Factors that may cause the Company's actual results or experiences to differ materially from results discussed in forward-looking statements are discussed under Part I, Item 1A (Risk Factors) and elsewhere in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as well as in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. These factors include, but are not limited to: (i) any reduction in the Company's AUM or AUA; (ii) withdrawal, renegotiation, or termination of investment advisory agreements; (iii) damage to the Company's reputation; (iv) failure to comply with investment guidelines or other contractual requirements; (v) challenges from the competition the Company faces in its business; (vi) challenges from industry trends towards lower fee strategies and model portfolio arrangements; (vii) adverse regulatory and legal developments; (viii) unfavorable changes in tax laws or limitations; (ix) interruptions in or failure to provide critical technological service by the Company or third parties; (x) adverse civil litigation and government investigations or proceedings; (xi) failure to adapt to or successfully incorporate technological changes, such as artificial intelligence, into the Company's business; (xii) risk of loss on the Company's investments; (xiii) lack of sufficient capital on satisfactory terms; (xiv) losses or costs not covered by insurance; (xv) a decline in the performance of the Company's products; (xvi) changes in interest rates and inflation; (xvii) changes in national and local economic and political conditions; (xviii) the continuing economic uncertainty in various parts of the world; (xix) the after-effects of the COVID-19 pandemic and the actions taken in connection therewith; (xx) political uncertainty caused by, among other things, political parties, economic nationalist sentiments, tensions surrounding the current socioeconomic landscape; and (xxi) other risks identified from time-to-time in the Company's public documents on file with the
In light of the significant uncertainties in forward-looking statements, the inclusion of such information should not be regarded as a representation by the Company or any other person that its expectations, objectives and plans will be achieved. All forward-looking statements made in this press release are based on information presently available to the management of the Company and speak only as of the date hereof. Readers are cautioned not to place undue reliance on forward-looking statements. New risks and uncertainties arise from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict these events or how they may affect it. The Company assumes no obligation to update any forward-looking statements after the date they are made, whether as a result of new information, future events or developments or otherwise, except as required by law, although it may do so from time to time. The Company does not endorse any projections regarding future performance that may be made by third parties.
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SOURCE Diamond Hill Investment Group, Inc.
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