[10-Q] P10, Inc. Quarterly Earnings Report
P10, Inc. (PX) 10-Q 鈥� quarter ended June 30, 2025. Total assets $932,165k vs $869,275k at 12/31/2024; cash and cash equivalents $33,440k; restricted cash $774k; total cash including restricted $34,214k. Debt obligations $373,021k vs $319,783k; goodwill $558,150k; intangibles, net $119,499k.
Results: Q2 revenues $72,704k vs $71,076k; management & advisory fees $71,516k. Q2 income from operations $17,733k; Q2 net income $4,200k (net income attributable to P10 $3,383k). Six-months: revenues $140,371k; net income $8,896k (attributable $7,905k). Operating cash flow provided $8,657k; investing cash used $42,935k (includes $40,237k acquisitions net of cash acquired); financing cash flow net $306k (includes $59,500k borrowings, $41,231k Class A repurchases, dividends paid $8,094k). Acquisition activity: Qualitas acquired April 4, 2025; contingent consideration liability related to Qualitas $13,126k. Total equity $388,941k.
P10, Inc. (PX) 10-Q 鈥� trimestre chiuso il 30 giugno 2025. Attivo totale $932,165k vs $869,275k al 31/12/2024; cassa e mezzi equivalenti $33,440k; cassa vincolata $774k; cassa totale incluse quelle vincolate $34,214k. Obbligazioni di debito $373,021k vs $319,783k; avviamento $558,150k; attivit脿 immateriali, netto $119,499k.
Risultati: Ricavi Q2 $72,704k vs $71,076k; commissioni di gestione e consulenza $71,516k. Risultato operativo Q2 $17,733k; utile netto Q2 $4,200k (utile netto attribuibile a P10 $3,383k). Sei mesi: ricavi $140,371k; utile netto $8,896k (attribuibile $7,905k). Flusso di cassa operativo generato $8,657k; cassa utilizzata per investimenti $42,935k (inclusi $40,237k per acquisizioni al netto della cassa acquisita); flusso di cassa da finanziamento netto $306k (include $59,500k di nuovi finanziamenti, $41,231k riacquisto di Class A, dividendi pagati $8,094k). Attivit脿 di acquisizione: Qualitas acquisita il 4 aprile 2025; passivit脿 per corrispettivo condizionato relativo a Qualitas $13,126k. Patrimonio netto totale $388,941k.
P10, Inc. (PX) 10-Q 鈥� trimestre terminado el 30 de junio de 2025. Activos totales $932,165k vs $869,275k al 31/12/2024; efectivo y equivalentes de efectivo $33,440k; efectivo restringido $774k; efectivo total incluyendo restringido $34,214k. Obligaciones de deuda $373,021k vs $319,783k; goodwill $558,150k; intangibles, neto $119,499k.
Resultados: Ingresos Q2 $72,704k vs $71,076k; honorarios de gesti贸n y asesor铆a $71,516k. Resultado operativo Q2 $17,733k; resultado neto Q2 $4,200k (resultado neto atribuible a P10 $3,383k). Seis meses: ingresos $140,371k; resultado neto $8,896k (atribuible $7,905k). Flujo de caja operativo generado $8,657k; efectivo usado en inversiones $42,935k (incluye $40,237k por adquisiciones netas del efectivo adquirido); flujo de caja neto de financiaci贸n $306k (incluye $59,500k en pr茅stamos, $41,231k en recompras de Clase A, dividendos pagados $8,094k). Actividad de adquisiciones: Qualitas adquirida el 4 de abril de 2025; pasivo por contraprestaci贸n contingente relacionado con Qualitas $13,126k. Patrimonio total $388,941k.
P10, Inc. (PX) 10-Q 鈥� 2025雲� 6鞗� 30鞚茧 膦呺霅� 攵勱赴. 齑濎瀽靷� $932,165k (2024-12-31: $869,275k); 順勱笀 氚� 順勱笀靹膘瀽靷� $33,440k; 鞝滍暅順勱笀 $774k; 鞝滍暅順勱笀鞚� 韽暔頃� 齑濏槃旮� $34,214k. 攵�毂�(毂勲) $373,021k (2024-12-31: $319,783k); 鞓侅梾甓� $558,150k; 氍错槙鞛愳偘, 靾滌暋 $119,499k.
鞁れ爜: 2攵勱赴 毵れ稖 $72,704k (鞝勲厔霃欔赴 $71,076k); 瓴届榿 氚� 鞛愲靾橃垬耄� $71,516k. 2攵勱赴 鞓侅梾鞚挫澋 $17,733k; 2攵勱赴 雼龟赴靾滌澊鞚� $4,200k(須岇偓鞐� 攴�靻嶋悩電� 靾滌澊鞚� P10 $3,383k). 靸侂皹旮�: 毵れ稖 $140,371k; 雼龟赴靾滌澊鞚� $8,896k (攴�靻嶌暋 $7,905k). 鞓侅梾頇滊彊鞙茧 鞚疙暅 順勱笀頋愲 彀届稖 $8,657k; 韴瀽頇滊彊鞐� 靷毄霅� 順勱笀 $42,935k(鞚胳垬 甏�霠� 靾滍槃旮� 鞙犾稖 $40,237k 韽暔); 鞛頇滊彊 順勱笀頋愲 靾滌暋 $306k(彀瀰 $59,500k, Class A 鞛愳偓欤� 毵れ瀰 $41,231k, 氚半嫻旮� 歆�旮� $8,094k 韽暔). 鞚胳垬頇滊彊: Qualitas毳� 2025雲� 4鞗� 4鞚检棎 鞚胳垬; Qualitas 甏�霠� 臁瓣贝攵� 歆�旮夓潣氍�(攵�毂�) $13,126k. 齑濎瀽氤�(歆�攵�) $388,941k.
P10, Inc. (PX) 10-Q 鈥� trimestre clos le 30 juin 2025. Actif total $932,165k vs $869,275k au 31/12/2024; liquidit茅s et 茅quivalents de tr茅sorerie $33,440k; tr茅sorerie restreinte $774k; tr茅sorerie totale incluant les montants restreints $34,214k. Endettement $373,021k vs $319,783k; goodwill $558,150k; immobilisations incorporelles, nettes $119,499k.
搁茅蝉耻濒迟补迟蝉听: Chiffre d'affaires T2 $72,704k vs $71,076k; honoraires de gestion et de conseil $71,516k. R茅sultat d'exploitation T2 $17,733k; r茅sultat net T2 $4,200k (r茅sultat net attribuable 脿 P10 $3,383k). Semestre : chiffre d'affaires $140,371k; r茅sultat net $8,896k (attribuable $7,905k). Flux de tr茅sorerie d'exploitation g茅n茅r茅 $8,657k; tr茅sorerie utilis茅e pour investissement $42,935k (inclut $40,237k d'acquisitions nets des liquidit茅s acquises); flux de tr茅sorerie net provenant du financement $306k (inclut $59,500k d'emprunts, $41,231k de rachat de Classe A, dividendes vers茅s $8,094k). Activit茅s d'acquisition : Qualitas acquise le 4 avril 2025; passif li茅 脿 la contrepartie 茅ventuelle relative 脿 Qualitas $13,126k. Capitaux propres totaux $388,941k.
P10, Inc. (PX) 10-Q 鈥� Quartal zum 30. Juni 2025. Gesamtverm枚gen $932,165k vs $869,275k zum 31.12.2024; Barmittel und Zahlungsmittel盲quivalente $33,440k; eingeschr盲nkte Barmittel $774k; Gesamtbarmittel einschlie脽lich eingeschr盲nkter Mittel $34,214k. Schuldenverpflichtungen $373,021k vs $319,783k; Goodwill $558,150k; immaterielle Verm枚genswerte, netto $119,499k.
Ergebnisse: Q2-Umsatz $72,704k vs $71,076k; Management- und Beratungsgeb眉hren $71,516k. Q2-Betriebsergebnis $17,733k; Q2-Nettoergebnis $4,200k (auf P10 entfallendes Nettoergebnis $3,383k). Sechs Monate: Umsatz $140,371k; Nettoergebnis $8,896k (entfallend $7,905k). Aus dem operativen Gesch盲ft erwirtschafteter Cashflow $8,657k; in Investitionen verwendeter Cashflow $42,935k (einschlie脽lich $40,237k f眉r Erwerbe, bereinigt um erworbene liquide Mittel); Netto-Cashflow aus Finanzierungst盲tigkeit $306k (enth盲lt $59,500k Kredite, $41,231k R眉ckk盲ufe der Klasse A, gezahlte Dividenden $8,094k). Akquisitionsaktivit盲ten: Qualitas am 4. April 2025 erworben; Verbindlichkeit f眉r bedingte Kaufpreiszahlungen im Zusammenhang mit Qualitas $13,126k. Gesamteigenkapital $388,941k.
- Total revenues increased year-over-year for the quarter to $72.7M (Q2 2025 vs Q2 2024 $71.1M).
- Operating income improved to $17.7M in Q2 2025 from $16.8M in Q2 2024.
- Completed acquisition of Qualitas (Apr 4, 2025), with equity consideration recorded (increase in additional paid-in-capital).
- Cash and cash equivalents declined$33.44M from $67.46M at 12/31/2024, reducing liquidity.
- Total debt increased to $373.02M from $319.78M at 12/31/2024, raising leverage.
- Large cash deployed to acquisitions and buybacks: acquisitions net $40.24M; Class A repurchases $41.23M in six months.
- Contingent consideration liability increased to $13.13M (Qualitas-related) and accrued contingent liabilities remain elevated at $24.12M.
Insights
TL;DR: Revenue and operating income rose modestly, but cash fell and leverage increased due to acquisitions and share repurchases.
P10 reported Q2 revenue of $72.7M and operating income of $17.7M, up versus the prior-year quarter. Net income attributable to P10 was $3.38M in Q2. Balance sheet changes are material: cash and equivalents declined to $33.44M and total debt increased to $373.02M. Operating cash flow for six months was $8.66M, while investing used $42.94M principally for acquisitions. Significant cash outflows for share repurchases ($41.23M) and dividends ($8.09M) reduced liquidity. These facts point to improved operating profitability offset by financing/investing choices that raise near鈥憈erm liquidity and leverage considerations.
TL;DR: The April 4, 2025 acquisition of Qualitas materially increased goodwill, intangibles and contingent consideration.
P10 completed the Qualitas acquisition (4/4/2025) and recorded a contingent consideration liability of $13.13M and increased goodwill to $558.15M and intangibles to $119.50M. The company issued equity consideration (reflected as a material increase in additional paid-in-capital and issuance entries) and recorded acquisition-related cash outflow of $40.24M (net of cash acquired). These acquisition accounting entries are clearly material to the balance sheet and cash flow profile for the period.
P10, Inc. (PX) 10-Q 鈥� trimestre chiuso il 30 giugno 2025. Attivo totale $932,165k vs $869,275k al 31/12/2024; cassa e mezzi equivalenti $33,440k; cassa vincolata $774k; cassa totale incluse quelle vincolate $34,214k. Obbligazioni di debito $373,021k vs $319,783k; avviamento $558,150k; attivit脿 immateriali, netto $119,499k.
Risultati: Ricavi Q2 $72,704k vs $71,076k; commissioni di gestione e consulenza $71,516k. Risultato operativo Q2 $17,733k; utile netto Q2 $4,200k (utile netto attribuibile a P10 $3,383k). Sei mesi: ricavi $140,371k; utile netto $8,896k (attribuibile $7,905k). Flusso di cassa operativo generato $8,657k; cassa utilizzata per investimenti $42,935k (inclusi $40,237k per acquisizioni al netto della cassa acquisita); flusso di cassa da finanziamento netto $306k (include $59,500k di nuovi finanziamenti, $41,231k riacquisto di Class A, dividendi pagati $8,094k). Attivit脿 di acquisizione: Qualitas acquisita il 4 aprile 2025; passivit脿 per corrispettivo condizionato relativo a Qualitas $13,126k. Patrimonio netto totale $388,941k.
P10, Inc. (PX) 10-Q 鈥� trimestre terminado el 30 de junio de 2025. Activos totales $932,165k vs $869,275k al 31/12/2024; efectivo y equivalentes de efectivo $33,440k; efectivo restringido $774k; efectivo total incluyendo restringido $34,214k. Obligaciones de deuda $373,021k vs $319,783k; goodwill $558,150k; intangibles, neto $119,499k.
Resultados: Ingresos Q2 $72,704k vs $71,076k; honorarios de gesti贸n y asesor铆a $71,516k. Resultado operativo Q2 $17,733k; resultado neto Q2 $4,200k (resultado neto atribuible a P10 $3,383k). Seis meses: ingresos $140,371k; resultado neto $8,896k (atribuible $7,905k). Flujo de caja operativo generado $8,657k; efectivo usado en inversiones $42,935k (incluye $40,237k por adquisiciones netas del efectivo adquirido); flujo de caja neto de financiaci贸n $306k (incluye $59,500k en pr茅stamos, $41,231k en recompras de Clase A, dividendos pagados $8,094k). Actividad de adquisiciones: Qualitas adquirida el 4 de abril de 2025; pasivo por contraprestaci贸n contingente relacionado con Qualitas $13,126k. Patrimonio total $388,941k.
P10, Inc. (PX) 10-Q 鈥� 2025雲� 6鞗� 30鞚茧 膦呺霅� 攵勱赴. 齑濎瀽靷� $932,165k (2024-12-31: $869,275k); 順勱笀 氚� 順勱笀靹膘瀽靷� $33,440k; 鞝滍暅順勱笀 $774k; 鞝滍暅順勱笀鞚� 韽暔頃� 齑濏槃旮� $34,214k. 攵�毂�(毂勲) $373,021k (2024-12-31: $319,783k); 鞓侅梾甓� $558,150k; 氍错槙鞛愳偘, 靾滌暋 $119,499k.
鞁れ爜: 2攵勱赴 毵れ稖 $72,704k (鞝勲厔霃欔赴 $71,076k); 瓴届榿 氚� 鞛愲靾橃垬耄� $71,516k. 2攵勱赴 鞓侅梾鞚挫澋 $17,733k; 2攵勱赴 雼龟赴靾滌澊鞚� $4,200k(須岇偓鞐� 攴�靻嶋悩電� 靾滌澊鞚� P10 $3,383k). 靸侂皹旮�: 毵れ稖 $140,371k; 雼龟赴靾滌澊鞚� $8,896k (攴�靻嶌暋 $7,905k). 鞓侅梾頇滊彊鞙茧 鞚疙暅 順勱笀頋愲 彀届稖 $8,657k; 韴瀽頇滊彊鞐� 靷毄霅� 順勱笀 $42,935k(鞚胳垬 甏�霠� 靾滍槃旮� 鞙犾稖 $40,237k 韽暔); 鞛頇滊彊 順勱笀頋愲 靾滌暋 $306k(彀瀰 $59,500k, Class A 鞛愳偓欤� 毵れ瀰 $41,231k, 氚半嫻旮� 歆�旮� $8,094k 韽暔). 鞚胳垬頇滊彊: Qualitas毳� 2025雲� 4鞗� 4鞚检棎 鞚胳垬; Qualitas 甏�霠� 臁瓣贝攵� 歆�旮夓潣氍�(攵�毂�) $13,126k. 齑濎瀽氤�(歆�攵�) $388,941k.
P10, Inc. (PX) 10-Q 鈥� trimestre clos le 30 juin 2025. Actif total $932,165k vs $869,275k au 31/12/2024; liquidit茅s et 茅quivalents de tr茅sorerie $33,440k; tr茅sorerie restreinte $774k; tr茅sorerie totale incluant les montants restreints $34,214k. Endettement $373,021k vs $319,783k; goodwill $558,150k; immobilisations incorporelles, nettes $119,499k.
搁茅蝉耻濒迟补迟蝉听: Chiffre d'affaires T2 $72,704k vs $71,076k; honoraires de gestion et de conseil $71,516k. R茅sultat d'exploitation T2 $17,733k; r茅sultat net T2 $4,200k (r茅sultat net attribuable 脿 P10 $3,383k). Semestre : chiffre d'affaires $140,371k; r茅sultat net $8,896k (attribuable $7,905k). Flux de tr茅sorerie d'exploitation g茅n茅r茅 $8,657k; tr茅sorerie utilis茅e pour investissement $42,935k (inclut $40,237k d'acquisitions nets des liquidit茅s acquises); flux de tr茅sorerie net provenant du financement $306k (inclut $59,500k d'emprunts, $41,231k de rachat de Classe A, dividendes vers茅s $8,094k). Activit茅s d'acquisition : Qualitas acquise le 4 avril 2025; passif li茅 脿 la contrepartie 茅ventuelle relative 脿 Qualitas $13,126k. Capitaux propres totaux $388,941k.
