P10 Holdings Reports Balanced Q3 Earnings Call

P10 Holdings, Inc. ((PX)) has held its Q3 earnings call. Read on for the main highlights of the call.

P10 Holdings, Inc. recently held its third-quarter earnings call, presenting a balanced mix of achievements and challenges. The company reported strong growth in fee-paying assets under management and successful fundraising efforts, notably closing RCP’s Secondary Fund V above its target. However, they also faced challenges such as increased step-downs and expirations, alongside a decrease in adjusted net income.

Strong Growth in Fee-Paying Assets Under Management

P10 Holdings ended the third quarter with $29.1 billion in total fee-paying assets under management, marking a significant 17% increase year-over-year. This growth underscores the company’s robust performance in managing and expanding its asset base.

Successful Fundraising and Deployment

The company successfully raised and deployed $915 million in organic gross new fee-paying assets under management. Surpassing its annual organic gross fundraising guidance for 2025, P10 raised its full-year target to $5 billion, reflecting strong investor confidence and effective capital deployment strategies.

Commingled Fund Success

RCP’s Secondary Fund V was a standout success, closing at $1.26 billion, well above the $1 billion target. Notably, the fund closed in just 13 months, significantly faster than the 25 months taken by its predecessor, highlighting efficient fund management and investor appeal.

Strong Balance Sheet

P10’s financial position remains robust, with cash and cash equivalents totaling approximately $40 million at the end of the third quarter. The company maintains a strong balance sheet with ample borrowing capacity to support future mergers and acquisitions.

Growth in Core Fee-Related Revenue

Fee-related revenue saw a 5% growth year-to-date, with an 11% increase when excluding direct and secondary catch-up fees. This growth in core revenue streams indicates a healthy underlying business performance.

Increased Step-Downs and Expirations

The company anticipates step-downs and expirations for the full year 2025 to slightly exceed initial expectations of 5% to 7%, primarily due to early paydowns in the credit business. This presents a challenge in maintaining asset levels.

Decrease in Adjusted Net Income

Adjusted net income decreased by 7% from the third quarter of 2024, attributed mainly to higher cash interest expenses following a debt refinancing. This decline highlights the impact of financial restructuring on profitability.

Lower Share Repurchases

Share repurchases slowed in the third quarter, with approximately 110,000 shares repurchased. This slowdown was due to capacity being pulled forward into the second quarter, affecting the overall repurchase strategy.

Forward-Looking Guidance

P10 Holdings provided updated guidance during the earnings call, emphasizing its financial performance and future expectations. The company ended the quarter with $29.1 billion in fee-paying assets under management, a 17% increase year-over-year. It exceeded its annual fundraising guidance, raising the target to $5 billion. Despite challenges, the firm reported a 5% year-to-date growth in fee-related revenue and a 17% increase in assets under management to $42.5 billion. The company also announced a quarterly cash dividend and continued its share repurchase program.

In summary, P10 Holdings’ earnings call presented a balanced view of its current financial standing, with strong growth in assets and successful fundraising efforts countered by challenges in adjusted net income and share repurchases. The company’s forward-looking guidance remains optimistic, with increased targets and continued strategic initiatives.