AssetMark Reports $116.9B Platform Assets for First Quarter 2024

CONCORD, Calif., May 01, 2024 (GLOBE NEWSWIRE) -- AssetMark Financial Holdings, Inc. (NYSE: AMK) today announced financial results for the quarter ended March 31, 2024.

First Quarter 2024 Financial and Operational Highlights

  • Net income for the quarter was $38.0 million, or $0.51 per share.
  • Adjusted net income for the quarter was $45.2 million, or $0.60 per share, on total revenue of $190.3 million.
  • Adjusted EBITDA for the quarter was $65.9 million, or 34.6% of total revenue.
  • Platform assets increased 21.5% year-over-year to $116.9 billion. Quarter-over-quarter platform assets were up 7.3%, due to market impact net of fees of $6.1 billion and quarterly net flows of $1.8 billion.
  • Year-to-date annualized net flows as a percentage of beginning-of-year platform assets were 6.8%.
  • More than 3,000 new households and 169 new producing advisors joined the AssetMark platform during the first quarter. In total, as of March 31, 2024, there were over 9,200 advisors (approximately 3,200 were engaged advisors) and over 257,000 investor households on the AssetMark platform.
  • We realized an 18.6% annualized production lift from existing advisors for the first quarter, indicating that advisors continued to grow organically and increase wallet share on our platform.

First Quarter 2024 Key Operating Metrics

 1Q23 1Q24 Variance
per year
Operational metrics:     
Platform assets (at period-beginning) (millions of dollars)$91,470  $108,929  19.1%
Net flows (millions of dollars) 1,631   1,842  12.9%
Market impact net of fees (millions of dollars) 3,102   6,130  97.6%
Platform assets (at period-end) (millions of dollars)$96,203  $116,901  21.5%
Net flows lift (% of beginning of year platform assets) 1.8%  1.7% (10 bps)
Advisors (at period-end) 9,319   9,280  (0.4)%
Engaged advisors (at period-end) 2,976   3,208  7.8%
Assets from engaged advisors (at period-end) (millions of dollars)$88,587  $109,267  23.3%
Households (at period-end) 243,775   257,162  5.5%
New producing advisors 166   169  1.8%
Production lift from existing advisors (annualized %) 18.8%  18.6% (20 bps)
Assets in custody at ATC (at period-end) (millions of dollars)$70,069  $86,373  23.3%
ATC client cash (at period-end) (millions of dollars)$3,189  $3,170  (0.6)%
      
Financial metrics:     
Total revenue (millions of dollars)*$170.3  $190.3  11.7%
Net income (millions of dollars)$17.2  $38.0  120.9%
Net income margin (%) 10.1%  20.0% 990 bps
Capital expenditure (millions of dollars)$10.0  $11.9  19.0%
      
Non-GAAP financial metrics:     
Adjusted EBITDA (millions of dollars)$58.8  $65.9  12.1%
Adjusted EBITDA margin (%) 34.5%  34.6% 10 bps
Adjusted net income (millions of dollars)$39.7  $45.2  13.9%

Note: Percentage variance based on actual numbers, not rounded results
All metrics include Adhesion data, except "New producing advisors," "Production lift from existing advisors" in 2023 and ATC related metrics
* The Company reclassified $6.3 million representing the three months of 2023 spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis during the three months ended March 31, 2023.

Webcast and Conference Call Information

As previously announced, on April 25, 2024, AssetMark entered into an agreement to be acquired by GTCR (the “Transaction”). A copy of the press release announcing the Transaction can be found on the investor relations page of AssetMark’s website. Additional details and information about the Transaction are included in the Current Report on Form 8-K filed by AssetMark with the Securities and Exchange Commission ("SEC") on April 25, 2024. The Transaction is subject to customary closing conditions and required regulatory approvals and is expected to close in Q4 2024.

Given the announced Transaction, AssetMark will not be hosting an earnings call and webcast to discuss its first quarter 2024 results and is withdrawing all previously provided financial guidance. For further information about AssetMark’s financial performance please refer to AssetMark’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, which will be filed subsequently with the SEC.

About AssetMark Financial Holdings, Inc.