P10, Inc. (PX) 10-Q 鈥� Quartal zum 30. Juni 2025. Gesamtverm枚gen $932,165k vs $869,275k zum 31.12.2024; Barmittel und Zahlungsmittel盲quivalente $33,440k; eingeschr盲nkte Barmittel $774k; Gesamtbarmittel einschlie脽lich eingeschr盲nkter Mittel $34,214k. Schuldenverpflichtungen $373,021k vs $319,783k; Goodwill $558,150k; immaterielle Verm枚genswerte, netto $119,499k.
Ergebnisse: Q2-Umsatz $72,704k vs $71,076k; Management- und Beratungsgeb眉hren $71,516k. Q2-Betriebsergebnis $17,733k; Q2-Nettoergebnis $4,200k (auf P10 entfallendes Nettoergebnis $3,383k). Sechs Monate: Umsatz $140,371k; Nettoergebnis $8,896k (entfallend $7,905k). Aus dem operativen Gesch盲ft erwirtschafteter Cashflow $8,657k; in Investitionen verwendeter Cashflow $42,935k (einschlie脽lich $40,237k f眉r Erwerbe, bereinigt um erworbene liquide Mittel); Netto-Cashflow aus Finanzierungst盲tigkeit $306k (enth盲lt $59,500k Kredite, $41,231k R眉ckk盲ufe der Klasse A, gezahlte Dividenden $8,094k). Akquisitionsaktivit盲ten: Qualitas am 4. April 2025 erworben; Verbindlichkeit f眉r bedingte Kaufpreiszahlungen im Zusammenhang mit Qualitas $13,126k. Gesamteigenkapital $388,941k.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________________ to ____________________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 4, 2025, there were
Table of Contents
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PART I |
FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (Unaudited) |
1 |
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Consolidated Balance Sheets |
1 |
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Consolidated Statements of Operations |
2 |
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Consolidated Statements of Comprehensive Income |
3 |
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Consolidated Statements of Changes in Equity |
4 |
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Consolidated Statements of Cash Flows |
6 |
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Notes to Unaudited Consolidated Financial Statements |
8 |
Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
39 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
55 |
Item 4. |
Controls and Procedures |
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PART II |
OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
57 |
Item 1A. |
Risk Factors |
57 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
57 |
Item 5. |
Other Information |
57 |
Item 6. |
Exhibits |
58 |
Signatures |
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
P10, Inc.
Consolidated Balance Sheets
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Goodwill |
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Due to related parties |
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|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
|
||
Contingent consideration |
|
|
|
|
|
|
||
Accrued contingent liabilities |
|
|
|
|
|
|
||
Deferred revenues |
|
|
|
|
|
|
||
Lease liabilities |
|
|
|
|
|
|
||
Deferred tax liabilities, net |
|
|
|
|
|
|
||
Debt obligations |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
COMMITMENTS AND CONTINGENCIES (NOTE 14) |
|
|
|
|
|
|
||
EQUITY: |
|
|
|
|
|
|
||
Class A common stock, $ |
|
|
|
|
|
|
||
Class B common stock, $ |
|
|
|
|
|
|
||
Treasury stock |
|
|
( |
) |
|
|
( |
) |
Additional paid-in-capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive income |
|
|
|
|
|
|
||
Noncontrolling interests |
|
|
|
|
|
|
||
Total equity |
|
|
|
|
|
|
||
TOTAL LIABILITIES AND EQUITY |
|
$ |
|
|
$ |
|
||
The Notes to Consolidated Financial Statements are an integral part of these statements.
1
P10, Inc.
Consolidated Statements of Operations
(Unaudited, in thousands except per share amounts)
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management and advisory fees |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compensation and benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General, administrative and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Strategic alliance expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
INCOME FROM OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
||||
OTHER (EXPENSE)/INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other (loss)/income |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Total other (expense) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
NET INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: net income attributable to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
NET INCOME ATTRIBUTABLE TO P10 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted average shares outstanding, basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding, diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Notes to Consolidated Financial Statements are an integral part of these statements.
2
P10, Inc.
Consolidated Statements of Comprehensive Income
(Unaudited, in thousands)
|
|
For the Three Months |
|
|
For the Six Months |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total other comprehensive income, net of tax |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Comprehensive income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive income attributable to noncontrolling interests |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Total comprehensive income attributable to P10 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Notes to Consolidated Financial Statements are an integral part of these statements.
3
P10, Inc.
Consolidated Statements of Changes in Equity
(Unaudited, in thousands)
|
Common Stock - Class A |
|
|
Common Stock - Class B |
|
|
Treasury stock |
|
Additional |
|
Accumulated Other |
|
Accumulated |
|
Non Controlling |
|
Total |
|
||||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
Paid-in-capital |
|
Comprehensive Income |
|
Deficit |
|
Interest |
|
Equity |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance At December 31, 2023 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
$ |
|
$ |
— |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||
Net income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Issuance of restricted stock units |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|||
Exchange of Class B common stock for Class A common stock |
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Exercise of stock options |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Repurchase of common stock for employee tax withholding and strike price |
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Stock repurchase |
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
Accrual for excise tax associated with stock repurchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Distributions to non-controlling interests, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Dividends declared |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Dividends paid per share $ |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Balance at March 31, 2024 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
$ |
|
$ |
— |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||
Net income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Issuance of restricted stock awards |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Issuance of restricted stock units |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Exchange of Class B common stock for Class A common stock |
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Exercise of stock options |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
||
Repurchase of common stock for employee tax withholding and strike price |
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Stock repurchase |
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
Accrual for excise tax associated with stock repurchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Distributions to non-controlling interests, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Dividends declared |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Dividends paid per share $ |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Balance at June 30, 2024 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
$ |
|
$ |
- |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||
The Notes to Consolidated Financial Statements are an integral part of these statements.
4
|
Common Stock - Class A |
|
|
Common Stock - Class B |
|
|
Treasury stock |
|
Additional |
|
Accumulated Other |
|
Accumulated |
|
Non Controlling |
|
Total |
|
||||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
Paid-in-capital |
|
Comprehensive Income |
|
Deficit |
|
Interest |
|
Equity |
|
|||||||||||
Balance at December 31, 2024 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
$ |
|
$ |
— |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||
Net income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Issuance of restricted stock units |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|||
Exchange of Class B common stock for Class A common stock |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||
Exercise of stock options |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Repurchase of common stock for employee tax withholding and strike price |
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Stock repurchase |
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
Accrual for excise tax associated with stock repurchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Distributions to non-controlling interests, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Dividends declared |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Dividends paid per share $ |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Balance at March 31, 2025 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
$ |
|
$ |
— |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||
Net income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|||
Other comprehensive Income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Issuance of equity consideration related to acquisition |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||||
Issuance of restricted stock awards |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Exchange of Class B common stock for Class A common stock |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||
Exercise of stock options |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Repurchase of common stock for employee tax withholding and strike price |
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Stock repurchase |
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
Accrual for excise tax associated with stock repurchases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Issuance of noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
|
|
|
||
Distributions to non-controlling interests, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Dividends paid per share $ |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Balance at June 30, 2025 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
|||||||||
The Notes to Consolidated Financial Statements are an integral part of these statements.
5
P10, Inc.
Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
For the Six Months |
|
|||||
|
|
|
|
|||||
|
|
2025 |
|
|
2024 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Depreciation expense |
|
|
|
|
|
|
||
Amortization of intangibles |
|
|
|
|
|
|
||
Amortization of debt issuance costs and debt discount |
|
|
|
|
|
|
||
Income from unconsolidated subsidiaries |
|
|
( |
) |
|
|
( |
) |
Deferred tax expense |
|
|
|
|
|
|
||
Loss on issuance of noncontrolling interests |
|
|
|
|
|
|
||
Remeasurement of contra-revenue put option |
|
|
|
|
|
|
||
Amortization of contingent payment to customers |
|
|
|
|
|
|
||
Remeasurement of contingent consideration |
|
|
|
|
|
|
||
Change in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
|
|
|
( |
) |
|
Due from related parties |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other assets |
|
|
( |
) |
|
|
|
|
Right-of-use assets |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
|
|
Accrued compensation and benefits |
|
|
( |
) |
|
|
|
|
Due to related parties |
|
|
( |
) |
|
|
( |
) |
Other liabilities |
|
|
|
|
|
( |
) |
|
Contingent consideration |
|
|
( |
) |
|
|
|
|
Deferred revenues |
|
|
|
|
|
( |
) |
|
Lease liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Acquisitions, net of cash acquired |
|
|
( |
) |
|
|
|
|
Funding of notes receivable |
|
|
( |
) |
|
|
( |
) |
Proceeds from notes receivable |
|
|
|
|
|
|
||
Investments in unconsolidated subsidiaries |
|
|
( |
) |
|
|
( |
) |
Distributions from investments in unconsolidated subsidiaries |
|
|
|
|
|
|
||
Software capitalization |
|
|
( |
) |
|
|
( |
) |
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS USED IN FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Borrowings on debt obligations |
|
|
|
|
|
|
||
Repayments on debt obligations |
|
|
( |
) |
|
|
( |
) |
Repurchase of Class A common stock |
|
|
( |
) |
|
|
( |
) |
Repurchase of Class A common stock for employee tax withholding |
|
|
( |
) |
|
|
( |
) |
Payment of contingent consideration |
|
|
|
|
|
( |
) |
|
Dividends paid |
|
|
( |
) |
|
|
( |
) |
Issuance of noncontrolling interests |
|
|
|
|
|
|
||
Distributions to non-controlling interests |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Effect of foreign currency exchange rate changes on cash and cash equivalents |
|
|
|
|
|
|
||
Net change in cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning |
|
|
|
|
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of |
|
$ |
|
|
$ |
|
||
The Notes to Consolidated Financial Statements are an integral part of these statements.
6
P10, Inc.
Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
For the Six Months |
|
|||||
|
|
|
|
|||||
|
|
2025 |
|
|
2024 |
|
||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Net cash paid for income taxes |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Additions to right-of-use assets |
|
$ |
|
|
$ |
|
||
Additions to lease liabilities |
|
|
|
|
|
|
||
Loss on issuance of noncontrolling interests |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
||
The Notes to Consolidated Financial Statements are an integral part of these statements.
7
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Note 1. Description of Business
Description of Business
On October 20, 2021, P10 Holdings, Inc. ("P10 Holdings"), in connection with its Initial Public Offering ("IPO"), completed a reorganization and restructure. In connection with the reorganization, P10, Inc. ("P10") became the parent company and all of the existing equity of P10 Holdings, and its consolidated subsidiaries. The offering and reorganization included a reverse stock split of P10 Holdings common stock on a
Following the reorganization and IPO, P10 has two classes of common stock, Class A common stock and Class B common stock. Each share of Class B common stock is entitled to ten votes while each share of Class A common stock is entitled to one vote.
P10, Inc. and its consolidated subsidiaries (the "Company") operate as a multi-asset class private market solutions provider in the alternative asset management industry. Our mission is to provide our investors differentiated access to a broad set of solutions and investment vehicles across a multitude of asset classes and geographies. Our existing portfolio of solutions across private equity, venture capital, private credit and impact investing support our mission by offering a comprehensive set of investment vehicles to our investors, including primary fund of funds, secondary investment, direct investment and co-investments, alongside separate accounts (collectively the "Funds").
The direct and indirect subsidiaries of the Company include P10 Holdings, P10 Intermediate Holdings, LLC ("P10 Intermediate"), which owns the subsidiaries P10 RCP Holdco, LLC ("Holdco"), Five Points Capital, Inc. ("Five Points"), TrueBridge Capital Partners, LLC ("TrueBridge"), Enhanced Capital Group, LLC ("ECG"), Bonaccord Capital Advisors, LLC ("Bonaccord"), Hark Capital Advisors, LLC ("Hark"), P10 Advisors, LLC ("P10 Advisors"), Western Technology Investment Advisors LLC ("WTI"), and Qualitas Equity Funds SGEIC, S.A. ("Qualitas").
Prior to November 19, 2016, P10, formerly Active Power, Inc., designed, manufactured, sold, and serviced flywheel-based uninterruptible power supply products and serviced modular infrastructure solutions. On November 19, 2016, we completed the sale of substantially all our assets and liabilities and operations to Langley Holdings plc, a United Kingdom public limited company. Following the sale, we changed our name from Active Power, Inc. to P10 Industries, Inc. and became a non-operating company focused on monetizing our retained intellectual property and acquiring profitable businesses. For the period from December 2016 through September 2017, our business primarily consisted of cash, certain retained intellectual property assets and our net operating losses ("NOLs") and other tax benefits. On March 22, 2017, we filed for reorganization under Chapter 11 of the Federal Bankruptcy Code, using a prepackaged plan of reorganization. The Company emerged from bankruptcy on May 3, 2017.
On December 1, 2017, the Company changed its name from P10 Industries, Inc. to P10 Holdings, Inc. We were founded as a Texas corporation in
On October 5, 2017, we closed on the acquisition of RCP Advisors 2, LLC ("RCP 2") and entered into a purchase agreement to acquire RCP Advisors 3, LLC ("RCP 3", and collectively with RCP 2, "RCP") in January 2018. On January 3, 2018, we closed on the acquisition of RCP 3. RCP 2 and RCP 3 are registered investment advisors with the United States Securities and Exchange Commission.
On April 1, 2020, the Company completed the acquisition of Five Points. Five Points is a leading lower middle market alternative investment manager focused on providing both equity and debt capital to private, growth-oriented companies and limited partner capital to other private equity funds, with all strategies focused exclusively in the U.S. lower middle market. In 2022, Five Points established the Reynolda brand that specializes in direct equity funds. Five Points is a registered investment advisor with the United States Securities and Exchange Commission.
On October 2, 2020, the Company completed the acquisition of TrueBridge. TrueBridge is an investment firm focused on investing in venture capital through fund-of-funds, co-investments, and separate accounts. TrueBridge is a registered investment advisor with the United States Securities and Exchange Commission.
On December 14, 2020, the Company completed the acquisition of
8
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
undertakes and manages equity and debt investments in impact initiatives across North America, targeting underserved areas and other socially responsible end markets including renewable energy, historic building renovations, and affordable housing. ECP is a registered investment advisor with the United States Securities and Exchange Commission.
On September 30, 2021, the Company completed acquisitions of Bonaccord and Hark. Bonaccord is an alternative asset manager focusing on acquiring minority equity interests in alternative asset management companies focused on private market strategies which may include private equity, private credit, real estate, and real asset strategies. Hark is engaged in the business of making loans to portfolio companies that are owned or controlled by financial sponsors, such as private equity funds or venture capital funds, and which do not meet traditional direct lending underwriting criteria but where the repayment of the loan by the portfolio company is guaranteed by its financial sponsor. Effective April 1, 2025, a third party acquired
In June 2022, the Company formed P10 Advisors, a wholly-owned consolidated subsidiary, to manage investment opportunities that are sourced across the P10 platform but do not fit within an existing investment mandate.
On October 13, 2022, the Company completed the acquisition of all of the issued and outstanding membership interests of WTI. WTI provides senior secured financing to early-stage and emerging stage life sciences and technology companies. WTI is a registered investment advisor with the United States Securities and Exchange Commission.
Simultaneously with the acquisition of WTI, the Company completed a restructuring of P10 Intermediate and subsidiaries to LLC entities that are considered disregarded entities for federal income tax purposes. This allowed the WTI sellers to obtain a partnership interest in P10 Intermediate and all of its subsidiaries. As a result of the acquisition, the WTI sellers obtained
On April 4, 2025, the Company completed the acquisition of Qualitas. Qualitas is a Madrid-based private equity investing platform that provides fund-of-funds, direct co-investing and net asset value ("NAV") financing opportunities in the European lower-middle market to limited partners across the ultra-high-net-worth, family office, and institutional channels.
Note 2. Significant Accounting Policies
Basis of Presentation
The accompanying Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Management believes it has made all necessary adjustments so that the Consolidated Financial Statements are presented fairly and that estimates made in preparing the Consolidated Financial Statements are reasonable and prudent. The Consolidated Financial Statements include the accounts of the Company, its wholly owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. All intercompany transactions and balances have been eliminated upon consolidation. The results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full year ended December 31, 2025.
Principles of Consolidation
The Company performs the variable interest analysis for all entities in which it has a potential variable interest. If the Company has a variable interest in the entity and the entity is a variable interest entity ("VIE"), we will also analyze whether the Company is the primary beneficiary of this entity and if consolidation is required.
9
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Generally, VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties, or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.
To determine a VIE's primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits. This assessment involves identifying the activities that most significantly impact the VIE's economic performance and determining whether we, or another party, has the power to direct those activities. When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties. See Note 7 for further information.
