| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2023
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) | 30-0774039 (I.R.S. Employer Identification Number) | |||||||||||||
1655 Grant Street, Concord, California 94520 (Address of principal executive offices) | ||||||||||||||
(925) 521-2200 (Registrant’s telephone number, including area code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Common stock, par value $0.001 per share | AMK | New York Stock Exchange |
Large accelerated filer |
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Non-accelerated filer |
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Emerging growth company |
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74,376,670.
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Item 1B. | |||||||||
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•Our revenue may fluctuate from period to period, which could cause our share price to fluctuate. |
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•We operate in an intensely competitive industry, with many firms competing for business from financial advisers on the basis of the quality and breadth of investment solutions and services, ability to innovate, reputation and the prices of services, among other factors, and this competition could hurt our financial performance. |
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•We derive nearly all of our revenue from the delivery of investment solutions and services to clients in the financial advisory industry and our revenue could suffer if that industry experiences a downturn. |
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•Investors that pay us asset-based fees may seek to negotiate lower fees, choose to use lower-revenue products or cease using our services, which could limit the growth of our revenue or cause our revenue to decrease. |
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•Investors may redeem or withdraw their investment assets generally at any time. Significant changes in investing patterns or large-scale withdrawal of investment funds could have a material adverse effect on our results of operations, financial condition or business. |
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•Changes in market and economic conditions (including as a result of geopolitical conditions or events) could lower the value of assets on which we earn revenue, thereby negatively impacting our revenue, and could decrease the demand for our investment solutions and services. |
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•We may be subject to liability for losses that result from a breach of our or a third party’s fiduciary duties. |
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•We rely on our executive officers and other key personnel. |
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•We are exposed to data and cybersecurity risks that could result in data breaches, service interruptions, harm to our reputation, protracted and costly litigation or significant liability. |
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•Our controlling stockholder is subject to supervision by regulatory authorities in the People’s Republic of China (“PRC”) and must comply with certain PRC laws and regulations that may influence our controlling stockholder’s decisions relating to our business. |
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•Integrated and intuitive technology that champions client engagement and drives efficiency from prospecting and financial planning to ongoing servicing and administration. |
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•A holistic offering of compelling wealth solutions and investment strategies that meets the evolving needs of investors. |
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Our offering’s distinctive combination of a compelling•Flexible technology platform extensive: Our integrated, open-architecture platform is built for advisers and can be tailored to support each adviser’s distinct objectives. Advisers have access to a broad range of highly automated tools and capabilities that help them differentiate the client experience, including new account opening, portfolio construction, streamlined financial planning, customer billing, investor reporting, progress-to-goal analysis, and client activity tracking. Our dual focus on technology utility and design has resulted in an expansive platform that is easy-to-use, accessible, and seamlessly integrates industry-leading solutions.
further deepen their relationships with clients.
We were incorporated in the State of Delaware in 2013.
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Our Offering and Business Model
AssetMark’s purpose
Our nearly 1,000 employees come to work focused on our mission: to make a difference in the lives of our advisers and the investors they serve. Our mission is guided by a singular focus on successful outcomes for those investors. We strive to execute our mission through our stated corporate values of heart, integrity, excellence and respect, in everything that we do.
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successful. The AssetMark offering to advisers and the investors they serve
We provide independent financial advisers with an array of tools and services designed to streamline their workflow, help them develop and expand their businesses and provide goal-oriented investment solutions. We believe that the quality of our offering, coupled with our deep relationships with our advisers, has generated significantconsistently driven adviser satisfaction, as measured by our exceptional, record-high Net Promoter Score (“NPS”) of 6772 as of June 30, 2022.August 2023.
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August 2023.
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We perform this challenging work•Compelling wealth solutions: Since 1996, we have helped advisers deliver financial well-being to clients across the wealth spectrum through industry-leading investment strategies. Over 60% of our investment team are CFA charter holders and collectively offer 162 years of combined experience. The team is backed by expansive data and research resources, including AssetMark’s world-class Due Diligence team. Leveraging our deep, time-tested knowledge of financial markets, we aim to maximize upside potential and minimize downside risk to help investors stay invested for the adviser through our dedicated teamlong term with a steady eye on their goals and ready to weather any market environment.
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•Core markets: Strategies that provide exposure to growth in domestic and global economies. |
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•Tactical strategies: Supplemental equity strategies that can augment core performance or provide risk mitigation in periods of market decline. |
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•Steady asset growth: We have experienced (1) platform asset growth from existing clients of approximately 9% from December 31, 2020 to December 31, 2023, (2) $18.6 billion in assets attracted from new advisers representing 54% growth to the platform over the same period and (3) $6.9 billion in assets added to our platform through acquisitions over the same period, measured at the date of acquisition. |
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•Our mission-driven, client-focused culture: We believe that our exceptional client-centric culture has driven our historical performance. The AssetMark team is dedicated to its mission of making a difference in the lives of advisers and investors through a culture that rests on our core pillars of heart, integrity, excellence and respect. We are also committed to helping advisers and the communities they serve. Through our annual Summer of Service event to support non-profit organizations and Community Inspiration Awards, which honor advisers who are committed to supporting their communities and non-profit organizations,we seek to ensure that our firm’s and our advisers’ communities benefit from our charitable contributions. We believe that our focus on doing the right thing while also running a great business not only results in higher adviser loyaltyand referrals, but also increases our employee tenure. • |
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| A deep understanding of fee-based, independent advisers: Our frequent, value-added interactions with our diverse group of advisers help us tailor offerings to meet their needs, at scale and in the context of their business opportunities and challenges. We also benefit from tracking and evaluating advisers’ extensive activity in our ecosystem. This allows us to create responsive service models, operational processes |
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Our Growth Strategy
We are focused on five key areas of growth to deliver platform enhancements and solutions that are corehelp advisers reduce the time associated with administrative tasks. In addition, members of our community of advisers have access to each other’s best practices as well as data about their specific business activity, which helps our advisers’advisers grow their businesses and drives our extensive best practices library.
offering has made us an essential part of our advisers’ businesses. |
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•We are a disciplined acquirer: Growth through acquisition is a core competency of our business. Our value creation through acquisition is generated by purchase price discipline and our ability to grow relationships formed through these acquisitions. In 2014 and 2015, respectively, we acquired the platform assets of two firms that collectively added $3.5 billion in assets to our platform at the time of acquisition. On average, three years post-acquisition, these acquired assets had grown by 17% compounded annually. Subsequently, from 2019 through 2022, AssetMark completed four additional acquisitions: |
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•2019 acquisition of Global Financial Private Capital, Inc. (“GFPC”), adding $3.8 billion in platform assets; |
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•2020 acquisition of OBS Financial Services, Inc. (“OBS”), adding $2.1 billion in platform assets; |
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•Other turnkey asset management platform providers: Most providers of turnkey asset management platforms typically provide financial advisers with one or more types of products and services and vary in the number of choices offered in terms of custodians, technology features, investments and quality of service. |
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•Independent broker-dealer proprietary wealth platforms: Many broker-dealers provide integrated proprietary wealth management platforms that offer an array of asset management solutions to their affiliated financial advisers. |
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•Providers of specific service applications: Several of our competitors provide financial advisers with a product or service designed to address one or a limited number of specific needs, such as financial planning or performance reporting. |
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ESG
In tandem with our new ESG investment solutions,responsibility, we released our first ESG report to demonstrate our commitment to corporate citizenship.2022 Environmental, Social and Governance Report in May 2023. Prepared in accordance with the accounting standards published by the Sustainability Accounting Standards Board, the report highlights our current sustainability initiatives, practices, and objectives.
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Information About Our Executive Officers
Name | Age | Position | ||||||
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| Chief Executive Officer, President and Director | ||||||
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Gary Zyla |
| EVP, Chief Financial Officer | ||||||
Ted Angus |
| EVP, General Counsel | ||||||
Carrie Hansen |
| EVP, Chief Operating Officer | ||||||
David McNatt |
| EVP, Investment Solutions | ||||||
Mukesh Mehta |
| EVP, Chief Information Officer | ||||||
Esi Minta-Jacobs |
| EVP, Human Resources and |
Natalie Wolfsen
Ms. Wolfsen
Michael Kim – President, Chief Client Officer
September 2023. Mr. Kim has served as our President since March 2021 and our Chief Client Officer since January 2018. Mr. Kim joined our company in 2010 and previously served as our National Sales Leader from January 2018 to March 2021. Prior to becoming our Chief Client Officer and National Sales Leader, Mr. Kim served2021, as our National Sales Manager from 2014 to 2018 and Head of our RIA Channel from 2010 to 2014. Prior to joining our company, Mr. Kim spent over twelve years with Fidelity Investments, Inc., including as a Senior Vice President from 1998 to 2010. From 1995 to 1998, Mr. Kim served as Senior Vice President at Transamerica, and from 1991 to 1995, Mr. Kim was a Senior Associate at Coopers & Lybrand Consulting. Mr. Kim holds a B.A. in Economics from the University of California, Los Angeles.
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Young & Logan. Mr. Angus holds a B.A. in both History and Economics from the University of California, Los Angeles and a J.D. from the University of California College of Law, San Francisco.
Digital Product Solutions
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•a continued decline or slowdown in growth of the value of financial market assets or changes in the mix of assets on our platform, which may reduce the value of our platform assets and therefore our revenue and cash flows; |
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•fluctuations in interest rates, which have a direct and proportionate impact on our spread-based revenue; |
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•significant fluctuations in securities prices affecting the value of assets on our platform, including as a result of macroeconomic factors, inflation, geopolitics or public health concerns; |
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•negative public perception and reputation of the financial services industry, which could reduce demand for our investment solutions and services; |
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•acceleration of client investment preferences to lower-fee options; |
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•downward pressure on fees we charge our investor clients, which would reduce our revenue; |
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•changes in laws or regulations that could impact our ability to offer investment solutions and services, including any laws or regulations implicated by our controlling stockholder’s ultimate parent being a PRC company; |
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•announcements regarding regulatory actions or litigation that are adverse to us or our business, including the payment of fines; |
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•failure to obtain new clients or retain existing clients on our platform, or changes in the mix of clients on our platform; |
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•failure to adequately protect our proprietary technology and intellectual property rights; |
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•reduction in the suite of investment solutions and services made available by third-party providers to existing clients; |
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•reduction in fee percentage or total fees for future periods, which may have a delayed impact on our results given that our asset-based fees are billed to advisers in advance of each quarter; |
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There has also been a trend toward online internet financial services and financial services that are based on mobile applications or automated processes as clients increasingly seek to manage their investment portfolios digitally. Other industry changes, such as zero-commission securities trading, may amplify this trend to increased utilization of “robo” adviser platforms, which may increase our competitive risks and could have a material adverse effect on our results of operations, financial condition or business.
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these factors could result in a significant decline in market share, revenue and net income. Furthermore, certain clients or potential clients may prefer not to work with a company, such as us, that is controlled by a PRC company in light of continued or increased tension in U.S.-PRC relations or any deterioration in political or trade relations between the United States and the PRC.
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investment in, one or more of our investment solutions. Inflation and other economic factors may also impact the cost of running our business including the cost of personnel, operations, travel and other expenses. If such fluctuations in securities prices, interest rates or inflation were to lead to decreased investment in the securities markets, our revenue and earnings derived from asset-based and spread-based revenue could be simultaneously materially adversely affected.
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as well as failures to provide adequate support for reasons that are outside of our direct control. These data centers and cloud services are vulnerable to damage or interruption from a variety of sources, including earthquakes, floods, fires, power loss, system failures, cyber-attacks, physical or electronic break-ins, human error or interference (including by employees, former employees or contractors), and other catastrophic events, including regional or global health events. Our data centers may also be subject to local administrative actions, changes to legal or permitting requirements and litigation to stop, limit or delay operations. Despite precautions taken at these facilities, such as disaster recovery and business continuity arrangements, the occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice or other unanticipated problems at these facilities could result in interruptions or delays in our services, impede our ability to scale our operations or have other adverse impacts on our business.
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reputation (as a consequence of the negative perception resultingresulted from such activities), our financial position or financial advisers’ client relationships and ability to attract new clients. In addition, certain of our third-party providers may engage in illegal activities, or may be accused of engaging in such activities, which could result in disruptions to our platform or solutions, subject us to liability, fines, penalties, regulatory orders or reputational harm or require us to be involved in regulatory investigations. Specifically, we have in the past been and may in the future be made aware of SEC investigations involving the actions of third-party financial advisers (or their employees) on our platform, which could cause us to experience any of the aforementioned consequences.
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capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay acquisitions and capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness. Our ability to restructure or refinance indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis could harm our ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our 2022 Credit Agreement (as defined in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”) currently restricts our ability to dispose of assets and our use of the proceeds from such disposition. We may not be able to consummate those dispositions, and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due. Any of these circumstances could adversely affect our results of operations, financial condition or business.
or AssetMark Trust Company (“ATC”), respectively.
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employees, service providers and other third parties with otherwise legitimate access to our systems or databases. The latency of a compromise is often measured in months, but could be years, and we may not be able to detect a compromise in a timely manner.
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On October 12, 2023, the United Kingdom adopted an adequacy decision concluding that the U.S. ensures an adequate level of protection for personal data transferred from the United Kingdom to the U.S. pursuant to the United Kingdom extension to the EU-U.S. Data Privacy Framework (also known as the U.K.-U.S. data bridge). As above, the adequacy decision does not foreclose, and may face, future legal challenges resulting in ongoing legal uncertainty.
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•obtaining approval from or filing with the China National Development and Reform Commission (the “NDRC”), for certain debt issuances by us, or certain investments we seek to make involving a sensitive industry, country or region, as defined by the NDRC; and •filing with the China Securities Regulatory Commission (the “CSRC”), and registering with the State Administration of Foreign Exchange, to provide us with financing or to guarantee our obligations. |
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In addition, PRC regulations require our controlling stockholder to ensure that our business focuses on securities, futures, asset management, broker-dealer services, financial information services, financial information technology system services, back-office support services for specific financial businesses or products or other financial-related businesses. A failure by our controlling stockholder to comply with these or other existing or future PRC laws or regulations could result in the imposition of administrative or financial sanctions against our controlling stockholder by PRC authorities. These laws and regulations could cause our controlling stockholder and its director appointees serving on our board of directors to act in a manner that may not be perceived to be in the best interests of our other stockholders. Likewise, any failure by our controlling stockholder to obtain certain approvals, make requisite filings or otherwise comply with PRC laws and regulations could materially limit our ability to raise debt financing or make certain investments, any of which could have a material adverse effect on our results of operations, financial condition or business.
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adviser.
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compliance, including potentially the loss of our ability to conduct certain operations, with any newly applicable laws or regulations could have a material adverse effect on our results of operations, financial condition or business. Further, we frequently develop improvements to our existing products and services, as well as new products and services. Many of these improvements or new products and services may implicate regulations to which we may not already be subject or with which we may not have experience. Any failure on our part to comply with applicable laws and regulations could result in regulatory fines, suspensions of personnel or other sanctions, including revocation of our registration or that of our subsidiaries as an investment adviser, broker-dealer, CPO or trust company, as the case may be, which could, among other things, require changes to our business practices and scope of operations or harm our reputation, which, in turn could have a material adverse effect on our results of operations, financial condition or business.
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indirect subsidiary Huatai International Investment Holdings Limited (“HIIHL”), held a 68.9%68.4% voting interest in us as of December 31, 2022.2023. An assignment or a change of control could be deemed to occur in the future if we, or one of our investment adviser subsidiaries, were to gain or lose a controlling person, or in other situations that may depend significantly on the facts and circumstances. In any such case, we would seek to obtain the consent of our advisory clients, including any funds, to the assignment. Further, our U.S. broker-dealer subsidiary, AMB, is a member of FINRA and subject to FINRA rules, which could impede or delay a change of control. FINRA Rule 1017 generally provides that FINRA approval must be obtained in connection with any transaction resulting in a single person or entity acquiring or controlling, directly or indirectly, 25% or more of a FINRA member’s or its parent company’s equity. In addition, we would be required to obtain approvals or non-objections from certain state financial regulators prior to a direct or indirect change of control of certain of our subsidiaries. If we fail to obtain such consents or approval, our results of operations, financial condition or business could be adversely affected.
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•market conditions in the broader stock market in general, or in our industry in particular; |
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•changes in the interest rate environment; |
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•actual or anticipated fluctuations in our quarterly financial and operating results; |
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•introduction of new products and services by us or our competitors; |
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•issuance of new or changed securities analysts’ reports or recommendations; |
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•sales of large blocks of our stock by our employees or controlling stockholder or the perception that our employees or controlling stockholder will sell our stock; |
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•additions or departures of key personnel; |
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•regulatory developments, litigation and governmental investigations; |
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2024; (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
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•a staggered board and restrictions on the ability of our stockholders to fill a vacancy on the board of directors; |
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•the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval; |
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•advance notice requirements for stockholder proposals; |
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•the amendment of certain provisions of our Certificate of Incorporation and bylaws only by the affirmative vote of the holders of at least two-thirds in voting power of all outstanding shares of our stock entitled to vote thereon, voting together as a single class. |
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These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our Company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take other corporate actions than you desire.