AssetMark operates a wealth management platform that powers independent financial advisors and their clients. Together with our affiliates Voyant and Adhesion Wealth, we serve advisors of all models at every stage of their journey with flexible, purpose-built solutions that champion client engagement and drive efficiency. Our ecosystem of solutions equips advisors with services and capabilities that would otherwise require significant investments of time and money, ultimately enabling them to deliver better investor outcomes and enhance their productivity, profitability and client satisfaction.

Founded in 1996 and based in Concord, California, the company has over 1,000 employees. Today, the AssetMark platform serves over 9,200 financial advisors and over 257,000 investor households. As of March 31, 2024, the company had $116.9 billion in platform assets.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating performance, which involve risks and uncertainties. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “will,” “may,” “could,” “should,” “believe,” “expect,” “estimate,” “potential” or “continue,” the negative of these terms and other comparable terminology that conveys uncertainty of future events or outcomes. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to differ materially from statements made in this presentation, including our ability to advance our growth strategy, deliver an industry leading experience to advisors and meet our operating and financial performance guidance. Other potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, which is on file with the Securities and Exchange Commission and available on our investor relations website at http://ir.assetmark.com. Additional information will be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which is expected to be filed on May 7, 2024. All information provided in this presentation is based on information available to us as of the date of this presentation and any forward-looking statements contained herein are based on assumptions that we believe are reasonable as of this date. Undue reliance should not be placed on the forward-looking statements in this presentation, which are inherently uncertain. We undertake no duty to update this information unless required by law.


AssetMark Financial Holdings, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands except share data and par value)

 March 31,
2024
 December 31,
2023
 (unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$247,626  $217,680 
Restricted cash 15,000   15,000 
Investments, at fair value 20,573   18,003 
Fees and other receivables, net 23,164   21,345 
Income tax receivable, net    1,890 
Prepaid expenses and other current assets 15,730   17,193 
Total current assets 322,093   291,111 
Property, plant and equipment, net 9,201   8,765 
Capitalized software, net 113,123   108,955 
Other intangible assets, net 681,519   684,142 
Operating lease right-of-use assets 19,244   20,408 
Goodwill 487,909   487,909 
Other assets 23,737   19,273 
Total assets$1,656,826  $1,620,563 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$278  $288 
Accrued liabilities and other current liabilities 60,430   75,554 
Income tax payable, net 8,539    
Total current liabilities 69,247   75,842 
Long-term debt, net 93,567   93,543 
Other long-term liabilities 20,541   18,429 
Long-term portion of operating lease liabilities 24,885   26,295 
Deferred income tax liabilities, net 139,072   139,072 
Total long-term liabilities 278,065   277,339 
Total liabilities 347,312   353,181 
Stockholders’ equity:   
Common stock, $0.001 par value (675,000,000 shares authorized and 74,399,237 and 74,372,889 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively) 74   74 
Additional paid-in capital 964,868   960,700 
Retained earnings 344,586   306,622 
Accumulated other comprehensive loss (14)  (14)
Total stockholders’ equity 1,309,514   1,267,382 
Total liabilities and stockholders’ equity$1,656,826  $1,620,563 



AssetMark Financial Holdings, Inc.

Unaudited Condensed Consolidated Statements of Comprehensive Income
(in thousands, except share and per share data)

 Three Months Ended March 31,
  2024   2023
Revenue:   
Asset-based revenue$149,984  $131,039
Spread-based revenue* 30,093   31,999
Subscription-based revenue 4,252   3,544
Other revenue 5,937   3,716
Total revenue 190,266   170,298
Operating expenses:   
Asset-based expenses 44,853   37,434
Spread-based expenses 389   293
Employee compensation 50,007   46,911
General and operating expenses 27,324   25,689
Professional fees 6,081   5,393
Depreciation and amortization 9,922   8,428
Total operating expenses 138,576   124,148
Interest expense 2,294   2,347
Other (income) expense, net (332)  19,865
Income before income taxes 49,728   23,938
Provision for income taxes 11,764   6,716
Net income 37,964   17,222
Net comprehensive income$37,964  $17,222
Net income per share attributable to common stockholders:   
Basic$0.51  $0.23
Diluted$0.50  $0.23
Weighted average number of common shares outstanding, basic 74,383,265   73,890,162
Weighted average number of common shares outstanding, diluted 75,269,626   74,370,353

* The Company reclassified $6.3 million representing the three months of 2023 spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis during the three months ended March 31, 2023.

