管理層發言
Good day, ladies and gentlemen. Welcome to the Abacus Global Management First Quarter 2026 Earnings Conference Call. (Operator Instructions) Please note that this event is being recorded. I would now like to turn the call over to Robert Phillips, Abacus Global Management's Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead, sir.
Thank you, operator, and thank you, everyone, for joining Abacus Global Management's first quarter earnings call. Here with me today are Jay Jackson, Chairman and Chief Executive Officer; Elena Plesco, Chief Investment Officer; and Bill McCauley, Chief Financial and Chief Operating Officer. This afternoon at 4:15 p.m. Eastern Time, Abacus Global Management released our first quarter 2026 results. This afternoon's call will allow participants to ask questions about our results. Before we begin, Abacus Global Management refers participants on this call to the Investor web page, ir.abacusgm.com, for the press release, investor information and filings with the SEC for a discussion of the risks that can affect the business. Abacus Global Management specifically refers participants to the presentation furnished today on Form 8-K with the Securities and Exchange Commission and reminds listeners that some of the comments today may contain forward-looking statements and as such will be subject to risks and uncertainties, which, if they materialize, could materially affect results. For more information on the risks, uncertainties and assumptions relating to forward-looking statements, please refer to Abacus Global Management's public filings. During the call, we will reference certain non-GAAP financial measures. Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized meanings under U.S. generally accepted accounting principles or GAAP. Please see our public filings for additional information regarding our non-GAAP financial measures, including references to comparable GAAP measures. With that, I'd now like to turn the call over to Jay Jackson, Abacus Global Management's Chairman and Chief Executive Officer.
Thank you, Rob, and good afternoon, everyone. Having had the pleasure of speaking with many of you in the weeks following our fourth quarter earnings call, I will keep my remarks focused and direct. I want to lead with the headline. Based on what we are seeing in the business today, we are raising our full year 2026 adjusted net income guidance from a range of $96 million to $104 million to a new range of $100 million to $106 million, lifting both the low end and the high end of our range. The new range translates into $1 to $1.05 in adjusted EPS. The conviction behind that decision comes from a few drivers we are seeing in real time. We raised $288 million into our longevity funds this quarter on top of the $275 million in Q4. By way of context, we raised $630 million across all of 2025. The step change in fundraising we saw at year-end has carried cleanly into the new year, and our pipeline continues to grow. In Q1 alone, we reviewed nearly 9,000 qualified policies compared to roughly 11,000 across all of 2025. The flywheel is working exactly as designed. Increased assets under management drives origination and our infrastructure is meeting that demand. That near-term visibility is what gives us the confidence to provide a forward quarter guide alongside our full year range. For Q2 2026, we expect adjusted net income of $24 million to $26 million or $0.24 to $0.26 in adjusted EPS. I want to spend a moment on the shape of the year because the pace of our growth over the past several years has obscured a normal dynamic in how we operate. Revenue does not flow evenly across quarters. January is typically our lightest month with activity picking up through February and March, then running robustly through spring and summer. August is generally a slower month for both deployment and fundraising before momentum picks back up in the fall and builds through a strong fourth quarter finish. Q1 adjusted net income came in at $20 million. Q2 is guided to $24 million to $26 million. The back half is historically our strongest, and that is the path to our raised full year range. Bill will walk you through business operations and financial results, and you will see that strength reflected across the metrics that matter. Elena will cover our KPIs and capital allocation. But first, let me set up the two dynamics that I believe define this moment for Abacus. The first is the current macro environment and what it means for our asset class. The uncertainty that has characterized Q1 has created a defining moment across the alternatives landscape. Investors are reassessing where they allocate capital. They are moving toward assets