Primarily due to the governance structure at subsidiaries, the Company has determined that certain of its subsidiaries are VIEs, and that the Company is the primary beneficiary of the entities, because it has the power to direct activities of the entities that most significantly impact the VIE’s economic performance and has a controlling financial interest in each entity. The assets and liabilities of the consolidated VIEs are presented on a gross basis in the Consolidated Balance Sheets. See Note 7 for more information on both consolidated and unconsolidated VIEs.
Use of Estimates
The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
Restricted Cash
Restricted cash as of June 30, 2025 and December 31, 2024 was primarily cash on deposit related to certain leases and cash on deposit from third parties related to pending tax credit projects. There are deposit liabilities associated with restricted cash related to the pending tax credit projects reported in other liabilities on the Consolidated Balance Sheets.
Accounts Receivable and Due from Related Parties
Accounts receivable is equal to contractual amounts reduced for allowances, if applicable. Management fees are collected on a quarterly basis. Certain subsidiaries management fee contracts are collected at the beginning of the quarter, while others are collected in arrears. The management fees reflected in accounts receivable at period end are those that are collected in arrears.
10
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Due from related parties represents receivables from the Funds for reimbursable expenses, and management fees collected by a related party of RCP 2 that are owed to RCP 2. Additionally, fees owed to the Company for the advisory agreement entered into upon the closing of the acquisitions of ECG and any supplemental agreements entered into after acquisition, ("Advisory Agreements") where ECG provides advisory services to Enhanced Permanent Capital, LLC ("Enhanced PC") are reflected in due from related parties on the Consolidated Balance Sheets.
Notes Receivable
Notes receivable is primarily related to contractual amounts owed from signed, secured promissory notes with BCP Partners Holdings, LP ("BCP") as well as certain employees. In addition to contractual amounts, borrowers are obligated to pay interest on outstanding amounts. Refer to Note 6 for further information.
Current Expected Credit Losses
The Company evaluates accounts receivable, due from related parties, and notes receivable using the current expected credit loss model. The Company determines a current estimate of all expected credit losses over the life of each financial instrument, which may result in recognition of credit losses on loans and receivables before an actual event of default. The Company establishes reserves for any estimated credit losses with a corresponding charge in the Consolidated Statements of Operations.
Prepaid Expenses and Other Assets
Prepaid expenses and other assets consist primarily of prepaid expenses related to technology, insurance, and professional fees. From time to time, there are also investments in allocable state tax credits on the Consolidated Balance Sheets due to timing differences associated with the purchase and sale of state tax credits in the tax credit finance business. As of June 30, 2025 and December 31, 2024, respectively, there is $
Investment in Unconsolidated Subsidiaries
For equity investments in entities that we do not control, but over which we exercise significant influence, we use the equity method of accounting. The equity method investments are initially recorded at cost, and their carrying amount is adjusted for the Company’s share in the earnings or losses of each investee, and for distributions received. The Company discontinues applying the equity method if the investment (and net advances) is reduced to zero and shall not record additional losses unless the Company has guaranteed obligations of the investee or is otherwise committed to provide further financial support for the investee. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The Company accounts for its investment in ECP, Enhanced PC, and the ECG's asset management businesses using the equity method of accounting.
For certain entities in which the Company does not have significant influence and fair value is not readily determinable, these investments are not accounted for on the equity method, but instead as equity securities and we value these investments under the measurement alternative. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments, requires equity securities to be recorded at cost and adjusted to fair value at each reporting period. However, the guidance allows for a measurement alternative, which is to record the investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer. All other investments in unconsolidated subsidiaries are accounted for under the measurement alternative.
11
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Property and Equipment
Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the terms of the respective leases or service lives of the improvements, whichever is shorter, using the straight-line method. Expenditures for major renewals and betterments that extend the useful lives of the property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.
Computers and purchased software |
|
|
|
|
Furniture and fixtures |
|
|
|
Long-lived Assets
Leases
The Company recognizes a lease liability and right-of-use asset in our Consolidated Balance Sheets for contracts that it determines are leases or contain a lease. The Company’s leases primarily consist of operating leases for various office spaces. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. The Company’s right-of-use assets and lease liabilities are recognized at lease commencement, which is when the Company obtains control of the asset, based on the present value of lease payments over the lease term. Lease right-of-use assets include initial direct costs incurred by the Company and are presented net of deferred rent, lease incentives and certain other existing lease liabilities. Absent an implicit interest rate in the lease, the Company uses its incremental borrowing rate, adjusted for the effects of collateralization, based on the information available at commencement in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease, and the Company would account for this when it is reasonably certain that the Company will exercise those options. Lease expense is recognized on a straight-line basis over the lease term. Additionally, upon amendments or other events, the Company may be required to remeasure our lease liability and right-of-use asset.
The Company does not recognize a lease liability or right-of-use asset on our Consolidated Balance Sheets for short-term leases. Instead, the Company recognizes short-term lease payments as an expense when incurred. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a short-term lease, the Company evaluates the lease term and the purchase option in the same manner as all other leases.
Revenue Share and Repurchase Arrangement
The Company recognizes accrued contingent liabilities and contingent payments to customers assets in our Consolidated Balance Sheets for an agreement between ECG and various third parties. The agreement requires ECG to share in certain revenues earned with the third parties and also includes an option for the third parties to sell back the revenue share to ECG at a set multiple. Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple. The options to repurchase the revenue share became exercisable in July 2025. The Company believes it is probable that the third parties will exercise its option to sell back the revenue share and has recognized a liability on the Consolidated Balance Sheets. The Company has also recognized a contingent payment to customers associated with the agreement and will amortize the asset against revenue over the contractual term of the management contract. The amortization is reported in management and advisory fees on the Consolidated Statements of Operations. On December 23, 2024, the Company became
12
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
a guarantor for a related party on a related put option and call option with the same third party customers and terms. The Company would be required to settle either the put or call options if either are exercised and the related party does not have the means to settle themselves. The Company's accrued contingent liabilities are recognized once determined that it is probable the Company would need to settle as guarantor and estimable and would record a loss at the same time. The Company will reassess at each reporting period. Refer to Note 14 for further information.
Goodwill and Intangible Assets
Goodwill is initially measured as the excess of the cost of the acquired business over the sum of the amounts assigned to identifiable assets acquired, less the liabilities assumed. As of June 30, 2025, goodwill recorded on our Consolidated Balance Sheets relates to prior acquisitions. As of June 30, 2025, the intangible assets are comprised of indefinite-lived intangible assets and finite-lived intangible assets related to prior acquisitions.
Indefinite-lived intangible assets and goodwill are not amortized. Finite-lived technology is amortized using the straight-line method over its estimated useful life of
Goodwill and indefinite lived intangibles are reviewed for impairment at least annually as of September 30 utilizing a qualitative or quantitative approach and more frequently if circumstances indicate impairment may have occurred. The impairment testing for goodwill and indefinite lived intangibles under the qualitative approach is based first on a qualitative assessment to determine if it is more likely than not that the fair value of the Company’s reporting unit or asset is less than the respective carrying value. The reporting unit is the reporting level for testing the impairment of goodwill and indefinite lived intangibles. If it is determined that it is more likely than not that an asset's or reporting unit’s fair value is less than its carrying value, then the Company will determine the fair value of the reporting unit or asset and record an impairment charge for the difference between fair value and carrying value (not to exceed the carrying amount of goodwill or indefinite lived intangible).
Contingent Consideration
Accrued Compensation and Benefits
Accrued compensation and benefits consists of employee salaries, bonuses, management profit shares, benefits, severance, and acquisition-related earnouts (contingent on employment) that has not yet been paid. Refer to Note 14 for further information.
Debt Issuance Costs
Costs incurred which are directly related to the issuance of debt are deferred and amortized using the effective interest method and are presented as a reduction to the carrying value of the associated debt on our Consolidated Balance Sheets. As these costs are amortized, they are included in interest expense, net within our Consolidated Statements of Operations.
Noncontrolling Interests
Noncontrolling interests ("NCI") reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders that are not 100% owned by the Company. Noncontrolling interests is presented as a separate component in our Consolidated Balance Sheets to clearly distinguish between our interests and the economic interests of third parties in those entities. Net income attributable to P10, as reported in the Consolidated Statements of Operations, is presented net of
13
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
the portion of net income attributable to holders of non-controlling interest. NCI is allocated a share of income or loss in the respective consolidated subsidiaries in proportion to their relative ownership interest.
Treasury Stock
The Company records common stock purchased for treasury at cost. At the date of subsequent reissuance, the treasury stock account is reduced by the cost of such stock using the average cost method.
Foreign Currency
The Company and substantially all of its subsidiaries utilize the U.S. dollar as their functional currency. The assets and liabilities of the Company’s foreign subsidiaries with non-U.S. dollar functional currencies are translated at exchange rates prevailing at the end of each reporting period. The results of foreign operations are translated using the exchange rate on the respective transaction dates. The resulting translation adjustments are included as a separate component of equity on the Consolidated Balance Sheets and on the Consolidated Statements of Comprehensive Income until realized. Foreign currency transaction gains and losses are included in general, administrative and other expenses in the Consolidated Statements of Operations.
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB.
As of June 30, 2025 and December 31, 2024, we used the following valuation techniques to measure fair value for assets and there were no changes to these methodologies during the periods presented:
Level 1—Assets were valued using the closing price reported in the active market in which the individual security was traded.
Level 2—Assets were valued using quoted prices in markets that are not active, broker dealer quotations, and other methods by which all significant inputs were observable at the measurement date.
Level 3—Assets were valued using unobservable inputs in which little or no market data exists as reported by the respective institutions at the measurement date.
The carrying values of financial instruments comprising cash and cash equivalents, restricted cash, prepaid assets, accounts payable, accounts receivable, and due from related parties receivables excluding the receivables from the Advisory Agreements approximate fair values due to the short-term maturities of these instruments. The Company estimates the fair value of the credit facility using level two inputs. The Company discounts the future cash flows using current interest rates which the Company could obtain similar borrowings. The Company estimates the fair value of the due from related parties associated with the Advisory Agreements based on the current expectation of payments. If the payments are not expected to be made on a short-term basis, the fair value is estimated using level three inputs and a discounted cash flow model. See Note 13 for further details on the Advisory Agreements. The Company had a contingent consideration liability related to the acquisition of Bonaccord that was measured at fair value using level three inputs and a discounted cash flow model. The contingent consideration was considered fully earned and was paid on January 24, 2025. As of December 31, 2024, the value was carried at the full balance of unpaid contingent consideration and is no longer subject to fair value measurements. As of June 30, 2025, the Company has a contingent consideration liability related to the acquisition of Qualitas that is measured at fair value using level three inputs and a discounted cash flow model. See Note 11 for additional information.
Revenue Recognition
Revenue is recognized when, or as, the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. While the
14
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
determination of who the customer is in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts.
Management and Advisory Fees
The Company earns management fees for asset management services provided to the Funds where the Company has discretion over investment decisions. The Company primarily earns fees for advisory services provided to clients where the Company does not have discretion over investment decisions. Management and advisory fees received in advance reflects the amount of fees that have been received prior to the period the fees are earned. These fees are recorded as deferred revenues on the Consolidated Balance Sheets due to the performance obligation not being satisfied at the time of collection.
For asset management and advisory services, the Company typically satisfies its performance obligations over time as the services are provided as a distinct series of daily performance obligations that the customer simultaneously benefits from as they are performed. Asset management fees and advisory services fees are based on the contractual terms of each contract which differ, such as fees calculated based on committed capital or deployed capital, fees initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term, fees that step down during specified periods of the fund's term, or in limited instances, fees based on assets under management. At contract inception, no revenue is estimated as the fees are dependent variable amounts which are susceptible to factors outside of our control. Fees are recognized for services provided during the period, which are distinct from services provided in other periods. In certain asset management and advisory agreements progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice.
Other advisory services include transaction and management fees associated with managing the origination and ongoing compliance of certain investments.
The Company allocates a portion of consideration received under an arrangement to a financing component when it determines that a significant financing component exists. The Company does not adjust the promised amount of consideration for the effects of a significant financing component if, at each contract inception the Company expects that the period between services being provided and cash collection would be less than one year. To the extent the Company determines that there is a significant financing component in a contract with a customer, it determines the impact of the time value of money in adjusting the transaction price to account for the income associated with the financing component by estimating the discount rate that would be reflected in a separate financing transaction between the customer and the Company at contract inception, based upon the credit characteristics of the customer receiving financing in the contract.
The Company is applying the optional disclosure exemption for variable consideration for unsatisfied performance obligations, as the variable consideration relates to these unsatisfied performance obligations being fulfilled as a series. The performance obligations related to these contracts are expected to be satisfied over the next
Catch-up fees are earned from investors that make commitments to a previously launched fund after the first fund closing occurs, but during the fundraising period. Contractual terms require the investors to pay a catch-up fee as if they had committed to the fund at the first closing. Catch-up fees are recorded as revenue when such commitments are made as variable consideration.
Other Revenue
15
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Income Taxes
Current income tax expense represents our estimated taxes to be paid or refunded for the current period. In accordance with ASC 740, Income Taxes ("ASC 740"), we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets to the amount we believe is more likely than not to be realized.
Uncertain tax positions are recognized only when we believe it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position. We recognize interest and penalties, if any, related to uncertain tax positions in income tax expense.
Earnings Per Share
Basic earnings per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares. Diluted EPS includes the determinants of basic EPS and common stock equivalents outstanding during the period adjusted to give effect to potentially dilutive securities, if the Company is in a net income position. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. See Note 17 for additional information.
Stock-Based Compensation Expense
Stock-based compensation relates to grants for shares of P10 awarded to our employees through stock options as well as RSUs awarded to employees and RSAs issued to non-employee directors as compensation for service on the Company's board. Stock compensation expense for awards that cliff-vest after a service period or both a service condition and a performance condition that is likely to be met is recorded ratably over the vesting period at the fair market value on the grant date. For awards with graded-vesting, and vesting only requires a service condition, the Company elected, in accordance with ASC 718, Compensation - Stock Compensation ("ASC 718"), to treat these awards as single awards for recognition purposes and recognize compensation on a straight-line basis over the requisite service period of the entire award. For awards with graded vesting and require a market condition to vest, the Company treats each expected vesting tranche as an individual award and recognizes expense ratably over the vesting period at the fair market value on the grant date. Certain acquisition-related RSUs vest after meeting certain performance metrics. For these, the Company uses the tranche method and recognizes expense for each tranche of RSUs deemed probable of vesting on a straight-line basis over the expected vesting period. The Company evaluates the probability of vesting at each reporting period. Unvested units are remeasured quarterly against performance metrics as a liability or equity, in accordance with GAAP, on the Consolidated Balance Sheets. Forfeitures are recognized as they occur. Refer to Note 16 for further discussion.
Segment Reporting
According to ASC 280, Segment Reporting, operating segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which discrete financial information is available and is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources
16
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
and in assessing performance. The Company operates our business as a single operating segment, which is how our CODM evaluates financial performance and makes decisions regarding the allocation of resources.
The CODM, who is responsible for allocating resources and assessing performance of the reportable segment, has been identified as the Chief Executive Officer. The CODM assesses performance for the single segment and decides how to allocate resources based on consolidated net income that also is reported on the Consolidated Statements of Operations as net income. The measure of segment assets is reported on the Consolidated Balance Sheets as total assets. The CODM uses these metrics for purposes of making operating decisions and assessing financial performance. The CODM considers forecast to actual variances when making decisions about allocation capital and personnel.
Business Acquisitions
In accordance with ASC 805, Business Combinations (“ASC 805”), the Company identifies a business to have three key elements; inputs, processes, and outputs. While an integrated set of assets and activities that is a business usually has outputs, outputs are not required to be present. In addition, all the inputs and processes that a seller uses in operating a set of assets and activities are not required if market participants can acquire the set of assets and activities and continue to produce outputs. In addition, the Company also performs a screen test to determine when a set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. If the set of assets and activities is not considered a business, it is accounted for as an asset acquisition using a cost accumulation model. In the cost accumulation model, the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values.
The Company includes the results of operations of acquired businesses beginning on the respective acquisition dates. In accordance with ASC 805, the Company allocates the purchase price of an acquired business to its identifiable assets and liabilities based on the estimated fair values using the acquisition method. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The excess value of the net identifiable assets and liabilities acquired over the purchase price of an acquired business is recorded as a bargain purchase gain. The Company uses all available information to estimate fair values of identifiable intangible assets and property acquired. In making these determinations, the Company may engage an independent third-party valuation specialist to assist with the valuation of certain intangible assets and tax assets and liabilities.
The consideration for certain of our acquisitions may include liability classified contingent consideration, which is determined based on formulas stated in the applicable purchase agreements. The amount to be paid under these arrangements is based on certain financial performance measures subsequent to the acquisitions. The contingent consideration included in the purchase price is measured at fair value on the date of the acquisition. The liabilities are remeasured at fair value on each reporting date, with changes in the fair value reflected in operating expenses on our Consolidated Statements of Operations.
