• Total Revenue: Increased by 33% year over year to $28.1 million.
• Adjusted EBITDA: Grew by 54% year over year to $16.7 million.
• Adjusted Net Income: Increased by 65% year over year to $14.9 million or $0.20 per diluted share.
• Capital Deployed: $93.2 million compared to $56.4 million in the prior year period.
• Policies Purchased: Increased by 53% to 278 policies.
• Balance Sheet Policy Assets: Valued at $274.4 million as of September 30, 2024.
• Adjusted EBITDA Margin: Increased to 59.2% from 51.1% in the prior year period.
• GAAP Net Loss: $5.1 million, primarily due to a non-cash increase in warrant liability.
• Cash and Cash Equivalents: $19.4 million as of September 30, 2024.
• Outstanding Long-Term Debt: $166.5 million.
• Adjusted Return on Equity: 23% for the three-month period ended September 30, 2024.
• Adjusted Return on Invested Capital: 21% for the three-month period ended September 30, 2024.

• Warning! GuruFocus has detected 7 Warning Signs with ASTH.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Abacus Life Inc (NASDAQ:ABL) reported a 33% year-over-year increase in total revenue for Q3 2024, reaching $28.1 million.
• Adjusted EBITDA grew by 54% year-over-year to $16.7 million, with an adjusted net income increase of 65% to $14.9 million.
• The company made significant progress with its ABL tech program, signing major clients including public pension funds and union pension funds.
• Abacus Life Inc (NASDAQ:ABL) announced key acquisitions, adding approximately $2.6 billion in assets under management to its portfolio.
• The company strengthened its executive team with strategic hires, enhancing its capabilities in capital markets and investor relations.

Negative Points

• Abacus Life Inc (NASDAQ:ABL) reported a GAAP net loss attributable to stockholders of $5.1 million for the quarter, primarily due to a non-cash increase in warrant liability.
• Total operating expenses increased to $19.4 million from $13.2 million in the prior year period, driven by higher investments in SG&A.
• The company experienced a decrease in portfolio servicing and origination revenue compared to the previous year.
• There is uncertainty regarding the closure of the Carlisle Management Company acquisition, which is expected by the end of the fourth quarter.
• The competitive environment remains tight, although Abacus Life Inc (NASDAQ:ABL) maintains a unique position as the only publicly traded company in its industry.

Q & A Highlights

Q: Can you discuss trends in the fourth quarter and seasonality, particularly regarding originated face value and capital deployed? A: Jay Jackson, Chairman & CEO: Historically, the fourth quarter has been strong for origination as policyholders look to conclude transactions by year-end. We saw strong numbers in Q3, and we remain optimistic about continued origination growth in Q4.

Q: What was the originated face value in the third quarter? A: Bill McCauley, CFO: The originated face value in the third quarter was $471.6 million.

Q: How do you see active management revenue playing out over the next four quarters? A: Jay Jackson, Chairman & CEO: We expect the trend of significant demand for our assets to continue, driven by lower cost of capital and above-market uncorrelated returns. We are well-positioned for continued growth in active management revenue into 2025.

Q: Can you provide insights into the smaller revenue line items, portfolio servicing, and origination revenue? A: Jay Jackson, Chairman & CEO: Servicing revenue may fluctuate based on portfolio activity. One client is winding down their portfolio, impacting servicing revenue. We expect growth in servicing revenue with the integration of Carlisle Asset Management. Origination revenue has decreased as we hold more policies on our balance sheet.

Q: What are your top priorities for 2025, and how is the competitive environment? A: Jay Jackson, Chairman & CEO: Our priorities include expanding education and awareness programs and exploring adjacent industries for revenue growth. The competitive environment remains favorable as we are the only publicly traded company in our industry, providing us with significant advantages in capital and market positioning.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.