Focus Financial Partners Inc. (NASDAQ:FOCS) Q2 2022 Earnings Conference Call August 4, 2022 8:30 AM ET

Company Participants

Ruediger Adolf – Founder, CEO & Chairman

James Shanahan – CFO

Russell McGranahan – General Counsel

Conference Call Participants

Craig Siegenthaler - Bank of America Securities

Matthew Moon - Keefe, Bruyette, & Woods

Brandon King - Truist Securities

Owen Lau - Oppenheimer

Russell McGranahan

Good morning, everyone. Before we begin, let me remind you that during the course of this call, we may make a number of forward-looking statements. We call your attention to the fact that Focus' results may, of course, differ from these statements. These statements are based on assumptions made by and information currently available to Focus Financial Partners and involve risks and uncertainties that could cause the results of Focus to materially differ from these statements. Focus has made filings with the SEC, which lists some of the factors that may cause its results to differ materially from these statements. And finally, Focus assumes no duty and does not undertake to update any such forward-looking statements. With that, I will turn it over to our Founder and CEO, Rudy Adolf. Rudy?

Ruediger Adolf

Thanks, Rusty. Good morning, everyone and thank you for joining our call today. The second quarter results we announced this morning were outstanding. Our performance was again above the top end of our guidance, and our business is weathering the volatile market environment well. The benefits of our diverse revenue stream, the variable nature of our cost structure, and the scale of our global partnership are evident. We generated Q2 revenues of $539.2 million, reflecting year-over-year growth of 26.8% and our organic revenue growth rate was 15%. Our adjusted net income, excluding tax adjustments per share was $0.99, and tax adjustments per share was $0.19, increasing 17.9% and 35.7%, respectively.

Year-to-date, we have closed or announced three new partner firms and 11 mergers, bringing our year-to-date transaction total to 14 deals. We closed on Octogone, our first partner firm in Switzerland on July 1st. We also closed on Icon Wealth Management as our newest partner firm on August 1st. Icon, which manages approximately $1.6 billion in client assets is a premier firm with a prudent management team that will help us expand our presence in the fast-growing Texas wealth management market. Despite the macro backdrop, industry M&A deal volume in the second quarter and first half of this year hit new records according to Echelon Partners. We continue to have an excellent pipeline with a good mix of new partner firms and mergers on behalf of our partners and connectors.