that are genuinely uncorrelated from market sentiment and credit cycles. That is precisely what Abacus offers. Our yield is mortality-driven, not rates driven. That means our returns are structurally uncorrelated. And this quarter, that distinction drove capital to us in a meaningful way. Assets under management grew substantially in Q1, fueled by capital inflows from investors who understand that we are not private credit, we are the alternative to it. Now, I want to address something that is important for investors to understand clearly, the relationship between increased demand and purchase discount rates. As more institutional capital has flowed into the asset class, buyers are competing more aggressively for policies. That competition means buyers are paying more for each policy, which translates directly into lower purchase discount rates. I want to be emphatic about this. A lower purchase discount rate in our business is a positive outcome. It reflects rising asset values and expanded long-term spreads on the contracts we already hold, and we believe this dynamic will continue through 2026. The second thing I want to highlight is what I consider one of the most important proof points this company has ever delivered, and it happened this quarter. Our LMA Income II Fund reached the end of its initial term. This is a fund we launched three years ago that grew to approximately $115 million in assets under management. At conclusion of its term, we returned capital to every single investor who requested it, 100% on time as promised. Returning investor capital at the end of a fund's term should be the norm. Across the alternatives industry today, it is not. At a moment when restrictions on investor capital have been commonplace, when redemption gates have become accepted norms, Abacus did what we said we would do. And here is what makes it even more meaningful. Approximately one-third of those investors chose to extend their investment and another one-third reinvested their capital into our new products. This is not just capital retention. That is an affirmation. Investors who had full optionality evaluated this asset, evaluated these funds and chose to put more capital to work with us. That is the strongest endorsement we can receive. Bill will address the balance sheet impact in detail, but I will note that this event reduces debt on our balance sheet by more than $75 million, further strengthening our capital position as we move through the remainder of the year. Looking ahead, I want to highlight two transformational growth opportunities that I believe will define the next chapter for Abacus. The first is our investment in Manning & Napier. This relationship continues to progress with real momentum. The strategic alliance and distribution agreements are both taking shape, and we are already working to integrate our respective platforms. Manning's existing infrastructure is robust and well suited to support what we are building together. This is not a passive investment. It is a distribution partnership that we expect to materially expand the reach of our products to a broader base of advisers and their clients. We expect early results from that alliance in Q2, and we'll have more to say as that relationship matures. The second is our securitization program. Following the success of our first securitization, we are actively targeting a second significant securitization in late Q2 or early Q3. Securitization is a powerful tool for us. It allows us to recycle capital efficiently, diversify our funding sources and demonstrate to institutional markets the quality and consistency of the assets we originate. A second transaction in this time frame would represent a meaningful acceleration of that program and further validate the institutional credibility of this asset class. We will provide updates as that process advances. With that, I will turn it over to Bill.
Thanks, Jay. I want to cover two things. First, how the business operated during the quarter; and second, what our financial results reflect about the momentum Jay described. Then I'll turn it over to Elena for KPIs and capital allocation. Jay covered the headline drivers for the quarter. I want to get into the operational detail underneath them. The deployment volume Jay referenced ran through an origination process that remained highly selective. We reviewed a substantial number of qualified policies in Q1 and closed at a rate consistent with our historical standards. We did not relax underwriting to meet demand. The higher inbound flow simply gave us more to choose from. Elena will take you through the specific metrics, but the headline is that volume went up and quality held. The most