Abacus Global Management raises 2025 guidance to $84M while initiating dividend and buyback

Earnings Call Insights: Abacus Global Management, Inc. (ABL) Q3 2025

MANAGEMENT VIEW

* Jay Jackson, CEO, President & Chairman, stated that "Abacus delivered another record quarter, our 10th consecutive quarter of beating consensus projections, keeping us firmly on track with our long-term growth targets." He highlighted a 124% year-over-year increase in total revenue to $63 million, a 60% rise in adjusted net income to $23.6 million, and a 127% increase in adjusted EBITDA to $37.9 million.
* Jackson announced the initiation of an annual dividend of $0.20 per share and a $10 million share repurchase program, calling these measures "a defining moment for Abacus, underscoring both our confidence in the strategy and its validation as we continue building durable recurring earnings."
* Management pointed to the acquisition of AccuQuote as "strategically and financially accretive, adding a new digital origination funnel, expanding our client life cycle coverage, and supporting accelerating growth in policy origination and asset acquisition volumes" (CEO Jay Jackson).
* Jackson also emphasized a recently closed $50 million securitization of life insurance assets, describing it as "the beginning of a scalable and reoccurring funding mechanism while validating the strong institutional demand for longevity linked less correlated assets."
* Elena Plesco, Chief Capital Officer, discussed the significance of the $50 million securitization, noting it "establishes a new institutional distribution channel... allowing us to access a broader universe of capital providers."
* William McCauley, Chief Financial Officer, stated, "Total revenue in the third quarter grew 124% to $63 million compared to $28.1 million in the prior year. This growth was driven by strong Life Solutions performance, increased asset management fees and contributions from our Technology Services business."

OUTLOOK

* Management raised its full year 2025 guidance, with Jackson stating, "Due to these strong Q3 results, we are once again in a position to increase our 2025 guidance to $80 million to $84 million, resulting in a year-over-year growth of 72% to 81% for 2025."
* McCauley confirmed, "We are raising our full year adjusted net income guidance on a gross basis to a range of $80 million to $84 million, up from our prior range of $74 million to $80 million."
* Management expects recurring revenues to approach 70% of total revenue over time, aiming for a balanced approach between growth investment and shareholder returns.

FINANCIAL RESULTS

* Total revenue reached $63 million, up from $28.1 million the previous year.
* Adjusted net income was $23.6 million, and adjusted EBITDA totaled $37.9 million with margins of 60.2%.
* GAAP net income attributable to stockholders was $7.1 million compared to a net loss of ($5.1 million) in the prior year.
* Capital deployed in Q3 was $102.4 million, with realized gains of $46.4 million from the sale of 282 policies to 17 counterparties. As of September 30, Abacus held 522 policies valued at $424.7 million.
* The asset management segment generated $8.6 million in revenue, with $102 million of new inflows.
* Operating expenses, excluding certain items, were $32.9 million, reflecting higher costs from acquisitions and increased marketing investment.

Q&A

* Patrick Davitt asked about incremental economics from securitization and institutional participation. Jackson responded that Abacus "will retain servicing fees on these assets on a go-forward basis," and all institutional partners in the initial $50 million securitization were new to the asset class.
* Davitt inquired about the impact of increased advertising. Jackson noted a 10% increase in Q3 origination over the prior year and expects Q4 to be productive due to seasonal advertising spend.
* Crispin Love questioned the capital deployed and future run rate. Jackson explained that strategic deployment in Q3 led to higher EBITDA margins and expects capital deployment to maintain or grow from Q3's $102 million, depending on new capital and institutional demand.
* Love also asked about the new dividend. Jackson said the annual dividend is set conservatively at less than 25% of adjusted net income or 55% of recurring revenue, allowing reinvestment throughout the year.
* Mike Grondahl probed unit economics of securitization, with Jackson stating, "unit economics for us are very compelling as they are for our business," and the structure provides more consistency for ROEs and margins.
* Andrew Kligerman asked about the high 37% realized gain and holding periods. Jackson attributed this to letting policies mature longer and favorable market conditions, but does not expect 37% every quarter.
* Timothy D'Agostino asked about larger securitizations and the number of "lives" tracked. Jackson expects larger and more frequent securitizations and noted exponential growth in tracked lives, targeting north of 3 million by end of Q4.

SENTIMENT ANALYSIS

* Analysts focused on the sustainability of securitization economics, capital deployment run rates, realized gains, and dividend strategy, displaying a neutral to slightly positive tone, often seeking clarifications and future outlooks.
* Management was confident and assertive, emphasizing record performance, strategic milestones, and recurring revenue growth. Jackson frequently used phrases like "we are continuing to diversify our revenue" and "our capital allocation framework is designed to balance growth investment with consistent shareholder returns."
* Compared to the previous quarter, analyst tone remained focused on growth sustainability and balance sheet strategy, while management showed increased confidence, supported by new dividend and buyback announcements.

QUARTER-OVER-QUARTER COMPARISON

* Full year guidance for adjusted net income was raised to $80 million to $84 million from $74 million to $80 million in Q2.
* Dividend initiation and share repurchase program were announced this quarter, compared to only a buyback authorization last quarter.
* Revenue and adjusted EBITDA both increased notably over Q2's results, with adjusted EBITDA margins expanding from 56.1% to 60.2%.
* Q3 saw the completion of a $50 million securitization, an event not present in Q2.
* Strategic focus expanded with the acquisition of AccuQuote and increased investor outreach, while recurring revenue and institutional channel development became more prominent themes.
* Management tone this quarter was more confident and forward-looking, citing market leadership and valuation disconnects as opportunities.
* Analysts continued to probe for clarity on realized gains, run rates, and capital allocation, but with greater emphasis on the impact of new financial initiatives.

RISKS AND CONCERNS

* Management noted the need for continued clear communication to ensure the market understands Abacus' evolving business model and recurring revenue profile.
* The company faces increased operating expenses due to acquisitions and marketing, but expects returns on these investments within 90 to 120 days.
* Jackson acknowledged "more work to do to communicate the depth of our business model and the durability of our results."
* The longevity-based asset strategy is positioned as uncorrelated to market cycles, aiming to mitigate traditional market risks.

FINAL TAKEAWAY

Abacus Global Management delivered a record third quarter, raising its full year 2025 adjusted net income guidance while launching an annual dividend and share buyback. With strong revenue growth, expanding recurring income, and strategic initiatives such as the AccuQuote acquisition and $50 million securitization, management emphasized their commitment to balancing growth and shareholder returns. The company's evolving capital allocation strategy and focus on recurring revenue are intended to reinforce Abacus' market leadership and long-term value creation for shareholders.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/abl/earnings/transcripts]

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