Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q1 2024 Earnings Presentation
22 slides from Hamilton Lane's earnings presentation, Aug 1, 2023
Slide 1: Fiscal Year 2024 First Quarter Results
Fiscal Year 2024 First Quarter Results Earnings Presentation - August 1, 2023 Hamilton Lane l Global Leader in the Private Markets 1
Slide 2: Today's Speakers
Today's Speakers Mario Giannini Erik Hirsch Atul Varma John Oh Chief Executive Officer Vice Chairman Chief Financial Officer Principal - Shareholder Relations Hamilton Lane l Global Leader in the Private Markets 2
Slide 3: Period Highlights
Period Highlights Business Performance • Assets under management and fee-earning assets under management were $117 billion and $60 billion, respectively, as of June 30, 2023, increases of 8% and 17%, respectively, compared to June 30, 2022 • Management and advisory fees increased 23% compared to the
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $818B AUM & AUA 1 Total Assets Under Management/Advisement ($B) $1,000 $98 $108 $117 Y-o-Y Growth $800 AUM: 8% AUA: (3)% $76 $724 $701 % : 18 $753 G R $600 CA $66 $581 $59 $50 $400 $410 $422 $40 $374 $35 $32 $292 $24 $30 $200 $22 $205 $189 $13 $16 $19 $147 $147 $1
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-Earning AUM growth continues and annual fee rates are stable Total Fee-Earning Assets Under Management ($B) $70 .56% .60% .56% .59% .57% .61% $60 $60 $57 : 14% CAGR $51 $49 $50 $24 $23 $42 $40 $39 $19 $18 $34 $16 $14 $30 $11 $20 $35 $36 $31 $32 $25 $26 $10 $22 $0
Slide 6: AUM & AUA Drivers
AUM & AUA Drivers AUM AUA Customized Specialized Advisory Separate Accounts Funds Services Diverse mix of existing and Select funds in market: Typically larger clients with prospective clients seeking • Secondary fund wide-ranging mandates to further or establish • Credit-oriented fund which include
Slide 7: Financial Highlights
Financial Highlights Hamilton Lane l Global Leader in the Private Markets 7
Slide 8: Consolidated Revenue
Consolidated Revenue Strong growth across management and advisory fees Management and Advisory Fees Long-Term Growth YTD Y-o-Y Growth: 23% CAGR: 14% • Recurring management and advisory fees represented an average of 85% of total revenues $372 over the past five fiscal years USD in Millions USD in Mi
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carry by Age Unrealized Carried Interest 96 100 90 $1,500 > 12 years 83 3% $1,250 80 $1,000 USD in Millions 60 8-12 years Vehicles 19% $750 < 5 years 40 42% $1,102 $1,101 $500 $809 20 $250 5-8 years 0 $0 36% Jun-21 Jun-22 Jun-23 Period Ending Unrealized Carried
Slide 10: Consolidated Earnings
Consolidated Earnings Stable long-term growth Net Income Attributable to HLI YTD Y-o-Y Growth: (7)% Long-Term Growth • $31M in net income attributable to HLI for the quarter USD in Millions USD in Millions $33 $31 $109 $17 FY18 FY23 Q1 FY23 Q1 FY24 Adjusted EBITDA1 YTD Long-Term Growth • Y-o-Y decre
Slide 11: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $700 $600 $634 • For 6/30/23, the total investment balance consisted $500 $588 primarily of: USD in Millions $514 ◦ ~$385M in investments in our funds $400 $300 $374 ◦ ~$205M in t
Slide 12: Appendix
Appendix Hamilton Lane l Global Leader in the Private Markets 12
Slide 13: Condensed Consolidated Statements of Income (Unaudited)
Condensed Consolidated Statements of Income (Unaudited) Three Months Ended (Dollars in thousands except share and per share amounts) June 30, 2022 March 31, 2023 June 30, 2023 YoY % Change QoQ % Change Management and advisory fees $85,946 $95,692 $105,407 23 % 10 % Incentive fees 49,524 17,096 19,63
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in thousands except share and per share amounts) June 30, 2022 March 31, 2023 June 30, 2023 YoY % Change QoQ % Change Adjusted EBITDA1 Management and advisory fees $85,946 $95,692 $105,407 23 % 10 % Revenue related to consolidated funds — 61 14
Slide 15: Management and Advisory Fees
Management and Advisory Fees Three Months Ended, (Dollars in thousands) June 30, 2022 March 31, 2023 June 30, 2023 YoY % Change QoQ % Change Management and advisory fees Specialized funds $43,649 $52,169 $57,716 32 % 11 % Customized separate accounts 28,375 30,434 31,719 12 % 4% Advisory 6,248 5,712
Slide 16: Incentive Fees
Incentive Fees Three Months Ended (Dollars in thousands) June 30, 2022 March 31, 2023 June 30, 2023 YoY % Change QoQ % Change Incentive fees Direct equity funds $24,851 $2,368 $2,331 (91)% (2)% Secondary funds 11,959 8,933 8,077 (32)% (10)% Direct credit funds 2,125 1,497 4,767 124 % 218 % Evergreen
Slide 17: Assets Under Management
Assets Under Management (Dollars in millions) June 30, 2022 March 31, 2023 June 30, 2023 YoY % Change QoQ % Change Assets under management / advisement Assets under management $108,034 $111,901 $117,064 8% 5% Assets under advisement 724,160 744,770 700,651 (3)% (6)% Total assets under management /ad
Slide 18: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) March 31, 2023 June 30, 2023 Assets Cash and cash equivalents $99,686 $100,255 Restricted cash 4,804 4,805 Fees receivable 47,140 65,864 Prepaid expenses 9,817 8,007 Due from related parties 7,186 7,963 Furniture, fixtures and
Slide 19: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended June 30, (Dollars in thousands) 2022 2023 Operating activities Net income $56,126 $51,344 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,764 1,873 Change
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation from Net Income Year Ended March 31, Three Months Ended (Dollars in thousands except share and per share amounts) 2018 2023 June 30 2022 March 31, 2023 June 30, 2023 Net income attributable to Hamilton Lane Incorporated $17,341 $109,120 $33,484 $31,086 $30,998
Slide 21: Terms
Terms Adjusted EBITDA is an internal measure of profitability. We believe Adjusted EBITDA is useful to investors because it enables them to better evaluate the performance of our core business across reporting periods. Adjusted EBITDA represents net income excluding (a) interest expense on our outst
Slide 22: Disclosures
Disclosures Some of the statements in this presentation may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as "will", "exp