Silvercrest Asset Management Group Inc. (NASDAQ:SAMG) Q1 2023 Earnings Conference Call May 5, 2023 8:30 AM ET

Company Participants

Richard Hough - Chairman, Chief Executive Officer and President

Scott Gerard - Chief Financial Officer

Conference Call Participants

Sumeet Mody - Piper Sandler

Sandy Mehta - Evaluate Research

Christopher Marinac - Janney Montgomery Scott

Chris Sakai - Singular Research

Operator

Good morning, and welcome to the Silvercrest Asset Management Group Inc. First Quarter 2023 Earnings Conference Call. All participants will in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask question. Please note that this event is being recorded.

Before we begin, I'll remind you that during today's call, certain statements made regarding our future performances are forward-looking statements. They are based on current expectations and projections, which are subject to a number of risks and uncertainties and many factors could cause actual results to differ materially from the statements that are made. Those factors are disclosed in our filings with the SEC under caption Risk Factors. For all forward-looking statements, we claim the protection provided by the Litigation Reform Act of 1995. All forward-looking statements made on this call are made of the date hereof, and Silvercrest assumes no obligations to update them.

Now I'd like to turn the conference over to Rick Hough, Chairman and CEO of Silvercrest. Please go ahead, sir.

Richard Hough

Thank you. Thanks for joining us for the first quarter results for Silvercrest. Despite volatility, markets were supportive during the first quarter of 2023, with Silvercrest concluding the quarter with total assets under management of $29.9 billion and discretionary AUM of $21.3 billion. Discretionary AUM, which primarily drives our revenue, increased 1.9% over the fourth quarter of 2022.

Nonetheless, our discretionary AUM has declined 10.5% year-over-year since the first quarter of 2022. Consequently, while business results have increased over fourth quarter results, they remain down on a year-over-year basis as markets recover. Our revenue fell 12.2% for the first quarter compared with 2022. This decline in revenue significantly affected adjusted EBITDA and adjusted diluted earnings per share.

Our adjusted EBITDA declined year-over-year to $8.2 million for the first quarter since the first quarter of 2022. Adjusted diluted earnings per share also declined year-over-year to $0.35 for the first quarter -- since the first quarter of 2022. Silvercrest adjusted EBITDA margin of 27.8% remains historically healthy for the company.

Economic uncertainty and market volatility often create long-term opportunities that benefit the high quality of our capabilities. The pipeline of new business opportunities has also increased over the fourth quarter of 2022 and has increased substantially since the first quarter of 2022. The firm's outsourced Chief Investment Officer initiative also increased during the first quarter and now manages AUM of $1.52 billion.