direct evidence of how the operational pieces came together this quarter is the cash flow statement. We generated $91.7 million in operating cash flow in Q1 2026 compared to negative $61.6 million in Q1 2025, a swing of more than $153 million year-over-year. That reflects three things converging at once: policies on our balance sheet generating cash through trading and maturities, the LMA Income II Fund completing its initial term and releasing capital, and the underlying operating leverage of the platform as we scale revenue without a commensurate increase in cash costs. Cash conversion is the ultimate test of whether the model is working and Q1 passed that test decisively. On the portfolio, the short version is that quality and margin are both tracking ahead of target. Realized gains for the quarter exceeded our 20% long-term benchmark, and our seasoned assets continue to appreciate in line with actuarial expectations. Elena will walk through the detailed KPIs of turnover, weighted average life expectancy and insured age, but the directional read is clean across the board. On LMA Income II, Jay described the fund outcome and what it means for investor confidence. I want to add the financial reporting dimension. Because of the fund's initial structure, we were required under GAAP to consolidate it as debt on our balance sheet. With the conclusion of the fund's initial term this quarter, that obligation unwinds. The result is a reduction in reported balance sheet debt of more than $75 million. I want to be precise about this. It is not a corporate deleveraging event. It is the reduction of a fund level consolidation from our balance sheet. The practical effect is that our reported leverage ratios improved significantly without any change in our underlying capital structure. I will address the specific metrics next in the financial section. Turning to our financial results. Total revenue in the first quarter grew 34.6% to $59.4 million compared to $44.1 million in the prior year period. Growth was primarily driven by strong performance in Life Solutions, which generated $50.6 million, along with continued expansion in asset management fees, which reached $8.5 million, reflecting the growth in fee-paying AUM across our longevity fund strategies. Technology Services contributed $0.4 million, consistent with our continued early-stage build-out of that segment. Turning to expenses. Total operating expenses for the first quarter were approximately $34.8 million compared to $19.6 million in the prior year when excluding the impact of gain on change in fair value of debt and gain on equity securities. The year-over-year increase was primarily driven by higher sales and marketing spend in support of our distribution build-out, along with increased G&A expenses associated with our platform investments, business acquisition and special project expenses. These are deliberate investments in the growth profile of the business. On an adjusted basis, excluding noncash stock compensation, business acquisition and special project costs, amortization and changes in the fair value of investments, adjusted net income for the first quarter grew by 16.6% to $20.1 million compared to $17.3 million in the prior year. Adjusted EBITDA for the quarter grew 33.3% to $32.7 million compared to $24.5 million in the prior year. Adjusted EBITDA margin was 55% for the quarter compared to 56% in the prior year. We are committed to growing the business responsibly, which is demonstrated by our ability to grow revenue and EBITDA by over 30% while sustaining margins in that range. GAAP net income attributable to Abacus Global Management for the quarter was $7.3 million or $0.07 per diluted share compared to $4.6 million or $0.05 per diluted share in the prior year period, representing growth of 59%. Turning to our balance sheet. For Q1, adjusted return on equity was 19% and adjusted return on invested capital was 17%, both improvements from Q1 2025. As of March 31, 2026, the company had cash of $37.2 million, balance sheet policy assets of $392.8 million, and outstanding long-term debt of approximately $330 million. The reduction in reported debt from $405.8 million at year-end reflects the conclusion of the initial term for the LMA Income II Fund I described earlier, which removed approximately $76.7 million in fund level reporting obligations from our balance sheet. In summary, we are very pleased with our strong start to 2026. We delivered meaningful top line growth, sustained profitability and strengthened our balance sheet, all while continuing to invest in the platform initiatives that will drive the next chapter of this company's growth. With that, I'll turn it over to Elena.