For business acquisitions, the Company recognizes the fair value of goodwill and other acquired intangible assets, and estimated contingent consideration at the acquisition date as part of purchase price. These non-recurring fair value measurement are based on unobservable (Level 3) inputs.
Dividends
Dividends are reflected in the consolidated financial statements when declared.
Recent Accounting Pronouncements
Pronouncements Recently Adopted
Effective January 1, 2024, the Company adopted ASU 2024-01, Compensation - Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards ("ASU 2024-01"), which is intended to reduce the complexity in determining whether a profits interest award is subject to Topic 718. The adoption of the update did not have an impact on the Company's consolidated financial statements.
17
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Effective January 1, 2024, the Company adopted ASU 2023-07, Improvements to Reportable Segment Disclosure ("ASU 2023-07"), which requires incremental disclosures related to a public entity's reportable segments. Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title, and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure of more than one measure of segment profit. The Company included the additional required disclosures above in the consolidated financial statements. Refer to Note 18.
On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"), to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025 The Company plans to include expanded disclosures beginning with its annual report on Form 10-K for the year ending December 31, 2025.
Pronouncements Not Yet Adopted
Note 3. Acquisitions
Qualitas Acquisition
On
The following is a summary of consideration paid:
|
|
Fair Value |
|
|
Cash |
|
$ |
|
|
Fair value of equity consideration |
|
|
|
|
Fair value of contingent consideration |
|
|
|
|
Total purchase consideration |
|
$ |
|
|
The fair value of the contingent consideration was calculated using a Monte Carlo simulation based on future net revenue projections of Qualitas, acquisition specific terms and conditions, and a risk adjusted discount rate. The determined risk adjusted discount rate for the contingent consideration of
The acquisition date fair value of certain assets and liabilities, including intangible assets acquired and related weighted average expected lives are provisional and subject to revision within one year of the acquisition date. As such, our estimates of fair value are pending finalization,which may result in adjustments to goodwill.
18
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
The following table presents the provisional fair value of the net assets acquired as of the acquisition date:
|
|
Fair Value |
|
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
Accounts receivable |
|
|
|
|
Due from related parties |
|
|
|
|
Prepaid expenses and other assets |
|
|
|
|
Property and equipment, net |
|
|
|
|
Right-of-use assets |
|
|
|
|
Intangible assets, net |
|
|
|
|
Total assets acquired |
|
$ |
|
|
LIABILITIES |
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
|
|
Accrued Compensation and benefits |
|
|
|
|
Deferred revenues |
|
|
|
|
Lease liabilities |
|
|
|
|
Deferred tax liabilites |
|
|
|
|
Total liabilities assumed |
|
$ |
|
|
|
|
|
|
|
Net identifiable assets acquired |
|
$ |
|
|
Goodwill |
|
|
|
|
Net assets acquired |
|
$ |
|
|
The provisional fair value of the identifiable intangible assets was calculated using a discounted cash flow model based on a risk adjusted discount rate. The determined risk adjusted discount rate for the identifiable intangible assets ranged from
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Weighted- |
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||
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|
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Average |
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||
|
|
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|
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Amortization |
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||
|
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Fair Value |
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Period |
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||
Value of management and advisory contracts |
|
$ |
|
|
|
|||
Value of direct investors and intermediary relationships |
|
|
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|||
Value of trade name |
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||
Value of technology |
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|
|
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||
Total identifiable intangible assets |
|
$ |
|
|
|
|
||
Goodwill
The goodwill recorded as part of the acquisition includes the expected benefits that management believes will result from the acquisition, including the Company's build out of its investment product offering.
19
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Note 4. Revenue
The following presents revenues disaggregated by nature:
|
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For the Three Months |
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|
For the Six Months |
|
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||||||||||
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2025 |
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2024 |
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|
2025 |
|
|
2024 |
|
||||
Management fees |
|
$ |
|
|
$ |
|
|
$ |
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||||
Advisory fees |
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Subscriptions |
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Other revenue |
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||||
Total revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Contract Liabilities
Our contract liabilities represent deferred revenue. We record contract liabilities when cash payments are received in advance of our performance. We recognized $
Note 5. Strategic Alliance Expense
In connection with the Bonaccord acquisition, Bonaccord entered into a Strategic Alliance Agreement ("SAA") with a third-party investor. This SAA provides the third-party the right to receive
After the final closing of Bonaccord Fund II ("Fund II"), the third-party had the opportunity to acquire, at the price at the time of the original acquisition, equity interests in Bonaccord based on the amount of commitment made. For each $
Simultaneously with the third-party exercising their option to acquire equity in Bonaccord, the Company and the third party entered into an agreement whereby the
The same third-party also has the option to purchase equity in Bonaccord under similar terms for Bonaccord Fund III, except the third-party can purchase 9.8 basis points for every $
20
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Note 6. Notes Receivable
The Company has three significant types of notes receivable. The first is an Advance Agreement and Secured Promissory Note that was executed on September 30, 2021 between the Company and BCP to lend funds to certain employees to be used to pay general partner commitments to certain funds managed by Bonaccord. This agreement provides for a note to BCP for $
The second consists of Secured Promissory Notes that were executed on October 13, 2023 between the Company and certain employees of Bonaccord to lend funds to be used to pay general partner commitments to certain funds managed by Bonaccord. The notes provided $
The third consists of a Loan Agreement and Secured Promissory Notes that were executed on September 26, 2024 between Bonaccord and certain general partners to lend funds to pay general partners commitments to certain funds managed by Bonaccord. The notes provide an aggregate maximum facility of $
As of June 30, 2025 and December 31, 2024, the total notes receivable balance associated with these notes was $
Note 7. Variable Interest Entities
Consolidated VIEs
The Company consolidates certain VIEs for which it is the primary beneficiary. VIEs consist of certain operating entities not wholly owned by the Company and include P10 Intermediate, Holdco, RCP 2, RCP 3, TrueBridge, Hark, Bonaccord, WTI, and Qualitas. The assets of the consolidated VIEs totaled $
Unconsolidated VIEs
Through its subsidiary, ECG, the Company holds variable interests in the form of direct equity interests in certain VIEs that are not consolidated because the Company is not the primary beneficiary. The Company's maximum exposure to loss is limited to the potential loss of assets recognized relating to these unconsolidated entities. These variable interests are included in investment in unconsolidated subsidiaries on the accompanying Consolidated Balance Sheets.
Note 8. Investment in Unconsolidated Subsidiaries
The Company’s investment in unconsolidated subsidiaries consist of unconsolidated equity method investments primarily related to ECG’s tax credit finance and asset management activities. Additionally, the investment in Enhanced
21
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Capital Partners and Enhanced PC is recorded at
As of June 30, 2025, investment in unconsolidated subsidiaries totaled $
Note 9. Property and Equipment
Property and equipment consist of the following:
|
|
As of June 30, |
|
|
As of December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Computers and purchased software |
|
$ |
|
|
$ |
|
||
Furniture and fixtures |
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||
Leasehold improvements |
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||
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|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total property and equipment, net |
|
$ |
|
|
$ |
|
||
Note 10. Goodwill and Intangibles
Changes in goodwill for the six months ended June 30, 2025 are as follows:
Balance at December 31, 2024 |
|
$ |
|
|
Increase from acquisitions |
|
|
|
|
Change related to foreign currency translations |
|
|
|
|
Balance at June 30, 2025 |
|
$ |
|
22
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Intangibles consists of the following:
|
|
Investor and Intermediary Relationships |
|
|
Management and Advisory Contracts |
|
|
Technology |
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Trade Names |
|
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Total |
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|||||
Gross Carrying Amount |
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|||||
Indefinite-lived intangible assets: |
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|
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|
|||||
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Impact of exchange rate movements |
|
|
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|
|
|
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|
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|
|
|
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|
|||||
Balance as of June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Finite-lived intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Additions, net of adjustments |
|
|
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|||||
Adjustment for fully amortized intangibles |
|
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|
|
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|
( |
) |
|
|
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|
|
( |
) |
|||
Impact of exchange rate movements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accumulated Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Amortization expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Adjustment for fully amortized intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impact of exchange rate movements |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balance as of June 30, 2025 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Total intangible assets, net balance as of June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
Investor and Intermediary Relationships |
|
|
Management and Advisory Contracts |
|
|
Technology |
|
|
Trade Names |
|
|
Total |
|
|||||
Gross Carrying Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Indefinite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Impact of exchange rate movements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of June 30, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Finite-lived intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Impact of exchange rate movements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of June 30, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accumulated Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Amortization expense |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance as of June 30, 2024 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Total intangible assets, net balance as of June 30, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Management and advisory contracts and finite lived trade names are amortized over
23
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
|
|
|
|
|
2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total amortization |
|
$ |
|
|
Note 11. Fair Value Measurements
Financial Instruments not recognized at Fair Value
The Company measures certain assets and liabilities at fair value on a recurring basis, which are discussed below. Our financial instruments not recognized at fair value were as follows:
|
|
As of June 30, 2025 |
|
|
As of December 31, 2024 |
|
|
|
|
||||||||||
|
|
Carrying Value |
|
|
Fair Value |
|
|
Carrying Value |
|
|
Fair Value |
|
Fair Value Level |
|
Reference |
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Due from related party - Advisory Agreements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
3 |
|
Note 13 |
||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt Obligations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
2 |
|
Note 12 |
||||
As of June 30, 2025 and December 31, 2024, debt obligations' carrying value approximates fair value.
Earnouts associated with the acquisitions of Bonaccord and Qualitas
Included in total consideration of the acquisition of Bonaccord was an earnout payment not to exceed $
On April 4, 2025, included in total consideration of the Qualitas acquisition was an earnout payment not to exceed €
24
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
The table below presents all items measured at fair value as of June 30, 2025.
|
|
As of June 30, 2025 |
|
|||||||||||||
|
|
Level I |
|
|
Level II |
|
|
Level III |
|
|
Total |
|
||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration obligation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
For the liabilities presented in the tables above, there were no changes in fair value hierarchy levels during the six months ended June 30, 2025.
The changes in the fair value of Level III financial instruments are set forth below:
Contingent Consideration Liability |
|
|
|
|
|
For the Six Months Ended June 30, |
|
|||||
|
|
|
|
|
|
2025 |
|
|
2024 |
|
||
Balance, beginning of year: |
|
|
|
|
|
$ |
|
|
$ |
|
||
Additions |
|
|
|
|
|
|
|
|
|
|
||
Change in fair value |
|
|
|
|
|
|
|
|
|
|
||
Impact of exchange rate movements |
|
|
|
|
|
|
|
|
|
|
||
Settlements |
|
|
|
|
|
|
|
|
|
( |
) |
|
Balance, end of period: |
|
|
|
|
|
$ |
|
|
$ |
|
||
Until transferred out of Level 3 fair value measurement, the fair value of the contingent consideration liability represents the fair value of future payments upon satisfaction of performance targets. The assumptions used in the analysis are inherently subjective; therefore, the ultimate amount of the contingent consideration liability primarily relate to the expected future payments of obligations with a discount rate applied. The contingent consideration liability is included in contingent consideration on the Consolidated Balance Sheets. Changes in the fair value of the liability are included in contingent consideration expense on the Consolidated Statements of Operations.
Note 12. Debt Obligations
Debt obligations consists of the following:
|
|
As of |
|
|
As of |
|
||
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Revolver facility |
|
$ |
|
|
$ |
|
||
Debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Revolver facility, net |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
||
Term Loan |
|
$ |
|
|
$ |
|
||
Debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Term loan, net |
|
$ |
|
|
$ |
|
||
Total debt obligations, net |
|
$ |
|
|
$ |
|
||
25
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
The principal balance consists of the following tranches:
|
|
As of June 30, 2025 |
||||||||||||
|
|
Principal Amount |
|
|
Base Rate |
|
|
SOFR Rate |
|
|
Rate Expiration Date |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Term Loan |
|
$ |
|
|
|
% |
|
|
% |
|
||||
Revolver - Tranche 1 |
|
|
|
|
|
% |
|
|
% |
|
||||
Revolver - Tranche 2 |
|
|
|
|
|
% |
|
|
% |
|
||||
Revolver - Tranche 3 |
|
|
|
|
|
% |
|
|
% |
|
||||
Revolver - Tranche 4 |
|
|
|
|
|
% |
|
|
% |
|
||||
Total |
|
$ |
|
|
|
|
|
|
|
|
|
|||
Revolving Credit Facility and Term Loan
On December 22, 2021, the Company entered into a credit agreement (the "Credit Agreement") with JPMorgan, in its capacity as administrative agent and collateral agent, and Texas Capital Bank, as joint lead arrangers and joint bookrunners, and the other loan parties party thereto. The Credit Agreement consists of two facilities. The first is a revolving credit facility with an available balance of $
The New Credit Facilities are "Term SOFR Loans" meaning loans bearing interest based upon the "Adjusted Term SOFR Rate". The Adjusted Term SOFR Rate is the Secured Overnight Financing Rate ("SOFR") at the date of election, plus
The Amended and Restated Credit Agreement contains affirmative and negative covenants typical of such financing transactions, and specific financial covenants which require P10 to maintain a minimum leverage ratio. As of June 30, 2025, P10 was in compliance with its financial and other covenants required under the facility. For the three and six months ended June 30, 2025, $
Debt Payable
Future principal maturities of debt as of June 30, 2025 are as follows:
2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
|
|
$ |
|
26
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Note 13. Related Party Transactions
Effective January 1, 2021, the Company entered into a sublease with 210 Capital, LLC, a related party, for office space that served as our corporate headquarters until June 2025. The monthly rent expense is $
As described in Note 1, through its subsidiaries, the Company serves as the investment manager to the Funds. Certain expenses incurred by the Funds are paid upfront and are reimbursed from the Funds as permissible per fund agreements. As of June 30, 2025, the total accounts receivable from the Funds totaled $
Upon the closing of the Company’s acquisition of ECG, the Advisory Agreement between ECG and Enhanced PC immediately became effective. Under this agreement, ECG provides advisory services to Enhanced PC related to the assets and operations of the permanent capital subsidiaries owned by Enhanced PC. ECG provides advisory services relating to new projects undertaken by Enhanced PC under additional arrangements governed by the terms of the Advisory Agreement. In exchange for those services, which commenced on January 1, 2021, ECG receives advisory fees from Enhanced PC based on a declining fixed fee schedule, that is commensurate with the level of services being performed. The Company allocates a portion of the consideration received under this arrangement to a financing component when it determines that a significant financing component exists. As of June 30, 2025, certain of the Company's contracts with Enhanced PC contained a significant financing component, as a result of the Company's expectation that the period between services being provided and cash collection will exceed one year. Interest income related to the identified significant financing component was $
Upon the closing of the Company’s acquisition of ECG, the Administrative Services Agreement between ECG and Enhanced Capital Holdings, Inc. (“ECH”), immediately became effective. Under this agreement, ECG pays ECH for the use of their employees to provide services at the direction of ECG. The Company recognized $
27
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
On September 10, 2021, Enhanced entered into a strategic partnership with Crossroads Impact Corp ("Crossroads"), the parent company of Capital Plus Financial ("CPF"), a leading certified development financial institution. Under the terms of the agreement, Enhanced was to originate and manage loans across its diverse lines of business including small business loans to women and minority owned businesses, and loans to renewable energy and community development projects. The loans were to be held by CPF and CPF will pay an advisory fee to Enhanced.
On July 6, 2022, Crossroads entered into the Advisory Agreement (the "Crossroads Advisory Agreement") with ECG. The Crossroads Advisory Agreement provides for ECG to receive a services fee of approximately
On July 6, 2022, certain funds managed by the Company purchased
On December 23, 2024, Crossroads and ECG terminated the Crossroads Advisory Agreement. Additionally, the impact credit asset portfolio managed by the Company was contributed to two new limited liability companies ("Clifford") and the funds managed by the Company redeemed their interest in Crossroads in exchange for membership interests in Clifford in proportion to the fair value of the net assets contributed. At the same time, ECG entered into an Advisory Agreement with Clifford ("Clifford Advisory Agreement") to manage the impact credit asset portfolio, which has a term ending on the disposal date for all of Clifford's underlying investments. The Clifford Advisory Agreement provides for ECG to receive a services fee of approximately
As part of the Clifford arrangement, Enhanced Clifford (GP) LLC ("Clifford GP"), a direct subsidiary of ECH, was formed. Clifford GP receives incremental fees from Clifford as part of the Clifford Advisory Agreement. The Company is a guarantor on a put option and call option with third party customers. Refer to Note 14 for further details.
The Company has an Advance Agreement and Secured Promissory Notes with BCP, an entity that was formed by employees of the Company and certain Bonaccord employees and certain Bonaccord general partners. For details, see Note 6.
