Earnings call transcript: Cohen & Co’s Q2 2025 earnings boost stock

Cohen & Company Inc (COHN) reported a significant improvement in its second-quarter financial performance for 2025, with net income reaching $1.4 million. This marks a turnaround from a net loss of $2.3 million in the same quarter last year. The company’s stock reacted positively, with a pre-market price increase of 14.57%, reaching $12.66 per share. This surge highlights investor enthusiasm following the earnings announcement and strategic developments.

Key Takeaways

• Cohen & Co achieved a net income of $1.4 million in Q2 2025, reversing last year’s net loss.
• The company launched a SPAC-focused equity trading desk, generating $1.4 million in trading revenue.
• Cohen & Co’s stock rose 14.57% in pre-market trading, reflecting positive investor sentiment.
• The company declared a quarterly dividend of $0.25 per share, payable on August 29, 2025.
• Cohen & Co is expanding its involvement in the SPAC and Bitcoin financial services markets.

Company Performance

Cohen & Co demonstrated robust performance in Q2 2025, with net income reaching $1.4 million, compared to a net loss of $2.3 million a year earlier. This improvement underscores the effectiveness of the company’s strategic initiatives, including its focus on the growing SPAC market and Bitcoin-related financial services. The company served 25 clients during the quarter, maintaining its strong position in boutique investment banking.

Financial Highlights

• Net income: $1.4 million for Q2 2025, a significant improvement from a $2.3 million net loss in Q2 2024.
• Adjusted pretax income: $5.5 million.
• New Issue and Advisory revenue: $37.4 million.
• Net trading revenue: $10.8 million.
• Asset management revenue: $2.2 million.

Market Reaction

Cohen & Co’s stock experienced a notable increase of 14.57% in pre-market trading, reaching $12.66. This rise reflects investor confidence in the company’s strategic direction and financial health. The stock’s movement is significant, particularly as it approaches its 52-week high of $13.25, indicating strong market optimism.

Outlook & Guidance

Looking ahead, Cohen & Co remains confident in its future earnings potential. The company expects its SPAC trading desk to complement existing strategies and drive future growth. The declared quarterly dividend of $0.25 per share further demonstrates the company’s commitment to returning value to shareholders.

Executive Commentary

CEO Lester Grassman expressed optimism about the company’s future, stating, "We remain confident in our future earnings potential and committed to create long term sustained value for our stockholders." He also highlighted the launch of the SPAC-focused equity trading desk, which is expected to enhance Cohen & Co’s market position. CFO Joe Pooler noted the company’s active pursuit of consents for the sale of remaining Alesco CDO management contracts.

Risks and Challenges

• Market volatility: Fluctuations in the financial markets could impact trading revenues.
• Regulatory changes: Potential changes in SPAC and Bitcoin-related regulations could affect operations.
• Competition: Increasing competition in the SPAC market may pressure margins.
• Economic conditions: Broader economic downturns could impact client activity and revenue.
• Technological advancements: The need to keep pace with technological changes in financial services remains a challenge.

Cohen & Co’s Q2 2025 earnings report highlights a successful quarter marked by strategic advancements and improved financial performance, driving positive investor sentiment and stock price appreciation.

Full transcript - Cohen & Company Inc (COHN) Q2 2025:

Operator: Good morning, ladies and gentlemen, and welcome to Cohen and Company’s Second Quarter twenty twenty May Call. My name is Alicia, and I’ll be your operator for today. Before we begin, Cohen and Company would like to remind everyone that some of the statements the company makes during this call may contain forward looking statements under applicable security laws. These statements may involve risks and uncertainties that could cause the company’s actual results to differ materially from the results discussed in such forward looking statements. The forward looking statements made during this call are made only as of the date of this call, and the company undertakes no obligation to update such statements to reflect the subsequent events or circumstances.

And Company advises you to read the cautionary note regarding forward looking statements in its earnings release and its most recent annual report on Form 10 k filed with the SEC. Earlier today, Cohen and Company issued a press release announcing second quarter twenty twenty five financial results. Today’s discussion is complementary to that press release, which is available on the company’s website at cohenandcompany.com. This conference call is being recorded, and a replay of it will be available for three days beginning shortly after the conclusion of this call. The company’s remarks also include certain non GAAP financial measures that management believes are meaningful when evaluating company’s performance.

A reconciliation of these non GAAP financial measures to the comparable GAAP measures is provided in the company’s earnings release. After the prepared remarks, the call will be opened up for questions. I would now like to turn the call over to Mr. Lester Grassman, Chief Executive Officer of Cohen and Company.

Lester Grassman, Chief Executive Officer, Cohen and Company: Thank you, Lisa, and thank you, everyone, for joining us for our second quarter twenty twenty five earnings call. With me on the call is Joe Pooler, our CFO. We are pleased with our second quarter results, which were driven by a strong performance from our full service boutique investment banking operation, Cohen Company Capital Markets, or what we call CCM. During the quarter, CCM generated $37,400,000 in new issue and advisory revenue across 25 clients and is entering the second half of the year with strong momentum and robust pipeline. In addition, in June 2025, our sponsor, FAC, Columbus Circle Capital Corp.

One, entered into a business combination agreement with ProCap DTC, a bitcoin native financial services firm. As sponsor, we retained 2,100,000.0 founder shares. Upon closing, which is expected to occur by the end of the year, the combined company will operate as ProCap Financial Inc. And hold up to 1,000,000,000 in Bitcoin on its balance sheet. As our involvement in the SPAC market continues to grow, we are excited to have launched our SPAC focused equity trading desk.