Thanks, Bill. I want to use my time today to walk through two things: how our balance sheet performed during the quarter and how we think about capital allocation at Abacus. Turning to the performance of our balance sheet. For Q1, our annualized portfolio turnover was 1.9x, in line with our long-term target of 1.5x to 2x. Our average realized gain was 26% for the quarter. These margins reflect rigorous origination, precise actuarial targets and patience, exceeding our target of 20%. Portfolio quality continues to be strong. Assets seasoned beyond 365 days had a weighted average life expectancy of 46 months and a weighted average insured age of 88 years compared to 45 months and 88 years last quarter. These positions reflect conviction in our underwriting, and we expect them to generate attractive returns as they continue to season. During Q1, we deployed $163.6 million in capital off our balance sheet. Our origination platform reviewed more than 9,000 qualified policies during the quarter, and we remain highly selective. This metric underpins the depth of our pipeline as last year we reviewed a little under 11,000 policies total. I want to spend the balance of my time on how we think about capital allocation because I believe it's one of the most important things for our shareholders to understand about this business. We think about capital allocation in two categories: operating and investing. Operating capital supports the day-to-day engine of the business. That means purchasing policies, acquiring other operating assets and funding organic growth across our platform. Investing capital is effectively everything else: returning capital to shareholders through dividends and buybacks, pursuing strategic M&A and supporting the growth of our asset management business, whether that means seeding new fund strategies, supporting our securitization program or providing the infrastructure for AUM expansion. These are not competing priorities. They are sequenced deliberately, and our goal is to ensure we always have the flexibility to do both well. When we look at where our capital comes from, the starting point is our balance sheet. We view our active balance sheet, our managed assets, as approximately $450 million in cash and liquid assets that we convert into cash in short order through our normal origination to monetization cycle. That is the core funding mechanism of the business, and it is self-sustaining. We do not need incremental balance sheet capital to grow our core Life Solutions business. Beyond that, we have two external levers, debt and equity. On debt, we're currently meaningfully under-levered. Our recourse debt-to-EBITDA ratio stands at around 2x compared to capacity we believe extends to 4x. That gives us significant incremental borrowing ability to deploy into high-returning opportunities without diluting shareholders. On equities, we're not looking to raise primary capital outside of any potential M&A activity. Our business generates the cash flow to fund its own growth, and we intend to keep it that way. When I step back and look at the business today, the story is straightforward. We have a core origination engine in Life Solutions that continues to perform at a high level, supported by disciplined underwriting and consistent monetization. On top of that, we're building a scalable asset management platform designed to generate growing fee-related earnings for our longevity funds, our ETFs, our asset-based finance strategy and continued expansion of our distribution capability. Since inception, the new vintage of longevity funds has attracted nearly $1 billion in investor capital. Growing fee-related earnings remains a central priority. As we scale fee-paying assets across our strategies, we generate contractual high-margin management fee income without requiring additional balance sheet capital. And our capital allocation framework is designed to ensure that every dollar we deploy, whether into operations or investments, is building toward that outcome. We're executing on this deliberately step-by-step with a long-term perspective. And we believe that approach will continue to create value for our shareholders. With that, I'll turn it over to Jay for closing remarks.
As I reflect on this quarter, what stands out is not any single result, but the convergence of everything we have been building toward. Capital is flowing into this asset class because investors are seeking exactly what we provide: consistent, predictable, uncorrelated returns. Our operational infrastructure is meeting that demand. Our funds are performing, and our strategic initiatives are positioning us to capture a much larger share of the opportunity in front of us. The foundation is strong and the trajectory is clear. These initiatives represent the kind of strategic scaling that moves the company from small cap to mid-cap. We are executing with both urgency and conviction. I want to thank our investors for their continued confidence, our team for their exceptional execution this quarter and our partners for their commitment to what we are building. We look forward to updating you on our progress and delivering on the opportunity this moment represents. We will now turn it over to the operator for any questions.
分析師問答
(Operator Instructions) Our first question will come from Patrick Davitt with Autonomous Research.
First on flows. Since you say in the release that the second securitization could slip into Q3, if that did fall in Q3, would that be incremental to the $500 million first half inflow expectation?
Patrick, yes, that would be in addition to that $500 million.
Okay. Great. And could you update us on where we are in the SEC process for the interval fund?
Sure. Thanks for asking. We've been working diligently with the SEC. And while we can't specifically state the SEC's exact process timing, we feel good about potentially being able to make an announcement in Q2.
Our next question will come from Andrew Kligerman with TD Cowen.
Looking at your Slide 11, I thought that was pretty interesting. So it implies that wealth advisers would move from 0 to about 25% of revenue over the next few years. Could you walk us through a little road map as to how you get to 25% of revenue? Is it Manning & Napier? Is it existing advisers? Do you expect a fair amount of deals? Just curious as to the road map there.