Note 14. Commitments and Contingencies
Operating Leases
The Company leases office space and various equipment under non-cancelable operating leases, with the longest lease expiring in 2036. These lease agreements provide for various renewal options. Rent expense for the various leased office space and equipment was approximately $
The Company leases an insignificant amount of office equipment under non-cancelable financing leases, with the longest lease expiring in 2028. The finance lease right-of-use asset is included in right-of-use assets and the finance lease liability is included in lease liabilities in the Consolidated Balance Sheets. Amortization and interest expense for the finance leased equipment is included in general, administrative, and other in the Consolidated Statements of Operations.
The following table presents information regarding the Company’s operating leases as of June 30, 2025:
28
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Operating lease right-of-use assets |
|
$ |
|
|
Operating lease liabilities |
|
$ |
|
|
Net cash paid during the six months ended June 30, 2025 for operating lease liabilities |
|
$ |
|
|
Weighted-average remaining lease term (in years) |
|
|
|
|
Weighted-average discount rate |
|
|
% |
The future contractual lease payments as of June 30, 2025 are as follows:
2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted lease payments |
|
|
|
|
Less imputed interest |
|
|
( |
) |
Total operating lease liabilities |
|
$ |
|
Earnout Payment
With the acquisition of WTI, an earnout payment of up to $
Bonus Payment
In connection with the acquisition of WTI, certain employees entered into employment agreements. As part of these employment agreements, certain employees may receive a one-time bonus payment if the employee is employed by the Company as of the fifth anniversary of the effective date and the trailing-twelve month EBITDA of WTI at that time is equal to or greater than $
29
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Revenue Share Arrangement
The Company recognizes accrued contingent liabilities and contingent payments to customers assets in the Consolidated Balance Sheets for agreements that exist between ECG and third party customers. The agreements require ECG to share in certain revenues earned with the third parties and also include an option for the third parties to sell back the revenue share to ECG at a set multiple. Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple. Both options are not exercisable until a certain period of time has lapsed per the agreements. The Company’s contingent liabilities and corresponding contingent payments to customers are recognized once determined to be probable and estimable. The contingent payments to customers are amortized and recorded within management and advisory fees on the Consolidated Statements of Operations over the estimated term of the revenue share agreements. As of June 30, 2025, the Company has determined that the put options are probable of being exercised and have accrued estimated contingent liabilities and contingent payments to customers. As of June 30, 2025 and December 31, 2024, the associated liabilities were $
On December 23, 2024, the Company became a guarantor for Clifford GP on a related put option and call option with the same third party customers and terms. The Company would be required to settle either the put or call options if either are exercised and Clifford GP does not have the means to settle themselves. The Company records accrued contingent liabilities when it is probable and estimable that the Company would need to settle as guarantor. As of June 30, 2025 and December 31, 2024, the associated liabilities were $
Contingencies
We may be involved, either as plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of our business. We evaluated all potentially significant litigation, government investigations, claims or assessments in which we are involved and disclosed anything more likely than not to be recognized below, if any are applicable. We do not believe that any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any.
Note 15. Income Taxes
The Company calculates its tax provision using the estimated annual effective tax rate methodology. The tax expense or benefit caused by an unusual or infrequent item is recorded in the quarter in which it occurs. To the extent that information is not available for the Company to fully determine the full year estimated impact of an item of income or tax adjustment, the Company calculates the tax impact of such item discretely.
Based on these methodologies, the Company’s worldwide effective income tax rate was
The Company records deferred tax assets and liabilities for the future tax benefit or expense that will result from differences between the carrying value of its assets for income tax purposes and for financial reporting purposes, as well as for operating loss and tax credit carryovers. A valuation allowance is recorded to bring the net deferred tax assets to a level that, in management's view, is more likely than not to be realized in the foreseeable future. This level will be estimated based on a number of factors, especially the amount of net deferred tax assets of the Company that are actually expected to be
30
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
realized, for tax purposes, in the foreseeable future. As of June 30, 2025, the Company has recorded a $
The Company monitors federal and state legislative activity and other developments that may impact our tax positions and their relation to the income tax provision. Any impacts will be recorded in the period in which the legislation is enacted or new regulations are issued. The Company is subject to examination by the United States Internal Revenue Service as well as state and local tax authorities. The Company is not currently under audit.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The OBBBA includes significant provisions, such as permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provision effective in 2025 and others implemented through 2027. Since the enactment occurred after the balance sheet date but before the issuance of these financial statements, the effects of the OBBBA are considered a non-recognized subsequent event. Accordingly, no adjustments have been made to the accompanying financial statements as of and for the three and six months ended June 30, 2025.
Note 16. Stockholders' Equity
Stock Incentive Plans
On July 20, 2021, the Board of Directors approved the P10 Holdings, Inc. 2021 Stock Incentive Plan (the "Plan"), which replaced the 2018 Incentive Plan ("2018 Plan"), our previously existing equity compensation plan. The Compensation Committee of the Board of Directors may issue equity-based awards including stock options, stock appreciation rights, restricted stock units, and restricted stock awards. Starting with options granted in 2024 under the Plan, vesting generally occurs on a graded schedule with
The 2018 Plan provided for an initial
On June 17, 2022, at the Annual Meeting of Stockholders, the shareholders authorized an increase of
31
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Equity-Based Compensation - Stock Options
A summary of stock option activity for the six months ended June 30, 2025 is as follows:
|
|
|
|
|
|
|
|
Weighted Average |
|
|
|
|
||||
|
|
|
|
|
|
|
|
Contractual Life |
|
|
Aggregate |
|
||||
|
|
Number of |
|
|
Weighted Average |
|
|
Remaining |
|
|
Intrinsic Value |
|
||||
|
|
Shares |
|
|
Exercise Price |
|
|
(in years) |
|
|
(whole dollars) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Outstanding as of December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Expired/Forfeited |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Outstanding as of June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable as of June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Compensation expense equal to the grant date fair value is recognized for these awards over the vesting period and is included in compensation and benefits in the Consolidated Statements of Operations. When stock options exercise, the awards are generally settled in equity net of employee tax withholdings and strike price. Stock option compensation cost is estimated at the grant date based on the fair-value of the award, which is determined using the Black Scholes option valuation model and is recognized as expense ratably over the requisite service period of the award, generally five years. The share price used in the Black Scholes model is based on the trading price of our shares on the public markets. Expected life is based on the vesting period and expiration date of the option. Stock price volatility is estimated using a weighted average of P10 and a group of similar publicly traded companies determined to be most reflective of the expected volatility of the Company due to the nature of operations of these entities. The risk-free rates are based on the U.S. Treasury yield in effect at the time of grant. The dividend yield is based on the quarterly dividend as of the grant date. The stock-based compensation expense for stock options was $
The weighted average assumptions used in calculating the fair value of stock options granted during the six months ended June 30, 2025 and June 30, 2024 were as follows:
|
|
For the six months ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Expected life (in years) |
|
|
|
|
||||
Expected volatility |
|
|
% |
|
|
% |
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Expected dividend yield |
|
|
% |
|
|
% |
||
Equity-Based Compensation - Restricted Stock Awards ("RSAs")
The Company has granted RSAs to certain non-employee directors. Holders of RSAs have no voting rights and accrue dividends until vesting with payment being made once they vest. When RSAs vest, the awards are generally settled in equity. All of the shares currently vest one year from the grant date. Compensation expense equal to the grant date fair value is recognized for these awards over the vesting period and is included in compensation and benefits in the Consolidated Statements of Operations. RSA compensation cost is estimated at the grant date based on the fair value of the award, which is based on the closing market price on the day of grant and is recognized as expense ratably over the requisite service period of the awards. The stock-based compensation expense for RSAs was $
32
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
compensation expense related to outstanding unvested RSAs as of June 30, 2025 was $
|
|
Number of |
|
|
Weighted-Average Grant |
|
||
|
|
RSAs |
|
|
Date Fair Value Per RSA |
|
||
Outstanding as of December 31, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
|
|
|
|
||
Outstanding as of June 30, 2025 |
|
|
|
|
$ |
|
||
Equity-Based Compensation - Restricted Stock Units ("RSUs")
The Company has granted restricted stock units ("RSUs") to certain employees. Holders of RSUs have no voting rights and generally are not eligible to receive dividends or other distributions paid with respect to any RSUs that have not vested. When RSUs vest, the awards are generally settled in equity net of employee tax withholdings. Compensation expense equal to the grant date fair value is recognized for these awards over the vesting period and is included in compensation and benefits in the Consolidated Statements of Operations. RSU compensation cost is estimated at the grant date based on the fair value of the award, which is based on one of the following methods: (1) the closing market price on the day of the grant, (2) the closing market price on the day prior to grant, or (3) a 30-day volume weighted average price ("VWAP") is recognized as expense ratably over the requisite service period of the awards. Most of the shares currently vest one year from the grant date excluding certain executive RSUs, the Bonaccord Units and Executive Market Units, which are discussed in more detail below. The stock-based compensation expense for RSUs excluding the Bonaccord Units, Executive Transition Units, and Executive Market Units, which are discussed in more detail below, was $
At the time of the Bonaccord acquisition, the Company entered into a Notice of Restricted Stock Units with certain employees of Bonaccord for grants of Restricted Stock Units ("Bonaccord Units") to be allocated to employees at a later date for meeting certain performance metrics. On August 16, 2022, allocations were finalized pursuant to which an aggregate value of $
With the vesting in full of the Bonaccord Units, the Company entered into a Cash Bonus and Restricted Stock Unit Agreement ("Bonus and Unit Agreement") with certain employees of Bonaccord for grants of additional RSUs ("Additional Units") and cash bonus with a total aggregate value of $
On October 23, 2023, the Company transitioned from their former co-CEOs to our current CEO ("Executive Transition"). The Company entered into an Executive Transition Agreement with a certain former executive, which granted Restricted Stock Units ("Executive Transition Units") for meeting a service requirement. The award had a stated value of $
33
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
following three quarters. Each $
At the time of Executive Transition, the Company entered into an Employment Agreement with a certain executive, which granted Restricted Stock Units ("Executive Market Units") for meeting a service requirement and achieving certain share price performance hurdles based on the thirty-day VWAP. The executive is entitled to receive RSUs upon the thirty-day VWAP of the Company's common stock reaching certain per share prices at any time prior to the fifth anniversary of the start date. There are five price per share performance hurdles for the executive to meet with each hurdle achievement allowing for the issuance of $
The below table shows the assumptions used in the Monte Carlo simulation for the Executive Market Units' fair value.
|
|
As of |
|
|
October 23, 2023 |
Expected life (in years) |
|
|
Expected volatility |
|
|
Risk-free interest rate |
|
|
Expected dividend yield |
|
The below table excludes Executive Market Units that the market conditions have not been satisfied.
|
|
Number of |
|
|
Weighted-Average Grant |
|
||
|
|
RSUs |
|
|
Date Fair Value Per RSU |
|
||
Outstanding as of December 31, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
|
|
|
|
||
Outstanding as of June 30, 2025 |
|
|
|
|
$ |
|
||
Note 17. Earnings Per Share
The Company presents basic EPS and diluted EPS for our common stock. Basic EPS excludes potential dilution and is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if shares of common stock were issued pursuant to our stock-based compensation awards. For the three and six months ended June 30, 2025 and the three and six months ended June 30, 2024, diluted EPS also reflects the potential dilution that could occur assuming that all units in P10 Intermediate that were granted as a result of the WTI acquisition are converted to shares of Class A common stock. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses.
34
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
The Company has Class A and Class B shares outstanding, therefore follows the two-class method. However, the shares are entitled to the same amount of the Company's earnings therefore the earnings per share calculation for Class A and Class B shares will always be equivalent.
The following table presents a reconciliation of the numerators and denominators used in the computation of basic and diluted EPS:
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator for basic calculation—Net income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator for basic calculation—Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Adjustment for: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to noncontrolling interests in P10 Intermediate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator for earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator for earnings per share assuming dilution |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator for basic calculation—Weighted- |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted shares assumed upon exercise of partnership units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted shares assumed upon exercise of stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted shares assumed upon the termination of an acquisition equity holdback period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator for earnings per share assuming dilution |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per Class A share—basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Earnings per Class A share—diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Earnings per Class B share—basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Earnings per Class B share—diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The computations of diluted earnings per share on a weighted average basis would exclude
Note 18. Segment Reporting
The accounting policies of the Company's single operating segment are the same as those described in the summary of significant accounting policies in Note 2.
Customer Information
35
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
Geographic Information
The primary geographic region in which the Company invests is in the United States and the majority of its revenues are generated in the United States. For the three and six months ended June 30, 2025 and 2024, most of the Company's revenues were generated in the United States. No individual foreign country constituted more than
The Company's long-lived assets consist of property and equipment, lease right-of-use assets, and finite-lived intangibles. As of June 30, 2025,
Significant Segment Expense
The following table presents information about reported segment revenue, segment profit or loss, and significant segment expenses for the three and six months ended June 30, 2025 and 2024:
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Total Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Less: cash compensation and benefits, net of one-time expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Less: stock based compensation |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Less: management profit share(2) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Less: professional fees, net of one-time expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Less: general, administrative and other, net of one-time expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Less: placement agent expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Less: other segment items (1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(1)
(2)
The following table reconciles the components of cash compensation and benefits, net of one-time expenses to their equivalent GAAP measures, reported in the Consolidated Statement of Operations for the three and six months ended June 30, 2025 and 2024:
|
|
For the three months ended June 30, |
|
|
For the six months ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Compensation and benefits |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock based compensation |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Management profit share(2) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
One-time expenses (1) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Cash compensation and benefits, net of one-time expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(1)
36
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
period for the acquisition of new businesses, which primarily consists of bonuses not paid to employees directly related to the WTI acquisition.
(2)
The following table reconciles the components of professional fees, net of one-time expenses to their equivalent GAAP measures, reported in the Consolidated Statement of Operations for the three and six months ended June 30, 2025 and 2024:
|
|
For the three months ended June 30, |
|
|
For the six months ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Professional fees |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
One-time expenses (1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Professional fees, net of one-time expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(1)
The following table reconciles the components of general, administrative and other, net of one-time expenses to their equivalent GAAP measures, reported in the Consolidated Statement of Operations for the three and six months ended June 30, 2025 and 2024:
|
|
For the three months ended June 30, |
|
|
For the six months ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
General, administrative and other |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Placement agent expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
One-time expenses (1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
General, administrative and other, net of one-time expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(1)
Other Segment Information
Interest expense is reported on the Consolidated Statements of Operations as interest expense, net. Interest income is reported on the Consolidated Statements of Operations within other income and was $
Note 19. Subsequent Events
On August 5, 2025, the Board of Directors of the Company has declared a quarterly cash dividend of $
On August 5, 2025, the Board of Directors authorized an additional $
37
P10, Inc.
Notes to Consolidated Financial Statements
(Unaudited, dollar amounts in tables stated in thousands, except per share amounts)
In accordance with ASC 855, Subsequent Events, the Company evaluated all material events or transactions that occurred after June 30, 2025, the Consolidated Balance Sheets date, through the date the Consolidated Financial Statements were issued, and determined there have been no additional events or transactions that would materially impact the Consolidated Financial Statements.
38
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis relates to the activities and operations of P10. As used in this section, “P10,” the “Company”, “we” or “our” includes P10 and only its consolidated subsidiaries. The following information should be read in conjunction with our selected financial and operating data and the accompanying consolidated financial statements and related notes contained elsewhere in this quarterly report on Form 10-Q. Our historical results discussed below, and the way we evaluate our results, may differ significantly from the descriptions of our business and key metrics used elsewhere in this quarterly report on Form 10-Q. The following discussion may contain forward-looking statements that reflects our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Form 10-Q, and in our annual report on Form 10-K for the year ended December 31, 2024, particularly in "Risk Factors" and the "Forward-Looking Information." Unless otherwise indicated, references in this Quarterly Report on Form 10-Q to fiscal 2025 and 2024 are to our fiscal years ended December 31, 2025 and 2024, respectively.
Business Overview
We are a leading multi-asset class private market solutions provider in the alternative asset management industry. Our mission is to provide our investors differentiated access to a broad set of solutions and investment vehicles across highly attractive asset classes and geographies that generate superior risk-adjusted returns. Our success and growth have been driven by our position in the private markets’ ecosystem, providing investors with specialized private market solutions across a comprehensive set of investment strategies, including primary investment funds, secondary investment funds, direct investment and co-investments and advisory solutions. As investors entrust us with additional capital, our relationships with our fund managers are strengthened, which drives additional investment opportunities, sources more data, enables portfolio optimization and enhances returns, and in turn attracts new investors.
