FOCS - Earnings call transcript Q1 2022 | Focus Financial Partners Inc

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Rusty McGranahan

Good morning, everyone.

Before we begin, let me remind you that during the course of this call, we may make a number of forward-looking statements. We call your attention to the fact that Focus' results may of course differ, from these statements. These statements are based on assumptions made by and information currently available to, Focus Financial Partners, and involve risks and uncertainties that could cause the results of Focus to materially differ from these statements. Focus has made filings with the SEC, which lists some of the factors that may cause its results to differ materially from these statements. no forward-looking does statements. assumes update undertake Focus such any finally, duty not and to And With to CEO, our I Founder that, will and Rudy turn Adolf. it over Rudy?

Rudy Adolf

We welcome Thanks, our Rusty. everyone, interest and Good call Focus. morning, today. appreciate your in to

of the the take on call, I events weeks. that have Before a details want to moment getting the into recent reflect geopolitical to unfolded in

conditions. of home. the unimaginable our This million XX% and We the European QX of our for margin revenue of and our We a this tragedy sacrifice stability of hits and our XX.X% close inhumane bravery, native again market organic was results, EBITDA business, year-over-year to grew the the spirit all of must morning and growth in revenues $XXX.X resiliency to the citizens acknowledge Ukraine excellent revenue such mix rate face the As particularly adjusted period. reflecting the we of challenging announced aggression. same diversity unprovoked during

Our XX.X% income per increasing and $X.XX $X.XX share was per tax by adjustments adjusted share excluding XX.X% adjustments respectively. net and was tax

of performance in partnership helping capital and clients our the high achieve worth again all quality market on ultra and also our across remain Our high continued our The execution. was they expectations net reinforced backdrop. evident to complex surface partner It macro is primarily these disciplined in is results that measures firms exceeded our cycles. the sophisticated, navigate preservation agile that critical to remember clientele seeks

of utmost market these prudent importance loyalty the is volatile advice when of are conditions the While relationships. reinforcing fiduciary

future firms value EBITDA the reflect management further find of reaffirm listeners April and partner markets. is continued strengthening strategically creation performance Azimuth but example. addition wealth first comparable because quarter invest have wealth enables the wealth is financial client the geopolitical the adjusted shareholders. management Year-to-date continuity business, XXXX plus into which is growth management in Although the to we in These X and a progress a industry. uncertainties firm industry Michigan targets investment dynamic and its challenge independent important persist The towards billion will our our targets management for will I and on distinctiveness an assets prominent well approximately leader. believe good substantial for in XX% firm and manages XXXX companies we of is capabilities services our its our team. us strengths well our it revenue complement our to with significant XXXX, of closed our known Azimuth to objectives. is that leading partnership, upside presence and in Azimuth targets $X.X market its in newest of established which for that

and one four closed completing who signed Advisors the also of merchant, close XXXX and Two for firms will first Wealth have merchants partner XXXX year-to-date these joined late respectively in and and one second in are for We additional transactions ARS us expect InterOcean, which mergers, their Connectus. we quarter.

our Octogone merger or dynamics Additionally, that U.S. of wealth similar growth the management Australia, Group and businesses These XXth expand expand of additional their both which and examples changes This and sectors first to are with regulatory our represents experiencing an cater large other reinforce independent partnership of by and Buckingham Switzerland. to UK this. transactions important add our signing and mergers firm which Canada completed our evolution ultra talent expertise Group, the partners high in their will are helping The worth announced high partner have sourcing first to Colony in in our countries net We strategy, in the discontinuities. and clients our international is attractive recently the year. opportunities. be similar

dollars always have business we enough our to is decentralized and many revenues our operations be support the opportunity. global partner flexible a meaningful partner that X.X% This firms outside coming expansion structure would Focus different from believe our that U.S. We of growth countries. international be Switzerland just of a envisioned assets, is firms Association in in similar a will to to demographic good of report the are independent trends this market is Managers, a that very that XXXX example the us. Switzerland a approximately the market half to Wealth Swiss annual the the According in characteristics trillion client are U.S. attractive is of

licensing for Supervisory Authority will for implementing which managers, be Markets sales is a requirements catalyst Financial Swiss independent the new Additionally, consolidation.

