Earnings call transcript: Alti Global Q1 2025 sees revenue growth, stock stable

Alti Global Inc. (market cap: $497.9M) reported a strong start to 2025 with a 14% year-over-year increase in consolidated revenue, reaching $58 million in Q1. Despite a net loss of $3 million, the company’s stock remained stable, closing at $3.44 in aftermarket trading. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value calculation. Alti’s focus on recurring revenue and strategic partnerships contributed to its robust performance, positioning it well for future growth.

Key Takeaways

• Revenue grew by 14% year-over-year, driven by recurring income.
• Adjusted EBITDA increased by 38%, showing strong operational efficiency.
• The stock price remained unchanged in aftermarket trading at $3.44.
• Strategic partnerships and new product launches underpin future growth plans.

Company Performance

Alti Global’s Q1 2025 performance reflected its strategic emphasis on recurring revenue streams, which accounted for 83% of its total revenue. The company’s core Wealth and Capital Solutions segment saw a 23% increase, contributing significantly to the overall revenue growth. With a gross profit margin of 21.23% and a beta of 0.75, the company shows lower volatility compared to the broader market. InvestingPro analysis reveals 8 additional key insights about Alti’s financial health and market position, available to subscribers.

Financial Highlights

• Revenue: $58 million, up 14% year-over-year
• Adjusted EBITDA: $9 million, up 38% year-over-year
• Net loss: $3 million on a GAAP basis
• Assets under management increased by 10%

Outlook & Guidance

Alti Global remains optimistic about its growth trajectory, with plans to focus on global expansion and organic growth acceleration. Analysts project 22% revenue growth for FY2025, with a consensus target price of $9, suggesting significant upside potential. The company expects its upcoming acquisition of Kontoora to be EBITDA accretive. It plans to provide a detailed financial outlook later in 2025, indicating a strategic approach to future guidance. For comprehensive analysis and detailed financial metrics, investors can access Alti’s full Pro Research Report, one of 1,400+ company reports available on InvestingPro.

Executive Commentary

CEO Mike Tiedemann emphasized the company’s strategic focus, stating, "We’ve entered 2025 focused on executing our strategic agenda." CFO Mike Harrington highlighted cost management, noting, "We recognize that our recurring cost base remains too high." Tiedemann also reiterated the company’s commitment to client impact, saying, "Delivering impact for our clients is at the core of our mission."

Risks and Challenges

• Market volatility: The company operates in a highly volatile market, which could impact future performance.
• High cost base: Alti’s recurring cost base remains a challenge that the company is addressing through cost optimization.
• International expansion risks: Entering new markets, such as Germany, poses execution risks.

Alti Global’s Q1 2025 earnings call highlighted its strong revenue growth and strategic initiatives, setting a positive tone for the rest of the year. The company’s focus on recurring revenue and strategic partnerships positions it well for future growth, despite challenges posed by market volatility and cost management.

Full transcript - Alti Global Inc (ALTI) Q1 2025:

Matt, Conference Operator: Good afternoon. My name is Matt and I’ll be your conference operator today. At this time, I’d like to welcome everyone to Altice First Quarter twenty twenty five Earnings Conference Call. During the call, your lines will remain in a listen only mode and after the speakers’ remarks, there will be a question and answer session. I’d like to advise all parties that this conference call is being recorded and a replay of the webcast is available on Investor Relations website.

Now, at this time, I’d like to turn things over to Lily Ortiga, Head of Investor Relations for Alti. Thank you. You may begin.

Lily Ortiga, Head of Investor Relations, Altice: Good afternoon to everyone on the call today. Joining me this afternoon are Michael Tiedemann, our CEO and Mike Harrington, our CFO. We invite you to visit the Investor Relations section of our website at www.altiglobal.com to view our earnings materials, including our investor presentation. I would like to remind everyone that certain statements made during the call may be deemed forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include, but are not limited to, comments made during the prepared remarks and in response to questions.

Forward looking statements can be identified by the use of words such as anticipate, believe, continue, estimate, expect, future, intend, may, planned, and will, or similar terms. Because these forward looking statements involve both known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these statements. For a discussion of the risks and uncertainties that could cause actual results to differ, please refer to Alti’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10 ks and subsequent quarterly reports on Form 10 Q. Altus assumes no obligation or responsibility to update any forward looking statements. During this call, some comments may include references to non GAAP financial measures.

Full reconciliations can be found in our earnings presentation and our related SEC filings. With that, I’d like to turn the call over to Mike Tietemann.