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7/18/2019 | 9/30/2019 | 12/31/2019 | ||||||||||||||||||||||||
AssetMark | $ | 100.00 | $ | 96.34 | $ | 107.32 | ||||||||||||||||||||
Russell 2000 Index | 100.00 | 97.93 | 107.25 | |||||||||||||||||||||||
Dow Jones U.S. Financials Index | $ | 100.00 | $ | 100.57 | $ | 107.68 | ||||||||||||||||||||
3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | |||||||||||||||||||||||
AssetMark | $ | 75.41 | $ | 100.92 | $ | 80.40 | $ | 89.50 | ||||||||||||||||||
Russell 2000 Index | 74.12 | 92.66 | 96.92 | 126.95 | ||||||||||||||||||||||
Dow Jones U.S. Financials Index | $ | 76.10 | $ | 86.16 | $ | 88.97 | $ | 104.46 | ||||||||||||||||||
3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | |||||||||||||||||||||||
AssetMark | $ | 86.32 | $ | 92.68 | $ | 91.97 | $ | 96.93 | ||||||||||||||||||
Russell 2000 Index | 142.74 | 148.53 | 141.70 | 144.34 | ||||||||||||||||||||||
Dow Jones U.S. Financials Index | $ | 116.64 | $ | 126.30 | $ | 127.90 | $ | 135.55 | ||||||||||||||||||
3/31/2022 | 6/30/2022 | 9/30/2022 | 12/30/2022 | |||||||||||||||||||||||
AssetMark | $ | 82.29 | $ | 69.42 | $ | 67.64 | $ | 85.06 | ||||||||||||||||||
Russell 2000 Index | 133.07 | 109.79 | 107.01 | 113.22 | ||||||||||||||||||||||
Dow Jones U.S. Financials Index | $ | 131.33 | $ | 109.49 | $ | 103.17 | $ | 114.42 | ||||||||||||||||||
3/31/2023 | 6/30/2023 | 9/29/2023 | 12/29/2023 | |||||||||||||||||||||||
AssetMark | $ | 116.31 | $ | 109.69 | $ | 92.75 | $ | 110.76 | ||||||||||||||||||
Russell 2000 Index | 115.87 | 121.41 | 114.75 | 130.31 | ||||||||||||||||||||||
Dow Jones U.S. Financials Index | $ | 111.17 | $ | 115.92 | $ | 113.25 | $ | 129.61 |
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AssetMark |
| $ | 100.00 |
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| $ | 96.34 |
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| $ | 107.32 |
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Russell 2000 Index |
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| 100.00 |
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| 97.93 |
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| 107.25 |
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Dow Jones U.S. Financials Index |
| $ | 100.00 |
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| $ | 100.57 |
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| $ | 107.68 |
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| 6/30/2020 |
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AssetMark |
| $ | 75.41 |
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| $ | 100.92 |
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| $ | 80.40 |
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| $ | 89.50 |
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Russell 2000 Index |
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| 74.12 |
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| 92.66 |
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| 96.92 |
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| 126.95 |
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Dow Jones U.S. Financials Index |
| $ | 76.10 |
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| $ | 86.16 |
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| $ | 88.97 |
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| $ | 104.46 |
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| 3/31/2021 |
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| 6/30/2021 |
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AssetMark |
| $ | 86.32 |
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| $ | 92.68 |
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| $ | 91.97 |
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| $ | 96.93 |
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Russell 2000 Index |
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| 142.74 |
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| 148.53 |
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| 141.70 |
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| 144.34 |
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Dow Jones U.S. Financials Index |
| $ | 116.64 |
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| $ | 126.30 |
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| $ | 127.90 |
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| $ | 135.55 |
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| 3/31/2022 |
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AssetMark |
| $ | 82.29 |
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| $ | 69.42 |
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| $ | 67.64 |
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| $ | 85.06 |
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Russell 2000 Index |
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| 133.07 |
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| 109.79 |
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| 107.01 |
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| 113.22 |
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Dow Jones U.S. Financials Index |
| $ | 131.33 |
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| $ | 109.49 |
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| $ | 103.17 |
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| $ | 114.42 |
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Unregistered Sales of Equity Securities
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•During the third quarter of 2023, we launched the pilot of tax management services (“TMS”). Driven by advisers' strong demand for a top-tier tax management solution, AssetMark developed a comprehensive suite of services, including tax transition, tax-efficient rebalancing, tax loss harvesting, and client-directed activity. |
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•Total revenue for the year ended December 31, 2023 was $708.5 million, up $96.8 million, or 15.8%, from $611.7 million for the year ended December 31, 2022. |
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•Net income for the year ended December 31, 2023 was $123.1 million, or $1.66 per share, compared to $103.3 million, or $1.40 per share, for the year ended December 31, 2022. |
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•Platform assets were $108.9 billion as of December 31, 2023, up 19.1% from $91.5 billion as of December 31, 2022. |
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| Year Ended December 31, |
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Operational metrics: |
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Platform assets (at period-beginning) (millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||||
Platform assets (at period-beginning) (millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||||
Platform assets (at period-beginning) (millions of dollars) |
| $ | 93,488 |
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| $ | 74,520 |
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| $ | 61,608 |
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Net flows (millions of dollars) |
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| 5,612 |
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| 9,934 |
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|
| 5,483 |
| ||||||||||||||||||||||||||||||||||
Market impact net of fees (millions of dollars) |
|
| (14,526 | ) |
|
| 9,034 |
|
|
| 5,369 |
| ||||||||||||||||||||||||||||||||||
Acquisition impact (millions of dollars) |
|
| 6,896 |
|
|
| — |
|
|
| 2,060 |
| ||||||||||||||||||||||||||||||||||
Platform assets (at period-end) (millions of dollars) |
| $ | 91,470 |
|
| $ | 93,488 |
|
| $ | 74,520 |
| ||||||||||||||||||||||||||||||||||
Net flows lift (% of beginning-of-year platform assets) |
|
| 6.0 | % |
|
| 13.3 | % |
|
| 8.9 | % | Net flows lift (% of beginning-of-year platform assets) | 6.7 | % | 6.0 | % | 13.3 | % | |||||||||||||||||||||||||||
Advisers (at period-end) |
|
| 9,297 |
|
|
| 8,649 |
|
|
| 8,454 |
| ||||||||||||||||||||||||||||||||||
Engaged advisers (at period-end) |
|
| 2,882 |
|
|
| 2,858 |
|
|
| 2,536 |
| ||||||||||||||||||||||||||||||||||
Assets from engaged advisers (at period-end) (millions of dollars) |
| $ | 83,803 |
|
| $ | 86,385 |
|
| $ | 67,300 |
| ||||||||||||||||||||||||||||||||||
Households (at period-end) |
|
| 241,053 |
|
|
| 209,900 |
|
|
| 186,602 |
| ||||||||||||||||||||||||||||||||||
New producing advisers |
|
| 690 |
|
|
| 811 |
|
|
| 743 |
| ||||||||||||||||||||||||||||||||||
Production lift from existing advisers (annualized %) |
|
| 16.3 | % |
|
| 24.2 | % |
|
| 19.9 | % | Production lift from existing advisers (annualized %) | 19.3 | % | 16.3 | % | 24.2 | % | |||||||||||||||||||||||||||
Assets in custody at ATC (at period-end) (millions of dollars) |
| $ | 66,169 |
|
| $ | 71,320 |
|
| $ | 53,878 |
| ||||||||||||||||||||||||||||||||||
ATC client cash (at period-end) (millions of dollars) |
| $ | 3,541 |
|
| $ | 2,932 |
|
| $ | 2,618 |
| ||||||||||||||||||||||||||||||||||
Financial metrics: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Total revenue (millions of dollars) |
| $ | 618.3 |
|
| $ | 530.3 |
|
| $ | 432.1 |
| ||||||||||||||||||||||||||||||||||
Net income (loss) (millions of dollars) |
| $ | 103.3 |
|
| $ | 25.7 |
|
| $ | (7.8 | ) | ||||||||||||||||||||||||||||||||||
Net income (loss) margin (%) |
|
| 16.7 | % |
|
| 4.8 | % |
|
| (1.8 | )% | ||||||||||||||||||||||||||||||||||
Total revenue (millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||||
Total revenue (millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||||
Net income (millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||||
Net income margin (%) | Net income margin (%) | 17.4 | % | 16.9 | % | 4.8 | % | |||||||||||||||||||||||||||||||||||||||
Capital expenditure (millions of dollars) |
| $ | 38.6 |
|
| $ | 34.7 |
|
| $ | 29.1 |
| ||||||||||||||||||||||||||||||||||
Non-GAAP financial metrics: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Adjusted EBITDA (millions of dollars) |
| $ | 199.7 |
|
| $ | 157.2 |
|
| $ | 115.0 |
| ||||||||||||||||||||||||||||||||||
Adjusted EBITDA (millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA (millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA margin (%) |
|
| 32.3 | % |
|
| 29.6 | % |
|
| 26.6 | % | Adjusted EBITDA margin (%) | 35.2 | % | 32.6 | % | 29.6 | % | |||||||||||||||||||||||||||
Adjusted net income (millions of dollars) |
| $ | 130.5 |
|
| $ | 103.3 |
|
| $ | 73.2 |
|
Platform Assets
|
| Year Ended December 31, |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions of dollars) |
| 2022 |
|
| 2021 |
|
| 2020 |
| (in millions of dollars) | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||
Beginning platform assets |
| $ | 93,488 |
|
| $ | 74,520 |
|
| $ | 61,608 |
| ||||||||||||||||||||||||||||||||||||||||||
Production |
|
| 16,182 |
|
|
| 19,351 |
|
|
| 13,995 |
| ||||||||||||||||||||||||||||||||||||||||||
Redemptions |
|
| (10,570 | ) |
|
| (9,417 | ) |
|
| (8,512 | ) | ||||||||||||||||||||||||||||||||||||||||||
Net flows |
|
| 5,612 |
|
|
| 9,934 |
|
|
| 5,483 |
| ||||||||||||||||||||||||||||||||||||||||||
Market impact net of fees |
|
| (14,526 | ) |
|
| 9,034 |
|
|
| 5,369 |
| ||||||||||||||||||||||||||||||||||||||||||
Acquisition impact |
|
| 6,896 |
|
|
| — |
|
|
| 2,060 |
| ||||||||||||||||||||||||||||||||||||||||||
Ending platform assets |
| $ | 91,470 |
|
| $ | 93,488 |
|
| $ | 74,520 |
|
41
42
financial metrics in assessing our operating performance from period to period because they exclude certain items that we believe are not representative of our core business, such as certain material non-cash items and other adjustments such as share-based compensation, strategic initiatives and reorganization and integration costs. We believe that adjusted EBITDA and adjusted EBITDA margin, viewed in addition to, and not in lieu of, our reported GAAP results, provide useful information to investors regarding our performance and overall results of operations for various reasons, including:
|
|
•non-cash equity grants made to employees at a certain price and point in time do not necessarily reflect how our business is performing at any particular time; as such, share-based compensation expense is not a key measure of our operating performance; and 48 •costs associated with acquisitions and the resulting integrations, debt refinancing, restructuring, conversions, as well as other non-recurring litigation costs can vary from period to period and transaction to transaction; as such, expenses associated with these activities are not considered a key measure of our operating performance. |
|
We use adjusted EBITDA and adjusted EBITDA margin:
•as measures of operating performance; •for planning purposes, including the preparation of budgets and forecasts; •to allocate resources to enhance the financial performance of our business; •to evaluate the effectiveness of our business strategies; •in communications with our board of directors concerning our financial performance; and •as considerations in determining compensation for certain employees. Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA and adjusted EBITDA margin have limitations as analytical tools, and should not be considered in isolation to, or as substitutes for, analysis of our results as reported under GAAP. Some of these limitations are:
|
|
•adjusted EBITDA and adjusted EBITDA margin do not reflect all cash expenditures, future requirements for capital expenditures or contractual commitments; |
|
•adjusted EBITDA and adjusted EBITDA margin do not reflect changes in, or cash requirements for, working capital needs; |
|
•adjusted EBITDA and adjusted EBITDA margin do not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments; and |
|
43
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
(in thousands except for percentages) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
Net income | $ | 123,119 | $ | 103,261 | $ | 25,671 | 17.4 | % | 16.9 | % | 4.8 | % | ||||||||||||||||||||||||||
Provision for income taxes | 44,347 | 33,499 | 19,316 | 6.3 | % | 5.5 | % | 3.6 | % | |||||||||||||||||||||||||||||
Interest income | (11,363) | (2,664) | (137) | (1.6) | % | (0.4) | % | — | ||||||||||||||||||||||||||||||
Interest expense | 9,108 | 6,520 | 3,559 | 1.3 | % | 1.1 | % | 0.7 | % | |||||||||||||||||||||||||||||
Amortization and depreciation | 35,544 | 31,149 | 37,929 | 5.0 | % | 5.1 | % | 7.2 | % | |||||||||||||||||||||||||||||
EBITDA | $ | 200,755 | $ | 171,765 | $ | 86,338 | 28.4 | % | 28.2 | % | 16.3 | % | ||||||||||||||||||||||||||
Share-based compensation(1) | 16,388 | 13,876 | 53,637 | 2.3 | % | 2.3 | % | 10.1 | % | |||||||||||||||||||||||||||||
Reorganization and integration costs(2) | 12,944 | 10,418 | 10,816 | 1.8 | % | 1.6 | % | 2.0 | % | |||||||||||||||||||||||||||||
Acquisition expenses(3) | 1,327 | 3,411 | 5,682 | 0.1 | % | 0.5 | % | 1.1 | % | |||||||||||||||||||||||||||||
Business continuity plan(4) | (6) | 61 | 460 | — | — | 0.1 | % | |||||||||||||||||||||||||||||||
SEC settlement(5) | 18,327 | — | — | 2.6 | % | — | — | |||||||||||||||||||||||||||||||
Office closures(6) | — | — | 167 | — | — | — | ||||||||||||||||||||||||||||||||
Other (income) expense, net | (265) | 135 | 106 | — | — | — | ||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 249,470 | $ | 199,666 | $ | 157,206 | 35.2 | % | 32.6 | % | 29.6 | % |
|
| Year Ended December 31, |
|
| Year Ended December 31, |
| ||||||||||||||||||
(in thousands except for percentages) |
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
|
| 2020 |
| ||||||
Net income (loss) |
| $ | 103,261 |
|
| $ | 25,671 |
|
| $ | (7,812 | ) |
|
| 16.7 | % |
|
| 4.8 | % |
|
| (1.8 | )% |
Provision for income taxes |
|
| 33,499 |
|
|
| 19,316 |
|
|
| 8,043 |
|
|
| 5.4 | % |
|
| 3.6 | % |
|
| 1.9 | % |
Interest income |
|
| (2,664 | ) |
|
| (137 | ) |
|
| (899 | ) |
|
| (0.4 | )% |
|
| — |
|
|
| (0.2 | )% |
Interest expense |
|
| 6,520 |
|
|
| 3,559 |
|
|
| 5,588 |
|
|
| 1.1 | % |
|
| 0.7 | % |
|
| 1.3 | % |
Amortization/depreciation |
|
| 31,149 |
|
|
| 37,929 |
|
|
| 35,126 |
|
|
| 5.0 | % |
|
| 7.2 | % |
|
| 8.1 | % |
EBITDA |
| $ | 171,765 |
|
| $ | 86,338 |
|
| $ | 40,046 |
|
|
| 27.8 | % |
|
| 16.3 | % |
|
| 9.3 | % |
Share-based compensation(1) |
|
| 13,876 |
|
|
| 53,637 |
|
|
| 53,837 |
|
|
| 2.2 | % |
|
| 10.1 | % |
|
| 12.4 | % |
Reorganization and integration costs(2) |
|
| 10,418 |
|
|
| 10,816 |
|
|
| 2,596 |
|
|
| 1.7 | % |
|
| 2.0 | % |
|
| 0.6 | % |
Acquisition expenses(3) |
|
| 3,411 |
|
|
| 5,682 |
|
|
| 12,558 |
|
|
| 0.6 | % |
|
| 1.1 | % |
|
| 2.9 | % |
Debt acquisition cost write-down(4) |
|
| — |
|
|
| — |
|
|
| 1,729 |
|
|
| — |
|
|
| — |
|
|
| 0.4 | % |
Business continuity plan(5) |
|
| 61 |
|
|
| 460 |
|
|
| 1,568 |
|
|
| — |
|
|
| 0.1 | % |
|
| 0.4 | % |
Office closures(6) |
|
| — |
|
|
| 167 |
|
|
| 2,755 |
|
|
| — |
|
|
| — |
|
|
| 0.6 | % |
Other (income) expense |
|
| 135 |
|
|
| 106 |
|
|
| (42 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
Adjusted EBITDA |
| $ | 199,666 |
|
| $ | 157,206 |
|
| $ | 115,047 |
|
|
| 32.3 | % |
|
| 29.6 | % |
|
| 26.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
Set forth below is a summary of the adjustments involved in the reconciliation from net income (loss) and net income (loss) margin, the most directly comparable GAAP financial measures, to adjusted EBITDA and adjusted EBITDA margin for the years ended December 31, 2022, 2021 and 2020, broken out by compensation andnon-compensation expenses.