This new trading desk generated more than $1,400,000 in trading revenue in its first quarter of operation, and we expect it will serve as a complementary strategy to CCM going forward. We remain confident in our future earnings potential and committed to create long term sustained value for our stockholders, including through our quarterly dividend. As we disclosed in our process in our press release this morning, the company’s Board of Directors has declared quarterly dividend of $0.25 a share payable on 08/29/2025, to stockholders as of record, 08/15/2025. Now I will turn

Joe Pooler, Chief Financial Officer, Cohen and Company: the call over to Joe to walk through this quarter’s financial highlights in more detail. Thank you, Lester. I will begin with a discussion of our operating results for the quarter. Our net income attributable to Cowen Company Inc. Shareholders was $1,400,000 for the quarter or $0.81 per fully diluted share compared to net income of $300,000 for the prior quarter or $0.19 per fully diluted share and net loss of $2,300,000 for the prior year quarter or $1.47 per fully diluted share.

Our adjusted pretax income was $5,500,000 for the quarter compared to adjusted pretax income of $1,300,000 for the prior quarter and adjusted pretax loss of $8,600,000 for the prior year quarter. As a reminder, adjusted pretax income or loss is a key earnings measurement for us as it incorporates enterprise earnings attributable to our convertible noncontrolling interest, which is substantially held by our Founder and Chairman, Daniel Cohen. Daniel holds his interest in the enterprise through the primary operating subsidiary, Cohen and Company LLC, which is a consolidated subsidiary of Cohen and Company Inc. New Issuer and Advisory revenue was $37,400,000 in the quarter, an increase of $4,200,000 from the prior quarter and an increase of $30,900,000 from the year ago quarter. All our new Issue and Advisory revenue came from our CCM business and was primarily driven by SPAC M and A and SPAC IPO transactions.

CCM also generated 6,700,000.0 of positive principal transactions revenue during the quarter. As a reminder, we have received financial instruments as consideration for new issue and advisory services provided by CCM instead of cash at times, which are included in other investments at fair value on our consolidated balance sheets. Net trading revenue came in at $10,800,000 in the second quarter, up $1,500,000 from the prior quarter and up $2,000,000 from the 2024. Asset management revenue totaled $2,200,000 in the quarter, up slightly from both prior quarters. Second quarter principal transactions and other revenue was $9,500,000 primarily due to the $6,700,000 of gains on our principal investments related to previously received consideration by CCM as well as certain gains related to our ongoing involvement in the SPAC market outside of CCM as an asset manager and an investor.

Principal transactions revenue includes all the gains and losses and income earned on our 50,600,000 net investment portfolio. Compensation and benefits expense for the second quarter was $44,300,000 which was up from both prior quarters primarily due to fluctuations in revenue, income from equity method affiliates, net of our non convertible non controlling interest and the related variable incentive compensation. The number of company employees was 118 as of the June compared to 117 at the March and 121 as of the prior year quarter. Net interest expense for the quarter was 1,500,000 including $1,200,000 on our two trust preferred debt instruments, 288,000 on our senior promissory notes and $22,000 on our credit line. Gain on sales management contracts for the three months ended June was $800,000 which resulted from the closing of the sale of two of our legacy Alesco CDL management contracts.

We are actively pursuing consents for the sale of the remaining three Alesco CDO management contracts in accordance with our previously announced master transaction agreement. Once complete, there will be no future asset management revenue from the company’s legacy Alesco CDOs. Loss from equity method affiliates totaled $1,400,000 primarily due to our consolidated sponsor entities investment in Columbus Circle Capital Corp. I, our sponsored SPAC. In terms of our balance sheet, at the June, total equity was $92,500,000 compared to $90,300,000 at the 2024.

The non convertible, non controlling interest component of total equity was $10,900,000 as of June 30 and $11,500,000 at the end of the year. Thus, the total enterprise equity, excluding the nonconvertible noncontrolling interest, was $81,600,000 at the June, a $2,700,000 increase from $78,800,000 at the end of the year. At quarter end, consolidated indebtedness was carried at $32,600,000 During the second quarter, we repaid $2,600,000 of our senior promissory notes. As Lester mentioned, we declared a quarterly dividend of $0.25 per share payable on August 29 to stockholders of record as of August 15. The Board of Directors will continue to evaluate the dividend policy each quarter and future decisions regarding dividends may be impacted by quarterly operating results and the company’s other capital needs.

With that, I’ll turn it back over to Ledford.

Lester Grassman, Chief Executive Officer, Cohen and Company: Thanks, Joe. And before we open the call for questions, I wanted to take a moment to thank all of our employees for their continued hard work and dedication to Cohen Company. We remain confident in our ability to navigate the current environment, execute on our strategic priorities and continue driving progress as we enhance long term value for our stockholders. Please direct any offline investor questions to Joe Pooler at (215) 701-8952 or via e mail to investorrelationskohencompany dot com. The contact information can also be found at the bottom of our earnings release.

Operator, you can now open the call lines for questions, and thank everyone for joining today.

Operator: Thank you. We’ll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question 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. Thank you. I don’t see any questions at this time. I’d like to pass the call back over to management for any closing remarks.

Lester Grassman, Chief Executive Officer, Cohen and Company: Thanks, Lisa, and thanks, everyone, for joining in today. We look forward to reconvening at our next call this following quarter. Thank you again, everyone.

Operator: Concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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