first We we with access globally. in net market, client and elite firms in billion wealth clientele. high Octogone one to Switzerland have is comprehensive geographies families pipeline in reputation, a largest Founded global East. Octogone reflecting substantial ultra and the specialists strategic truly high provides global decades markets will of acquisition other Reflective the management three Europe advantage mover us of net firms XX and us enter solutions quality over to the wealthy for in diversifying in the wealth and in high has and the our further Middle ultra focus, to spanning orientation. approximately high high expanding in global this XX of Europe, additional This net team believe growth is important and loss Octogone assets which its includes XX market significant business. its individuals in $X languages, footprint most the ultra market. and our U.S., new with while Its international nearly and a an nationalities give Latin management worth expertise ago, in significant worth America positioning a partnership

Looking pipeline robust. our is forward,

positioning another strong for M&A year. us momentum Our remains successful

to across Our business a to three model resume continues structures. acquisition our interest significant

trends M&A M&A industry activity saw for update in the According of term year likely and generation slowdown, a build industry. QX strategic continued new advantages advice last personalized was high driving a worlds strongest temporary has with of As increasing to to ever The scale, contrary XXXX. this any consolidation client pundits nature. highly of we to aging a for founders, in the long second first many later momentum or demand watermark of latest importantly set the and quarter unconflicted in quarter

As the U.S. Cerulli navigating historically staying growth the is average industry not value course just performance but opportunities asset successfully environment ourselves RIAs downturns. margin of market after including of cycles, this that XXXX client a first service their rates, been increased in and also about made creating clear, years again market their advantage during in post relative in positioning To the client of the has exceptional of take holistic crisis. will substantially the RIA to have arise the highlight current data, the geopolitical to growth The driver long-term this growth an two disruption all outperformance. about

these delivering As us believe in we of also credit of partners upside only to our that robust itself in clients planning, out partnership. continuing services they especially important XXXX. we investments, and performance substantial predicted financial that dynamic will trust dynamic in play when were market The attractiveness current our a QX the of to we central crisis. growth strongest their the but yet, emerge saw our as and QX value We shareholders. meaningful deepening which strength beneficiaries Surrounding resources alternative a this further and also XXXX, value-added of environment. this generated in are estate year few, same proposition, insurance, enables suite repeat Not name to our areas of our this We geopolitical our our such to capabilities. reinforce is with from

of remainder in also see programmatic within markets. model. and our and differentiated the as the internationally, our stability and come we both believe global and market, being to will capital. discipline M&A, year, stewards As to of again firmly value sights our our well will enormous business our in the as addressable turn soon appreciate to approach continued second size will the power investors the of U.S. They our this resiliency those and the good that appreciate proposition They our I quarter of of

our through of and successfully business years XX are our the history, in market learnings have embedded model. those from We navigated experiences dislocations

example quote another XXXX confident final continue to I Jim. Andy Our and will that his I of companies quoted of today. by be our industry crises. is think turning growth and business relevant performance beneficiaries that. call are we XXXX to by Great equally Rajini, destroyed them. be for the in the that survive was a companies companies year are them. substantial Grove great over and note before Jim? are in Bad XXXX, I Good will excellent Lenny, and improved consolidation. One

Jim Shanahan

business macro and against this delivered once quarter, backdrop. again Good We of morning, everyone. resiliency results choppy a our demonstrating the stability excellent

this what than are different performing the well partner driving and storm equally the in to equipped are environment current XXXX, While experienced well. very weather our firms dynamics are we

with than 'XX, have larger Connectus. substantially Our business to footprint just From were increased more QX is diverse, stronger a partnership and globally 'XX added where our months XX we XX QX ago. firms by we and

will better grew I will have emerge current and that same business stronger positioned adjusted XX.X%. revenues we challenges the no our even our Over by period, our growth. and XX.X% doubt for and successfully EBITDA the navigate

for our above Now and revenues increasing $XXX end of the the million, our million of million. turning $XXX P&L, high key $XXX.X QX range $XX.X guidance year-over-year XX.X% to elements were to our

with driven of our was not million amount outperformance office one-time in our by increase will and fees, associated family in revenue was services and which correlated QX. performance small revenues nonmarket of Our approximately $X a an recur

our primarily the want factors high-end to a growth revenue during Our of elements QX stress. was revenue the which also moment organic year-over-year of of periods to the highlight mentioned. to market guidance, XX%, drive I due of resiliency model our above XX% to our take just XX% several rate revenues I

or the fees. plus can't profits. enough primarily strongly XX% and recurring of revenues our of of nature transaction the and revenue our predictability and than to emphasize were are QX commission recurring our how on important fee-based other being is stability revenues in First, based rather I

revenues revenues from XXXX, of live events, provide period. Second, COVID are the markets. important will correlated an effects in Unlike on were by impacted as and source continue navigate these sources came of not QX they this the to to we XX.X% our diversification of when