|
| Year Ended December 31, 2022 |
|
| Year Ended December 31, 2021 |
|
| Year Ended December 31, 2020 |
| |||||||||||||||||||||||||||
(in thousands) |
| Compensation |
|
| Non- Compensation |
|
| Total |
|
| Compensation |
|
| Non- Compensation |
|
| Total |
|
| Compensation |
|
| Non- Compensation |
|
| Total |
| |||||||||
Share-based compensation(1) |
| $ | 13,876 |
|
| $ | — |
|
| $ | 13,876 |
|
| $ | 53,637 |
|
| $ | — |
|
| $ | 53,637 |
|
| $ | 53,837 |
|
| $ | — |
|
| $ | 53,837 |
|
Reorganization and integration costs(2) |
|
| 4,335 |
|
|
| 6,083 |
|
|
| 10,418 |
|
|
| 5,396 |
|
|
| 5,420 |
|
|
| 10,816 |
|
|
| 2,585 |
|
|
| 11 |
|
|
| 2,596 |
|
Acquisition expenses(3) |
|
| — |
|
|
| 3,411 |
|
|
| 3,411 |
|
|
| 1,441 |
|
|
| 4,241 |
|
|
| 5,682 |
|
|
| 6,022 |
|
|
| 6,536 |
|
|
| 12,558 |
|
Debt acquisition cost write-down(4) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,729 |
|
|
| 1,729 |
|
Business continuity plan(5) |
|
| (2 | ) |
|
| 63 |
|
|
| 61 |
|
|
| 174 |
|
|
| 286 |
|
|
| 460 |
|
|
| 1,082 |
|
|
| 486 |
|
|
| 1,568 |
|
Office closures(6) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 167 |
|
|
| 167 |
|
|
| — |
|
|
| 2,755 |
|
|
| 2,755 |
|
Other (income) expense |
|
| — |
|
|
| 135 |
|
|
| 135 |
|
|
| — |
|
|
| 106 |
|
|
| 106 |
|
|
| — |
|
|
| (42 | ) |
|
| (42 | ) |
Total adjustments to adjusted EBITDA |
| $ | 18,209 |
|
| $ | 9,692 |
|
| $ | 27,901 |
|
| $ | 60,648 |
|
| $ | 10,220 |
|
| $ | 70,868 |
|
| $ | 63,526 |
|
| $ | 11,475 |
|
| $ | 75,001 |
|
|
| Year Ended December 31, 2022 |
|
| Year Ended December 31, 2021 |
|
| Year Ended December 31, 2020 |
| |||||||||||||||||||||||||||
(in percentages) |
| Compensation |
|
| Non- Compensation |
|
| Total |
|
| Compensation |
|
| Non- Compensation |
|
| Total |
|
| Compensation |
|
| Non- Compensation |
|
| Total |
| |||||||||
Share-based compensation(1) |
|
| 2.2 | % |
|
| — |
|
|
| 2.2 | % |
|
| 10.1 | % |
|
| — |
|
|
| 10.1 | % |
|
| 12.4 | % |
|
| — |
|
|
| 12.4 | % |
Reorganization and integration costs(2) |
|
| 0.7 | % |
|
| 1.0 | % |
|
| 1.7 | % |
|
| 1.0 | % |
|
| 1.0 | % |
|
| 2.0 | % |
|
| 0.6 | % |
|
| — |
|
|
| 0.6 | % |
Acquisition expenses(3) |
|
| — |
|
|
| 0.6 | % |
|
| 0.6 | % |
|
| 0.2 | % |
|
| 0.7 | % |
|
| 0.9 | % |
|
| 1.4 | % |
|
| 1.5 | % |
|
| 2.9 | % |
Debt acquisition cost write-down(4) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.4 | % |
|
| 0.4 | % |
Business continuity plan(5) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.3 | % |
|
| 0.1 | % |
|
| 0.4 | % |
Office closures(6) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.6 | % |
|
| 0.6 | % |
Other (income) expense |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total adjustments to adjusted EBITDA margin % |
|
| 2.9 | % |
|
| 1.6 | % |
|
| 4.5 | % |
|
| 11.3 | % |
|
| 1.7 | % |
|
| 13.0 | % |
|
| 14.7 | % |
|
| 2.6 | % |
|
| 17.3 | % |
Year Ended December 31, 2023 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Compensation | Non- Compensation | Total | Compensation | Non- Compensation | Total | Compensation | Non- Compensation | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation(1) | $ | 16,388 | $ | — | $ | 16,388 | $ | 13,876 | $ | — | $ | 13,876 | $ | 53,637 | $ | — | $ | 53,637 | ||||||||||||||||||||||||||||||||||||||
Reorganization and integration costs(2) | 5,904 | 7,040 | 12,944 | 4,335 | 6,083 | 10,418 | 5,396 | 5,420 | 10,816 | |||||||||||||||||||||||||||||||||||||||||||||||
Acquisition expenses(3) | 939 | 388 | 1,327 | — | 3,411 | 3,411 | 1,441 | 4,241 | 5,682 | |||||||||||||||||||||||||||||||||||||||||||||||
Business continuity plan(4) | — | (6) | (6) | (2) | 63 | 61 | 174 | 286 | 460 | |||||||||||||||||||||||||||||||||||||||||||||||
SEC settlement(5) | — | 18,327 | 18,327 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Office closures(6) | — | — | — | — | — | — | — | 167 | 167 | |||||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | — | (265) | (265) | — | 135 | 135 | — | 106 | 106 | |||||||||||||||||||||||||||||||||||||||||||||||
Total adjustments to adjusted EBITDA | $ | 23,231 | $ | 25,484 | $ | 48,715 | $ | 18,209 | $ | 9,692 | $ | 27,901 | $ | 60,648 | $ | 10,220 | $ | 70,868 |
(1)“Share-based compensation” represents granted share-based compensation in the form of restricted stock unit, stock option and stock appreciation right grants by us to certain of our directors and employees. Although this expense occurred in each measurement period, we have added the expense back in our calculation of adjusted EBITDA because of its noncash impact. |
|
(2)“Reorganization and integration costs” includes costs related to our functional reorganization within our Operations, Technology and Retirement functions as well as duplicate costs related to the outsourcing of back-office operations functions. While we have incurred such expenses in all periods measured, these expenses serve varied reorganization and integration initiatives, each of which is non-recurring. We do not consider these expenses to be part of our core operations. |
|
(3)“Acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions. |
|
(4)“Business continuity plan” includes incremental compensation and other costs that are directly related to a transition to a hybrid workforce in 2022. |
|
(5)“SEC settlement” represents the amount paid by us pursuant to our settlement with the SEC discussed in Note 17 to our consolidated financial statements included elsewhere in this Annual Report on Form 10K. |
|
(6)“Office closures” represents one-time expenses related to closing facilities. |
|
Year Ended December 31, 2023 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in percentages) | Compensation | Non- Compensation | Total | Compensation | Non- Compensation | Total | Compensation | Non- Compensation | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation(1) | 2.3 | % | — | 2.3 | % | 2.3 | % | — | 2.3 | % | 10.1 | % | — | 10.1 | % | |||||||||||||||||||||||||||||||||||||||||
Reorganization and integration costs(2) | 0.8 | % | 1.0 | % | 1.8 | % | 0.7 | % | 0.9 | % | 1.6 | % | 1.0 | % | 1.0 | % | 2.0 | % | ||||||||||||||||||||||||||||||||||||||
Acquisition expenses(3) | 0.1 | % | — | 0.1 | % | — | 0.5 | % | 0.5 | % | 0.2 | % | 0.7 | % | 0.9 | % | ||||||||||||||||||||||||||||||||||||||||
Business continuity plan(4) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
SEC settlement(5) | — | 2.6 | % | 2.6 | % | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Office closures(6) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Total adjustments to adjusted EBITDA margin % | 3.2 | % | 3.6 | % | 6.8 | % | 3.0 | % | 1.4 | % | 4.4 | % | 11.3 | % | 1.7 | % | 13.0 | % |
|
|
•non-cash equity grants made to employees at a certain price and point in time do not necessarily reflect how our business is performing at any particular time; as such, share-based compensation expense is not a key measure of our operating performance; |
|
•costs associated with acquisitions and related integrations, debt refinancing, restructuring and conversions can vary from period to period and transaction to transaction; as such, expenses associated with these activities are not considered a key measure of our operating performance; and •amortization expenses can vary substantially from company to company and from period to period depending upon each company’s financing and accounting methods, the fair value and average expected life of acquired intangible assets and the method by which assets were acquired; as such, the amortization of intangible assets obtained in acquisitions is not considered a key measure of our operating performance. |
|
Adjusted net income does not purport to be an alternative to net income or cash flows from operating activities. The term adjusted net income is not defined under GAAP, and adjusted net income is not a measure of net income, operating income or any other performance or liquidity measure derived in accordance with GAAP. Therefore, adjusted net income has limitations as an analytical tool and should not be considered in isolation to, or as a substitute for, analysis of our results as reported under GAAP. Some of these limitations are:
|
|
•adjusted net income does not reflect all cash expenditures, future requirements for capital expenditures or contractual commitments; |
|
|
|
45
|
| Year Ended December 31, 2022 |
|
| Year Ended December 31, 2021 |
|
| Year Ended December 31, 2020 |
| |||||||||||||||||||||||||||
(in thousands) |
| Compensation |
|
| Non- Compensation |
|
| Total |
|
| Compensation |
|
| Non- Compensation |
|
| Total |
|
| Compensation |
|
| Non- Compensation |
|
| Total |
| |||||||||
Net income (loss) |
|
|
|
|
|
|
|
|
| $ | 103,261 |
|
|
|
|
|
|
|
|
|
| $ | 25,671 |
|
|
|
|
|
|
|
|
|
| $ | (7,812 | ) |
Acquisition-related amortization(1) |
| $ | — |
|
| $ | 6,996 |
|
|
| 6,996 |
|
| $ | — |
|
| $ | 19,139 |
|
|
| 19,139 |
|
| $ | — |
|
| $ | 20,432 |
|
|
| 20,432 |
|
Expense adjustments(2) |
|
| 4,333 |
|
|
| 9,557 |
|
|
| 13,890 |
|
|
| 7,012 |
|
|
| 10,114 |
|
|
| 17,126 |
|
|
| 9,689 |
|
|
| 9,788 |
|
|
| 19,477 |
|
Share-based compensation |
|
| 13,876 |
|
|
| — |
|
|
| 13,876 |
|
|
| 53,637 |
|
|
| — |
|
|
| 53,637 |
|
|
| 53,837 |
|
|
| — |
|
|
| 53,837 |
|
Other (income) expense |
|
| — |
|
|
| 135 |
|
|
| 135 |
|
|
| — |
|
|
| 106 |
|
|
| 106 |
|
|
| — |
|
|
| 1,687 |
|
|
| 1,687 |
|
Tax effect of adjustments(3) |
|
| (4,370 | ) |
|
| (3,329 | ) |
|
| (7,699 | ) |
|
| (1,648 | ) |
|
| (10,759 | ) |
|
| (12,407 | ) |
|
| (2,519 | ) |
|
| (11,919 | ) |
|
| (14,438 | ) |
Adjusted net income |
|
|
|
|
|
|
|
|
| $ | 130,459 |
|
|
|
|
|
|
|
|
|
| $ | 103,272 |
|
|
|
|
|
|
|
|
|
| $ | 73,183 |
|
|
|
|
|
Year Ended December 31, 2023 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Compensation | Non- Compensation | Total | Compensation | Non- Compensation | Total | Compensation | Non- Compensation | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 123,119 | $ | 103,261 | $ | 25,671 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition-related amortization(1) | $ | — | $ | 8,715 | 8,715 | $ | — | $ | 6,996 | 6,996 | $ | — | $ | 19,139 | 19,139 | |||||||||||||||||||||||||||||||||||||||||
Expense adjustments(2) | 6,843 | 25,749 | 32,592 | 4,333 | 9,557 | 13,890 | 7,012 | 10,114 | 17,126 | |||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | 16,388 | — | 16,388 | 13,876 | — | 13,876 | 53,637 | — | 53,637 | |||||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | — | (265) | (265) | — | 135 | 135 | — | 106 | 106 | |||||||||||||||||||||||||||||||||||||||||||||||
Tax effect of adjustments(3) | (5,575) | (4,054) | (9,629) | (4,370) | (3,329) | (7,699) | (1,648) | (10,759) | (12,407) | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted net income | $ | 170,920 | $ | 130,459 | $ | 103,272 |
|
|
46
47
Year Ended December 31, | ||||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | $ Change | % Change | ||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||
Asset-based revenue | $ | 553,483 | $ | 534,182 | $ | 19,301 | 3.6 | |||||||||||||||||||
Spread-based revenue | 120,262 | 56,798 | 63,464 | 111.7 | ||||||||||||||||||||||
Subscription-based revenue | 15,179 | 13,020 | 2,159 | 16.6 | ||||||||||||||||||||||
Other revenue | 19,575 | 7,695 | 11,880 | 154.4 | ||||||||||||||||||||||
Total revenue | 708,499 | 611,695 | 96,804 | 15.8 | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Asset-based expenses | 162,420 | 154,100 | 8,320 | 5.4 | ||||||||||||||||||||||
Spread-based expenses | 1,244 | 1,571 | (327) | (20.8) | ||||||||||||||||||||||
Employee compensation | 190,616 | 166,330 | 24,286 | 14.6 | ||||||||||||||||||||||
General and operating expenses | 98,302 | 90,122 | 8,180 | 9.1 | ||||||||||||||||||||||
Professional fees | 26,852 | 25,186 | 1,666 | 6.6 | ||||||||||||||||||||||
Depreciation and amortization | 35,544 | 31,149 | 4,395 | 14.1 | ||||||||||||||||||||||
Total operating expenses | 514,978 | 468,458 | 46,520 | 9.9 | ||||||||||||||||||||||
Interest expense | 9,108 | 6,520 | 2,588 | 39.7 | ||||||||||||||||||||||
Other (income) expense, net | 16,947 | (43) | 16,990 | * | ||||||||||||||||||||||
Income before income taxes | 167,466 | 136,760 | 30,706 | 22.5 | ||||||||||||||||||||||
Provision for income taxes | 44,347 | 33,499 | 10,848 | 32.4 | ||||||||||||||||||||||
Net income | $ | 123,119 | $ | 103,261 | $ | 19,858 | 19.2 |
|
| Year Ended December 31, |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| $ Change |
|
| % Change |
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Asset-based revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-based revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-based revenue |
| $ | 534,182 |
|
| $ | 512,188 |
|
| $ | 21,994 |
|
|
| 4.3 |
| ||||||||||||||||||||||||||||||||||||
Spread-based revenue |
|
| 63,409 |
|
|
| 8,568 |
|
|
| 54,841 |
|
|
| 640.1 |
| ||||||||||||||||||||||||||||||||||||
Subscription-based revenue |
|
| 13,020 |
|
|
| 6,381 |
|
|
| 6,639 |
|
|
| 104.0 |
| ||||||||||||||||||||||||||||||||||||
Other revenue |
|
| 7,695 |
|
|
| 3,162 |
|
|
| 4,533 |
|
|
| 143.4 |
| ||||||||||||||||||||||||||||||||||||
Total revenue |
|
| 618,306 |
|
|
| 530,299 |
|
|
| 88,007 |
|
|
| 16.6 |
| ||||||||||||||||||||||||||||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
Asset-based expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-based expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-based expenses |
|
| 154,100 |
|
|
| 150,836 |
|
|
| 3,264 |
|
|
| 2.2 |
| ||||||||||||||||||||||||||||||||||||
Spread-based expenses |
|
| 8,182 |
|
|
| 1,427 |
|
|
| 6,755 |
|
|
| 473.4 |
| ||||||||||||||||||||||||||||||||||||
Employee compensation |
|
| 166,330 |
|
|
| 196,701 |
|
|
| (30,371 | ) |
|
| (15.4 | ) | ||||||||||||||||||||||||||||||||||||
General and operating expenses |
|
| 90,122 |
|
|
| 72,941 |
|
|
| 17,181 |
|
|
| 23.6 |
| ||||||||||||||||||||||||||||||||||||
Professional fees |
|
| 25,186 |
|
|
| 21,813 |
|
|
| 3,373 |
|
|
| 15.5 |
| ||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
|
| 31,149 |
|
|
| 37,929 |
|
|
| (6,780 | ) |
|
| (17.9 | ) | ||||||||||||||||||||||||||||||||||||
Total operating expenses |
|
| 475,069 |
|
|
| 481,647 |
|
|
| (6,578 | ) |
|
| (1.4 | ) | ||||||||||||||||||||||||||||||||||||
Interest expense |
|
| 6,520 |
|
|
| 3,559 |
|
|
| 2,961 |
|
|
| 83.2 |
| ||||||||||||||||||||||||||||||||||||
Other (income) expense, net |
|
| (43 | ) |
|
| 106 |
|
|
| (149 | ) |
|
| (140.6 | ) | ||||||||||||||||||||||||||||||||||||
Income before income taxes |
|
| 136,760 |
|
|
| 44,987 |
|
|
| 91,773 |
|
|
| 204.0 |
| ||||||||||||||||||||||||||||||||||||
Provision for income taxes |
|
| 33,499 |
|
|
| 19,316 |
|
|
| 14,183 |
|
|
| 73.4 |
| ||||||||||||||||||||||||||||||||||||
Net income |
| $ | 103,261 |
|
| $ | 25,671 |
|
| $ | 77,590 |
|
|
| 302.2 |
|
The increase was partially offset by $6.6 million in interest credited to client accounts.
48
49
Year Ended
The following discussion presents an analysis2023. Operating lease obligations of our results$36.8 million consist of operationsminimum payments under various operating leases for the years ended December 31, 2021office facilities and 2020. Where appropriate, we have identified specific eventsexclude potential lease renewals. Purchase obligations of $37.8 million are non-cancellable purchase commitments. Debt principal and changes that affect comparability or trends and, where possible and practical, have quantified the impactinterest payments of such items.
|
| Year Ended December 31, |
|
|
|
|
|
|
|
|
| |||||
(in thousands) |
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-based revenue |
| $ | 512,188 |
|
| $ | 412,023 |
|
| $ | 100,165 |
|
|
| 24.3 |
|
Spread-based revenue |
|
| 8,568 |
|
|
| 16,618 |
|
|
| (8,050 | ) |
|
| (48.4 | ) |
Subscription-based revenue |
|
| 6,381 |
|
|
| — |
|
|
| 6,381 |
|
| * |
| |
Other revenue |
|
| 3,162 |
|
|
| 3,438 |
|
|
| (276 | ) |
|
| (8.0 | ) |
Total revenue |
|
| 530,299 |
|
|
| 432,079 |
|
|
| 98,220 |
|
|
| 22.7 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-based expenses |
|
| 150,836 |
|
|
| 132,695 |
|
|
| 18,141 |
|
|
| 13.7 |
|
Spread-based expenses |
|
| 1,427 |
|
|
| 2,703 |
|
|
| (1,276 | ) |
|
| (47.2 | ) |
Employee compensation |
|
| 196,701 |
|
|
| 176,483 |
|
|
| 20,218 |
|
|
| 11.5 |
|
General and operating expenses |
|
| 72,941 |
|
|
| 62,466 |
|
|
| 10,475 |
|
|
| 16.8 |
|
Professional fees |
|
| 21,813 |
|
|
| 15,100 |
|
|
| 6,713 |
|
|
| 44.5 |
|
Depreciation and amortization |
|
| 37,929 |
|
|
| 35,126 |
|
|
| 2,803 |
|
|
| 8.0 |
|
Total operating expenses |
|
| 481,647 |
|
|
| 424,573 |
|
|
| 57,074 |
|
|
| 13.4 |
|
Interest expense |
|
| 3,559 |
|
|
| 5,588 |
|
|
| (2,029 | ) |
|
| (36.3 | ) |
Other expense, net |
|
| 106 |
|
|
| 1,687 |
|
|
| (1,581 | ) |
|
| (93.7 | ) |
Income before income taxes |
|
| 44,987 |
|
|
| 231 |
|
|
| 44,756 |
|
|
| 19,374.9 |
|
Provision for income taxes |
|
| 19,316 |
|
|
| 8,043 |
|
|
| 11,273 |
|
|
| 140.2 |
|
Net income (loss) |
| $ | 25,671 |
|
| $ | (7,812 | ) |
| $ | 33,483 |
|
|
| (428.6 | ) |
|
|
Asset-Based Revenue
Asset-based revenue increased by $100.2$117.3 million or 24.3%, from $412.0 million in the twelve months ended December 31, 2020 to $512.2 million in the twelve months ended December 31, 2021. This increase was primarily related to increased platform fees and advisory fees of $108.1 million associated with growth in platform assets. This increase was partially offset by lower custodial and marketing revenue of $7.9 million.