Thanks for asking that, Andrew, and great to hear from you. Yes, our road map to the financial advisory and private wealth division is consistent with the premise that it's build it or buy it. We have a number of opportunities that we think will come to fruition and help us meet those targets. The Manning & Napier initial investment made a ton of sense for us to demonstrate and show the synergies between sourcing contracts, sending leads and processing potential lead generation for them, and then operating those synergies with additional cash flow from both entities. We're already seeing some success there and are very close to finalizing our strategic alliance agreement and the go-forward agreement. We have a number of additional opportunities among registered investment advisers that I think are seeking that same type of partnership, whether that's in a minority position or a full acquisition. We're really excited about the pipeline for that. I think we'll see more of that through year-end and certainly more heavily into 2027.
Got it. Makes a lot of sense. And then just looking at Slide 27, I thought it was a nice trend to see the days held on the sold policies increased really significantly to 290, which maybe you could share with us the kinds of gains that you have by holding that for quite a bit of time. And then on the flip side, the days held on the owned policies kind of decreased meaningfully to 209. So what are you thinking about both of those metrics as we move forward? Are they right in the band where they should be? Or do you see one of them moving up or down? What are your thoughts going forward?
Thank you. I think you're right that we believe we're in the band where we target. Historically, where we've been on days held and days held via transactions, we're finding a sweet spot there. In the prior quarter, we saw a shift where we took advantage of some contracts that were very opportunistic and moved a larger percentage of those. Historically, where we're trading right now is where you should model going forward. In the quarter, we were somewhere around 1.9x to 2x on an annual basis related to our book turnover, and that's reflective of the opportunities we see in the market. One thing to highlight is that we are seeing significant increased demand for the underlying asset, driven by its uncorrelated nature. Considering some of the volatility in adjacent asset classes, this opportunity has been more appealing to institutional investors who are looking for less volatility and uncorrelated stability that these policies represent.
Our next question will come from Mike Grondahl with Northland Securities.
I just wanted to ask about the 9,000 policies you reviewed in 1Q '26 versus the 11,000 in 2025. Would you say that's all organic growth, all inbound? Any extra marketing or anything to drive that?
Sure. It's a very astute pickup. Yes, it is organic. It's also opportunistic. We're seeing opportunities as we continue to have demand and increased capital related to our own funds and other funds, and that's driving up supply. As we continue to raise capital on our funds, securitizations and other products, a common question is whether we have the policies to support that demand. Clear evidence in Q1 shows we do, and some of that is carrying into Q2. We're not necessarily turning up the advertising budget; the budget year-over-year was fairly stable in Q1. Instead, I believe work from 2025, where we increased our budget particularly in Q3 and Q4, is paying off in Q1 and Q2 and Q3.
Got it. And then you talked about rising asset value and the demand for those policies resulting in that lower purchase discount rate. Can you quantify that for us a little bit, Jay? Like, is that worth a point or two? Or how do we measure that or get a sense?
Sure. The best way to think about it is to look at the slide related to our gross trade spread margin. We're around 26% for the quarter. When demand increases and prices go up, you would historically see purchase discount rates compress. In our case, that can be a positive event because prices go up, we sell at a higher price, and that demand drives additional revenue. Whether it's 100 basis points or 200 basis points, it's ultimately a positive outcome for us.
Our next question will come from Crispin Love with Piper Sandler.
This is Ben Graham in for Crispin Love. I'm just wondering if you could share a little bit more about your current thoughts on M&A, specifically what types of assets you're most interested in currently? Would it be more on the RIA side, technology or some other areas?
Yes, great question. The pipeline is fairly robust right now. The areas we're most interested in include the RIA side. We think there are interesting opportunities there, and we're very selective. It is important that any platform meets our expectations culturally, is profitable, and most importantly, is accretive. It's critical that these opportunities are accretive both from an EPS basis and through synergies. We want acquisitions that will help grow the business into 2027 and 2028. On the technology front, we're developing some exciting things in-house that we'll begin announcing in the next 60 days, and at our Investor Day we will roll some of those out. These developments will have a transformative shift in private wealth management by incorporating lifespan into financial planning. We're adopting AI platforms to assist with that process. Those technology companies that provide data and information useful for customized solutions in insurance or financial planning, all related to longevity data, are of great interest. I recently spoke to the Milken Institute on this topic. With a large transfer of wealth underway, our point is that better understanding longevity and lifespan data can provide clearer signals about timing of wealth transfer, which is highly valuable.