QX another global provides our source international revenue from Third, sources, came which X.X% revenues important of diversification. of

because and revenues of XX% And generally approximately is an were XXXX XX% of had an movements been our our lag four also enabled the As management Rudy billed we of advance, variable we revenues us earnings is effect discussed, nature QX able for deliver quarter any also it a of positioned quarterly since revenues. guidance international correlated one source revenue navigate the so arrears. on our in of our quarter This priority. on plus in volatile market us were markets to have impact preference, elements, The market every billed and quarter, of strategic important structure reduces these the XXXX. to diversification successfully have on in fourth, our given combination why fees in They record tight any year are in QX the provided while important expansion resulting we the volatility XXXX. against

Our line of in XX.X% QX guidance our XX.X%, year-over-year adjusted XX%. was approximately and growth reflecting adjusted EBITDA $XXX.X of was with million our EBITDA margin

contribute As adjusted we XX on estimate revenues QX year. were Capital in last partner on merger EBITDA Azimuth last we Xst $X.X in the will million one completed M&A transactions Management, We lower quarter, our our QX. noted $X.X firm. anticipated during in closings and We Azimuth XXth closed QX million and closed April in given and approximately of QX we

than Additionally, our revenues contribute flows. and enhance $X recurring will million annual This million adjusted diversification approval, firm in $XX further revenues will close respectively. EBITDA and cash will QX, and and regulatory to we that anticipate more of estimated Octogone of the subject

mix. pipeline strong, high highlighted, transaction Rudy a As our with is quality XXXX

by Joining the high led space. dynamic is teams high independent net to catering generally ultra relationships management unique in the an stickiest international partnership and of management wealth in XX which and are worth clients, firms, industry, the

percentage was expect which relationships our approximately firms. of X.X% or cash and QX flow, revenues, we we approximately contractual partner QX slightly will have and revenues. expense with million, to lower Non-cash fees equity be in turning X.X% of sequentially. economic our XX.X% line reflective $XXX.X the of of compensation This Now with management was estimate, is expense our percentage a revenues, expenses were estimated

XX. of of estimated quarter million of in to drove $X XXXX our under impacted March estimate GAAP. in value the changes as first by Market a reflecting earnings, pursuant conditions The reduction simulations Carlo of fair non-cash these was liabilities of earn-outs long-term the Monte

recover, increase. markets estimates these As typically

available for of amplifying typical fee flow financial increase XX, our with performance growth effect release of our LTM allocation our XX.X% As sustained The our the partnership. annual capital increasing further was connection of hold-back our of year-over-year, March also management cash reflected and QX $XXX.X in million, the audit.

unamortized tax support excess as XX our shield $X.X flows in Our of gross cash billion March in and was periods. future will

obligations our in with $XX.X paid of will which QX million our that we QX. estimate estimate, in million, and cash earn-out also We $XX line approximately was be earn-outs

expectations. Now let in growth XX% me QX estimate organic be $XXX $XXX the XX%. our and our revenues that We our range to million, P&L to review of be revenue that QX million rate will will

QX. from approximately as reflects QX guidance QX our market well outlook recent revenue the not revenue approximately million recur in QX which in million acquisition from and as $X Our our revenues Included in Azimuth, is volatility activities. will one-time $X.X in

approximately adjusted between date. and that XX%, XXXX acquisitions bring XX%. half EBITDA margin shares anticipate our adjusted our QX average QX weighted increase outstanding with associated be our will will We margin which QX Additionally, first by XXX,XXX approximately shares to to would XX.X%

While our on quarter-to-quarter, our annual based business vary evaluate margin performance. we can

reaffirming growth challenging conditions. for mix our Importantly, reaffirm XX% annual and guidance revenue together our I'd our The EBITDA. revenues of strength we resiliency business, our market plus results and adjusted position of that of in year growth to QX despite the us of stability like with these target reiterate to are this

turn Now balance let sheet. to me our

times, range. expense estimate rates. the of which and this that net approximately trajectory net our As quarter leverage interest backdrop in have to the same estimated given our will you of about We had times. X.XX our ratio number X.XX year of X in a that we billion QX ratio of be within rising leverage I we of March of debt XX, the the was know interest asked a with $X.X ended range outstanding

weighted floating plus points, remaining include $X.X floor of is of larger The debt We to is loans. points loan, XX no with $XXX.X rate basis basis $XXX point plus $X.X use a a pieces. reminder, XX Tranche elements of LIBOR LIBOR basis has million a rate, a basis a few billion average swapped a The a which basis LIBOR rate which XXX points in A million our fixed LIBOR of As points. outstanding from spread a billion has interest floating of loan, a which LIBOR term has $XXX.X floor. XX typically million and spread XXX term B term Tranche XXX plus day our