Spread-Based Revenue
Spread-based revenue decreased by $8.1 million, or 48.4%, from $16.6 million in the twelve months ended December 31, 2020 to $8.6 million in the twelve months ended December 31, 2021. This decrease was primarily related to lower interest income attributed to the lower interest rate environment.
Subscription-Based Revenue
Subscription-based revenue increased by $6.4 million during the twelve months ended December 31, 2021 due to the acquisition of Voyant.
Other Revenue
Other revenue decreased by $0.3 million, or 8.0%, in the twelve months ended December 31, 2021 compared to the twelve months ended December 31, 2020. This decrease was primarily related to a decrease in interest income of $0.8 million attributable to lower interest rates for the quarter ended December 31, 2021, partially offset by a $0.5 million increase in consulting revenue in connection with the Voyant acquisition.
Asset-Based Expenses
Asset-based expenses increased by $18.1 million, or 13.7%, from $132.7 million in the twelve months ended December 31, 2020 to $150.8 million in the twelve months ended December 31, 2021. This increase was primarily driven by an increase in asset-based fees due to increased platform assets from prior year.
Spread-Based Expenses
Spread-based expenses decreased by $1.3 million, or 47.2%, from $2.7 million in the twelve months ended December 31, 2020 to $1.4 million in the twelve months ended December 31, 2021. This decrease was primarily due to lower interest-credited payments to clients as a result of the lower overall interest rate environment and its impact on cash invested through ATC’s insured cash deposit program.
Employee Compensation
Employee compensation increased by $20.2 million, or 11.5%, from $176.5 million in the twelve months ended December 31, 2020 to $196.7 million in the twelve months ended December 31, 2021. This increase was primarily driven by a $23.7 million increase in salaries and benefits attributable to our ongoing growth, a $2.8 million increase in reorganization and integration costs and a $0.5 million increase in contractor-related costs. The increase was partially offset by a $4.6 million decrease in acquisition costs, a $1.1 million increase in capitalization of associates in software development, a $0.9 million decrease in business continuity planning-related expenses, and a $0.2 million decrease in share-based compensation expense.
General and Operating Expenses
General and operating expenses increased by $10.5 million, or 16.8%, from $62.4 million in the twelve months ended December 31, 2020 to $72.9 million in the twelve months ended December 31, 2021. This increase was primarily due to a $4.9 million increase in event-related expenses, $4.1 million in higher reorganization and integration costs, a $3.6 million increase in software and subscriptions costs, a $1.9 million increase in advertising costs, and $1.3 million in increased trading fees. The increase was partially offset by a $2.5 million decrease in office closure-related costs compared to 2020, a $2.1 million decrease in acquisition-related costs, and a $0.7 million decrease in printing and telecom costs.
Professional Fees
Professional fees increased by $6.7 million, or 44.5%, from $15.1 million in the twelve months ended December 31, 2020 to $21.8 million in the twelve months ended December 31, 2021. This increase was primarily due to a $4.9 million increase in general professional expenses, a $1.3 million increase in reorganization and integration costs, and a $0.7 million increase in audit and consulting-related expenses. This increase was partially offset by a $0.2 million decrease in acquisition-related expenses.
51
Depreciation and Amortization
Depreciation and amortization expense increased by $2.8 million, or 8.0%, from $35.1 million in the twelve months ended December 31, 2020 to $37.9 million in the twelve months ended December 31, 2021. The increase was primarily related to $1.3 million of additional depreciation and amortization related to assets placed into service during 2021 net of assets fully amortized, and $1.5 million in additional depreciation and amortization related to the intangible assets placed into service as a result of the acquisition of Voyant.
Interest Expense
Interest expense decreased by $2.0 million, or 36.3%, from $5.6 million in the twelve months ended December 31, 2020 to $3.6 million in the twelve months ended December 31, 2021. This decrease was primarily attributed to our lower debt balance and lower interest rates during the twelve months ended December 31, 2021.
Other Expense, Net
Other expense, net, decreased by $1.6 million, from $1.7 million in the twelve months ended December 31, 2020 to $0.1 million in the twelve months ended December 31, 2021. This change was primarily due to a $1.7 million loss on debt extinguishment costs given our repayment of all outstanding indebtednessare under the Term Loan in December 2020, partially offset by $0.1 million in remeasurement losses from transactions denominated in foreign currencies during the twelve months ended December 31, 2021.
Provision for Income Taxes
Provision for income taxes increased by $11.3 million, or 140.2%, from $8.0 million in the twelve months ended December 31, 2020 to $19.3 million in the twelve months ended December 31, 2021. This increase was primarily due to the increase in pre-tax income in the twelve months ended December 31, 2021.
Net Income (Loss)
Net comprehensive income increased by $33.5 million, or 428.6%, from a loss of $7.8 million in the twelve months ended December 31, 2020 to net income of $25.7 million in the twelve months ended December 31, 2021.
This increase was primarily due to an increase in net asset-based revenues of $82.0 million partially offset by (i) a $21.3 million increase in employee compensation expense, (ii) a $11.2 million increase in tax expenses due to an increase in pre-tax income, (iii) a decrease in spread-based revenue, net of spread-based expenses, of $6.8 million, (iv) a $6.7 million increase in professional fees, and (v) a $2.8 million increase in depreciation and amortization expense in connection with additional intangible assets recognized as part of our acquisition of Voyant.
Quarterly Results of Operations
The following tables set forth our unaudited quarterly statements of income data for each of the periods presented, as well as the percentage of revenue that each line item represents for the applicable quarter. The information for each quarter has been prepared on a basis consistent with our audited financial statements included elsewhere in this Annual Report on Form 10-K, and reflect, in the opinion of management, all adjustments of a normal, recurring nature that are necessary for a fair presentation of the financial information contained in those statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following quarterly financial data should be read in conjunction with our audited financial statements included elsewhere in this Annual Report on Form 10-K. The sum of the quarterly amounts in the tables below may not agree to the annual amounts presented elsewhere in this prospectus due to rounding.
52
Quarterly Consolidated Statements of Income (Unaudited)
|
| Three Months Ended |
| |||||||||||||||||||||||||||||
(in thousands) |
| Mar. 31, 2021 |
|
| Jun. 30, 2021 |
|
| Sept. 30, 2021 |
|
| Dec. 31, 2021 |
|
| Mar. 31, 2022 |
|
| Jun. 30, 2022 |
|
| Sept. 30, 2022 |
|
| Dec. 31, 2022 |
| ||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-based revenue |
| $ | 115,813 |
|
| $ | 124,690 |
|
| $ | 134,152 |
|
| $ | 137,533 |
|
| $ | 142,076 |
|
| $ | 139,249 |
|
| $ | 128,173 |
|
| $ | 124,684 |
|
Spread-based revenue |
|
| 2,606 |
|
|
| 2,672 |
|
|
| 1,235 |
|
|
| 2,055 |
|
|
| 3,318 |
|
|
| 7,150 |
|
|
| 21,160 |
|
|
| 33,144 |
|
Subscription-based revenue |
|
| — |
|
|
| — |
|
|
| 3,172 |
|
|
| 3,209 |
|
|
| 1,955 |
|
|
| 3,259 |
|
|
| 3,126 |
|
|
| 3,317 |
|
Other revenue |
|
| 587 |
|
|
| 680 |
|
|
| 1,108 |
|
|
| 787 |
|
|
| 954 |
|
|
| 1,549 |
|
|
| 2,204 |
|
|
| 2,988 |
|
Total revenue |
|
| 119,006 |
|
|
| 128,042 |
|
|
| 139,667 |
|
|
| 143,584 |
|
|
| 148,303 |
|
|
| 151,207 |
|
|
| 154,663 |
|
|
| 164,133 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-based expenses |
|
| 36,094 |
|
|
| 35,818 |
|
|
| 38,697 |
|
|
| 40,227 |
|
|
| 41,687 |
|
|
| 40,266 |
|
|
| 36,476 |
|
|
| 35,671 |
|
Spread-based expenses |
|
| 676 |
|
|
| 868 |
|
|
| (484 | ) |
|
| 367 |
|
|
| 405 |
|
|
| 641 |
|
|
| 2,142 |
|
|
| 4,994 |
|
Employee compensation |
|
| 67,302 |
|
|
| 39,447 |
|
|
| 44,051 |
|
|
| 45,901 |
|
|
| 40,290 |
|
|
| 39,973 |
|
|
| 41,589 |
|
|
| 44,478 |
|
General and operating expenses |
|
| 17,489 |
|
|
| 16,316 |
|
|
| 18,794 |
|
|
| 20,342 |
|
|
| 22,059 |
|
|
| 22,223 |
|
|
| 21,667 |
|
|
| 24,173 |
|
Professional fees |
|
| 4,260 |
|
|
| 5,018 |
|
|
| 5,071 |
|
|
| 7,464 |
|
|
| 5,733 |
|
|
| 5,494 |
|
|
| 5,877 |
|
|
| 8,082 |
|
Depreciation and amortization |
|
| 9,471 |
|
|
| 9,730 |
|
|
| 10,648 |
|
|
| 8,080 |
|
|
| 7,469 |
|
|
| 7,711 |
|
|
| 7,961 |
|
|
| 8,008 |
|
Total operating expenses |
|
| 135,292 |
|
|
| 107,197 |
|
|
| 116,777 |
|
|
| 122,381 |
|
|
| 117,643 |
|
|
| 116,308 |
|
|
| 115,712 |
|
|
| 125,406 |
|
Interest expense |
|
| 771 |
|
|
| 774 |
|
|
| 1,061 |
|
|
| 953 |
|
|
| 1,159 |
|
|
| 1,488 |
|
|
| 1,560 |
|
|
| 2,313 |
|
Other (income) expense, net |
|
| (15 | ) |
|
| (22 | ) |
|
| 119 |
|
|
| 24 |
|
|
| 128 |
|
|
| 78 |
|
|
| (11 | ) |
|
| (238 | ) |
Income (loss) before income taxes |
|
| (17,042 | ) |
|
| 20,093 |
|
|
| 21,710 |
|
|
| 20,226 |
|
|
| 29,373 |
|
|
| 33,333 |
|
|
| 37,402 |
|
|
| 36,652 |
|
Provision for (benefit from) income taxes |
|
| (8,126 | ) |
|
| 10,107 |
|
|
| 9,460 |
|
|
| 7,875 |
|
|
| 7,154 |
|
|
| 7,993 |
|
|
| 7,293 |
|
|
| 11,059 |
|
Net income (loss) |
| $ | (8,916 | ) |
| $ | 9,986 |
|
| $ | 12,250 |
|
| $ | 12,351 |
|
| $ | 22,219 |
|
| $ | 25,340 |
|
| $ | 30,109 |
|
| $ | 25,593 |
|
Net income (loss) per share attributable to common shareholder: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| (0.13 | ) |
|
| 0.14 |
|
|
| 0.17 |
|
|
| 0.18 |
|
|
| 0.30 |
|
|
| 0.34 |
|
|
| 0.41 |
|
|
| 0.35 |
|
Diluted |
|
| (0.13 | ) |
|
| 0.14 |
|
|
| 0.17 |
|
|
| 0.17 |
|
|
| 0.30 |
|
|
| 0.34 |
|
|
| 0.41 |
|
|
| 0.35 |
|
Percentage of Revenue Data (Unaudited)
|
| Three Months Ended |
| |||||||||||||||||||||||||||||
|
| Mar. 31, 2021 |
|
| Jun. 30, 2021 |
|
| Sept. 30, 2021 |
|
| Dec. 31, 2021 |
|
| Mar. 31, 2022 |
|
| Jun. 30, 2022 |
|
| Sept. 30, 2022 |
|
| Dec. 31, 2022 |
| ||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-based revenue |
|
| 97 | % |
|
| 97 | % |
|
| 96 | % |
|
| 96 | % |
|
| 96 | % |
|
| 92 | % |
|
| 83 | % |
|
| 76 | % |
Spread-based revenue |
|
| 2 |
|
|
| 2 |
|
|
| 1 |
|
|
| 1 |
|
|
| 2 |
|
|
| 5 |
|
|
| 14 |
|
|
| 20 |
|
Subscription-based revenue |
|
| — |
|
|
| — |
|
|
| 2 |
|
|
| 2 |
|
|
| 1 |
|
|
| 2 |
|
|
| 2 |
|
|
| 2 |
|
Other revenue |
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 2 |
|
Total revenue |
|
| 100 |
|
|
| 100 |
|
|
| 100 |
|
|
| 100 |
|
|
| 100 |
|
|
| 100 |
|
|
| 100 |
|
|
| 100 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-based expenses |
|
| 30 |
|
|
| 28 |
|
|
| 28 |
|
|
| 28 |
|
|
| 28 |
|
|
| 27 |
|
|
| 24 |
|
|
| 22 |
|
Spread-based expenses |
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 3 |
|
Employee compensation |
|
| 57 |
|
|
| 31 |
|
|
| 32 |
|
|
| 32 |
|
|
| 27 |
|
|
| 26 |
|
|
| 27 |
|
|
| 27 |
|
General and operating expenses |
|
| 15 |
|
|
| 13 |
|
|
| 13 |
|
|
| 14 |
|
|
| 15 |
|
|
| 15 |
|
|
| 14 |
|
|
| 14 |
|
Professional fees |
|
| 4 |
|
|
| 4 |
|
|
| 4 |
|
|
| 5 |
|
|
| 4 |
|
|
| 4 |
|
|
| 4 |
|
|
| 5 |
|
Depreciation and amortization |
|
| 8 |
|
|
| 8 |
|
|
| 8 |
|
|
| 6 |
|
|
| 5 |
|
|
| 5 |
|
|
| 5 |
|
|
| 5 |
|
Total operating expenses |
|
| 115 |
|
|
| 85 |
|
|
| 85 |
|
|
| 85 |
|
|
| 79 |
|
|
| 77 |
|
|
| 75 |
|
|
| 76 |
|
Interest expense |
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
Other (income) expense, net |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Income (loss) before income taxes |
|
| (14 | ) |
|
| 16 |
|
|
| 16 |
|
|
| 14 |
|
|
| 20 |
|
|
| 22 |
|
|
| 24 |
|
|
| 23 |
|
Provision for (benefit from) income taxes |
|
| (7 | ) |
|
| 8 |
|
|
| 7 |
|
|
| 5 |
|
|
| 5 |
|
|
| 5 |
|
|
| 5 |
|
|
| 7 |
|
Net income (loss) |
|
| (7 | )% |
|
| 8 | % |
|
| 9 | % |
|
| 9 | % |
|
| 15 | % |
|
| 17 | % |
|
| 19 | % |
|
| 16 | % |
Quarterly Revenue Trends
Our quarterly revenue increased sequentially in each of the quarters presented. Quarterly revenue growth in 2021 was driven primarily by growth in platform assets as a result of positive net flows and strong market conditions. Quarterly revenue growth in 2022 was driven primarily by an increase in spread-based revenue as a result of increased interest rates in the United States.
Quarterly Operating Expense Trends
Our quarterly asset-based expenses generally remained consistent with changes in our quarterly asset-based revenue. Changes in employee compensation expense were mainly driven by a decrease in our share-based compensation expense as a result of our RSA awards fully vesting in November of 2021. General and operating expenses and professional fees generally increased as a result of investments to support the growth of our business. Depreciation and amortization expense generally decreased as a result of certain software intangible assets from HTSC’s acquisition of us becoming fully amortized.
Quarterly Interest Expense Trends
We incurred interest expense on our $250.0 million 2020 Revolving Loans during 2021, and on our term loan in connection with our 2022 Credit Agreement during 2022. Interest expense generally increased sequentially for the quarters presented, driven by an increasewith interest payments using a forecasted rate and principal due in interest rates and our average outstanding borrowings.
Quarterly Income Tax Trends
The quarterly tax provisions for 2022 were primarily driven by our changes in profits and losses. The quarterly tax provisions for 2021 were primarily driven by our changes in profits and losses, and certain share-based compensation, which is not deductible for tax purposes.
54
January 2027.
Since 2016, our
55
satisfy or comply with covenants, a change of control, the imposition of certain judgments and the invalidation of liens we have granted. We had an outstanding balance under the 2022 Credit Agreement of $118.8 $93.8 million as of December 31, 20222023.
|
| Year Ended December 31, |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| 2020 |
| (in thousands) | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||
Cash flows provided by operating activities |
| $ | 140,301 |
|
| $ | 128,976 |
|
| $ | 76,947 |
| ||||||||||||||||||||||||||||||||||||||||||
Cash flows used in investing activities |
|
| (94,992 | ) |
|
| (160,983 | ) |
|
| (49,970 | ) | ||||||||||||||||||||||||||||||||||||||||||
Cash flows provided by (used in) financing activities |
|
| 1,258 |
|
|
| 40,095 |
|
|
| (50,699 | ) | ||||||||||||||||||||||||||||||||||||||||||
Cash flows (used in) provided by financing activities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net change in cash, cash equivalents and restricted cash |
|
| 46,567 |
|
|
| 8,088 |
|
|
| (23,722 | ) | ||||||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period |
|
| 89,707 |
|
|
| 81,619 |
|
|
| 105,341 |
| ||||||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash at end of period |
| $ | 136,274 |
|
| $ | 89,707 |
|
| $ | 81,619 |
|
Cash Flows from Investing Activities
capital expenditures related to internal software development during the year ended December 31, 2023 compared to the year ended December 31, 2022.
Cash Flows from Financing Activities
2023.
Cash flows from financing activities increased by $90.8 million in the year ended December 31, 2021 compared to the year ended December 31, 2020. This increase was primarily due to a net draw down
56
Contractual ObligationsContents
Contractual obligations consist of operating lease obligations, purchase obligations, and debt principal and interest totaling $211.2 million as of December 31, 2022. Operating lease obligations of $37.4 million consist of minimum payments under various operating leases for office facilities and exclude potential lease renewals. Purchase obligations of $24.1 million are non-cancellable purchase commitments. Debt principal and interest payments of $149.7 million are under the 2022 Credit Agreement with interest payments using a forecasted rate and principal due in January 2027.
Off-Balance Sheet Arrangements
As of December 31, 2022, we had no off-balance sheet arrangements.
2022.
2022.
2022.
57
Income Tax
We use the asset-and-liability method of accounting for income taxes. Under this method, 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 that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled.