As of June 30, 2025, our private market solutions were comprised of the following:
39
Sources of Revenue
Our sources of revenue currently include fund management fee contracts, advisory service fee contracts, consulting agreements, referral fees, subscriptions and other services. The majority of our revenues are generated through long-term, fixed fee management and advisory contracts with our investors for providing investment solutions in the following vehicles for our investors:
Operating Segments
We operate our business as a single operating segment, which is how our chief operating decision maker evaluates financial performance and makes decisions regarding the allocation of resources.
40
Trends Affecting Our Business
Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions in the North American and European markets in which we operate, as well as changes in global economic conditions, and regulatory or other governmental policies or actions, which can materially affect the values of the funds our platforms manage, as well as our ability to effectively manage investments and attract capital. Despite higher interest rates and the global economy outlook remaining uncertain, we continue to see investors turning towards alternative investments to achieve asset class diversification, superior investment returns, and participation in access constrained investment opportunities.
The continued growth of our business may be influenced by several factors, including the following market trends:
41
Key Financial & Operating Metrics
Revenues
We generate revenues primarily from management fees and advisory contracts, and to a lesser extent, other consulting arrangements and services. See Significant Accounting Policies in Note 2 of our Consolidated Financial Statements for additional information regarding the way revenues are recognized.
We earn management and advisory fees based on a percentage of investors’ capital commitments in or, in select cases, capital deployed to our investment funds. Management and advisory fees during the commitment period are charged on capital commitments and after the commitment period (or a defined anniversary of the fund’s initial closing) is reduced by a percentage of the management and advisory fees for the preceding years or charged on net invested capital or NAV, in select cases. Fee schedules are generally fixed and set for the expected life of the funds, which typically are between ten to fifteen years. These fees are typically staged to decrease over the life of the contract due to built-in declines in contractual rates and/or as a result of lower net invested capital balances as capital is returned to investors. We also earn revenues through catch-up fees on the funds we manage. Catch-up fees are earned from investors that make commitments to the fund after the first fund closing occurs during the fundraising period of funds originally launched in prior periods, and as such the investors are required to pay a catch-up fee as if they had committed to the fund at the first closing. While catch-up fees are not a
42
significant component of our overall revenue stream, they may result in a temporary increase in our revenues in the period in which they are recognized.
Other revenue consists of subscription and consulting agreements and referral fees that we offer in certain cases. Subscription and consulting agreements provide advisory and/or reporting services to our investors such as monitoring and reporting on an investor’s existing private markets investments. The subscription and consulting agreements typically have renewable one-year lives, and revenue is recognized ratably over the current term of the subscription or the agreement. If subscriptions or fees have been paid in advance, these fees are recorded as deferred revenue on our Consolidated Balance Sheets. Referral fee revenue is recognized upon closing of opportunities where we have referred credit opportunities that do not match our investment criteria. Incentive fees consists of carried interest income from a pre-acquisition legacy managed fund and incremental incentive revenues earned as a part of an advisory agreement between ECG and Crossroads Impact Corp.
The Company recognizes an accrued contingent liability and contingent payments to customers in our Consolidated Balance Sheets for agreements between ECG and third parties. The agreements require ECG to share in certain revenues earned with the third parties and also includes an option for the third parties to sell back the revenue share to ECG at a set multiple. Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple. The options became exercisable in July 2025. The Company believes it is probable that the third parties will exercise their options to sell back the revenue share and has recognized liabilities on the Consolidated Balance Sheets. The Company has also recognized contingent payments to customers assets associated with the agreements and will amortize the assets against revenue over the estimated length of the management contracts. The amortization is reported in management and advisory fees on the Consolidated Statements of Operations, which was terminated by the parties on December 23, 2024.
Operating Expenses
Compensation and benefits are our largest expense and consists of salaries, bonuses, severance, stock-based compensation, earnout and bonus payments related to the acquisition of WTI, employee benefits and employer-related payroll taxes. Despite our general operating leverage that exists, we expect to continue to experience an incremental rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain competitive compensation levels as we expand into new markets to create new products and services. In substantially all instances, the Company does not hold carried interests in the funds that we manage. Carried interest is typically structured to stay with the investment professionals. It allows our investment professionals to receive additional benefit and provides an economic incentive for them to outperform on behalf of our investors. This structure differs from that of most of our competitors, which we believe better aligns the objectives of our stockholders, investors and investment professionals.
Professional fees primarily consist of legal, advisory, accounting and tax fees which may include services related to our strategic development opportunities such as due diligence performed in connection with potential acquisitions. As our Company is an SEC registrant, our professional fees will fluctuate commensurate with our strategic objectives and potential acquisitions, and certain recurring accounting advisory, audit and tax expenses will increase to comply with additional regulatory requirements.
General, administrative, and other includes rent, travel and entertainment, technology, insurance and other general costs associated with operating our business.
Strategic alliance expense was included in operating expenses. This expense was driven by the Strategic Alliance Agreement that Bonaccord entered into with an investor at the time Bonaccord was acquired in exchange for a portion of net management fee earnings.
Other (Expense)/ Income
Interest expense, net includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs. Other income (loss) includes any (loss)/income from unconsolidated subsidiaries, interest income earned from bank accounts across management companies, the loss recognized for the conversion of the right to receive 15% of net management fee earnings to a 15% equity interest in Bonaccord, remeasurement of the contingent loss related to the Clifford guarantee, and accrued expenses related to litigation and regulatory activity as necessary, which would be discussed in Note 14 of our Consolidated Financial Statements.
43
Income Tax Expense
Income tax expense is comprised of current and deferred tax expense. Current income tax expense represents our estimated taxes to be paid or refunded for the current period. In accordance with ASC 740, Income Taxes (“ASC 740”), we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets to the amount we believe is more likely than not to be realized.
Fee-Paying Assets Under Management, or FPAUM
FPAUM reflects the assets from which we earn management and advisory fees. Our vehicles typically earn management and advisory fees based on committed capital, and in certain cases, net invested capital, depending on the fee terms. Management and advisory fees based on committed or deployed capital are not affected by market appreciation or depreciation.
Results of Operations
For the three and six months ended June 30, 2025 and June 30, 2024.
|
|
For the Three Months Ended June 30, |
|
|
|
|
|
|
|
For the Six Months Ended June 30, |
|
|
|
|
|
|
||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
||||||
REVENUES |
|
(in thousands) |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
||||||||||||
Management and advisory fees |
|
$ |
71,516 |
|
|
$ |
68,475 |
|
|
$ |
3,041 |
|
|
4% |
|
$ |
138,251 |
|
|
$ |
133,597 |
|
|
$ |
4,654 |
|
|
3% |
Other revenue |
|
|
1,188 |
|
|
|
2,601 |
|
|
|
(1,413 |
) |
|
(54)% |
|
|
2,120 |
|
|
|
3,594 |
|
|
|
(1,474 |
) |
|
(41)% |
Total revenues |
|
|
72,704 |
|
|
|
71,076 |
|
|
|
1,628 |
|
|
2% |
|
|
140,371 |
|
|
|
137,191 |
|
|
|
3,180 |
|
|
2% |
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Compensation and benefits |
|
|
32,145 |
|
|
|
36,253 |
|
|
|
(4,108 |
) |
|
(11)% |
|
|
69,225 |
|
|
|
73,362 |
|
|
|
(4,137 |
) |
|
(6)% |
Professional fees |
|
|
6,743 |
|
|
|
3,535 |
|
|
|
3,208 |
|
|
91% |
|
|
13,258 |
|
|
|
7,303 |
|
|
|
5,955 |
|
|
82% |
General, administrative and other |
|
|
8,824 |
|
|
|
7,017 |
|
|
|
1,807 |
|
|
26% |
|
|
15,649 |
|
|
|
13,074 |
|
|
|
2,575 |
|
|
20% |
Contingent consideration expense |
|
|
1,109 |
|
|
|
91 |
|
|
|
1,018 |
|
|
N/A |
|
|
1,109 |
|
|
|
121 |
|
|
|
988 |
|
|
N/A |
Amortization of intangibles |
|
|
6,150 |
|
|
|
6,438 |
|
|
|
(288 |
) |
|
(4)% |
|
|
11,468 |
|
|
|
12,875 |
|
|
|
(1,407 |
) |
|
(11)% |
Strategic alliance expense |
|
|
— |
|
|
|
903 |
|
|
|
(903 |
) |
|
(100)% |
|
|
703 |
|
|
|
1,518 |
|
|
|
(815 |
) |
|
(54)% |
Total operating expenses |
|
|
54,971 |
|
|
|
54,237 |
|
|
|
734 |
|
|
1% |
|
|
111,412 |
|
|
|
108,253 |
|
|
|
3,159 |
|
|
3% |
INCOME FROM OPERATIONS |
|
|
17,733 |
|
|
|
16,839 |
|
|
|
894 |
|
|
5% |
|
|
28,959 |
|
|
|
28,938 |
|
|
|
21 |
|
|
0% |
OTHER (EXPENSE)/LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense, net |
|
|
(6,799 |
) |
|
|
(6,115 |
) |
|
|
(684 |
) |
|
11% |
|
|
(13,216 |
) |
|
|
(11,891 |
) |
|
|
(1,325 |
) |
|
11% |
Other (loss)/income |
|
|
(5,354 |
) |
|
|
384 |
|
|
|
(5,738 |
) |
|
N/A |
|
|
(5,202 |
) |
|
|
1,062 |
|
|
|
(6,264 |
) |
|
N/A |
Total other (expense) |
|
|
(12,153 |
) |
|
|
(5,731 |
) |
|
|
(6,422 |
) |
|
112% |
|
|
(18,418 |
) |
|
|
(10,829 |
) |
|
|
(7,589 |
) |
|
70% |
Net income before income taxes |
|
|
5,580 |
|
|
|
11,108 |
|
|
|
(5,528 |
) |
|
(50)% |
|
|
10,541 |
|
|
|
18,109 |
|
|
|
(7,568 |
) |
|
(42)% |
Income tax expense |
|
|
(1,380 |
) |
|
|
(3,718 |
) |
|
|
2,338 |
|
|
(63)% |
|
|
(1,645 |
) |
|
|
(5,476 |
) |
|
|
3,831 |
|
|
(70)% |
NET INCOME |
|
$ |
4,200 |
|
|
$ |
7,390 |
|
|
$ |
(3,190 |
) |
|
(43)% |
|
$ |
8,896 |
|
|
$ |
12,633 |
|
|
$ |
(3,737 |
) |
|
(30)% |
Revenues
For the Three Months Ended June 30, 2025 and June 30, 2024
Our revenue is composed almost entirely of recurring management and advisory fees, with the vast majority of fees earned on committed capital that is typically subject to ten to fifteen year lock up agreements, therefore our average fee rates have remained stable at approximately 1% of average FPAUM for the three months ended June 30, 2025 and June 30, 2024. For the three months ended June 30, 2025 compared to the three months ended June 30, 2024, revenues increased by $1.6 million or 2% due to higher management and advisory fees across the Company.
Management and advisory fees increased by $3.0 million, or 4%, to $71.5 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The growth in management and advisory fees is attributable to continued success in fundraising and deploying capital. Furthermore, the Qualitas acquisition added to our fee base. Catch-up fees for the three months ended June 30, 2025 were $1.7 million. Catch up fees are primarily associated with the fund closings at Qualitas, RCP, and TrueBridge.
Other revenues, which represent ancillary elements of our business, decreased by $1.4 million or 54% to $1.2 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 driven primarily by a decrease of $1.8 million of recognized carried interest income in other revenue from a pre-acquisition legacy managed fund
44
in the three months ended June 30, 2024. This decrease was offset slightly by an increase of $0.3 million in income associated with ancillary services performed for certain funds in other revenue.
For the Six Months Ended June 30, 2025 and June 30, 2024
Our revenue is composed almost entirely of recurring management and advisory fees, with the vast majority of fees earned on committed capital that is typically subject to ten to fifteen year lock up agreements, therefore our average fee rates have remained stable at approximately 1% for the six months ended June 30, 2025 and June 30, 2024. For the six months ended June 30, 2025 compared to the six months ended June 30, 2024, revenues increased by $3.2 million or 2% primarily due to higher management and advisory fees across the Company.
Management and advisory fees increased by $4.7 million, or 3%, to $138.3 million for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The growth in management and advisory fees is attributable to continued success in fundraising and deploying capital. Furthermore, the Qualitas acquisition added to our fee base. Catch-up fees for the six months ended June 30, 2025 were $4.5 million associated with the fund closings at Qualitas, RCP, and TrueBridge.
Other revenues decreased by $1.5 million or 41% to $2.1 million for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 primarily driven by a decrease of $1.8 million of recognized carried interest income from a pre-acquisition legacy managed fund in other revenue offset slightly by an increase of $0.4 million of income associated with ancillary services performed for certain funds in other revenue.
|
|
For the Three Months Ended June 30, |
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, |
|
|
|
|
|
|
||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
$ Change |
|
|
% Change |
|
||||||||
OPERATING EXPENSES |
|
(in thousands) |
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
||||||||||||||
Compensation and benefits |
|
$ |
32,145 |
|
|
$ |
36,253 |
|
|
$ |
(4,108 |
) |
|
|
(11 |
)% |
|
$ |
69,225 |
|
|
$ |
73,362 |
|
$ |
(4,137 |
) |
|
|
(6 |
)% |
Professional fees |
|
|
6,743 |
|
|
|
3,535 |
|
|
|
3,208 |
|
|
|
91 |
% |
|
|
13,258 |
|
|
|
7,303 |
|
|
5,955 |
|
|
|
82 |
% |
General, administrative, and other |
|
|
8,824 |
|
|
|
7,017 |
|
|
|
1,807 |
|
|
|
26 |
% |
|
|
15,649 |
|
|
|
13,074 |
|
|
2,575 |
|
|
|
20 |
% |
Contingent consideration expense |
|
|
1,109 |
|
|
|
91 |
|
|
|
1,018 |
|
|
N/A |
|
|
|
1,109 |
|
|
|
121 |
|
|
988 |
|
|
N/A |
|
||
Amortization of intangibles |
|
|
6,150 |
|
|
|
6,438 |
|
|
|
(288 |
) |
|
|
(4 |
)% |
|
|
11,468 |
|
|
|
12,875 |
|
|
(1,407 |
) |
|
|
(11 |
)% |
Strategic alliance expense |
|
|
— |
|
|
|
903 |
|
|
|
(903 |
) |
|
|
(100 |
)% |
|
|
703 |
|
|
|
1,518 |
|
|
(815 |
) |
|
|
(54 |
)% |
Total operating expenses |
|
$ |
54,971 |
|
|
$ |
54,237 |
|
|
$ |
734 |
|
|
|
1 |
% |
|
$ |
111,412 |
|
|
$ |
108,253 |
|
$ |
3,159 |
|
|
|
3 |
% |
Operating Expenses
For the Three Months Ended June 30, 2025 and June 30, 2024
Total operating expenses increased by $0.7 million, or 1%, to $55.0 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was primarily due to increases in professional fees, general, administrative, and other expenses, and contingent consideration expense. This increase was offset by decreases in compensation and benefits expense, amortization of intangibles, and strategic alliance expense.
Compensation and benefits expense decreased by $4.1 million, or 11%, to $32.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This was driven by a $9.6 million decrease in compensation expense due to the second tranche of the WTI earn-out no longer being probable of achievement in the three months ended June 30, 2025. This decrease was offset by a $4.4 million increase in stock compensation, which consists of a $3.5 million increase related to the 2025 grant of Bonaccord Units and an increase of $0.9 million for management stock awards. This decrease was also offset slightly by a $0.6 million increase in general compensation expense in the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Professional fees increased by $3.2 million, or 91%, to $6.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This was primarily driven by an increase of $2.2 million in legal and professional services associated with acquisition activity and other strategic transactions during the three months ended June 30, 2025, as well as an increase of $1.1 million in audit, SEC Rule 404(b) implementation, tax, and compliance services provided to the Company.
45
Contingent consideration expense increased by $1.0 million to $1.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This was primarily driven by the remeasurement of the Qualitas earnout, related to the Qualitas acquisition in April 2025.
General, administrative, and other increased by $1.8 million, or 26%, to $8.8 million, due primarily to increases in ongoing enhancements to infrastructure, technology, and security, expanding operations with the Qualitas acquisition, and additional rent expense as well as associated office maintenance.
Amortization of intangibles decreased by $0.3 million, or 4%, to $6.2 million, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. This was due to decreases at ECG, Five Points, RCP, TrueBridge, and WTI. The decrease at ECG is driven by unique syndication contracts and advisory contracts' amortization schedule, which is based on projected revenues at the time of acquisition. The decreases at Five Points, RCP, TrueBridge, and WTI are driven by asset management fee contracts' amortization schedule, which is based on projected revenues at the time of acquisition. These decreases were offset by the additional intangible asset amortization associated with the Qualitas acquisition in April 2025.