LIBOR XXX was inhibit increase $X average growth quarterly we million. not points forma interest than term our an higher borrowings, type loan LIBOR day XX achieve basis have basis to Assuming expense in QX points pre-tax of pro XX year. during This on does our would rate ability of effect our forma incremental in quarter the pro this approximately targets of the

results interest extension with in revolver. to extended expense XX day term challenging evident plus benefits analysis date XX our QX a for briefly in our financial markets. change effect results revenues our I pre-tax but once to and which during the wanted the earning material year. on us on on show our of various maturity anticipate XX% in a interest of our comment our adjusted future were in enable EBITDA We sensitivity extension, of QX on the our also this revolver our We for revenues the as targets this very LIBOR. we'll have included period diversification our growth strong our duration reduces page again expense The on reaffirm the you supplement LIBOR, rate use effect to we of for risk. will further benchmark revolver closing, In of interest XXXX, replacement have any a June don't to Concurrent periods. financial SOFR increases recent

fully planning current resiliency navigate recently the have are after crisis our partners' was stability major it we expect evident results deep, we We the post on -- offer our believe most to will relationships as as the businesses built test we time substantial turbulence. will growth as to and and evident we results. cycles. in our other has long-standing continue period, actively market have the current geopolitical of of many XXXX, Our Similar also be stood across that opportunities are that XXXX for firms partner and which crises, client

our As on side. strong one which about of it's environment fitting as the storm, coming weathering other the it's not partner firms is in about said for out XXXX, today's well,

the Let over me operator now. Operator? call to for the turn Q&A

Operator

a ahead. [Operator question of Thank Siegenthaler session. Bank go from America. Craig will you. answer we First and time, At of Instructions] conducting be is this question Please

Craig Siegenthaler

Good doing on congrats and your well you're morning, both first transaction. Rudy, Swiss Jim. Hope

Rudy Adolf

Very Craig. exciting. you Thank

Craig Siegenthaler

the U.S. my first So, competitive RIA landscape one M&A. is on for

Given I'm of you target in rates, are the transactions? future landscape? is in sharp the correction year-to-date benefit pull really which bond could competitors any in prices have with for future your higher seeing multiples combined any and competitive your change seen you back, equity what And looking

Rudy Adolf

as the have in improved. for of time returns we know, kind showed very of kind we to never proposition, entrepreneur, capital, want where, multiple have been So, a yes, that proven you You competitive worried seen value actually Focus Investor we game Day, And big the in in access have value-added and we over deployed unique town. Craig, our inflation, want only yes? because to we to have want you permanent be have you that deploy overly never capital services, way actually we And pressures in about an have capital.

are year. last avoided certainly -- So, that I some heavily overpriced drunken of them we, we think many we yes, is that, called yes, And transactions I yes, -- are do look our the seen of seeing yes, maybe in these so I see we at what have are capital. buyers stable, even now. deploying slightly frankly our quite way multiples see suffering And, pipeline, yes, improving, the we when we the sailor transactions,

a I years last strong will be can one -- year, quite yes, year. last yes, but models pipeline. of highly that most what if a our P/E level with on tell, the buyers these, probably over-levered, not very, suffering foreign some of successful improving. and others, have we from and deals very some will not are can as we yes, state of they again, M&A So, are very And, successful And that did type XXXX confidence have one the yes, multiples yes, of stable, we from, year. yes,

Craig Siegenthaler

And Thanks, follow nice up, was to market, new Switzerland. deal Rudy. just my a it for in see a

So guys obviously very are U.S. now in you big the

You kind of be could Switzerland, markets What have markets. next? Canada, Australia, very five UK, large

Rudy Adolf

with one the And we to Rudy dollar But a to this we I in quite excited and traveling and really market, similar I of be It's it. the have of in couldn't our yes, first announced managed Adolf about Swiss have Octogone, many market. for there. players, just dynamics. yes, Switzerland, more the out following watching close -- trillion Well, deal in market. top years still half we attract market frankly, been we a

So, well in stronger. transaction, yes, yes, actually it's team response we we spent have with boding for -- And, the been this market. quite future not frankly, could the announced also time this the when I yesterday,

management I've yes, in But most -- yet. nothing to wealth to attractive where locations announce we the industry. constantly are looking at, the Additional yes, are markets.