We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. In assessing the need for a valuation allowance, we consider our historical levels of income, expectations of future taxable income and ongoing tax planning strategies. To evaluate the sensitivity of the valuation allowance, we applied a hypothetical 10% decrease to our projected taxable income. Based on the assessment performed, there was sufficient future taxable income to support the realization of tax credits and net operating losses carried from prior years, except to the extent a valuation allowance has been recorded. See Note 13 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional details.
We recognize and measure tax benefits from uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Significant judgment is required to evaluate uncertain tax positions.
Although we believe that we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters will not be materially different. We evaluate our uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit and effective settlement of issues.
We follow the policy of releasing residual tax effects from accumulated other comprehensive income based on a portfolio approach, whereby we release the residual tax effects only after the entire accumulated other comprehensive income adjustment has been reversed (e.g., when all available-for-sale debt securities are sold). We did not make an election to reclassify the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings.
58
2023.
59
Page | |||||
| |||||
| |||||
Auditor Name: KPMG LLP | |||||
Audit Firm ID: 185 | |||||
Auditor Location: San Francisco, CA | |||||
Consolidated Financial Statements | |||||
| |||||
| |||||
| |||||
| |||||
| |||||
The supplementary financial information required by this Item 8 is included in Part II, Item 7 under the caption “Quarterly Results
Report of Independent Registered Public Accounting Firm
/s/ KPMG LLP
|
| December 31, |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
ASSETS |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Current assets: |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||||
Cash and cash equivalents |
| $ | 123,274 |
|
| $ | 76,707 |
| ||||||||||||||||||||||
Restricted cash |
|
| 13,000 |
|
|
| 13,000 |
| ||||||||||||||||||||||
Investments, at fair value |
|
| 13,714 |
|
|
| 14,498 |
| ||||||||||||||||||||||
Fees and other receivables, net |
|
| 20,082 |
|
|
| 9,019 |
| ||||||||||||||||||||||
Income tax receivable, net |
|
| 265 |
|
|
| 6,276 |
| ||||||||||||||||||||||
Prepaid expenses and other current assets |
|
| 16,870 |
|
|
| 14,673 |
| ||||||||||||||||||||||
Total current assets |
|
| 187,205 |
|
|
| 134,173 |
| ||||||||||||||||||||||
Property, plant and equipment, net |
|
| 8,495 |
|
|
| 8,015 |
| ||||||||||||||||||||||
Capitalized software, net |
|
| 89,959 |
|
|
| 73,701 |
| ||||||||||||||||||||||
Other intangible assets, net |
|
| 694,627 |
|
|
| 695,093 |
| ||||||||||||||||||||||
Operating lease right-of-use assets |
|
| 22,002 |
|
|
| 22,469 |
| ||||||||||||||||||||||
Goodwill |
|
| 487,225 |
|
|
| 447,864 |
| ||||||||||||||||||||||
Other assets |
|
| 13,417 |
|
|
| 2,090 |
| ||||||||||||||||||||||
Total assets |
| $ | 1,502,930 |
|
| $ | 1,383,405 |
| ||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Current liabilities: |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||
Accounts payable | ||||||||||||||||||||||||||||||
Accounts payable | ||||||||||||||||||||||||||||||
Accounts payable |
| $ | 4,624 |
|
| $ | 2,613 |
| ||||||||||||||||||||||
Accrued liabilities and other current liabilities |
|
| 69,196 |
|
|
| 56,249 |
| ||||||||||||||||||||||
Total current liabilities |
|
| 73,820 |
|
|
| 58,862 |
| ||||||||||||||||||||||
Long-term debt, net |
|
| 112,138 |
|
|
| 115,000 |
| ||||||||||||||||||||||
Other long-term liabilities |
|
| 15,185 |
|
|
| 16,468 |
| ||||||||||||||||||||||
Long-term portion of operating lease liabilities |
|
| 27,924 |
|
|
| 28,316 |
| ||||||||||||||||||||||
Deferred income tax liabilities, net |
|
| 147,497 |
|
|
| 155,373 |
| ||||||||||||||||||||||
Total long-term liabilities |
|
| 302,744 |
|
|
| 315,157 |
| ||||||||||||||||||||||
Total liabilities |
|
| 376,564 |
|
|
| 374,019 |
| ||||||||||||||||||||||
Commitments and contingencies |
|
| — |
|
|
| — |
| ||||||||||||||||||||||
Stockholders’ equity: |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Common stock, $0.001 par value (675,000,000 shares authorized and 73,847,596 and 73,562,717 shares issued and outstanding as of December 31, 2022 and 2021, respectively) |
|
| 74 |
|
|
| 74 |
| ||||||||||||||||||||||
Common stock, $0.001 par value (675,000,000 shares authorized and 74,372,889 and 73,847,596 shares issued and outstanding as of December 31, 2023 and 2022, respectively) | ||||||||||||||||||||||||||||||
Common stock, $0.001 par value (675,000,000 shares authorized and 74,372,889 and 73,847,596 shares issued and outstanding as of December 31, 2023 and 2022, respectively) | ||||||||||||||||||||||||||||||
Common stock, $0.001 par value (675,000,000 shares authorized and 74,372,889 and 73,847,596 shares issued and outstanding as of December 31, 2023 and 2022, respectively) | ||||||||||||||||||||||||||||||
Additional paid-in capital |
|
| 942,946 |
|
|
| 929,070 |
| ||||||||||||||||||||||
Retained earnings |
|
| 183,503 |
|
|
| 80,242 |
| ||||||||||||||||||||||
Accumulated other comprehensive loss |
|
| (157 | ) |
|
| — |
| ||||||||||||||||||||||
Total stockholders’ equity |
|
| 1,126,366 |
|
|
| 1,009,386 |
| ||||||||||||||||||||||
Total liabilities and stockholders’ equity |
| $ | 1,502,930 |
|
| $ | 1,383,405 |
|
62
|
| Year Ended December 31, |
| |||||||||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Asset-based revenue | ||||||||||||||||||||||||||||||||||||||||||||||
Asset-based revenue | ||||||||||||||||||||||||||||||||||||||||||||||
Asset-based revenue |
| $ | 534,182 |
|
| $ | 512,188 |
|
| $ | 412,023 |
| ||||||||||||||||||||||||||||||||||
Spread-based revenue |
|
| 63,409 |
|
|
| 8,568 |
|
|
| 16,618 |
| ||||||||||||||||||||||||||||||||||
Subscription-based revenue |
|
| 13,020 |
|
|
| 6,381 |
|
|
| — |
| ||||||||||||||||||||||||||||||||||
Other revenue |
|
| 7,695 |
|
|
| 3,162 |
|
|
| 3,438 |
| ||||||||||||||||||||||||||||||||||
Total revenue |
|
| 618,306 |
|
|
| 530,299 |
|
|
| 432,079 |
| ||||||||||||||||||||||||||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Asset-based expenses | ||||||||||||||||||||||||||||||||||||||||||||||
Asset-based expenses | ||||||||||||||||||||||||||||||||||||||||||||||
Asset-based expenses |
|
| 154,100 |
|
|
| 150,836 |
|
|
| 132,695 |
| ||||||||||||||||||||||||||||||||||
Spread-based expenses |
|
| 8,182 |
|
|
| 1,427 |
|
|
| 2,703 |
| ||||||||||||||||||||||||||||||||||
Employee compensation |
|
| 166,330 |
|
|
| 196,701 |
|
|
| 176,483 |
| ||||||||||||||||||||||||||||||||||
General and operating expenses |
|
| 90,122 |
|
|
| 72,941 |
|
|
| 62,466 |
| ||||||||||||||||||||||||||||||||||
Professional fees |
|
| 25,186 |
|
|
| 21,813 |
|
|
| 15,100 |
| ||||||||||||||||||||||||||||||||||
Depreciation and amortization |
|
| 31,149 |
|
|
| 37,929 |
|
|
| 35,126 |
| ||||||||||||||||||||||||||||||||||
Total operating expenses |
|
| 475,069 |
|
|
| 481,647 |
|
|
| 424,573 |
| ||||||||||||||||||||||||||||||||||
Interest expense |
|
| 6,520 |
|
|
| 3,559 |
|
|
| 5,588 |
| ||||||||||||||||||||||||||||||||||
Other (income) expense, net |
|
| (43 | ) |
|
| 106 |
|
|
| 1,687 |
| ||||||||||||||||||||||||||||||||||
Income before income taxes |
|
| 136,760 |
|
|
| 44,987 |
|
|
| 231 |
| ||||||||||||||||||||||||||||||||||
Provision for income taxes |
|
| 33,499 |
|
|
| 19,316 |
|
|
| 8,043 |
| ||||||||||||||||||||||||||||||||||
Net income (loss) |
|
| 103,261 |
|
|
| 25,671 |
|
|
| (7,812 | ) | ||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of convertible notes receivable, net |
|
| (157 | ) |
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||
Net comprehensive income (loss) |
| $ | 103,104 |
|
| $ | 25,671 |
|
| $ | (7,812 | ) | ||||||||||||||||||||||||||||||||||
Net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Net comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||
Net income per share attributable to common stockholders: | ||||||||||||||||||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||||||||||||||||||
Basic |
| $ | 1.40 |
|
| $ | 0.36 |
|
| $ | (0.12 | ) | ||||||||||||||||||||||||||||||||||
Diluted |
| $ | 1.40 |
|
| $ | 0.35 |
|
| $ | (0.12 | ) | ||||||||||||||||||||||||||||||||||
Weighted average number of common shares outstanding, basic |
|
| 73,724,341 |
|
|
| 72,137,174 |
|
|
| 67,361,995 |
| Weighted average number of common shares outstanding, basic | 74,113,591 | 73,724,341 | 72,137,174 | ||||||||||||||||||||||||||||||
Weighted average number of common shares outstanding, diluted |
|
| 73,872,828 |
|
|
| 72,399,213 |
|
|
| 67,361,995 |
| Weighted average number of common shares outstanding, diluted | 74,438,332 | 73,872,828 | 72,399,213 |
63
|
| Common stock |
|
| Additional paid-in |
|
| Retained |
|
| Accumulated other comprehensive |
|
| Total stockholders’ |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| capital |
|
| earnings |
|
| loss |
|
| equity |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
|
| 72,390,080 |
|
| $ | 72 |
|
| $ | 796,406 |
|
| $ | 62,383 |
|
| $ | — |
|
| $ | 858,861 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (7,812 | ) |
|
| — |
|
|
| (7,812 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based employee compensation |
|
| — |
|
|
| — |
|
|
| 53,837 |
|
|
| — |
|
|
| — |
|
|
| 53,837 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options |
|
| 8,504 |
|
|
| — |
|
|
| 187 |
|
|
| — |
|
|
| — |
|
|
| 187 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock – vesting of restricted stock units |
|
| 60,671 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Total stockholders’ equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
|
| 72,459,255 |
|
| $ | 72 |
|
| $ | 850,430 |
|
| $ | 54,571 |
|
| $ | — |
|
| $ | 905,073 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 25,671 |
|
|
| — |
|
|
| 25,671 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based employee compensation |
|
| — |
|
|
| — |
|
|
| 53,637 |
|
|
| — |
|
|
| — |
|
|
| 53,637 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock – vesting of restricted stock units |
|
| 106,110 |
|
|
| 1 |
|
|
| (1 | ) |
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued in connection with business combination |
|
| 994,028 |
|
|
| 1 |
|
|
| 24,909 |
|
|
| — |
|
|
| — |
|
|
| 24,910 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options |
|
| 6,242 |
|
|
| — |
|
|
| 95 |
|
|
| — |
|
|
| — |
|
|
| 95 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cancellation of unvested restricted stock awards |
|
| (2,918 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
|
| 73,562,717 |
|
| $ | 74 |
|
| $ | 929,070 |
|
| $ | 80,242 |
|
| $ | — |
|
| $ | 1,009,386 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 103,261 |
|
|
| — |
|
|
| 103,261 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based employee compensation |
|
| — |
|
|
| — |
|
|
| 13,876 |
|
|
| — |
|
|
| — |
|
|
| 13,876 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of convertible notes receivable, net |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (157 | ) |
|
| (157 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock – vesting of restricted stock units |
|
| 284,168 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options |
|
| 711 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 |
|
| 73,847,596 |
|
| $ | 74 |
|
| $ | 942,946 |
|
| $ | 183,503 |
|
| $ | (157 | ) |
| $ | 1,126,366 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based employee compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of convertible notes receivable, net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock appreciation rights | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 |
64
|
| Year Ended December 31, |
| |||||||||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Net income (loss) |
| $ | 103,261 |
|
| $ | 25,671 |
|
| $ | (7,812 | ) | ||||||||||||||||||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
|
| 31,149 |
|
|
| 37,929 |
|
|
| 35,126 |
| ||||||||||||||||||||||||||||||||||
Interest expense, net |
|
| 541 |
|
|
| 700 |
|
|
| 606 |
| ||||||||||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||||||||
Interest (income) expense, net | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred income taxes |
|
| (6,673 | ) |
|
| (1,562 | ) |
|
| (706 | ) | ||||||||||||||||||||||||||||||||||
Share-based compensation |
|
| 13,876 |
|
|
| 53,637 |
|
|
| 53,837 |
| ||||||||||||||||||||||||||||||||||
Debt acquisition cost write-down |
|
| 130 |
|
|
| — |
|
|
| 1,729 |
| ||||||||||||||||||||||||||||||||||
Impairment of operating lease right-of-use assets and property, plant, and equipment |
|
| — |
|
|
| — |
|
|
| 2,520 |
| ||||||||||||||||||||||||||||||||||
Changes in certain assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Fees and other receivables, net | ||||||||||||||||||||||||||||||||||||||||||||||
Fees and other receivables, net | ||||||||||||||||||||||||||||||||||||||||||||||
Fees and other receivables, net |
|
| (10,718 | ) |
|
| 163 |
|
|
| 1,525 |
| ||||||||||||||||||||||||||||||||||
Receivables from related party |
|
| 568 |
|
|
| (91 | ) |
|
| (143 | ) | ||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets |
|
| 2,346 |
|
|
| 2,460 |
|
|
| 2,401 |
| ||||||||||||||||||||||||||||||||||
Income tax receivable, net |
|
| 6,073 |
|
|
| 2,570 |
|
|
| (4,602 | ) | ||||||||||||||||||||||||||||||||||
Income tax receivable and payable, net | ||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable, accrued liabilities and other liabilities |
|
| (252 | ) |
|
| 7,500 |
|
|
| (7,534 | ) | ||||||||||||||||||||||||||||||||||
Net cash provided by operating activities |
|
| 140,301 |
|
|
| 128,977 |
|
|
| 76,947 |
| ||||||||||||||||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Purchase of Adhesion Wealth, net of cash received |
|
| (43,861 | ) |
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||
Purchase of Adhesion Wealth, net of cash received | ||||||||||||||||||||||||||||||||||||||||||||||
Purchase of Adhesion Wealth, net of cash received | ||||||||||||||||||||||||||||||||||||||||||||||
Purchase of Voyant, net of cash received |
|
| — |
|
|
| (124,161 | ) |
|
| — |
| ||||||||||||||||||||||||||||||||||
Purchase of OBS, net of cash received |
|
| — |
|
|
| — |
|
|
| (18,561 | ) | ||||||||||||||||||||||||||||||||||
Purchase of convertible notes |
|
| (10,300 | ) |
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||
Purchase of investments |
|
| (2,692 | ) |
|
| (3,004 | ) |
|
| (2,384 | ) | ||||||||||||||||||||||||||||||||||
Sale of investments |
|
| 918 |
|
|
| 833 |
|
|
| 40 |
| ||||||||||||||||||||||||||||||||||
Purchase of property and equipment |
|
| (3,061 | ) |
|
| (1,507 | ) |
|
| (2,901 | ) | ||||||||||||||||||||||||||||||||||
Purchase of computer software |
|
| (35,996 | ) |
|
| (33,145 | ) |
|
| (26,164 | ) | ||||||||||||||||||||||||||||||||||
Net cash used in investing activities |
|
| (94,992 | ) |
|
| (160,984 | ) |
|
| (49,970 | ) | ||||||||||||||||||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Proceeds from issuance of long-term debt, net |
|
| 122,508 |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||
Proceeds from issuance of long-term debt, net | ||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuance of long-term debt, net | ||||||||||||||||||||||||||||||||||||||||||||||
Payments on revolving credit facility |
|
| (115,000 | ) |
|
| (35,000 | ) |
|
| — |
| ||||||||||||||||||||||||||||||||||
Payments on long-term debt |
|
| (6,250 | ) |
|
| — |
|
|
| (123,750 | ) | ||||||||||||||||||||||||||||||||||
Payments on term loan | ||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from credit facility draw down |
|
| — |
|
|
| 75,000 |
|
|
| 73,019 |
| ||||||||||||||||||||||||||||||||||
Proceeds from exercise of stock options |
|
| — |
|
|
| 95 |
|
|
| 187 |
| ||||||||||||||||||||||||||||||||||
Payment of credit facility issuance costs |
|
| — |
|
|
| — |
|
|
| (155 | ) | ||||||||||||||||||||||||||||||||||
Net cash provided by (used in) financing activities |
|
| 1,258 |
|
|
| 40,095 |
|
|
| (50,699 | ) | ||||||||||||||||||||||||||||||||||
Net cash (used in) provided by financing activities | ||||||||||||||||||||||||||||||||||||||||||||||
Net change in cash, cash equivalents, and restricted cash |
|
| 46,567 |
|
|
| 8,088 |
|
|
| (23,722 | ) | ||||||||||||||||||||||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period |
|
| 89,707 |
|
|
| 81,619 |
|
|
| 105,341 |
| ||||||||||||||||||||||||||||||||||
Cash, cash equivalents, and restricted cash at end of period |
| $ | 136,274 |
|
| $ | 89,707 |
|
| $ | 81,619 |
| ||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Income taxes paid, net |
| $ | 33,637 |
|
| $ | 19,796 |
|
| $ | 13,456 |
| ||||||||||||||||||||||||||||||||||
Income taxes paid, net | ||||||||||||||||||||||||||||||||||||||||||||||
Income taxes paid, net | ||||||||||||||||||||||||||||||||||||||||||||||
Interest paid |
| $ | 4,087 |
|
| $ | 2,828 |
|
| $ | 4,969 |
| ||||||||||||||||||||||||||||||||||
Non-cash operating, investing, and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Non-cash changes to right-of-use assets | ||||||||||||||||||||||||||||||||||||||||||||||
Non-cash changes to right-of-use assets | ||||||||||||||||||||||||||||||||||||||||||||||
Non-cash changes to right-of-use assets |
| $ | 3,775 |
|
| $ | 933 |
|
| $ | 38,796 |
| ||||||||||||||||||||||||||||||||||
Non-cash changes to lease liabilities |
| $ | 3,775 |
|
| $ | 933 |
|
| $ | 40,140 |
| ||||||||||||||||||||||||||||||||||
Non-cash change in fair value of convertible notes |
| $ | (157 | ) |
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||||
Common stock issued in acquisition of business |
| $ | — |
|
| $ | 24,910 |
|
| $ | — |
|
65
2022
The Company offers a broad array of wealth management solutions to individual investors through financial advisers by providing an open-architecture product platform along with tailored client advice, asset allocation options, practice management, support services and technology to the financial adviser channel. The following is a description of the products and services offered by our significant operating subsidiaries.