Awesome. And then just briefly on the carrier buyback program. Is there anything new to call out here, any new announcements or expectations for the year? Is anything baked into the guide there?
There continues to be a high level of interest and structure that we're working directly with carriers on. In addition to buybacks, we're also speaking with carriers about new product issuance related to our underwriting. This is coming full circle in our partnerships with carriers and reinsurance companies. Regarding the buyback structure, there are structural advantages we're working through with carrier partners that can make buybacks more affordable and easier to execute. We're continuing that program through 2026 and adding to some carrier relationships, potentially including new product sales.
Our next question will come from Timothy D'Agostino with B. Riley Securities.
I joined a bit late here, so apologies if anything is repeated. Looking at capital deployed for policy originations on Slide 26, that number for Q1 continues or was ahead again of what we were forecasting. I guess trying to understand: in 2025 in the beginning part it was about $120 million. At these current levels of $230 million in the fourth quarter and $163 million in the first quarter, are you comfortable with this kind of being the run rate? Or are you taking advantage of opportunities?
Great question. Yes, certainly opportunistic. We had capital demand to meet that capital deployment. If you're modeling a closer range, we have analysts who tracked us at a very high number, which isn't necessarily the right way to think about it. We think we're tracking in the $130 million to $150 million range and had a very strong quarter in Q1. One KPI to consider is that the number can increase over $150 million, like we did in Q1, if gross capital inflows are higher. So modelers should be cautious about assuming a consistent $200 million per quarter. We're more comfortable guiding to the $130 million to $150 million range and, if we surpass that as we did in Q1, that's positive and part of why we raised our guidance.
Okay. Great. And then if I can ask a second question on AUM, relatively flat quarter-over-quarter. I understand it's a short period just the first quarter. But as we look at the 2028 guide of $30 billion of AUM, could you walk us through again how much of that is coming organically and how much is inorganic?
Yes. The intent is to target roughly a 50-50 split between organic and inorganic growth by 2028. Inorganic would come from acquisitions, whether on the asset management side or private wealth. We expect more of that activity in 2027. Based upon opportunities in our pipeline, we believe we're tracking toward that $30 billion target.
Our next question will come from Patrick Davitt with Autonomous Research.
I don't think I saw it in the materials, but how much is left on the repurchase authorization? And through the lens of this M&A conversation, could you update us on how you're thinking about the stock here and repurchases from here?
Sure. We've deployed approximately 50% of the last $20 million Board-approved buyback, so we still have a decent amount remaining to execute on. We look closely at buybacks and their relative attractiveness compared to other deployment options. We view our current stock price as significantly discounted relative to our earnings potential and analyst targets. We look at ROICs and ROEs in the high teens to low 20s for other opportunities and believe buybacks remain an important deployment option. Regarding M&A, the stock price matters because many transactions involve stock. The deals in our pipeline are accretive even at the current stock price, and as stock valuation improves, those deals look even more accretive. We think we're in a strong position on the M&A front.
This concludes our question-and-answer session. I would now like to turn the meeting back over to Jay Jackson for any additional or closing remarks.
Thank you. Again, we just want to express our gratitude to our partners, our analysts, our shareholders and certainly each and every one of our employees where nearly all of them are shareholders. I think it speaks volumes about the production of our company and our ability to continue to meet the consistent goals we have set out. We raised our targets in 2026. Our expectation is we're going to continue to push through those into 2027 and 2028, and we're tracking to our $250 million EBITDA target for 2028. We are grateful and thankful for all of you to be on our journey together and look forward to our next call.
Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.