track wherever we that, competitive think TAM ready, I yes, capital. the are to yes, markets opportunities. we number the is, are course, in diversify the these Most XXXX. unique add tentacles yes, ultimately, a Switzerland. yes, us we are we best and our, deploy markets. two, this that into, by strong gives and a And have the see we in our the one doing will of the record here us distinctive into, U.S.; deployment since importantly, board growing here. we And, expanding number three, is added continue we've managed on there this markets capital a we of in if have deploying now yes, that drawing when, we a very have firms, ability continue other partnering Rule can We well -- very and already presence; with yes, for yes, advantage obviously of And entrepreneurial capital to

Craig Siegenthaler

Rudy. you, Thank

Operator

question Our is next Oppenheimer. ahead. go Please Lau from Owen of

Unidentified Analyst

Marc Palucci you taking my Owen. It's on Thank for for question.

growth. Just XXXX-XXXX revenue wanted your for you reaffirmed to target ask, EBITDA XX% and

has Given M&A volatility, equity confident markets weakness like reaffirm down of guidance? What you recently. in makes and you feel this you. Thank looks it kind the can slowed

Rudy Adolf

this it guidance, a do was Well, little of gave reinform we course, that. slower the did but yes, excellent really a to side, closed, us But the XX terrific XX Jim frankly, year, the and, and first -- usually was year results a do on it, and came QX M&A where is. easily in foundation out last QX I don't when transactions we quite reaffirm what quarter we deals. Jim, just of

breather first needed But quarter. to before, the we bit in strong. little take pipeline So, a a of I very is said as

and, see very after of of framework are the within deploying value capital. that the one other are announcement financially we will of both that attractive course, and You high transactions, strategically transactions

in you and the yes, what storm, remember certainly COVID of we if impact most storm, the XXXX that really of demonstrating is into and since ultimately of simply of the recovered -- weathered and quickly turned in correction had when public. some the this out the business, quarter how impacted full of you we've see So, XXXX we successful how really we business second model. year, resiliency momentum are of our out we being market yes, again demonstrated XXXX, Yes, been the the the well anything, XXXX what

our remind financial in Focus margin an in confident, you, billion XXXX context revenues, the are more even We adjusted long-term our revenue provide of are they of trekking we billion XX%. believe that, yes, to plus that towards, And, this XXXX. but that we $X.X So, are think this are yes, EBITDA, growth, -- don't $X of I yes, guidance, many ambitious in important, but and goals. and, achievable, yes, XX% there XX% can services see yes, plus EBITDA very businesses growth. in

yes, trekking XXXX, So, confidence as 'XX. also in we confidence but towards are

Jim Shanahan

Yes.

add only our in largest the M&A maybe I'd is team. have think obviously, the I thing industry, we

partner firms partners. new extension an that. the to acquisition go market are And Our you three models know, with adding as of we

Connectus about firms. plus our or launched do We we year ago, have and for that a we mergers

over for now have accretive are we that firms mergers. platforms XX So,

of kind the that gives even So, XX% to us the visibility market and confidence XXXX, pipeline times during for goals of volatility. these into set

Unidentified Analyst

provided Focus the allocation. remained Thanks one team interest and looming of around this the has -- you color. been can have, of you in of anything Great. situation I for the through that maybe weather to if out the slide shields color that you're or you you you storm. a the have But maybe pull some you past some the then recession I call on management know, horizon, And resilient. can appreciate just capital is, levers your could has talk XX of more kind rate the on sensitivity. Maybe if some thinking with about about how

Rudy Adolf

important some they there some in can selling other I go of that course, yes, here. more of Jim during times yes, time just many, matters this yes, really There of still performance many defense absolutely providing, were assets of then volatility, many of times advice by and, geopolitical are a frankly, basis again, almost in we very and advice want was, delivered EBITDA model. critical. these it to when things, back not, out in And it kind are business yes, XXXX yes, from that certainly Jim, XX% And is complexity, yes, an clients, years. growing, financial is quite prudent have tough in changes, geopolitically. resilient client economy, Yes. These clients this best XXXX, that this sound business is just go advice But is uncertainty, frankly, this. retention, through the led but want usually, broker, referrals, for advice, know you XXXX. yes, client new yes, aspects yes, the we yes, This And certainly But where are structure of most. tremendous but for to to consolidation yes, don't tax through on is this -- callous our very like looking those like do to holistic, no when XXXX, advisors shields? fiduciary made holistic our quite to shields who was