66
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
financial statements taken as a whole.
67
2022
|
| December 31, |
| |||||||||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||||||||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
| $ | 123,274 |
|
| $ | 76,707 |
|
| $ | 70,619 |
| ||||||||||||||||||||||||||||||||||
Restricted cash |
|
| 13,000 |
|
|
| 13,000 |
|
|
| 11,000 |
| ||||||||||||||||||||||||||||||||||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows |
| $ | 136,274 |
|
| $ | 89,707 |
|
| $ | 81,619 |
|
|
|
•Level 1 – Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. |
|
•Level 2 – Inputs that are directly or indirectly observable in the marketplace. •Level 3 – Unobservable inputs that are supported by little or no market activity. |
|
As of
each reporting period, all assets recorded at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. See Note 9 for more information regarding fair value measurements.As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.
68
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
No impairment charges related to indefinite-lived intangible assets were recorded during the years ended December 31, 2023, 2022 and 2021. There were no changes in the indefinite useful life assigned to indefinite-lived intangible assets during the years ended December 31, 2023, 2022 and 2021.
2021.
Certain items in prior periods were adjusted to correct an immaterial error relating to the valuation of indefinite-lived intangible assets as part to the Company’s acquisition of Voyant2021., resulting in a decrease of $14,600 from intangible assets, a decrease of $3,557 to deferred income tax liabilities, and a $11,043 increase to goodwill as of December 31, 2021.
2022
|
| December 31, |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Computer software and equipment |
| $ | 9,760 |
|
| $ | 8,445 |
| ||||||||||||||||||||||
Furniture and equipment |
|
| 3,918 |
|
|
| 3,852 |
| ||||||||||||||||||||||
Leasehold improvements |
|
| 7,649 |
|
|
| 5,904 |
| ||||||||||||||||||||||
Total property and equipment |
|
| 21,327 |
|
|
| 18,201 |
| ||||||||||||||||||||||
Less: accumulated depreciation |
|
| (12,832 | ) |
|
| (10,186 | ) | ||||||||||||||||||||||
Property, plant and equipment, net |
| $ | 8,495 |
|
| $ | 8,015 |
|
69
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
•Asset-based revenue — The Company primarily derives revenue from fees assessed against customer’s assets under management or administration for services the Company provides to its customers. Such services include investment manager due diligence and research, portfolio diagnostics, proposal generation, investment model management, rebalancing and trading, portfolio performance reporting and monitoring solutions, billing, and back office and middle-office operations and custody services. Investment decisions for assets under management or administration are made by the Company’s customers. The fee arrangements are based on a percentage applied to the customers’ assets under management or administration. The performance obligation is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fees are generally calculated, billed and collected quarterly in advance on the preceding quarter-end customer asset values, and are recognized as revenue at the time the services are provided in the period. Fees related to assets under management or administration increase or decrease based on values of existing customer accounts. The values are affected by inflows or outflows of customer funds and market fluctuations. •Spread-based revenue — The Company’s spread-based revenue is derived from providing Complete Cash Solutions to banks and clients. Spread-based revenue consists of the interest rate return earned on cash custodied at ATC. ATC utilizes third-party banks that accept deposits of client cash to generate 74 AssetMark Financial Holdings, Inc. Notes to Consolidated Financial Statements – Continued December 31, 2023 and 2022 interest from deposits which earns spread income for the Company. A portion of the proceeds from those investments are credited to client accounts. ATC is paid interest-rate sensitive fees calculated by reference to such deposits. The Company recognizes interest paid to clients on a net basis as the payment to the end clients is consideration payable to the customer and reduces the transaction price accordingly. The performance obligation is satisfied over time because the banks and clients are receiving and consuming the benefits of the Complete Cash Solutions as they are provided by the cash sweep provider. •Subscription-based revenue — Subscription-based revenue represents revenue recognized from subscription fee arrangements in connection with financial planning and wealth management software solutions for use as a hosted application. Subscription fees from these applications are recognized over time on a ratable basis over the customer agreement term beginning on the date the solution is made available to the customer. •Other revenue — Other revenue consists primarily of interest earned on operating cash held by the Company. |
|
|
|
|
|
|
|
The Company has applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in asset-based expenses on the consolidated statements of income and comprehensive income.
70
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
percentage of the customers’ assets under management or administration. As a practical expedient, these costs are paid monthly and quarterly in advance on the preceding quarter-end customer asset values, and expensed as incurred over the period of time that the services are expected to be provided to customers, since the amortization of costs are in one year or less. See Note 12 for a breakout of these costs.
71
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
In certain circumstances, the Company enters into leases with free rent periods, rent escalations or lease incentives over the term of the lease. In such cases, the Company calculates the total payments over the term of the lease and records them ratably as rent expense over that term.
72
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
Recent
|
| December 31, |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Prepaid expenses |
| $ | 11,697 |
|
| $ | 9,355 |
| ||||||||||||||||||||||
Operating lease right-of-use assets |
|
| 4,387 |
|
|
| 4,198 |
| ||||||||||||||||||||||
Other |
|
| 786 |
|
|
| 1,120 |
| ||||||||||||||||||||||
Total |
| $ | 16,870 |
|
| $ | 14,673 |
|
Cash consideration, net of working capital adjustments | $ | 46,862 |
|
Purchase consideration liability |
| 3,000 |
|
Less: cash acquired |
| (3,001 | ) |
Total consideration transferred, net of cash acquired and working capital adjustments | $ | 46,861 |
|
73
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
The estimated fair values of working capital balances, identifiable intangible assets and goodwill are provisional and are based on the information that was available as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies that remain in progress and are not yet determinable. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of tangible assets and liabilities and identifiable intangible assets and goodwill and complete the acquisition accounting as soon as practicable, but no later than December 14, 2023.
The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
Preliminary Estimate | Preliminary Estimate | Measurement Period Adjustments | Revised Estimate | |||||||||||||||||||||||||||||
Total tangible assets acquired |
| $ | 6,136 |
| ||||||||||||||||||||||||||||
Total liabilities assumed |
|
| (3,603 | ) | ||||||||||||||||||||||||||||
Identifiable intangible assets |
|
| 8,300 |
| ||||||||||||||||||||||||||||
Goodwill |
|
| 39,029 |
| ||||||||||||||||||||||||||||
Total net assets acquired |
| $ | 49,862 |
|
Estimated Useful Life in Years | |||||||||||
Trade name | $ | 1,500 | 10 years | ||||||||
Customer relationships | 3,200 | 7 years | |||||||||
Technology | 3,600 | 3 years | |||||||||
Total intangible assets acquired | $ | 8,300 |
Cash and cash equivalents | $ | 8,027 | ||||||
Intangible assets | 46,600 | |||||||
Goodwill | 109,349 | |||||||
Other assets | 2,896 | |||||||
Total assets acquired | 166,872 | |||||||
Deferred income tax liabilities | (7,758) | |||||||
Other liabilities | (2,016) | |||||||
Total liabilities assumed | (9,774) | |||||||
Total net assets acquired | $ | 157,098 |
|
|
|
|
|
| Estimated Useful Life in Years |
Trade name |
| $ | 1,500 |
|
| 10 years |
Customer relationships |
|
| 3,200 |
|
| 7 years |
Technology |
|
| 3,600 |
|
| 3 years |
Total intangible assets acquired |
| $ | 8,300 |
|
|
|
The results of Adhesion Wealth’s operations were included in the consolidated statements of income and comprehensive income beginning December 14, 2022 and were not considered material to the Company’s results of operations.
Acquisition of Voyant
On July 1, 2021, the Company acquired all of the issued and outstanding equity interests of Voyant through a merger of Voyant with and into a wholly owned subsidiary of AFHI.
Voyant provides software as a service (“SaaS”) based financial planning and wealth management software solutions to advisers across financial institutions and small adviser firms in the United Kingdom, Canada, Australia, and the United States.
The Company acquired Voyant to add complementary financial planning tools to its existing suite of offerings and to strengthen Voyant’s growth prospects by leveraging the Company’s U.S. relationships. The Company is continuing to integrate the technology and operations of Voyant into its wealth management channel.
The Company funded the acquisition with a combination of cash on hand, borrowings under its 2020 Revolving Credit Facility, and equity. The equity consideration at issuance comprised of 994,028 shares, and was valued at approximately $24,910 using the Company’s closing share price prior to issuance. The consideration transferred in the acquisition, net of cash received, was $157,098.
74
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition:
|
| Preliminary Estimate |
|
| Measurement Period Adjustments |
|
| Revised Estimate |
| |||
Cash and cash equivalents |
| $ | 8,027 |
|
| $ | — |
|
| $ | 8,027 |
|
Intangible assets |
|
| 46,600 |
|
|
| — |
|
|
| 46,600 |
|
Goodwill |
|
| 109,016 |
|
|
| 333 |
|
|
| 109,349 |
|
Other assets |
|
| 2,896 |
|
|
| — |
|
|
| 2,896 |
|
Total assets acquired |
|
| 166,539 |
|
|
| 333 |
|
|
| 166,872 |
|
Deferred income tax liabilities |
|
| (7,431 | ) |
|
| (327 | ) |
|
| (7,758 | ) |
Other liabilities |
|
| (2,010 | ) |
|
| (6 | ) |
|
| (2,016 | ) |
Total liabilities assumed |
|
| (9,441 | ) |
|
| (333 | ) |
|
| (9,774 | ) |
Total net assets acquired |
| $ | 157,098 |
|
| $ | — |
|
| $ | 157,098 |
|
The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to lower future operating expenses and the knowledge and experience of the existing workforce. The goodwill is not deductible for income tax purposes.
A summary of identifiable intangible assets acquired and estimated useful lives is as follows:
Estimated Useful Life in Years | |||||||||||
Technology | $ | 16,000 | 9 | ||||||||
Enterprise distribution channel customer relationships | 17,500 | Indefinite | |||||||||
Non-enterprise distribution channel customer relationships | 9,500 | 14 | |||||||||
Trade name | 3,200 | 11 | |||||||||
Non-compete agreements | 400 | 3 | |||||||||
Total intangible assets acquired | $ | 46,600 |
Acquisition of OBS
On February 29, 2020,operations for the Company closed the acquisition of WBI OBS Financial, LLC (now known as WBI OBS Financial, Inc.) and paid a final purchase price of $21,339, net of working capital adjustments. The Company recorded goodwill of $11,538, adviser and trust relationships of $9,500 and deferred tax assets of $188 in connection with the acquisition.
75
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
December 31, 2022 |
| Gross carrying amount |
|
| Accumulated amortization |
|
| Net carrying amount |
|
| Estimated remaining useful life | |||
Indefinite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broker-dealer relationships |
| $ | 570,480 |
|
| $ | — |
|
| $ | 570,480 |
|
|
|
Voyant enterprise distribution channel customer relationships |
|
| 17,500 |
|
|
| — |
|
|
| 17,500 |
|
|
|
Definite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade names |
|
| 45,830 |
|
|
| (14,131 | ) |
|
| 31,699 |
|
| 14 years |
Broker-dealer license |
|
| 11,550 |
|
|
| (3,561 | ) |
|
| 7,989 |
|
| 14 years |
ATC regulatory status |
|
| 23,300 |
|
|
| (7,184 | ) |
|
| 16,116 |
|
| 14 years |
Voyant non-enterprise distribution channel customer relationships |
|
| 9,500 |
|
|
| (1,018 | ) |
|
| 8,482 |
|
| 13 years |
GFPC adviser relationships |
|
| 14,250 |
|
|
| (3,775 | ) |
|
| 10,475 |
|
| 10 years |
OBS adviser and trust relationships |
|
| 9,500 |
|
|
| (2,130 | ) |
|
| 7,370 |
|
| 10 years |
Voyant trade name |
|
| 3,200 |
|
|
| (436 | ) |
|
| 2,764 |
|
| 10 years |
Voyant technology |
|
| 16,000 |
|
|
| (2,667 | ) |
|
| 13,333 |
|
| 8 years |
Voyant non-compete agreement |
|
| 400 |
|
|
| (200 | ) |
|
| 200 |
|
| 2 years |
Adhesion Wealth trade name |
|
| 1,500 |
|
|
| (6 | ) |
|
| 1,494 |
|
| 10 years |
Adhesion Wealth customer relationships |
|
| 3,200 |
|
|
| (25 | ) |
|
| 3,175 |
|
| 7 years |
Adhesion Wealth technology |
|
| 3,600 |
|
|
| (50 | ) |
|
| 3,550 |
|
| 3 years |
Total |
| $ | 729,810 |
|
| $ | (35,183 | ) |
| $ | 694,627 |
|
|
|
December 31, 2023 | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||
Broker-dealer relationships | $ | 570,480 | $ | — | $ | 570,480 | |||||||||||
Enterprise distribution channel customer relationships | 17,500 | — | 17,500 | ||||||||||||||
Definite-lived intangible assets: | |||||||||||||||||
Trade names | 50,530 | (17,305) | 33,225 | ||||||||||||||
Technology | 19,600 | (5,694) | 13,906 | ||||||||||||||
Customer relationships | 36,450 | (9,846) | 26,604 | ||||||||||||||
Regulatory licenses | 34,850 | (12,488) | 22,362 | ||||||||||||||
Non-compete agreements | 400 | (335) | 65 | ||||||||||||||
Total | $ | 729,810 | $ | (45,668) | $ | 684,142 |
76
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
December 31, 2021 |
| Gross carrying amount |
|
| Accumulated amortization |
|
| Net carrying amount |
|
| Estimated remaining useful life | |||
Indefinite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broker-dealer relationships |
| $ | 570,480 |
|
| $ | — |
|
| $ | 570,480 |
|
|
|
Voyant enterprise distribution channel customer relationships |
|
| 17,500 |
|
|
| — |
|
|
| 17,500 |
|
|
|
Definite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade names |
|
| 45,830 |
|
|
| (11,839 | ) |
|
| 33,991 |
|
| 15 years |
Broker-dealer license |
|
| 11,550 |
|
|
| (2,984 | ) |
|
| 8,566 |
|
| 15 years |
ATC regulatory status |
|
| 23,300 |
|
|
| (6,019 | ) |
|
| 17,281 |
|
| 15 years |
Voyant non-enterprise distribution channel customer relationships |
|
| 9,500 |
|
|
| (339 | ) |
|
| 9,161 |
|
| 14 years |
GFPC adviser relationships |
|
| 14,250 |
|
|
| (2,757 | ) |
|
| 11,493 |
|
| 11 years |
OBS adviser and trust relationships |
|
| 9,500 |
|
|
| (1,378 | ) |
|
| 8,122 |
|
| 11 years |
Voyant trade name |
|
| 3,200 |
|
|
| (145 | ) |
|
| 3,055 |
|
| 11 years |
Voyant technology |
|
| 16,000 |
|
|
| (889 | ) |
|
| 15,111 |
|
| 9 years |
Voyant non-compete agreement |
|
| 400 |
|
|
| (67 | ) |
|
| 333 |
|
| 3 years |
Total |
| $ | 721,510 |
|
| $ | (26,417 | ) |
| $ | 695,093 |
|
|
|
December 31, 2022 | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||
Broker-dealer relationships | $ | 570,480 | $ | — | $ | 570,480 | |||||||||||
Enterprise distribution channel customer relationships | 17,500 | — | 17,500 | ||||||||||||||
Definite-lived intangible assets: | |||||||||||||||||
Trade names | 50,530 | (14,573) | 35,957 | ||||||||||||||
Technology | 19,600 | (2,717) | 16,883 | ||||||||||||||
Customer relationships | 36,450 | (6,948) | 29,502 | ||||||||||||||
Regulatory licenses | 34,850 | (10,745) | 24,105 | ||||||||||||||
Non-compete agreements | 400 | (200) | 200 | ||||||||||||||
Total | $ | 729,810 | $ | (35,183) | $ | 694,627 |
2022
Year Ended December 31: |
| Estimated amortization |
| Year Ended December 31: | Estimated amortization | ||||
2023 |
| $ | 10,484 |
| |||||
2024 |
|
| 10,425 |
| |||||
2025 |
|
| 10,308 |
| |||||
2026 |
|
| 9,158 |
| |||||
2027 |
|
| 9,158 |
| |||||
2028 and thereafter |
|
| 57,114 |
| |||||
2028 | |||||||||
2029 and thereafter | |||||||||
Total |
| $ | 106,647 |
|
|
| December 31, |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Accrued bonus |
| $ | 19,813 |
|
| $ | 20,718 |
| ||||||||||||||||||||||
Compensation and benefits payable |
|
| 13,403 |
|
|
| 7,182 |
| ||||||||||||||||||||||
Asset-based payables | ||||||||||||||||||||||||||||||
Reserve for uncertain tax positions | ||||||||||||||||||||||||||||||
Current portion of operating lease liabilities | ||||||||||||||||||||||||||||||
Current portion of long-term debt, net |
|
| 6,123 |
|
|
| — |
| ||||||||||||||||||||||
Current portion of operating lease liabilities |
|
| 4,485 |
|
|
| 4,223 |
| ||||||||||||||||||||||
Reserve for uncertain tax positions |
|
| 4,136 |
|
|
| 3,695 |
| ||||||||||||||||||||||
Asset-based payables |
|
| 840 |
|
|
| 1,709 |
| ||||||||||||||||||||||
Other accrued expenses |
|
| 20,396 |
|
|
| 18,722 |
| ||||||||||||||||||||||
Total |
| $ | 69,196 |
|
| $ | 56,249 |
|
77
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
|
| December 31, |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Deferred compensation plan liability |
| $ | 13,602 |
|
| $ | 14,379 |
| ||||||||||||||||||||||
Contractor liability |
|
| 1,178 |
|
|
| 1,602 |
| ||||||||||||||||||||||
Other |
|
| 405 |
|
|
| 487 |
| ||||||||||||||||||||||
Total |
| $ | 15,185 |
|
| $ | 16,468 |
|
|
| December 31, 2022 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Fair Value |
|
| Level I |
|
| Level II |
|
| Level III |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2023 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | Level I | Level II | Level III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Equity security investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity security investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity security investments |
| $ | 112 |
|
| $ | 112 |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||||||||||||||||
Assets to fund deferred compensation liability |
|
| 13,602 |
|
|
| 13,602 |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||||||||||||
Convertible notes receivable |
|
| 10,352 |
|
|
| — |
|
|
| — |
|
|
| 10,352 |
| ||||||||||||||||||||||||||||||||||||||||||||||
Total assets |
| $ | 24,066 |
|
| $ | 13,714 |
|
| $ | — |
|
| $ | 10,352 |
| ||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation liability |
| $ | 13,602 |
|
| $ | 13,602 |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities |
| $ | 13,602 |
|
| $ | 13,602 |
|
| $ | — |
|
| $ | — |
|
|
| December 31, 2021 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Fair Value |
|
| Level I |
|
| Level II |
|
| Level III |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | Level I | Level II | Level III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Equity security investments |
| $ | 119 |
|
| $ | 119 |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||||||||||||||||
Equity security investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity security investments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets to fund deferred compensation liability |
|
| 14,379 |
|
|
| 14,379 |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||||||||||||||
Convertible notes receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets |
| $ | 14,498 |
|
| $ | 14,498 |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation liability |
| $ | 14,379 |
|
| $ | 14,379 |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities |
| $ | 14,379 |
|
| $ | 14,379 |
|
| $ | — |
|
| $ | — |
|
prices.