Mike Tiedemann, CEO, Altice: Good afternoon, everyone, and thank you for joining us today. Since the beginning of the year, we’ve made meaningful progress advancing our long term strategy to become the leading independent global multifamily office and OCIO platform. On the growth front, we closed the acquisition of Kontoora, marking our official entry into Germany, the world’s third largest ultra high net worth market. We also began activating the capabilities of our strategic partners, launching our new private credit program to bring differentiated investment opportunities to our clients. These efforts expand our global footprint and enhance the strength of our offering.

At the same time, we continue to lay the foundation for long term profitability and efficiency by advancing our resource optimization program. Through our zero based budget approach, we are aligning costs with strategic priorities, enabling us to scale with greater focus and discipline. In parallel, we’re taking deliberate steps to exit non core businesses, streamlining our operations and channeling resources towards our highest conviction opportunities. Together, these initiatives are positioning Alti to accelerate business performance and deliver sustained value creation through 2025 and beyond. This afternoon, I’ll walk you through our first quarter results and highlight the strides we’re making towards our long term strategic priorities and growth agenda.

In the first quarter, Alti generated $58,000,000 in consolidated revenue, representing a 14% increase year over year. Revenue in our core Wealth Management and Capital Solutions segment rose 23%, driven by a 10% increase in assets under management and advisement, reflecting contributions from last year’s acquisitions and solid portfolio performance. Revenues in this segment also benefited from robust investment distributions from our stakes in external managers. Notably, 83% of consolidated revenue came from recurring management fees underscoring the stability and predictability of the business model we are building. Adjusted EBITDA for the quarter was $9,000,000 on a consolidated basis, up from $7,000,000 in the same period last year.

The key pillar of our strategy is leveraging the full power of our long term partners, AllianzX and Constellation Wealth Capital, strategic collaborators who are helping us scale smarter and faster. Together, we’re expanding into new markets, broadening our offerings and strengthening our position as a preferred partner for ultra high net worth clients globally. A compelling example of this collaboration is our joint venture with Allianz ICE, which is transforming how our clients access private markets. Through this platform, international clients can now invest alongside Allianz’s balance sheet, unlocking access to top tier third party managers, secondaries and co investments. These are opportunities typically reserved for the world’s largest institutions and we’re proud to bring them to our client base.

The first launch under the program focused on the $1,500,000,000,000 global private credit market. It’s off to a great start. Allianz’s scale and track record in the space with approximately 150,000,000,000 allocated to the sector brings credibility and reach. Since launching in December, we’ve secured approximately $240,000,000 in commitments from our international wealth clients through the end of the first quarter, and we see a clear runway for continued momentum. We’re also using our partners’ capital to accelerate strategic acquisitions.

Kontoora is a standout example. The premier Hamburg based multifamily office manages €14,000,000,000 in assets and represents our official entry into Germany. As I referenced earlier, the third largest ultra high net worth market globally. This deal was closed on April 30, is our first European transaction since securing the capital from Allianz X. From the outset, we saw a natural fit.

Santoro’s founder led independent model aligns with our own, and their sixteen year track record of serving ultra high net worth clients across Germany and Austria in a holistic manner made them a clear strategic addition. By connecting them to Alti’s global scale and capabilities, particularly in alternatives and impact, we’re enabling the next chapter of their growth story. With the addition of Contura, total assets in our Wealth and Capital Solutions segments have reached approximately $82,000,000,000 including around $32,000,000,000 front managed through our international platform, positioning Alti as one of the largest international multifamily offices. Contura will be consolidated into our financial results beginning in the second quarter of twenty twenty five. We expect the transaction to be accretive to EBITDA this year and to enhance our platform profitability through increased scale and operational synergies.

We are already seeing commercial momentum take hold. Since the announcement, Kaltura secured two major client mandates, a single family office and an entrepreneurial family, and is actively engaged with several high potential prospects. These opportunities are being driven by enhanced international reach, cross border capabilities, and access to impact focused solutions enabled by combination. It’s a clear sign that our integration is resonating in the market and opening the door for meaningful long term growth opportunities. As we look ahead, our priorities remain clear, driving growth through both organic initiatives and strategic acquisitions by expanding into new markets and deepening our presence in existing ones across The U.

S. And internationally. We’ve had a strong year on the M and A front, including the recent acquisition of Contura, and have made meaningful progress integrating teams and offices across the platform. That said, we see significant untapped potential in our organic growth engine and are encouraged by our current A List prospect pipeline. Accelerating our organic momentum is a key focus in 2025, and we’re taking deliberate steps to strengthen this pillar of our strategy.