Jim Shanahan

just I XX% the mean, noted would plus say, recurring some with them a of remarks. business I in prepared we're But, Yes. fee-based revenue. I

management second are Our that fees, at nature. in partner firms Obviously, largest our which to correlated all. our of we're variable market expense, XX.X% of the revenue. further internationally, in gives aren't new adding are so QX revenues operating a diversification our

support P&Ls business. run on the flow. cash generate continue the they'll their P&Ls manage accordingly are how XXXX the clearly and cost was And margin to times. of volatile to by in who know Our This great to of COVID. the entrepreneurs now, certainly onset evident during volatility structure And we we have run some

doing then there down to flow extreme redeploy grow. acquisition. business cash or capital And volatility, we periods LTM to for that are an cash vis-à-vis that debt into we Our use the excess if pay would allocation continues of

Rudy Adolf

does question? answer your that Marc,

Unidentified Analyst

set. guys. All Thanks, Yes.

Operator

question Goldman Blostein next from of Please Sachs. is Our Alex go ahead.

Unidentified Analyst

is Brian on Rudy actually Jim Alex. morning Good behalf and of this

Rudy Adolf

Hi Brian.

Unidentified Analyst

are had question mergers, merger to what just what And the XQ. to How's in hearing continues it your merger firms, a thinking about given looks wondering going? So, which them volatile speak target was from for solid your backdrop. like And can market be also, firms partner if conversations? you then I in the you I are on activity, it

Rudy Adolf

Yes.

we industrial to many So, so Ryan, scale want, mergers that It's, in you brought ways, this was if industry. innovation. really an an

have and of over years the We have mergers expertise. or done probably XXX so build just tremendous

transactions. XX merger last Year-to-date, either which are may we of course, You remember five closed announced XX or mergers, already we of the which includes, transactions, have year transactions. did

is It's a scale. and with So, clients a in critical grow. to firms way prospects, team similar similar and quite is frankly, what terrific partner cultures and small firm a a with terrific to way for, similar ultimately this that teams is our industry, and yes, up for accomplish this or medium sized

are So and very have when for difficult support as business. better. Typically, grow what second, services. enough develop time of dilemma have or have little frankly, support reasons; is, do advise so grow They have general to four geographic for they new in yes, and new Two, for first, sized because to at more mergers expansion; -- are around is firm; is need very, importantly, mergers quite firms provide to such, Growth industry don't clients. course, And them, in a many clients this you're yes, services a first, they important to now, important, deliver very to of more particularly these to it and is three, expense to helpful. yes, frankly, to And much you entrepreneur's medium synergies age and right can next course there very this yes, day talent are is and this sophisticated yes, yes, partner to generation add in be a here that firm; then, driving they because their of that very where, services. firms, everything. small classic of can kind most have larger scale, easier quite smaller can't

a critical a why and we So, of terrific business reason model, pipeline. very partners have important part us, join our merger

Unidentified Analyst

you with stock that. one from question deals, the thinking if you're use just maybe given the wondering for around your on I about could the and outlook just was year-to-date XQ. what's price the equity just for comment And how Okay. of happened thoughts

think like you're philosophically. implication is But guess from thinking something the how about wondering more roughly. just I was I it the I million-ish XX shares XXX,XXX

Rudy Adolf

Yes.

is yes, the time, I when reasons, are sometimes tax of and, of kind that stock do most foremost very a we very tax of a But time that quite -- it So, for very use. said that use use to cash, an and to quite and is stock, and, will deals for need efficient currency as And well. feel we deploy. be this us is frankly, to interest there there frankly, deeper currency we attractive first level are yes, reasons But there, attractive for as alignment. cash case. cheap very and to continue all the still Yes, from we strategic a

into use factoring part when of the, are the transaction. just here stock, of of that are formula we at look economics course, using. the we yes, of accretion we it's The a So,

a we look economic equation. that XX.X have. currently at of stock yes, just strategic we use then will outstanding right But continue basis. see when shares we it's very opportunity, the course, And part exception the an Of small tax-wise, we when on percentage the million to it's

Unidentified Analyst

you. it. Got Thank

Operator

question Voight Kyle of from go is ahead. Our KBW. Please next

Matt Moon

for Hi, actually on this Matt is Kyle. Moon

one me. Just capital management for on

or a of wondering an here, -- with the Just how and as just about you're leverage versus you capital ever capital your maybe program of buyback of sitting would the lower range, performance M&A about stock specifically or half guys use of if a kind towards paydown. repurchase your from debt if given thinking consider year-to-date, target I'm alternative thinking you use