78
See Note 52022
Fair Value of Convertible Notes Receivable
sale, and included in other assets in the Company’s consolidated balance sheets. On August 9, 2022, the Company, as lender, entered into a loan and security agreement under which the Company agreed to purchase up to $25,000 in principal amount of convertible notes from the borrower. The notes are convertible, at the Company’s election, into shares of the borrower’s common stock at the end of 2025. The convertible notes are classified as available for sale, and included in other assets in the Company’s consolidated balance sheets.
sheets, respectively.
Changes to these estimated
for the years ended December 31, 2023 and 2022, respectively.
December 31, 2022 and 2021. The Company paid $5,713 and $5,407 for amounts included in
December 31, | |||||||||||
2023 | 2022 | 2021 | |||||||||
Operating lease cost | $ | 6,030 | $ | 5,321 | $ | 5,170 | |||||
Variable lease cost | 933 | 651 | 773 | ||||||||
Cash paid for amounts included in the measurement of the operating lease liabilities | 6,434 | 5,713 | 5,407 |
leases was as follows:
December 31, | |||||||||||
2023 | 2022 | ||||||||||
Weighted average remaining lease term (in years) | 5.7 | 5.9 | |||||||||
Weighted average discount rate | 5.17 | % | 4.65 | % |
2023 |
| $ | 5,486 |
|
2024 |
|
| 6,685 |
|
2025 |
|
| 6,405 |
|
2026 |
|
| 6,231 |
|
2027 |
|
| 6,091 |
|
2028 and thereafter |
|
| 6,493 |
|
2028 | ||||
2029 and thereafter | ||||
Total future minimum lease payments |
|
| 37,391 |
|
Less: imputed interest |
|
| (4,982 | ) |
Total operating lease liabilities |
| $ | 32,409 |
|
|
| Year Ended December 31, |
| |||||||||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Strategist and manager fees |
| $ | 135,992 |
|
| $ | 128,490 |
|
| $ | 107,317 |
| ||||||||||||||||||||||||||||||||||
Premier broker-dealer fees |
|
| 6,300 |
|
|
| 9,461 |
|
|
| 11,303 |
| ||||||||||||||||||||||||||||||||||
Custody fees |
|
| 6,676 |
|
|
| 6,712 |
|
|
| 6,226 |
| ||||||||||||||||||||||||||||||||||
Fund advisory fees |
|
| 4,837 |
|
|
| 4,402 |
|
|
| 4,600 |
| ||||||||||||||||||||||||||||||||||
Marketing allowance |
|
| 254 |
|
|
| 1,769 |
|
|
| 3,244 |
| ||||||||||||||||||||||||||||||||||
Other |
|
| 41 |
|
|
| 2 |
|
|
| 5 |
| ||||||||||||||||||||||||||||||||||
Total |
| $ | 154,100 |
|
| $ | 150,836 |
|
| $ | 132,695 |
|
|
| Year Ended December 31, |
| |||||||||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Current provision |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Federal | ||||||||||||||||||||||||||||||||||||||||||||||
Federal | ||||||||||||||||||||||||||||||||||||||||||||||
Federal |
| $ | 31,348 |
|
| $ | 16,273 |
|
| $ | 6,331 |
| ||||||||||||||||||||||||||||||||||
State |
|
| 8,798 |
|
|
| 4,605 |
|
|
| 2,418 |
| ||||||||||||||||||||||||||||||||||
Foreign |
|
| 26 |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||
Total current provision |
|
| 40,172 |
|
|
| 20,878 |
|
|
| 8,749 |
| ||||||||||||||||||||||||||||||||||
Deferred provision (benefit) |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Deferred benefit | ||||||||||||||||||||||||||||||||||||||||||||||
Federal | ||||||||||||||||||||||||||||||||||||||||||||||
Federal | ||||||||||||||||||||||||||||||||||||||||||||||
Federal |
|
| (5,061 | ) |
|
| (578 | ) |
|
| 391 |
| ||||||||||||||||||||||||||||||||||
State |
|
| (1,608 | ) |
|
| (984 | ) |
|
| (1,097 | ) | ||||||||||||||||||||||||||||||||||
Foreign |
|
| (4 | ) |
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||||||||||
Total deferred provision (benefit) |
|
| (6,673 | ) |
|
| (1,562 | ) |
|
| (706 | ) | ||||||||||||||||||||||||||||||||||
Total deferred benefit | ||||||||||||||||||||||||||||||||||||||||||||||
Total income tax expense |
| $ | 33,499 |
|
| $ | 19,316 |
|
| $ | 8,043 |
|
80
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31,2023, 2022 and 2021,
respectively.
|
| Year Ended December 31, |
| |||||||||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||||||||||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Statutory U.S. federal income tax rate: |
|
| 21.00 | % |
|
| 21.00 | % |
|
| 21.00 | % | Statutory U.S. federal income tax rate: | 21.00 | % | 21.00 | % | 21.00 | % | |||||||||||||||||||||||||||
Increase in rate resulting from: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||
Non-deductible meals & entertainment |
|
| 0.01 | % |
|
| 0.10 | % |
|
| 24.98 | % | ||||||||||||||||||||||||||||||||||
Officers life insurance |
|
| — |
|
|
| — |
|
|
| 1.65 | % | ||||||||||||||||||||||||||||||||||
Non-deductible meals & entertainment | ||||||||||||||||||||||||||||||||||||||||||||||
Non-deductible meals & entertainment | 0.12 | % | 0.01 | % | 0.10 | % | ||||||||||||||||||||||||||||||||||||||||
Penalties | Penalties | 1.19 | % | — | % | — | % | |||||||||||||||||||||||||||||||||||||||
Qualified transportation fringe benefits |
|
| 0.03 | % |
|
| 0.09 | % |
|
| 21.63 | % | Qualified transportation fringe benefits | 0.03 | % | 0.03 | % | 0.09 | % | |||||||||||||||||||||||||||
Equity compensation |
|
| 0.27 | % |
|
| 19.22 | % |
|
| 4284.57 | % | Equity compensation | 0.23 | % | 0.27 | % | 19.22 | % | |||||||||||||||||||||||||||
Executive compensation limitation |
|
| 0.16 | % |
|
| 1.28 | % |
|
| 224.53 | % | Executive compensation limitation | 0.86 | % | 0.16 | % | 1.28 | % | |||||||||||||||||||||||||||
State income tax, net of federal income tax effect |
|
| 4.05 | % |
|
| 6.03 | % |
|
| 359.74 | % | State income tax, net of federal income tax effect | 4.72 | % | 4.05 | % | 6.03 | % | |||||||||||||||||||||||||||
Unrecognized tax benefits |
|
| 0.05 | % |
|
| 1.70 | % |
|
| 407.72 | % | Unrecognized tax benefits | (0.11) | % | 0.05 | % | 1.70 | % | |||||||||||||||||||||||||||
Research & development tax credit |
|
| (1.39 | )% |
|
| (5.21 | )% |
|
| (1797.83 | )% | Research & development tax credit | (0.87) | % | (1.39) | % | (5.21) | % | |||||||||||||||||||||||||||
Return to provision |
|
| 0.06 | % |
|
| (1.76 | )% |
|
| (66.74 | )% | Return to provision | (0.34) | % | 0.06 | % | (1.76) | % | |||||||||||||||||||||||||||
Other, net |
|
| 0.25 | % |
|
| 0.48 | % |
|
| 0.57 | % | Other, net | (0.35) | % | 0.25 | % | 0.48 | % | |||||||||||||||||||||||||||
Effective rate |
|
| 24.49 | % |
|
| 42.93 | % |
|
| 3,481.82 | % | Effective rate | 26.48 | % | 24.49 | % | 42.93 | % |
|
| December 31, |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Assets: |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Accrued expenses | ||||||||||||||||||||||||||||||
Accrued expenses | ||||||||||||||||||||||||||||||
Accrued expenses |
| $ | 7,633 |
|
| $ | 7,031 |
| ||||||||||||||||||||||
Federal benefit of state tax expense |
|
| 5,790 |
|
|
| 5,544 |
| ||||||||||||||||||||||
Federal and state net operating loss carryforwards |
|
| 15,598 |
|
|
| 17,108 |
| ||||||||||||||||||||||
Tax credit carryforwards |
|
| 2,885 |
|
|
| 2,537 |
| ||||||||||||||||||||||
Lease liability |
|
| 8,549 |
|
|
| 8,797 |
| ||||||||||||||||||||||
Stock-based compensation |
|
| 5,359 |
|
|
| 3,756 |
| ||||||||||||||||||||||
Operating lease liabilities | ||||||||||||||||||||||||||||||
Share-based compensation | ||||||||||||||||||||||||||||||
Other |
|
| 103 |
|
|
| 24 |
| ||||||||||||||||||||||
Total deferred income tax assets | ||||||||||||||||||||||||||||||
Total deferred income tax assets | ||||||||||||||||||||||||||||||
Total deferred income tax assets |
|
| 45,917 |
|
|
| 44,797 |
| ||||||||||||||||||||||
Liabilities: |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Other intangible assets |
|
| 170,407 |
|
|
| 170,131 |
| ||||||||||||||||||||||
Other intangible assets | ||||||||||||||||||||||||||||||
Other intangible assets | ||||||||||||||||||||||||||||||
Property and equipment, and capitalized software |
|
| 14,307 |
|
|
| 20,529 |
| ||||||||||||||||||||||
Right-of-use asset |
|
| 6,960 |
|
|
| 7,221 |
| ||||||||||||||||||||||
Operating lease right-of-use assets | ||||||||||||||||||||||||||||||
Other |
|
| 1,740 |
|
|
| 2,289 |
| ||||||||||||||||||||||
Total deferred income tax liabilities |
|
| 193,414 |
|
|
| 200,170 |
| ||||||||||||||||||||||
Net deferred income tax liability |
| $ | 147,497 |
|
| $ | 155,373 |
|
$87 as of December 31, 2023 and 2022.
81
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
limitation of Internal Revenue Code Section 382 will cause $113,873 of the Company’s state net operating loss carryforwards to expire unused, and these amounts are not included in the Company’s gross deferred income tax asset. If unused, the Company’s state net operating loss carryforwards will begin to expire in 2023.2027. The Company had state tax credit carryforwards of $2,762$3,270 and $2,422$2,762 as of December 31, 20222023 and 2021,2022, respectively, which do not expire and can be carried forward indefinitely.
|
| December 31, |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Balance, beginning of year |
| $ | 4,918 |
|
| $ | 3,278 |
| ||||||||||||||||||||||
Increases related to prior year tax positions |
|
| 313 |
|
|
| 497 |
| ||||||||||||||||||||||
Decreases related to prior year tax positions | ||||||||||||||||||||||||||||||
Decreases related to prior year tax positions due to closure of statute |
|
| (389 | ) |
|
| (131 | ) | ||||||||||||||||||||||
Increases related to current year tax positions |
|
| 813 |
|
|
| 1,274 |
| ||||||||||||||||||||||
Balance, end of year |
| $ | 5,655 |
|
| $ | 4,918 |
|
82
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
for any portion of an award, the shares covered by such RSAs transferred automatically to the Company. On November 18, 2021, the last installment of outstanding RSAs vested.
|
| Number of RSAs |
|
| Weighted-average grant-date fair value |
| |||||||||||||||||||||
Balance at December 31, 2019 |
|
| 5,257,541 |
|
| $ | 22.00 |
| |||||||||||||||||||
Vested |
|
| (1,049,488 | ) |
|
| 22.00 |
| |||||||||||||||||||
Forfeited |
|
| (9,920 | ) |
|
| 22.00 |
| |||||||||||||||||||
Number of RSAs | Number of RSAs | Weighted-average grant-date fair value | |||||||||||||||||||||||||
Balance at December 31, 2020 |
|
| 4,198,133 |
|
| $ | 22.00 |
| |||||||||||||||||||
Vested |
|
| (4,195,215 | ) |
|
| 22.00 |
| |||||||||||||||||||
Forfeited |
|
| (2,918 | ) |
|
| 22.00 |
| |||||||||||||||||||
Balance at December 31, 2021 |
|
| — |
|
|
|
|
| Balance at December 31, 2021 | — |
|
| 2019 |
| |||||||||||
2019 | 2019 | |||||||||||||
Grant date fair value of options |
| $ | 7.73 |
| Grant date fair value of options | $ | 7.73 | |||||||
Risk free rate |
|
| 1.9 | % | Risk free rate | 1.9 | % | |||||||
Expected volatility |
|
| 32.8 | % | Expected volatility | 32.8 | % | |||||||
Dividend yield |
|
| — |
| ||||||||||
Expected terms (in years) |
|
| 6.0 |
| ||||||||||
Expected term (in years) | Expected term (in years) | 6.0 |
|
| Number of options |
|
| Weighted-average exercise price |
|
| Aggregate intrinsic value |
|
| Weighted-average remaining contractual term (years) |
| |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
|
| 908,775 |
|
| $ | 22.00 |
|
| $ | 6,380 |
|
|
| — |
| |||||||||||||||||||||||||||||||||||||
Exercised |
|
| (8,504 | ) |
|
| 22.00 |
|
|
| 44 |
|
|
| — |
| |||||||||||||||||||||||||||||||||||||
Number of options | Number of options | Weighted-average exercise price | Aggregate intrinsic value | Weighted-average remaining contractual term (years) | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
|
| 900,271 |
|
|
| 22.00 |
|
|
| 1,981 |
|
|
| 8.5 |
| Balance at December 31, 2020 | 900,271 | $ | $ | 22.00 | $ | $ | 1,981 | 8.5 | 8.5 | |||||||||||||||||||||||||||
Exercised |
|
| (17,860 | ) |
|
| 22.00 |
|
|
| 67 |
|
|
| — |
| |||||||||||||||||||||||||||||||||||||
Forfeited |
|
| (10,206 | ) |
|
| 22.00 |
|
|
| 37 |
|
|
| — |
| |||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
|
| 872,205 |
|
|
| 22.00 |
|
|
| 3,672 |
|
|
| 5.5 |
| 872,205 | 22.00 | 22.00 | 3,672 | 3,672 | 5.5 | 5.5 | ||||||||||||||||||||||||||||||
Exercised |
|
| (17,010 | ) |
|
| 22.00 |
|
|
| 17 |
|
|
| — |
| |||||||||||||||||||||||||||||||||||||
Expired |
|
| (51,602 | ) |
|
| 22.00 |
|
|
| 29 |
|
|
| — |
| |||||||||||||||||||||||||||||||||||||
Expired | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Expired | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited |
|
| (20,699 | ) |
|
| 22.00 |
|
|
| 16 |
|
|
| — |
| |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 |
|
| 782,894 |
|
|
| 22.00 |
|
|
| 783 |
|
|
| 4.3 |
| |||||||||||||||||||||||||||||||||||||
Options vested and exercisable at December 31, 2022 |
|
| 782,894 |
|
| $ | 22.00 |
|
| $ | 783 |
|
|
| 4.3 |
| |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 782,894 | 22.00 | 783 | 4.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | 408,976 | 22.00 | 3,251 | 5.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Options vested and exercisable at December 31, 2023 | Options vested and exercisable at December 31, 2023 | 408,976 | $ | 22.00 | $ | 3,251 | 5.5 |
83
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31,2023, 2022 and 2021,
respectively.
|
| Number of RSUs |
|
| Weighted-average grant-date fair value |
| |||||||||||||||||||||
Balance at December 31, 2019 |
|
| 114,044 |
|
| $ | 22.79 |
| |||||||||||||||||||
Granted |
|
| 310,225 |
|
|
| 28.27 |
| |||||||||||||||||||
Vested |
|
| (60,671 | ) |
|
| 22.49 |
| |||||||||||||||||||
Forfeited |
|
| (19,863 | ) |
|
| 25.62 |
| |||||||||||||||||||
Number of RSUs | Number of RSUs | Weighted-average grant-date fair value | |||||||||||||||||||||||||
Balance at December 31, 2020 |
|
| 343,735 |
|
|
| 27.63 |
| |||||||||||||||||||
Granted |
|
| 819,011 |
|
|
| 25.35 |
| |||||||||||||||||||
Vested |
|
| (106,110 | ) |
|
| 27.30 |
| |||||||||||||||||||
Forfeited |
|
| (33,237 | ) |
|
| 26.65 |
| |||||||||||||||||||
Balance at December 31, 2021 |
|
| 1,023,399 |
|
|
| 25.87 |
| |||||||||||||||||||
Granted |
|
| 525,195 |
|
|
| 21.29 |
| |||||||||||||||||||
Vested |
|
| (284,168 | ) |
|
| 25.93 |
| |||||||||||||||||||
Forfeited |
|
| (82,387 | ) |
|
| 25.41 |
| |||||||||||||||||||
Balance at December 31, 2022 |
|
| 1,182,039 |
|
| $ | 23.85 |
| |||||||||||||||||||
Granted | |||||||||||||||||||||||||||
Vested | |||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||
Balance at December 31, 2023 |
2023.