To support this, we’re advancing our marketing strategy with a strong emphasis on segmentation. We’re finding how we position our value proposition to better resonate with both existing and emerging client segments. By tailoring our approach to the distinct needs of each segment, we aim to drive differentiated growth through a more compelling client experience, broader offerings, and a sharper delivery of our advice and insights. In parallel, we’re embedding technology more deeply across the business, transforming our technology stack to support global consistent workflows, increase advisor productivity, and further elevate service quality. Together, these marketing and technology actions position us to scale more effectively and execute on our long term strategy.

Of course, successfully delivering on that strategy requires staying attuned to the broader market environment. Since the beginning of the year, markets have experienced significant volatility. In the first quarter, our portfolios remain resilient. Our broad diversification across asset classes and focus on manager selection helped mitigate downside risk and preserve capital. Performance was supported by active underweights to concentrated equity exposures, alongside positive contributions from real assets, private credit and international markets.

In difficult markets, our clients’ long term horizon has meant that we maintain stable allocations and use volatility to our advantage to deploy capital as attractive opportunities emerge. Hence, we remain focused on thoughtful portfolio construction, balancing liquid and illiquid exposures, managing risk with discipline, and maintaining a long term lens. Our approach is built to navigate complexity and volatility while helping clients capture durable risk adjusted return. This disciplined investment philosophy is core to our broader mission, becoming the leading independent global multifamily office and OCIO platform with deep capabilities and alternatives and impacts. That mission extends beyond performance.

It includes helping clients align their wealth with their values. On that note, I want to highlight the recent launch of the 2025 Alti Global Social Progress Index developed in partnership with the social progress imperative. This index, which tracks the performance of 170 countries across key drivers like health, education, and rights, highlights where private capital can have the greatest impact at a time when global progress is stalled. As a global wealth manager, we see growing demand from clients to align investments with purpose. And this index provides a practical tool to help drive meaningful social outcomes along financial returns.

Importantly, the index offers investors real world data and evidence that their capital is contributing to the impact they intend to achieve. Delivering impact for our clients is at the core of our mission, but realizing our long term vision also demands a sharp focus on operational excellence. To support sustained profitable growth and unlock greater operating leverage, we launched a program in late twenty twenty four aimed at driving productivity and enhancing cost efficiency. One important tool in this broader effort was the execution of a zero based budgeting process. Introduced late last year, the CBB provides a rigorous line by line approach to expense management, enabling us to reexamine every dollar spent and reallocate resources towards our most strategic priorities.

We’ve already begun implementing aspects of our plan across our wealth management segment and corporate functions with a focus on high impact spend categories such as professional services, technology, marketing, travel and occupancy. At the April, we’ve completed reviews across most of the non compensation cost base, identifying substantial annual savings that we expect to materialize over the remainder of this year and be fully reflected in 2026. Reductions in recurring costs are expected across all major non compensation expense categories. To ensure that this is not a one time exercise, we’ve also implemented cost governance tools, including centralized procurement function and a new executive level cost approval committee designed to ensure ongoing discipline and accountability. As part of our broader operational streamlining, we’re also sharpening our focus on recurring revenue in our core businesses.

Building on what we shared last quarter, we’ve made meaningful progress towards exiting our international real estate segment, which we’ve identified as non core to our strategy. We’ve advanced this effort over the last quarter and expect to provide a definitive plan of action next quarter. With the plan to optimize our operating efficiency close to completion, the Contura acquisition set to be consolidated in Q2 and the decision on international real estate forthcoming, we expect to share more detailed guidance on our long term financial outlook, including margin expansion and capital allocations later this year. By focusing on our highest conviction businesses and executing decisively on cost optimization, we’re positioning Alti for sustainable, profitable growth and delivering increased value for shareholders in 2025 and beyond. With that, I’d like to turn the call over to Mike Harrington.

Mike Harrington, CFO, Altice: Thank you, Mike. As this is my first earnings call presentation as CFO, I want to begin by saying how excited I am to join the Alti team. While there’s meaningful work ahead, I’m energized by our strong market positioning, the scale of our addressable opportunity, the strategic initiatives already underway, and the unique advantage we have through our strategic partners. All of this gives me strong conviction in Alti’s ability to drive long term growth and value creation. Before I walk through the numbers, please note that unless otherwise specified, all comparisons are made on a year over year basis versus the first quarter of twenty twenty four.

Starting with our consolidated results. Alti generated $58,000,000 in revenue for the first quarter of twenty twenty five, representing 14% growth. Approximately 83% of total revenue came from stable recurring sources, including management and advisory fees and fee components embedded in investment distributions from external managers. Our core wealth and capital solutions segment was the primary contributor, generating $57,000,000 of revenue, up 23% from the prior year period. This growth was largely driven by higher management fees supported by a 10% increase in segment assets, reflecting both the successful integration of the East End and Envoy acquisitions as well as strong underlying portfolio performance.