Rudy Adolf

Day. committed we foremost, manage is towards this not and we north Investor stock IRRs on XX%. showed out business, first Well, we the journey, of create in the certainly, laid short-term XX% have is doing ultimately, we are transactions the this the Investor that When the journey, and stock. deploy and the XXXX of business And are not capital, The volatility. we that in we business, Day, this stock not

thing. short-term a I see we opportunistic Buybacks is think tremendous very a So, opportunity.

course, Of attractive and, pipeline Quite when now that that it we are returns look generating this we the capital are really we the would will the not at terrific want math we frankly, business and here. to we looking frankly, strong right deploy be quite -- build. given

opportunities, have will price. demonstrated. have along you've and excellent And share there yes, now we but to business the -- the And manage we alignment when with got a factor, ultimately, patient, the frankly, here. So, business continue the just performance it's we that be will yes, an be quite and tremendous between discipline to way

Matt Moon

then And Okay. for going me just one back Octagon. another to just

into that trends? this specifically? it that I in think country the you is aggressive term that you've -- guys us pushing sized more to of that those And near the might guess targeting maybe are those seeing that I think maybe mean you're financial fair just who you the be that what with attractive and U.S., for characteristics compare will just an that the with familiar characteristics since familiar of market, given advice in secular opportunity, could to trends and as the market the more makes maybe we're this in not space, go the in region of you through

Rudy Adolf

Yes. Yes.

we, the yes, -- we well. I frankly, and quite personally very Swiss know yes, So, market,

are just business -- or We stated Days, opportunities internationalize a are on yes, more. to Swiss was capital I a of very other of client yes, management businesses. we kind going in believe Switzerland's quite mover long calls to have starting has, market. the We way. these market have into advantage Investor frankly, the getting. For potential. that yes, the first we diversity a built tremendous a tax frankly, a globally, tremendous that we need we career, very high-quality a issues almost quite you of just if like tremendous has forward. on and like it quite time frankly, an I these on want cleaned hub to out had strategic my really like the that to any up with, Octogone, management yes, up with wealth And we footprint of that new partner have It industry will earnings in the starting like returns high-quality in of expertise And objective to We relationships And and after centuries market. they winner, they the are in ultimately, be of in absolute have the we all, markets. markets credit, wealth these that deal the with turned in yes, in expecting very, you

-- I We announcements, not this push quite of everywhere. opportunities the more right have expect But in as for strong market. have it's And a frankly, pipeline. -- we yes, some because, course, we said, it's very yes, we so, And aggressive opportunities, we yes, will There in it more But But are be tuned. these very strategic with has long-term stay of the see in we be kind right of to a the opportunity right eager that to deploy transactions. potential, number international capital these markets.

Matt Moon

Okay, great. Thanks guys.

Operator

Michael Our go of Young Truist next question ahead. Securities. Please is from

Michael Young

up of Hey, good on follow M&A question. to Wanted kind international the morning.

the both pent-up through deals that otherwise? would of from demand caused delay that given come should there the has at we Russia markets disruption might kind have And the volatility any Just in that and equity Europe, maybe issue of like be all? of some expect

Rudy Adolf

we them, when here business nobody you of firms, that see for that yes? reality It's with is their number when you're is, a Well, And the just very -- being we case. in it's a yes, in -- able much quite frankly, Adolf are this yes, one frankly, market very one one are regulatory has course, need in. impact high-quality Russian kind so dynamics simply Europe, that consolidation feeling of created kind of we This clients, no ultimately any you're really can envisioning. these the into are of a the drivers that to, the many of turn in is Rudy that war so to half a to true there in traditional these somewhere impact, we in operating doing you're that is, yes, Octogone in regime closer, platforms yes, than FINMA, X,XXX, and particularly rigorous of not that the got mergers, have the clients, make universe That's are at. trillion impact. be will Russian And good yes, X,XXX sure of these markets of You've that firms market smaller large to similar U.S., of yes? are very regulatory of very tangible new markets adjust authority, many so looking targets a quite players. But we fundamental a that, a otherwise, States.

but we you cognizant, we unique course, are realistic in have markets. yes, so business number And very in we that this market, will the offering a going any just yes, of on there. in here, world yes, what's -- time, at the terrific So, are be ahead of us out to under these need model a in pipeline, the assumptions same of

Michael Young

Jim. And great. for maybe Okay, one

perform and if we costs, cut more is And as structure are a the firms broadly, the obviously, was in then guide terms mentioned, Just what had on just market curious to into maybe you which, entrepreneurial markets of worse. dislocation, sort at kind can these XQ they'd- guide can - assumptions But separately, margin they going that of the just businesses. some point -- heavy EBITDA of that aren't thinking bigger that EBITDA XQ cost -- performance. for there just extent

to actually you cut EBITDA much an can costs? start margin how So feel they really when And would squeeze?