The following assumptions were used to value SARs granted during the periods indicated:
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
Weighted-average grant date fair value of SARs |
| $ | 8.67 |
|
| $ | 9.81 |
|
| $ | 11.18 |
|
Risk free rate |
|
| 3.05 | % |
| 0.63% - 1.04% |
|
| 0.42% - 0.56% |
| ||
Expected volatility |
|
| 37 | % |
| 37% - 39% |
|
| 38% - 40% |
| ||
Dividend yield |
|
| — |
|
|
| — |
|
|
| — |
|
Expected terms (in years) |
| 6.25 |
|
|
| 6.25 |
|
|
| 6.25 |
|
84
2022
2023 | 2022 | 2021 | |||||||||||||||
Weighted-average grant date fair value of Equity-settled SARs | $ | 13.96 | $ | 8.67 | $ | 9.81 | |||||||||||
Risk free rate | 3.79 | % | 3.05 | % | 0.63% - 1.04% | ||||||||||||
Expected volatility | 41 | % | 37 | % | 37% - 39% | ||||||||||||
Dividend yield | — | — | — | ||||||||||||||
Expected term (in years) | 6.25 | 6.25 | 6.25 |
|
| Number of SARs |
|
| Weighted-average exercise price |
|
| Aggregate intrinsic value |
|
| Weighted-average remaining contractual term (years) |
| |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
|
| — |
|
| $ | — |
|
| $ | — |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||
Granted |
|
| 831,902 |
|
|
| 28.42 |
|
|
| 139 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||
Number of Equity-settled SARs | Number of Equity-settled SARs | Weighted-average exercise price | Aggregate intrinsic value | Weighted-average remaining contractual term (years) | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
|
| 831,902 |
|
| $ | 28.42 |
|
|
| 139 |
|
|
| 9.4 |
| Balance at December 31, 2020 | 831,902 | $ | $ | 28.42 | $ | $ | 139 | 9.4 | 9.4 | |||||||||||||||||||||||||||
Granted |
|
| 894,411 |
|
|
| 25.59 |
|
|
| 363 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||
Forfeited |
|
| (38,111 | ) |
|
| 27.12 |
|
|
| 10 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Expired |
|
| (4,688 | ) |
|
| 28.48 |
|
|
| — |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||
Expired | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Expired | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
|
| 1,683,514 |
|
| $ | 26.94 |
|
|
| 571 |
|
|
| 8.6 |
| 1,683,514 | $ | $ | 26.94 | 571 | 571 | 8.6 | 8.6 | |||||||||||||||||||||||||||||
Granted |
|
| 1,030,037 |
|
|
| 20.72 |
|
|
| — |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||
Forfeited |
|
| (85,551 | ) |
|
| 26.58 |
|
|
| 31 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Expired | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Expired | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Expired |
|
| (31,361 | ) |
|
| 27.88 |
|
|
| — |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 |
|
| 2,596,639 |
|
| $ | 24.48 |
|
|
| 2,324 |
|
|
| 8.3 |
| |||||||||||||||||||||||||||||||||||||
SARs vested and exercisable at December 31, 2022 |
|
| 582,229 |
|
| $ | 27.38 |
|
| $ | 100 |
|
|
| 7.3 |
| |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 2,596,639 | $ | 24.48 | 2,324 | 8.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Granted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | 1,956,769 | $ | 24.68 | 10,336 | 7.5 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity-settled SARs vested and exercisable at December 31, 2023 | Equity-settled SARs vested and exercisable at December 31, 2023 | 912,542 | $ | 25.86 | $ | 3,729 | 7.1 |
2023 | |||||
Weighted-average grant date fair value of Cash-settled SARs | $ | 15.01 | |||
Risk free rate | 4.57 | % | |||
Expected volatility | 40 | % | |||
Dividend yield | — | ||||
Expected term (in years) | 9.7 | ||||
Suboptimal exercise multiple | 3.0 |
Number of Cash-settled SARs | Weighted-average exercise price | Aggregate intrinsic value | Weighted-average remaining contractual term (years) | ||||||||||||||||||||
Balance at December 31, 2022 | — | $ | — | $ | — | ||||||||||||||||||
Granted | 338,907 | 30.30 | — | ||||||||||||||||||||
Forfeited | (172,798) | 30.30 | — | ||||||||||||||||||||
Balance at December 31, 2023 | 166,109 | $ | 30.30 | — | 9.4 | ||||||||||||||||||
Cash-settled SARs vested and exercisable at December 31, 2023 | — | $ | — | $ | — | 9.4 |
85
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
year ended
December 31,2023.
AssetMark Trust Company,
AssetMark Brokerage, LLC,
equity-settled SARs.
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
Net income (loss) attributable to common stockholders |
| $ | 103,261 |
|
| $ | 25,671 |
|
| $ | (7,812 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares of common stock used in computing net income (loss) per share attributable to common stockholders, basic |
|
| 73,724,341 |
|
|
| 72,137,174 |
|
|
| 67,361,995 |
|
Net income (loss) per share attributable to common stockholders, basic |
| $ | 1.40 |
|
| $ | 0.36 |
|
| $ | (0.12 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic |
|
| 73,724,341 |
|
|
| 72,137,174 |
|
|
| 67,361,995 |
|
Effect of dilutive shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Options to purchase common stock |
|
| — |
|
|
| 9,913 |
|
|
| — |
|
Unvested RSUs |
|
| 148,487 |
|
|
| 252,126 |
|
|
| — |
|
Diluted number of weighted-average shares outstanding |
|
| 73,872,828 |
|
|
| 72,399,213 |
|
|
| 67,361,995 |
|
Net income (loss) per share attributable to common stockholders, diluted |
| $ | 1.40 |
|
| $ | 0.35 |
|
| $ | (0.12 | ) |
Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Net income attributable to common stockholders | $ | 123,119 | $ | 103,261 | $ | 25,671 | |||||||||||
Weighted average number of shares of common stock used in computing net income per share attributable to common stockholders, basic | 74,113,591 | 73,724,341 | 72,137,174 | ||||||||||||||
Net income per share attributable to common stockholders, basic | $ | 1.66 | $ | 1.40 | $ | 0.36 | |||||||||||
Weighted average shares used in computing net income per share attributable to common stockholders, basic | 74,113,591 | 73,724,341 | 72,137,174 | ||||||||||||||
Effect of dilutive shares: | |||||||||||||||||
Stock options | 86,155 | — | 9,913 | ||||||||||||||
Unvested RSUs | 237,863 | 148,487 | 252,126 | ||||||||||||||
Equity-settled SARs | 723 | — | — | ||||||||||||||
Diluted number of weighted-average shares outstanding | 74,438,332 | 73,872,828 | 72,399,213 | ||||||||||||||
Net income per share attributable to common stockholders, diluted | $ | 1.65 | $ | 1.40 | $ | 0.35 |
86
AssetMark Financial Holdings, Inc.
Notes to Consolidated Financial Statements – Continued
December 31, 2022 and 2021
Since the Company was in a loss position for the year ended December 31, 2020, basic net loss per share is the same as diluted net loss per share, as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive
|
| As of December 31, |
| |||||||||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||||||||||||||||||||||||||||||||||||
RSAs |
|
| — |
|
|
| — |
|
|
| 4,198,133 |
| ||||||||||||||||||||||||||||||||||
As of December 31, | As of December 31, | |||||||||||||||||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Stock options |
|
| 782,894 |
|
|
| — |
|
|
| 900,271 |
| Stock options | — | 782,894 | — | ||||||||||||||||||||||||||||||
Equity-settled SARs | Equity-settled SARs | 1,941,700 | 2,596,639 | 1,683,514 | ||||||||||||||||||||||||||||||||||||||||||
RSUs |
|
| 599,398 |
|
|
| 207,232 |
|
|
| 343,735 |
| RSUs | 61,680 | 599,398 | 207,232 | ||||||||||||||||||||||||||||||
SARs |
|
| 2,596,639 |
|
|
| 1,683,514 |
|
|
| 831,902 |
| ||||||||||||||||||||||||||||||||||
Total |
|
| 3,978,931 |
|
|
| 1,890,746 |
|
|
| 6,274,041 |
| Total | 2,003,380 | 3,978,931 | 1,890,746 |
We completed an internal restructuringdate.
2023.
companies.”
Not applicable.
88
2022
89
2022
(a)Financial Statements |
|
See the Exhibit Index immediately following the section of this Annual Report on Form 10-K in Item 16 titled “Form 10-K Summary.”(b)Exhibits
|
|
All schedules have been omitted because the required information is not present or not present in amounts sufficient to require submission of the schedules, or because the information required is included in the section of this Annual Report on Form 10-K in Item 8 titled the “Consolidated Financial Statements and Supplementary Data.”
90
2022
Exhibit Number |
| Exhibit Description |
| Form |
| File No. |
| Exhibit |
| Filing Date |
| Filed Herewith |
3.1 |
| Amended and Restated Certificate of Incorporation of the Company |
| S-1/A |
| 333-232312 |
| 3.1 |
| July 8, 2019 |
|
|
3.2 |
|
| 8-K |
| 001-38980 |
| 3.1 |
| July 22, 2019 |
|
| |
4.1 |
|
| S-1/A |
| 333-232312 |
| 4.1 |
| July 8, 2019 |
|
| |
4.2 |
|
| 10-Q |
| 001-38980 |
| 4.1 |
| August 28, 2019 |
|
| |
4.3 |
|
|
|
|
|
|
|
|
|
| X | |
10.1 |
|
| 8-K |
| 001-38980 |
| 10.1 |
| January 13, 2022 |
|
| |
10.2 |
|
| 8-K |
| 001-38980 |
| 10.1 |
| November 10, 2022 |
|
| |
10.3 |
|
| 10-Q |
| 001-38980 |
| 10.1 |
| August 6, 2021 |
|
| |
10.4 |
| Master Services Agreement, dated April 18, 2017, by and between AssetMark, Inc. and Incedo Inc. |
| S-1/A |
| 333-232312 |
| 10.6 |
| July 8, 2019 |
|
|
10.5 |
|
| S-1/A |
| 333-232312 |
| 10.7 |
| July 8, 2019 |
|
| |
10.6 |
|
| 10-Q |
| 001-38980 |
| 10.4 |
| May 9, 2022 |
|
| |
10.7 |
|
| S-1/A |
| 333-232312 |
| 10.5 |
| July 8, 2019 |
|
| |
10.8 |
|
| 10-Q |
| 001-38980 |
| 10.2 |
| May 9, 2022 |
|
| |
10.9 |
|
| S-1/A |
| 333-232312 |
| 10.1 |
| July 8, 2019 |
|
| |
10.10 |
|
| 10-Q |
| 001-38980 |
| 10.2 |
| August 28, 2019 |
|
| |
10.11 |
|
| 10-Q |
| 001-38980 |
| 10.3 |
| May 9, 2022 |
|
| |
10.12 |
|
| S-1/A |
| 333-232312 |
| 10.3 |
| July 8, 2019 |
|
| |
10.13 |
|
| 8-K |
| 001-38980 |
| 10.1 |
| March 10, 2021 |
|
| |
10.14# |
| Employment Agreement by and between the AssetMark Financial Holdings, Inc. and Natalie Wolfsen |
| 8-K |
| 001-38980 |
| 10.1 |
| April 29, 2021 |
|
|
10.15# |
| Employment Agreement by and between the AssetMark Financial Holdings, Inc. and Michael Kim |
| 8-K |
| 001-38980 |
| 10.2 |
| April 29, 2021 |
|
|
10.16 |
|
| S-1 |
| 333-232312 |
| 10.12 |
| June 24, 2019 |
|
| |
10.17# |
|
| S-1/A |
| 333-232312 |
| 10.10 |
| July 10, 2019 |
|
| |
10.18# |
|
| S-1/A |
| 333-232312 |
| 10.11 |
| July 10, 2019 |
|
| |
10.19# |
|
| 10-Q |
| 001-38980 |
| 10.1 |
| August 8, 2022 |
|
| |
10.20# |
|
| 10-Q |
| 001-38980 |
| 10.2 |
| August 8, 2022 |
|
| |
10.21# |
|
| 10-Q |
| 001-38980 |
| 10.3 |
| August 8, 2022 |
|
| |
21.1 |
|
|
|
|
|
|
|
|
|
| X | |
23.1 |
| Consent of KPMG LLP, Independent Registered Public Accounting Firm |
|
|
|
|
|
|
|
|
| X |
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed Herewith | ||||||||||||||||||||||||||||||||
3.1 | S-1/A | 333-232312 | 3.1 | July 8, 2019 | ||||||||||||||||||||||||||||||||||
3.2 | 8-K | 001-38980 | 3.1 | June 7, 2023 | ||||||||||||||||||||||||||||||||||
3.3 | 8-K | 001-38980 | 3.1 | July 22, 2019 | ||||||||||||||||||||||||||||||||||
4.1 | S-1/A | 333-232312 | 4.1 | July 8, 2019 | ||||||||||||||||||||||||||||||||||
4.2 | 10-Q | 001-38980 | 4.1 | November 5, 2019 | ||||||||||||||||||||||||||||||||||
4.3 | X | |||||||||||||||||||||||||||||||||||||
10.1 | 8-K | 001-38980 | 10.1 | January 13, 2022 | ||||||||||||||||||||||||||||||||||
10.2† | 8-K | 001-38980 | 10.1 | November 10, 2022 | ||||||||||||||||||||||||||||||||||
10.3† | 10-Q | 001-38980 | 10.1 | August 6, 2021 | ||||||||||||||||||||||||||||||||||
10.4† | X | |||||||||||||||||||||||||||||||||||||
10.5 | S-1 | 333-232312 | 10.6 | June 24, 2019 | ||||||||||||||||||||||||||||||||||
10.6 | X | |||||||||||||||||||||||||||||||||||||
10.7† | S-1 | 333-232312 | 10.7 | June 24, 2019 | ||||||||||||||||||||||||||||||||||
10.8† | 10-Q | 001-38980 | 10.4 | May 9, 2022 | ||||||||||||||||||||||||||||||||||
10.9† | S-1 | 333-232312 | 10.5 | June 24, 2019 | ||||||||||||||||||||||||||||||||||
10.10† | 10-Q | 001-38980 | 10.2 | May 9, 2022 | ||||||||||||||||||||||||||||||||||
10.11 | S-1 | 333-232312 | 10.1 | June 24, 2019 | ||||||||||||||||||||||||||||||||||
10.12 | 10-Q | 001-38980 | 10.2 | August 28, 2019 | ||||||||||||||||||||||||||||||||||
10.13 | 10-Q | 001-38980 | 10.3 | May 9, 2022 | ||||||||||||||||||||||||||||||||||
10.14† | 10-Q | 001-38980 | 10.1 | May 5, 2023 |
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10.15† | S-1 | 333-232312 | 10.4 | June 24, 2019 | ||||||||||||||||||||||||||||||||||
10.16† | X | |||||||||||||||||||||||||||||||||||||
10.17# | 8-K | 001-38980 | 10.1 | April 29, 2021 | ||||||||||||||||||||||||||||||||||
10.18# | 8-K | 001-38980 | 10.2 | April 29, 2021 | ||||||||||||||||||||||||||||||||||
10.19 | S-1 | 333-232312 | 10.12 | June 24, 2019 | ||||||||||||||||||||||||||||||||||
10.20# | S-1 | 333-232312 | 10.10 | June 24, 2019 | ||||||||||||||||||||||||||||||||||
10.21# | S-1 | 333-232312 | 10.11 | June 24, 2019 | ||||||||||||||||||||||||||||||||||
10.22# | 10-Q | 001-38980 | 10.1 | August 8, 2022 | ||||||||||||||||||||||||||||||||||
10.23# | 10-Q | 001-38980 | 10.3 | August 8, 2022 | ||||||||||||||||||||||||||||||||||
10.24# | 10-Q | 001-38980 | 10.1 | August 4, 2023 | ||||||||||||||||||||||||||||||||||
10.25# | 10-Q | 001-38980 | 10.2 | August 4, 2023 | ||||||||||||||||||||||||||||||||||
21.1 | X | |||||||||||||||||||||||||||||||||||||
23.1 | X | |||||||||||||||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||||||||||||||
32.1* | X | |||||||||||||||||||||||||||||||||||||
32.2* | X | |||||||||||||||||||||||||||||||||||||
97.1 | X | |||||||||||||||||||||||||||||||||||||
101.INS | Inline XBRL Instance Document | X | ||||||||||||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
104 | Cover Page Formatted as Inline XBRL and Contained in Exhibit 101 |
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2022
ASSETMARK FINANCIAL HOLDINGS, INC. | ||||||||||
By: | /s/ Michael Kim | |||||||||
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Chief Executive Officer and President | ||||||||||
(Principal Executive Officer) |
Signature | Title | Date | |||||||||||||
/s/
| Director and Chief Executive Officer | ||||||||||||||
Michael Kim | March 14, | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
Gary Zyla | March 14, | ||||||||||||||
/s/ Xiaoning Jiao | |||||||||||||||
Xiaoning Jiao | Chairman of the Board | March 14, | |||||||||||||
/s/ Rohit Bhagat | |||||||||||||||
Rohit Bhagat | Director | March 14, | |||||||||||||
/s/ Patricia Guinn | |||||||||||||||
Patricia Guinn | Director | March 14, | |||||||||||||
/s/ Bryan Lin | |||||||||||||||
Bryan Lin | Director | March 14, | |||||||||||||
/s/ Ying Sun | |||||||||||||||
Ying Sun | Director | March 14, | |||||||||||||
/s/ Joseph Velli | |||||||||||||||
Joseph Velli | Director | March 14, | |||||||||||||
/s/ Lei Wang | |||||||||||||||
Lei Wang | Director | March 14, | |||||||||||||
/s/ Yi Zhou | |||||||||||||||
Yi Zhou | Director | March 14, |
93