Strategic alliance expense decreased by $0.9 million, or 100%, to $0 for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. This decrease was due to the conversion of the SAA to an equity interest in Bonaccord, which was effective on April 1, 2025.
For the Six Months Ended June 30, 2025 and June 30, 2024
Total operating expenses increased by $3.2 million, or 3%, to $111.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was due to increases in professional fees, general, administrative and other expense, as well as contingent consideration offset by the decrease in compensation and benefits, amortization of intangibles and strategic alliance expense.
Compensation and benefits expense decreased by $4.1 million, or 6%, to $69.2 million, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This was driven by a $9.6 million decrease in compensation expense due to the second tranche of the WTI earn-out no longer being probable of achievement in the six months ended June 30, 2025. This decrease was offset by a $4.4 million increase in stock compensation, which consists of a $3.5 million increase related to the second grant of Bonaccord Units and an increase of $0.9 million for management stock awards. This decrease was offset slightly by a $0.6 million increase in general compensation expense in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Professional fees increased by $6.0 million, or 82%, to $13.3 million. The primary driver for the increase in professional fees for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was an increase of $5.1 million in professional and legal expenses associated with acquisition activity and other strategic transactions during the six months ended June 30, 2025 as well as normal course of business such as filings and due diligence for acquisitions. Additionally fees related to audit, SEC Rule 404(b) implementation, tax, and compliance services provided to the Company increased by $0.9 million.
Contingent consideration expense increased by $1.0 million to $1.1 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This was primarily driven by the remeasurement of the Qualitas earnout, related to the Qualitas Acquisition in April 2025.
General, administrative and other increased by $2.6 million, or 20%, to $15.6 million, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This was primarily driven by ongoing enhancements to infrastructure, technology, and security, expanding operations with the acquisition of Qualitas, and additional rent expense as well as associated office maintenance.
Amortization of intangibles decreased by $1.4 million, or 11%, to $11.5 million, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. This was due to decreases at ECG, RCP, and TrueBridge. The decrease at ECG was driven by unique syndication contracts and advisory contracts' amortization schedule, which is based on projected revenues at the time of acquisition. The decreases at RCP and TrueBridge were driven by asset management fee contracts' amortization schedules, which are based on projected revenues at the time of acquisition. These decreases were offset by the additional intangible asset amortization associated with the Qualitas acquisition in April 2025.
46
Strategic alliance expense decreased by $0.8 million, or 54%, to $0.7 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. This decrease was due to the conversion of the SAA to an equity interest in Bonaccord, which was effective on April 1, 2025.
Other (Expense)/Income
For the Three Months Ended June 30, 2025 and June 30, 2024
Other expense increased by $6.4 million, or 112%, to $12.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was driven by an increase in interest expense of $0.7 million on the debt facility due to a larger outstanding debt balance for the three months ended June 30, 2025. Additionally, other (loss)/income increased expense by $5.7 million primarily due to a $6.5 million loss recognized for the conversion of the right to receive 15% of net management fee earnings to a 15% equity interest in Bonaccord offset slightly by a $0.7 million increase in income from unconsolidated subsidiaries.
For the Six Months Ended June 30, 2025 and June 30, 2024
Other expense increased by $7.6 million, or 70%, to $18.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was driven by $6.3 million increase in expenses included other income/(losses) related to a loss recognized for the conversion of the right to receive 15% of net management fee earnings to a 15% equity interest in Bonaccord as well as a $0.2 million loss related to the guarantee for the Clifford incremental fee offset slightly by a $0.4 million increase in income from unconsolidated subsidiaries. Additionally interest expense increased by $1.3 million due to a larger average outstanding debt balance for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Income Tax Expense
For the Three Months Ended June 30, 2025 and June 30, 2024
Income tax expense was $1.4 million for the three months ended June 30, 2025, a decrease of $2.3 million from $3.7 million for the three months ended June 30, 2024. This reduction was mainly due to lower pre-tax income and an increase in the stock-based compensation-related tax benefit in the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
For the Six Months Ended June 30, 2025 and June 30, 2024
Income tax expense decreased by $3.8 million to $1.6 million for the six months ended June 30, 2025 compared to an expense of $5.5 million for the six months ended June 30, 2024. The decrease was primarily due to a decrease in income and an increase in stock-based compensation-related tax benefit in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
47
FPAUM
The following table provides a period-to-period roll-forward of our fee paying assets under management on an actual basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
For the three months |
|
|
For the six months |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in millions) |
|
|
(in millions) |
|
|
(in millions) |
|
|
(in millions) |
|
||||
Balance, Beginning of Period |
|
$ |
26,320 |
|
|
$ |
23,846 |
|
|
$ |
25,677 |
|
|
$ |
23,259 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisitions |
|
|
980 |
|
|
|
— |
|
|
|
980 |
|
|
|
— |
|
Capital raised (1) |
|
|
1,424 |
|
|
|
737 |
|
|
|
2,609 |
|
|
|
1,206 |
|
Capital deployed (2) |
|
|
504 |
|
|
|
107 |
|
|
|
753 |
|
|
|
306 |
|
Net Asset Value Change (3) |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
Impact of exchange rate movements |
|
|
82 |
|
|
|
— |
|
|
|
82 |
|
|
|
— |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Scheduled fee base stepdowns |
|
|
(88 |
) |
|
|
(105 |
) |
|
|
(463 |
) |
|
|
(162 |
) |
Expiration of fee period |
|
|
(346 |
) |
|
|
(746 |
) |
|
|
(762 |
) |
|
|
(770 |
) |
Balance, End of period |
|
$ |
28,875 |
|
|
$ |
23,835 |
|
|
$ |
28,875 |
|
|
$ |
23,835 |
|
FPAUM as of June 30, 2025
FPAUM increased by $2.6 million to $28.9 million for the three months ended June 30, 2025, due primarily to an increase in capital raised and capital deployed from our private equity and private credit as well as the FPAUM acquired in the Qualitas acquisition, which was offset by a decline of fees related to scheduled fee stepdowns and expirations of fees. Our FPAUM growth and concentration across solutions and vehicles has been relatively consistent over time but can vary in particular periods due to the systematic fundraising cycles of new funds, which typically lasts 12-24 months. We expect to continue to expand our fundraising efforts and grow FPAUM with the launch of new specialized investment vehicles and asset class solutions.
Non-GAAP Financial Measures
Below is a description of our unaudited non-GAAP financial measures. These are not measures of financial performance under GAAP and should not be construed as a substitute for the most directly comparable GAAP measures, which are reconciled below. These measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these measures in isolation or as a substitute for GAAP measures. Other companies may calculate these measures differently than we do, limiting their usefulness as a comparative measure.
We use Adjusted Net Income ("ANI"), Fee-Related Revenue ("FRR"), and Fee-Related Earnings ("FRE") to provide additional measures of profitability. We use the measures to assess our performance relative to our intended strategies, expected patterns of profitability, and budgets, and use the results of that assessment to adjust our future activities to the extent we deem necessary. FRR is calculated as Total Revenues less any non-fee related revenue. ANI reflects an estimate of our cash flows generated by our core operations. ANI is calculated as FRE, plus non-fee related income less strategic alliance noncontrolling interests expense, less actual cash paid for interest and federal and state income taxes.
In order to compute FRE, we adjust our GAAP net income for certain items, including the following:
48
The cash income taxes during the three months ended June 30, 2025 and June 30, 2024 as well as during the six months ended June 30, 2025 and June 30, 2024 differ significantly from the net income tax expense, which is primarily comprised of deferred tax expense as described in the results of operations.
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|
(in thousands) |
|
||||||||||
Net Income |
|
$ |
4,200 |
|
|
$ |
7,390 |
|
|
$ |
8,896 |
|
|
$ |
12,633 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation & amortization |
|
|
6,766 |
|
|
|
7,075 |
|
|
|
12,570 |
|
|
|
14,157 |
|
Interest expense, net |
|
|
6,799 |
|
|
|
6,115 |
|
|
|
13,216 |
|
|
|
11,891 |
|
Income tax expense |
|
|
1,380 |
|
|
|
3,718 |
|
|
|
1,645 |
|
|
|
5,476 |
|
Non-recurring expenses |
|
|
11,184 |
|
|
|
884 |
|
|
|
14,644 |
|
|
|
1,575 |
|
Non-cash stock based compensation |
|
|
6,680 |
|
|
|
5,771 |
|
|
|
12,536 |
|
|
|
11,716 |
|
Non-cash stock based compensation - acquisitions |
|
|
4,376 |
|
|
|
904 |
|
|
|
5,085 |
|
|
|
1,675 |
|
Earn out related compensation |
|
|
(6,007 |
) |
|
|
3,558 |
|
|
|
(2,488 |
) |
|
|
7,117 |
|
Non-fee related income |
|
|
— |
|
|
|
(1,850 |
) |
|
|
(39 |
) |
|
|
(1,934 |
) |
Fee-Related Earnings |
|
$ |
35,378 |
|
|
$ |
33,565 |
|
|
$ |
66,065 |
|
|
$ |
64,306 |
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-fee related income |
|
|
— |
|
|
|
1,850 |
|
|
|
39 |
|
|
|
1,934 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Strategic alliance noncontrolling interests expense |
|
|
(663 |
) |
|
|
— |
|
|
|
(663 |
) |
|
|
— |
|
Cash interest expense |
|
|
(6,241 |
) |
|
|
(5,636 |
) |
|
|
(12,937 |
) |
|
|
(11,042 |
) |
Cash income taxes, net of taxes related to acquisitions |
|
|
(1,743 |
) |
|
|
(1,029 |
) |
|
|
(2,314 |
) |
|
|
(1,049 |
) |
Adjusted Net Income |
|
$ |
26,731 |
|
|
$ |
28,750 |
|
|
$ |
50,190 |
|
|
$ |
54,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Revenues |
|
$ |
72,704 |
|
|
$ |
71,076 |
|
|
$ |
140,371 |
|
|
$ |
137,191 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-Fee Related Revenue |
|
|
— |
|
|
|
(2,767 |
) |
|
|
(39 |
) |
|
|
(3,875 |
) |
Fee-Related Revenue |
|
$ |
72,704 |
|
|
$ |
68,309 |
|
|
$ |
140,332 |
|
|
$ |
133,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
49
Financial Position, Liquidity and Capital Resources
Selected Statements of Financial Position
|
|
As of |
|
|
As of |
|
|
|
|
|
|
|||
|
|
June 30, |
|
|
December 31, |
|
|
|
|
|
|
|||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|||
|
|
(in thousands) |
|
|
|
|
|
|
||||||
Cash and cash equivalents (including restricted cash) |
|
$ |
34,214 |
|
|
$ |
68,115 |
|
|
$ |
(33,901 |
) |
|
(50)% |
Goodwill and other intangibles |
|
|
677,649 |
|
|
|
603,627 |
|
|
|
74,022 |
|
|
12% |
Total assets |
|
|
932,165 |
|
|
|
869,275 |
|
|
|
62,890 |
|
|
7% |
Accrued compensation and benefits |
|
|
53,289 |
|
|
|
69,544 |
|
|
|
(16,255 |
) |
|
(23)% |
Debt obligations |
|
|
373,021 |
|
|
|
319,783 |
|
|
|
53,238 |
|
|
17% |
Equity |
|
|
388,941 |
|
|
|
386,890 |
|
|
|
2,051 |
|
|
1% |
There was a decrease in cash and cash equivalents of $33.9 million from December 31, 2024 to $34.3 million as of June 30, 2025 primarily due to the share repurchases in the open market and the Qualitas acquisition. There was an increase in goodwill and intangible assets of $74.1 million due to the Qualitas acquisition. Remaining total assets increased in the same period by $15.2 million. The increase is driven by an increase in accounts receivable from related parties which is primarily due to ECG's Advisory Agreement with Enhanced PC. Additionally, there was an increase in right of use assets related to new office leases as well as an increase in prepaid expenses and other assets associated with the purchase of allocable state tax credits. Debt obligations increased by $53.2 million which is driven by revolver activity due to the Qualitas acquisition that closed in April 2025 and open market Class A share repurchases.
Liquidity and Capital Resources
We have continued to support our ongoing operations through the receipt of management and advisory fee revenues. However, to fund our continued growth, we have utilized capital obtained through debt and equity raises. Our ability to continue to raise funds will be critical as we pursue additional business development opportunities and new acquisitions.
On December 22, 2021, P10, Inc. entered into a Term Loan and Revolving Credit Facility with JP Morgan Chase Bank, N.A.. The term loan and revolving credit facility provides financing for acquisition activity. The term loan provides for a $125.0 million facility and the revolving credit facility provides for an additional $125.0 million. There is also a $125.0 million accordion feature available in the credit agreement, which we exercised in September 2022. The accordion was not drawn until October 2022, at which point it was divided to $87.5 million of term loan and $37.5 million of revolver. On August 1, 2024, the Company entered into the Amended and Restated Credit Agreement, which provides for a new senior secured revolving credit facility in the amount of $175.0 million, with a $10.0 million sublimit for the issuance of letters of credit, and a new senior secured loan facility in the amount of $325.0 million. The New Credit Facilities are to be used to refinance and replace the credit facilities under the Credit Agreement and for general corporate purposes, including acquisitions.
The New Credit Facilities are Term SOFR Loans meaning loans bearing interest based upon the "Adjusted Term SOFR Rate". The Adjusted Term SOFR Rate is the Secured Overnight Financing Rate ("SOFR") at the date of election, plus 2.60%. The Company can elect one or three months for the Revolver Facility and one, three, or six months for the Term Loan. Principal is contractually repaid at a rate of 1.25% on the term loan quarterly effective December 31, 2025. The New Revolving Facility has no contractual principal repayments until maturity, which is August 1, 2028 for both facilities.
As of June 30, 2025, the Term Loan with a balance of $325.0 million is incurring interest at a weighted average SOFR rate of 6.85%. As of June 30, 2025, the New Revolving Facility is split into four tranches. The total principal outstanding is $52.5 million and the weighted-average SOFR rate amongst the tranches is 6.92%. The tranches are all incurring interest at a set rate for one or three month periods and are subsequently reset at the current SOFR rate. Refer to Note 12 of our consolidated financial statements for further details provided on the debt and associated interest periods.
The Amended and Restated Credit Agreement contains affirmative and negative covenants typical of such financing transactions, and specific financial covenants which require P10 to maintain a minimum FPAUM of the sum of $16.7 million plus 70% of the aggregate amount of FPAUM acquired or not constituted as organic growth as well as a minimum leverage ratio of less than or equal to 3.50. As of June 30, 2025, P10 was in compliance with its financial and other covenants required under the facility. The Company has incurred $12.5 million in interest expense for the six months ended June 30, 2025.
50
Cash Flows
Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024
The following table reflects our cash flows for the six months ended June 30, 2025 and 2024:
|
|
For the Six Months |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
2025 |
|
|
2024 |
|
$ Change |
|
|
% Change |
|||
|
|
(in thousands) |
|
|
|
|
|
||||||
Net cash provided by operating activities |
|
$ |
8,657 |
|
|
$ |
45,786 |
|
$ |
(37,129 |
) |
|
(81)% |
Net cash used in investing activities |
|
|
(42,935 |
) |
|
|
(1,135 |
) |
|
(41,800 |
) |
|
N/A |
Net cash provided by (used in) financing activities |
|
|
306 |
|
|
|
(44,506 |
) |
|
44,812 |
|
|
N/A |
Increase in cash, cash equivalents and |
|
$ |
(33,972 |
) |
|
$ |
145 |
|
$ |
(34,117 |
) |
|
N/A |
Operating Activities
Six Months Ended June 30, 2025 and June 30, 2024
The Company's operating activities generally reflect the Company's earnings in the respective periods after adjusting for significant non-cash activity, including income of unconsolidated subsidiaries, stock-based compensation, depreciation, amortization, and deferred tax expense, all of which are included in net income. Cash from operating activities decreased by $37.1 million, or 81%, to $8.7 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. For the six months ended June 30, 2025 and 2024, our net cash provided by operating activities was driven primarily by receipts of management fees and advisory fees, offset by a purchase of allocable state tax credits and payment of operating expenses, which includes professional fees, compensation and benefits, as well as general, administrative and other expenses.
Investing activities
Six Months Ended June 30, 2025 and June 30, 2024
The cash used in investing activities increased by $41.8 million to $42.9 million, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. This increase in cash used in investing activities was due to Qualitas acquisition and the purchases of additional property and equipment during the six months ended June 30, 2025.
Financing Activities
Six Months Ended June 30, 2025 and June 30, 2024
Cash from financing activities for the six months ended June 30, 2025 was $0.4 million, as compared to cash used in financing activities of $44.5 million for the six months ended June 30, 2024. The change is driven by net borrowing activity on the Company's credit facilities and the proceeds from the SAA 5% purchase option exercise of equity interests in Bonaccord during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Future Sources and Uses of Liquidity
We generate significant cash flows from operating activities. We believe that we will be able to continue to meet our current and long-term liquidity and capital requirements through our cash flows from operating activities, existing cash and cash equivalents, and our external financing activities which may include refinancing of existing indebtedness or the pay down of debt using proceeds of equity offerings.