Jim Shanahan

fees the had stability. XXXX And We in to our if quarterly feature it's with of margin think, volatility. had of test really and a the a very say nice I during model model, unique I XXXX, often think have you It's feature you at that that. volatile Yes, look of reset management and go extreme results was a I the times. profitability. the we

So, as business and just recurring manage fee-based our Obviously, right? we I fortunate revenue the know to we're model, commented to -- partners margin. a critical. have That's how earlier, maintain the

it's as very We has of earnings the resiliency have firm. in with correlated $XXX built guidance provided million of for revenues over that been grown XX%, our of margin. support visibility on the the the was $XXX probably market majority which guidance. the that supplement half lot our we're the time, support minus And preference proud to are you that revenue. our reflects line first And the this and billed that margin. our in of QX, in and year, about into -- be Connectus because, a the margin acquisition that a QX provided in advance, enhance Obviously, market of slide of partner time the XX.X% built talks earnings as we'd over helps will we've new which the QX plus so of or we've million volatility in know, of

Rudy Adolf

yes, that, when to yes, little are trajectory speaks optimistic. model power business. the we perspective, XXXX expenses adjust this continue out do when yes? and to business optimistic and see of are a Yes, will the from point, They we adding we ultimately partners, prospects, yes, at think to talking the maybe the also remain with about of we business are yes, not see more XXXX also it our I the very And just trek talking to it towards that need this there very, certainly a you to resiliency they objectives. guidance, very

Michael Young

Thanks. great. Okay,

Rudy Adolf

you. Thank

Operator

Blostein line a We from Please Goldman of Sachs. ahead. of Alex go have follow-up question the

Unidentified Analyst

here. Hi, Ryan in was comments about make sort of the sure and this to over again and the quickly I a tie few -- course thinking the of acquisitions year. of I just mergers wanted of pace together terms right the

be, the would the XXXX once again, said comments you've you one pipeline. on think years positive I of successful had, So, most

of have We the sort dotter to-date. year of deals

terms And XQ. which which XQ so, was very deals path very, to a pace better sort XQ, the XQ, this same of look in sort year better the should of I'm similar was which that Is was quarter, seeing on year? strong built to -- expect we than last you're of just for wondering, than that of

Rudy Adolf

looking where at impossible of the to Ryan, be one our timing at, it's just what can That's announcement most see said transactions. attractive I precisely M&A yes, this going difficult, quite But certainly of to a that is are, the pipeline, skills. stand beyond M&A before is, much kind of say very time But even successful will I closing number we so announced. then actual timing more looking of our to yes? of Like and we announcements. years. Octogone very QX, actual just QX, the are we I

be and a but it's M&A very it do We year, quite the this But is predict. -- regulators way last QX to yet in at strong we yes? of closing, -- the again very It's really But very, look which going really very know? year. much to be so, where like and yes? the I be we in to and QX, close timing going makes expect hand again to it not a Could Jim difficult are, lawyers yet

Unidentified Analyst

sense. Thank you. Makes Okay.

Operator

gentleman. and Ladies

Rudy Adolf

Operator any more questions?

Operator

No, to for sir, further questions. remarks. we no Back have closing you

Rudy Adolf

Okay. Rudy Adolf

the as closing, resiliency I'm In of the all. strong backdrop. excellent that we fundamentals macro quarter extremely you business well challenging proud thank demonstrating had, in the as despite our of our So, momentum

deliver were as level our and partnership, us helping to holding nimbleness global company our of partners the of the diversity in our team scale as instrumental this well Our of in performance.

firm strategic Switzerland, leading further our a our enhanced expansion continue invest that value-add firms. in TAM. partner our to providing We partnership and an our execute resources wealth complement into on management and expanding in that firms signing substantial We to further top market important services,

deliver and in remains many our you are substantial undervalued Our to shareholders. all elements upside and as we of points current momentum the year excellent positioned M&A interest. contribute future for deliver to are XXXX believe today your will we strong we of capitalize but the on industry well Thank these value another prospective Each which opportunity. business, to in Bye-bye. our

Focus Financial Partners (FOCS) 7 May 222022 Q1 Earnings call transcript