The segment also benefited from robust investment distributions, including crystallized incentive fees earned in 2024 from two external managers in which ALTI holds equity stakes, notably the Asian Credit and the European long short equity strategies delivered healthy returns of 13.311.9%, respectively, for the year. These fees are paid in the quarter following year end. On a GAAP basis, we reported a net loss of $3,000,000 for the quarter. Adjusted net income, which excludes nonrecurring and noncash items, was $3,000,000 in the period. Consolidated adjusted EBITDA for the quarter was $9,000,000 up 38% year over year.

This figure reflects the combined results of our Wealth and Capital Solutions segment, Corporate Functions and the International Real Estate segment, which we are in the process of exiting. The increase was supported by the accretive impact of distributions from our investment interest and the acquisitions. On a stand alone basis, our Core Wealth and Capital Solutions segment delivered $19,000,000 in adjusted EBITDA, a 34% margin, notably benefiting from investment distributions and acquisitions. Operating expenses totaled $72,000,000 in the quarter, up from $66,000,000 in the same period last year. On a normalized basis, excluding nonrecurring noncash items, operating expenses were $50,000,000 compared to $45,000,000 in Q1 twenty twenty four.

The year over year increase primarily reflects higher professional fees and general and administrative expenses related to non core operations, as well as FX gains that benefited the prior year period. Sequentially, normalized operating expenses declined by $13,000,000 from Q4 twenty twenty four, driven largely by lower compensation and G and A costs. We recognize that our recurring cost base remains too high relative to the current scale of the business, and we are taking firm steps to address it. As discussed earlier, we have essentially completed a plan to optimize expenses, leveraging zero based budgeting, and have already begun the process of implementing the plan to impact our expense run rate. This effort has unlocked meaningful savings, some of which will be reinvested to increase organizational agility and efficiency and support long term margin expansion.

We’ll provide more detail on the financial impact once the rollout is complete and reflected in our forward plans. Other income totaled $9,000,000 for the quarter, primarily driven by fair value adjustments, most notably gains on earn out liabilities, partially offset by a decrease in the fair value of some investments. This compares to 37,000,000 in the prior year period, which included a $39,000,000 fair value gain on earn out liabilities. Turning to our capital structure. We ended the quarter with $52,000,000 in cash and no debt.

As we continue to scale, we are evaluating financing alternatives that align with specific needs of our business, supporting both organic initiatives and M and A activity, while preserving the flexibility to deploy capital efficiently and strategically. With a more focused organization, a growing base of recurring revenue, and strong alignment with our strategic partners, we are taking purposeful steps to enhance the scalability and financial discipline of our business. Our ongoing cost optimization and productivity efforts are enabling us to better align resources with growth priorities and improve our margin profile. Collectively, these initiatives position us to drive sustained long term value creation. With that, I’ll turn it back to Mike Tiedemann for his closing remarks.

Mike Tiedemann, CEO, Altice: Thank you, Mike. We’ve entered 2025 focused on executing our strategic agenda, expanding globally through the Kontoor acquisition and unlocking new capabilities through our partnerships. At the same time, we’ve taken decisive action to streamline operations, exit non core activities and strengthen our technology infrastructure. As we look ahead, our attention remains on unlocking operating leverage and scaling with intention. These efforts are essential to building a durable, high performing business that delivers long term value to our clients, shareholders and employees, many of whom are invested in our collective success.

With that, we can open up for questions. Operator?

Matt, Conference Operator: Great, thank you. We will now be conducting a question and answer session. If you’d like to ask a question, please press star one on your telephone keypad. Confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. First question is from Wilma Burtus from Raymond James. Please go ahead.

Wilma Burtus, Analyst, Raymond James: Hey, good evening everybody. Could you talk a little bit about the, zero based budgeting efforts? Give some good color on the call, but maybe talk about I don’t know if it’s possible to quantify how much you might be able to reduce there on the expenses, and also if you could provide some type of timeline, that would be helpful as well. Thanks.

Mike Tiedemann, CEO, Altice: Hi Wilma, Mike Tiedemann. I’ll have Michael Harrington answer some of this, but the ZBB process has been a line item by line item review across all segments of the business. And the implementation of that begins immediately. Some of the costs do have longer tails, but the implementation of the cost saves or the identification of where we want to focus on those cost saves begin immediately or have already begun or prior, late Q4, early Q1. So it is meaningful, but we believe, Glenn, on giving more color on that at a later point in the year where we can give an update on what is already in the numbers and to come from there.