The Board approved a program to repurchase shares of our Class A and Class B common stock. As of June 30, 2025, the Board has approved $132.0 million since inception of the program, of which $40 million was approved for the six months ended June 30, 2025, for repurchase under the Share Repurchase Program. These shares may be repurchased from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades, in accordance with Rule 10b5-1 trading plans and/or through other legally permissible means. The timing and amount of any repurchases pursuant to the program will depend on various factors including, the market price of our Class A common stock, trading volume, ongoing assessment of our working capital needs, general market conditions, and other factors. As of June 30, 2025,
51
$129.7 million has been spent to buy back shares since the inception of the program and there was $2.3 million remaining for authorized repurchases under this program. On August 5, 2025, the Board of Directors authorized an additional $25.0 million for repurchases under the Share Repurchase program.
Off Balance Sheet Arrangements
We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market, or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our consolidated financial statements.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its consolidated subsidiaries. The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We believe the following critical accounting policies could potentially produce materially different results if we were to change the underlying assumptions, estimates, or judgments. See Note 2 of our consolidated financial statements for a summary of our significant accounting policies.
Basis of Presentation
The accompanying Consolidated Financial Statements are prepared in accordance with GAAP. Management believes it has made all necessary adjustments so that the Consolidated Financial Statements are presented fairly and that estimates made in preparing the Consolidated Financial Statements are reasonable and prudent. The Consolidated Financial Statements include the accounts of the Company, its wholly owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. All intercompany transactions and balances have been eliminated upon consolidation. Certain entities in which the Company holds an interest are investment companies that follow specialized accounting rules under GAAP and reflect their investments at estimated fair value. Accordingly, the carrying value of the Company’s equity method investments in such entities retains the specialized accounting treatment.
Current Expected Credit Losses for Due from Related Parties
The Company evaluates accounts receivable, due from related parties, and notes receivable using the current expected credit loss model. The Company determines a current estimate of all expected credit losses over the life of each financial instrument, which may result in recognition of credit losses on loans and receivables before an actual event of default. The Company establishes reserves for any estimated credit losses with a corresponding charge in the Consolidated Statements of Operations. If accounts are subsequently determined to be uncollectible, they will be expensed in the period that determination is made. Due from related parties represents receivables from the Funds for reimbursable expenses, and management fees collected by a related party of RCP 2 that are owed to RCP 2. Additionally, fees owed to the Company for the advisory agreement entered into upon the closing of the acquisition of ECG and any supplemental agreements entered into after acquisition, ("Advisory Agreements") where ECG provides advisory services to Enhanced Permanent Capital, LLC ("Enhanced PC") are reflected in due from related parties on the Consolidated Balance Sheets.
The Company estimates that accounts receivable, due from related parties, and notes receivable are fully collectible based on historical events, current conditions, and reasonable and supportable forecasts. The estimate for the Enhanced PC Advisory Agreements require more judgment than other receivables due to the size of the outstanding receivable and the Company's reliance on reasonable and supportable forecasts on this particular receivable bucket.
Revenue Recognition of Management Fees and Advisory Fees
The Company earns management fees for asset management services provided to the Funds where the Company has discretion over investment decisions. The Company primarily earns fees for advisory services provided to clients where the Company does not have discretion over investment decisions. Management and advisory fees received in advance reflects the amount of fees that have been received prior to the period the fees are earned. These fees are recorded as deferred revenues on the Consolidated Balance Sheets due to the performance obligations not being satisfied at the time of collection.
52
For asset management and advisory services, the Company typically satisfies its performance obligations over time as the services are provided as a distinct series of daily performance obligations that the customer simultaneously benefits from as they are performed. Asset management fees are based on the contractual terms of each contract which differ, such as fees calculated based on committed capital or deployed capital, fees initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term, fees that step down during specified periods of the fund's term, or in limited instances, fees based on assets under management. At contract inception, no revenue is estimated as the fees are dependent variable amounts which are susceptible to factors outside of our control. Fees are recognized for services provided during the period, which are distinct from services provided in other periods. In certain asset management and advisory agreements progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has the right to invoice.
Advisory service fees are determined using fixed-rate fees and are recognized over time as the related services are delivered. Other advisory services include transaction and management fees associated with managing the origination and ongoing compliance of certain investments.
The Company allocates a portion of consideration received under an arrangement to a financing component when it determines that a significant financing component exists. The Company does not adjust the promised amount of consideration for the effects of a significant financing component if, at each contract inception the Company expects that the period between services being provided and cash collection would be less than one year. To the extent the Company determines that there is a significant financing component in a contract with a customer, it determines the impact of the time value of money in adjusting the transaction price to account for the income associated with the financing component by estimating the discount rate that would be reflected in a separate financing transaction between the customer and the Company at contract inception, based upon the credit characteristics of the customer receiving financing in the contract.
The Company is applying the optional disclosure exemption for variable consideration for unsatisfied performance obligations, as the variable consideration relates to these unsatisfied performance obligations being fulfilled as a series. The performance obligations related to these contracts are expected to be satisfied over the next 1-10 years as services are provided to the customer.
Catch-up fees are earned from investors that make commitments to the previously launched fund after the first fund closing occurs, but during the fundraising period. Contractual terms require the investors to pay a catch-up fee as if they had committed to the fund at the first closing. Catch-up fees are recorded as revenue when such commitments are made as variable consideration in which the constraint is relieved at the time of the commitment.
Stock-Based Compensation Expense
Stock-based compensation relates to grants for shares of P10 awarded to our employees through stock options as well as RSUs awarded to employees and RSAs issued to non-employee directors as compensation for service on the Company's board. Stock compensation expense for awards that cliff-vest after either a service period or both a service period and performance condition is recorded ratably over the vesting period at the fair market value on the grant date. For awards with graded vesting, and vesting only requires a service condition, the Company elected, in accordance with ASC 718, to treat these awards as single awards for recognition purposes and recognize compensation on a straight-line basis over the requisite service period of the entire award. For awards with graded vesting and require a market condition to vest, the Company treats each expected vesting tranche as an individual award and recognizes expense ratably over the vesting period at the fair market value of the grant date. Certain acquisition related RSUs vest after meeting certain performance metrics. For these, the Company uses the tranche method and recognizes expense for each tranche of RSUs deemed probable of vesting on a straight-line basis over the expected vesting period. The Company evaluates the probability of vesting at each reporting period. Unvested RSUs are remeasured quarterly against performance metrics as a liability or equity, in accordance with GAAP, on the Consolidated Balance Sheets. Refer to Note 16 to the Consolidated Financial Statements for further discussion. Forfeitures are recognized as they occur.
Accrued Compensation and Benefits
Accrued compensation and benefits consists of employee salaries, bonuses, benefits, severance, and acquisition-related earnouts (contingent on employment) that has not yet been paid. The estimate for the acquisition-related earnouts require more judgment than the other components in accrued compensation and benefits. The acquisition-related earnout for WTI is an earnout payment of up to $70.0 million of cash and common stock may be earned upon meeting certain performance metrics. Upon the achievement of $20.0 million, $22.5 million, and $25.0 million of EBTIDA, $35.0 million, $17.5 million, and $17.5 million are earned, respectively. Of the total amount, $50.0 million can be earned by the sellers and the remaining
53
$20.0 million would be allocated to employees of the Company at the time the earnout is earned. Payment to both sellers and employees is contingent on continued employment and, therefore, these earnout payments are recorded as compensation and benefits expense on the Consolidated Statements of Operations. Payments will be made in cash, with the option to pay up to 50.0% in units of P10 Intermediate, no later than 90 days following the last day of the calendar quarter in which a milestone payment is achieved. Total payments will not exceed $70.0 million and any amounts paid will be paid by October 2027. The Company will evaluate whether each earn-out hurdle is probable of occurring and recognize an expense over the period the hurdle is expected to be achieved. As of December 31, 2024, the Company had determined that only the first two of three EBITDA hurdles are probable of being achieved. As of June 30, 2025, the first EBITDA hurdle was achieved and the Company does not expect that the second and third EBITDA hurdle will be achieved. No payments have been made on the earnout but payment for the achievement of the first hurdle is expected to be made in September 2025. Additionally in connection with the acquisition of WTI, certain employees entered into employment agreements. As part of these employment agreements, certain employees may receive a one-time bonus payment if the employee is employed by the Company as of the fifth anniversary of the effective date and the trailing-twelve month EBITDA of WTI at that time is equal to or greater than $20.0 million. Payment can be made in cash or stock of P10, provided that no more than $5.0 million will be payable in cash. Total payment will not exceed $10.0 million and any amounts will be paid in October 2027, the fifth anniversary of the effective date.
Revenue Share and Repurchase Agreement
The Company recognizes accrued contingent liabilities and contingent payments to customers asset in our Consolidated Balance Sheets for an agreement between ECG and various third parties. The agreement requires ECG to share in certain revenues earned with the third parties and also includes an option for the third parties to sell back the revenue share to ECG at a set multiple. Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple. The options to repurchase the revenue share became exercisable in July 2025. The Company believes it is probable that the third parties will exercise its option to sell back the revenue share and has recognized a liability on the Consolidated Balance Sheets. The Company has also recognized a contingent payment to customers associated with the agreement and will amortize the asset against revenue over the estimated term of the management contract. The amortization is reported in management and advisory fees on the Consolidated Statements of Operations. The Company will reassess at each reporting period and recognize all changes.
On December 23, 2024, the Company became a guarantor for a related party on a related put option and call option with the same third party customers and terms. The Company would be required to settle either the put or call options if either are exercised and the related party does not have the means to settle themselves. The Company’s accrued contingent liabilities are recognized once determined that it is probable the Company would need to settle as guarantor and estimable and would record a loss at the same time. The Company will reassess at each reporting period and recognize all changes. Refer to Note 14 to the Consolidated Financial Statements for further discussion.
Business Acquisitions
In accordance with ASC 805, Business Combinations (“ASC 805”), the Company allocates the purchase price of an acquired business to its identifiable assets and liabilities based on the estimated fair values using the acquisition method. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The excess value of the net identifiable assets and liabilities acquired over the purchase price of an acquired business is recorded as a bargain purchase gain. The Company uses all available information to estimate fair values of identifiable intangible assets and property acquired. In making these determinations, the Company may engage an independent third-party valuation specialist to assist with the valuation of certain intangible assets and tax assets and liabilities.
The consideration for certain of our acquisitions may include liability classified contingent consideration, which is determined based on formulas stated in the applicable purchase agreements. The amount to be paid under these arrangements is based on certain financial performance measures subsequent to the acquisitions. The contingent consideration included in the purchase price is measured at fair value on the date of the acquisition. The liabilities are remeasured at fair value on each reporting date, with changes in the fair value reflected in operating expenses on our Consolidated Statements of Operations.
For business acquisitions, the Company recognizes the fair value of goodwill and other acquired intangible assets, and estimated contingent consideration at the acquisition date as part of purchase price. These non-recurring fair value measurement are based on unobservable (Level 3) inputs.
54
Item 3. Qualitative and Quantitative Disclosures about Market Risk.
In the normal course of business, we are exposed to a broad range of risks inherent in the financial markets in which we participate, including price risk, interest-rate risk, access to and cost of financing risk, liquidity risk, and counterparty risk. Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit or financial market dislocations.
Our predominant exposure to market risk is related to our role as general partner or investment manager for our specialized investment vehicles and the sensitivities to movements in the fair value of their investments and overall returns for our investors. Since our management fees are generally based on commitments or net invested capital, our management fee and advisory fee revenue is not significantly impacted by changes in investment values, but unfavorable changes in the value of the assets we manage could adversely impact our ability to attract and retain our investors.
Fair value of the financial assets and liabilities of our specialized investment vehicles may fluctuate in response to changes in the value of underlying assets, and interest rates.
Interest Rate Risk
As of June 30, 2025, we had $325.0 million in outstanding principal in Term Loans under our Term Loan and $52.5 million under our Revolving Credit Facility. The annual interest rate on the Term Loan is based on SOFR plus 2.6%. The Company remains exposed to interest rate risk if there is a shift in the environment. We estimate that a 100-basis point increase in the interest rate would result in an approximately $3.3 million increase in interest expense related to the loan over the next 12 months.
Credit Risk
We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the respective counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.
Exchange Rate Risk
The Company and its underlying funds hold cash and investments that are denominated in foreign currencies that may be affected by movements in the rate of exchange between those currencies and the U.S. dollar. Movements in the exchange rate between currencies impact the management fees earned by funds with FPAUM denominated in foreign currencies as well as by funds with FPAUM denominated in U.S. dollars that hold investments denominated in foreign currencies. Additionally, movements in the exchange rate impact operating expenses for our global offices that transact in foreign currencies and the revaluation of assets and liabilities denominated in non-functional currencies, including cash balances and investments. We manage our exposure to exchange rate risks through our regular operating activities, wherein we utilize payments received in foreign currencies to fulfill obligations in foreign currencies. A portion of our management fees and investments are denominated in foreign currencies that may be affected by movements in the rate of exchange between currencies. We estimate that a hypothetical 10% decline in the rate of exchange of the Euro against the U.S. dollar as of June 30, 2025 would not result in a material change to management fees or investments, and would be largely offset by the currency conversions of the expenses denominated in foreign currencies.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as amended (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, our
55
management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives.
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective to provide reasonable assurance that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Changes in Internal Controls over Financial Reporting
On April 4, 2025, we completed our acquisition of Qualitas (See Note 3 for more information). We are currently integrating Qualitas into our internal control framework and processes and, pursuant to the SEC's guidance that an assessment of a recently acquired business may be omitted from the scope of an assessment in the year of acquisition, the scope of our assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 will not include the operating results of Qualitas.
Except for the preceding changes, there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
56
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The information required with respect to this item can be found under “Contingencies” in Note 14, Commitments and Contingencies, to our consolidated financial statements included elsewhere in this annual report, and such information is incorporated by reference into this Item 1.
Item 1A. Risk Factors.
There have been no material changes from the risk factors previously disclosed in "Risk Factors" included in our annual report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table provides information about our repurchase activity with respect to shares of our common stock for the quarter ended June 30, 2025:
Period |
Total Number of Shares Purchased |
|
Weighted Average Price Paid per Share |
|
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program (1) |
|
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) |
|
||||
April 1 - 30, 2025 |
|
— |
|
$ |
- |
|
|
- |
|
$ |
28,524,163 |
|
May 1 - 31, 2025 |
|
1,194,000 |
|
$ |
11.50 |
|
|
1,194,000 |
|
$ |
14,792,833 |
|
June 1 - 30, 2025 |
|
1,307,083 |
|
$ |
9.57 |
|
|
1,307,083 |
|
$ |
2,278,317 |
|
Total |
|
2,501,083 |
|
$ |
10.49 |
|
|
2,501,083 |
|
|
|
|
Item 5. Other Information
Neither the Company nor any of our officers or directors
57
Item 6. Exhibits.
Exhibit Number |
|
Description |
|
|
|
10.1 |
|
Employment Agreement , made and entered into effective aas of April 3, 2025, by and between P10 Intermediate Holdings, LLC and Amanda Coussens (incorporated by reference to Exhibit 10.1 to the Company's Current Report on form 8-K filed on April 7, 2025). |
|
|
|
10.2
|
|
Employment Agreement, made and entered into effective as of April 3, 2025, by and betwen P10 Intermediate Holdings, LLC and Mark Hood (incorporated by reference to Exhibit 10.2 to the Company's Current Report on form 8-K filed on April 7, 2025).
|
|
|
|
31.1* |
|
Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2* |
|
Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1*(1) |
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2*(1) |
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101.INS |
|
Inline XBRL Instance Document |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
(1) This exhibit should not be deemed to be "filed" for purposes of Section 18 of the Exchange Act.
58
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
P10, Inc. |
|
|
|
|
|
Date: August 8, 2025 |
|
By: |
/s/ Luke A. Sarsfield III |
|
|
|
Luke A. Sarsfield III |
|
|
|
Chief Executive Officer and Director (Principal Executive Officer) |
|
|
|
|
Date: August 8, 2025 |
|
By: |
/s/ Amanda Coussens |
|
|
|
Amanda Coussens |
|
|
|
Chief Financial Officer (Principal Financial Officer) |
59
Source:
FAQ
What were P10 (PX) total revenues and net income for Q2 2025?
How much cash and debt did P10 report as of June 30, 2025?
Did P10 complete any acquisitions in the period?
What is the contingent consideration related to acquisitions?
How much cash did P10 use for share repurchases and dividends in H1 2025?
