CNS Q2 2025 Earnings Call Summary

Earnings Per Share: $0.73, a slight decrease from $0.75 in the previous quarter.
Revenue: Increased by 1.1% to $135 million from the prior quarter.
Average Assets Under Management (AUM): Increased, with ending AUM at $88.9 billion compared to $87.6 billion in Q1 2025, driven by market appreciation.
Effective Fee Rate: Stable at 59 basis points.
Operating Margin: Decreased to 33.6% from 34.7% in the prior quarter.
Total Expenses: Increased by 2.9%, primarily due to higher compensation and benefits, G&A expenses, and talent acquisition costs.
Liquidity: Improved to $323 million from $295 million in the previous quarter.
Effective Tax Rate: Remained at 25.3%.

Investment Performance: 89% of AUM outperformed benchmarks in Q2, with historical performance showing 94% outperformance over one year and 99% over ten years.
New Initiatives: Launched a tactical listed and private real estate strategy aimed at integrating listed and private allocations, which is expected to enhance returns and liquidity.
Active ETFs: Successful launch of three active ETFs with $54 million in net inflows, indicating strong early interest and potential for future growth.
Growth in Unfunded Pipeline: Increased to $776 million, reflecting a recovery in demand and competitive wins.

2025 Compensation Ratio: Expected to remain at 40.5%.
G&A Expenses: Anticipated to rise by 7% to 8% compared to 2024, primarily due to talent acquisition and business development activities.
Tax Rate: Expected to stay at 25.3% for the remainder of 2025.
Market Outlook: Positive sentiment regarding real estate valuations, with expectations of rental growth and a favorable environment for real assets.

Net Outflows: Experienced net outflows of $131 million after three consecutive quarters of inflows, attributed to institutional rebalancing and specific fund removals from model portfolios.
Advisory Outflows: Significant outflows in advisory services, totaling $412 million, primarily due to rebalancing rather than performance issues.
Market Volatility: The quarter began with heightened volatility due to geopolitical tensions, although markets recovered later.
Competitive Pressures: Noted challenges in attracting flows in certain strategies, particularly in preferred securities, which saw substantial outflows.

Wealth Management Channel: The appetite for gross sales has seen a slight decline, with expectations of seasonality affecting flows. However, there is optimism about gaining allocations from sophisticated RIAs.
Active ETFs: Initial marketing efforts are yielding positive results, with new investors showing interest, particularly from RIAs focused solely on ETFs.
Global Listed Infrastructure: Noted a decrease in flows due to large institutional redemptions, though long-term interest in the strategy remains strong.
Geographical Demand: The U.S. remains the most active market, while Asia is showing growth potential, and Europe is slower. Concerns about U.S. policy have minimally impacted flows.

This summary encapsulates the key points from the earnings call, highlighting both the strengths and challenges faced by Cohen & Steers in Q2 2025.

CNS — Cohen & Steers, Inc.