Mike Harrington, CFO, Altice: Yes. Hi, well, Nice to meet you. Yeah, as Mike said, the process is essentially complete and we’re just working that into our longer term plan. And again, we’re not waiting to take actions. So you’re starting to see some of that even in this quarter to quarter view, where you’re starting to see some cost improvements.

And we plan to provide more detail and quantify that in a more precise way when we talk to you in August.

Wilma Burtus, Analyst, Raymond James: Okay, thank you. Yes, costs look like they were down a little bit. So good to hear. Sorry, you’re starting to have some impact. Could you talk a little bit more about the expectations for Germany and the growth there?

And also give us a little bit of color on the M and A pipeline and the capital remaining to be deployed? Thanks.

Mike Tiedemann, CEO, Altice: Yes, Germany is, everyone knows is a huge market and a really important market and a very difficult one to come from the outside and attempt to compete on the ground. I don’t think many people have had success doing that. So we were very fortunate to find a great entrepreneurial firm in Kontoora that has very similar operating ethos as the broader platform insomuch that they deal with very large, very complex families and help them in a broad array of areas. And what they found that appealed to us was the fact that we brought more scale, more capabilities globally to couple with the capabilities they had. And obviously having Allianz in the German market behind us as an organization of support was a real differentiator.

So we’ve already begun winning certain business, they’ve actually had a few great wins and we are working on several more prospects right out of the gate. We think it’s an enormous opportunity and having that team and the quality of that team will be, with our support, will ultimately be what drives that. In terms of the pipeline, there is a range of pipeline. There are both individual team lift outs as well as some organizations in several of the markets we’re looking at, but certainly in The US there are some very attractive areas that we are focused on. And arguably as important as anything is our organic pipeline is very strong.

There’s terrific organic opportunities for us to drive growth and as history isn’t a guide, volatility of markets tends to actually help advance those conversations. People begin to make decisions to either move or to initiate conversations, but we have a lot of activity both on the shores of The US and off.

Wilma Burtus, Analyst, Raymond James: Thank you. Just a quick follow-up on that one. Could you talk about the capital remaining to be deployed?

Mike Tiedemann, CEO, Altice: Yeah, couple of things. One is depending on the size of any transaction, we obviously are evaluating debt financing and to pair that. But the capital that we have today is sufficient for the short term smaller opportunities that we have in front of us.

Wilma Burtus, Analyst, Raymond James: Okay, thank you. And I think you touched on it a little bit on the call, but could you provide a little bit more detail on the real estate business and where we should expect that to head near term? Thanks.

Mike Tiedemann, CEO, Altice: We are divesting from the structures and we are, and that is something we’ve said in prior calls. The operations around those assets, which again, are joint ventures we have with many developers. So in many ways, there’s a reporting function to that, but we want to focus on the core of the wealth management business and made that decision a year ago now and have been working towards that. But we really believe that will be complete and packaged and very defined by the next call in August.

Wilma Burtus, Analyst, Raymond James: Help us think a little bit through market volatility we’ve seen in 2Q. I know you guys have pretty good uncorrelated assets, but maybe just talk about what you’re seeing with your clients and how we should think through your AUM and how it would react in this particular market. Thank you.

Mike Tiedemann, CEO, Altice: Yeah, relatively sanguine. We were projecting just greater volatility generally based on the trailing years of muted volatility, number one. Have always had a focus on higher quality risk assets. That becomes quite apparent in times of equity market volatility, if that’s what we’re really talking about. We have a balance of assets like gold and illiquid assets, I.

E. Private credit or others that are just less impacted in the short term from markets. There’s, as you can imagine, a lot of, I think this is a global comment, not a US comment, there’s a lot of conversations related to currency, related to obviously the tariffs and what this all means. I think our research team and our CIO office has done a terrific job of sort of keeping people updated on the changing news flow related to that, and very specifically what we should not change and should not overreact. And then we have the ability for some families that want to have assets, hard assets, or liquidity in other markets and other jurisdictions and other currencies, we can do that for families.

So we have the ability to have US clients have capital abroad in some of our other jurisdictions, it be Switzerland or Singapore, and we’ve seen some families take advantage of that.

Wilma Burtus, Analyst, Raymond James: Okay, thank you very much.

Mike Tiedemann, CEO, Altice: You’re welcome, thank you.

Matt, Conference Operator: I’d like to turn the floor back to management now for any closing comments.

Mike Tiedemann, CEO, Altice: Well, that’s the last of the questions. Thank you all for listening in, and, we look forward to updating people further in our August call. Take care.

Matt, Conference Operator: Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time. Thank you again for your participation.

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