AssetMark Financial Holdings, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)

 Three Months Ended March 31,
  2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES   
Net income$37,964  $17,222 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization 9,922   8,428 
Interest expense, net (159)  (9)
Share-based compensation 4,168   3,822 
Debt acquisition cost write-down    92 
Changes in certain assets and liabilities:   
Fees and other receivables, net (1,578)  (1,484)
Receivables from related party (241)  (400)
Prepaid expenses and other current assets 2,493   1,738 
Accounts payable, accrued liabilities and other current liabilities (15,583)  3,871 
Income tax receivable and payable, net 10,429   5,846 
Net cash provided by operating activities 47,415   39,126 
CASH FLOWS FROM INVESTING ACTIVITIES   
Purchase of Adhesion Wealth    (3,000)
Purchase of investments (1,562)  (824)
Sale of investments 179   66 
Purchase of property and equipment (1,071)  (220)
Purchase of computer software (10,833)  (9,954)
Purchase of convertible notes (4,182)   
Net cash used in investing activities (17,469)  (13,932)
CASH FLOWS FROM FINANCING ACTIVITIES   
Payments on term loan    (25,000)
Net cash used in financing activities    (25,000)
Net change in cash, cash equivalents, and restricted cash 29,946   194 
Cash, cash equivalents, and restricted cash at beginning of period 232,680   136,274 
Cash, cash equivalents, and restricted cash at end of period$262,626  $136,468 
SUPPLEMENTAL CASH FLOW INFORMATION   
Income taxes paid, net$1,324  $868 
Interest paid$2,104  $3,787 
Non-cash operating and investing activities:   
Non-cash changes to right-of-use assets$  $1,742 
Non-cash changes to lease liabilities$  $1,742 
        

Explanations and Reconciliations of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe adjusted EBITDA, adjusted EBITDA margin and adjusted net income, all of which are non-GAAP measures, are useful in evaluating our performance. We use adjusted EBITDA, adjusted EBITDA margin and adjusted net income to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that such non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, such non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is defined as EBITDA (net income plus interest expense, income tax expense, depreciation and amortization and less interest income), further adjusted to exclude certain non-cash charges and other adjustments set forth below. Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenue. Adjusted EBITDA and adjusted EBITDA margin are useful financial metrics in assessing our operating performance from period to period because they exclude certain items that we believe are not representative of our core business, such as certain material non-cash items and other adjustments such as share-based compensation, strategic initiatives and reorganization and integration costs. We believe that adjusted EBITDA and adjusted EBITDA margin, viewed in addition to, and not in lieu of, our reported GAAP results, provide useful information to investors regarding our performance and overall results of operations for various reasons, including:

  • non-cash equity grants made to employees at a certain price and point in time do not necessarily reflect how our business is performing at any particular time; as such, share-based compensation expense is not a key measure of our operating performance; and
  • costs associated with acquisitions and the resulting integrations, debt refinancing, restructuring, conversions, as well as other non-recurring litigation costs, can vary from period to period and transaction to transaction; as such, expenses associated with these activities are not considered a key measure of our operating performance.

We use adjusted EBITDA and adjusted EBITDA margin:

  • as measures of operating performance;
  • for planning purposes, including the preparation of budgets and forecasts;
  • to allocate resources to enhance the financial performance of our business;
  • to evaluate the effectiveness of our business strategies;
  • in communications with our board of directors concerning our financial performance; and
  • as considerations in determining compensation for certain employees.

Adjusted EBITDA and adjusted EBITDA margin have limitations as analytical tools, and should not be considered in isolation to, or as substitutes for, analysis of our results as reported under GAAP. Some of these limitations are:

  • adjusted EBITDA and adjusted EBITDA margin do not reflect all cash expenditures, future requirements for capital expenditures or contractual commitments;
  • adjusted EBITDA and adjusted EBITDA margin do not reflect changes in, or cash requirements for, working capital needs;
  • adjusted EBITDA and adjusted EBITDA margin do not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments; and
  • the definitions of adjusted EBITDA and adjusted EBITDA margin can differ significantly from company to company and as a result have limitations when comparing similarly titled measures across companies.

Set forth below is a reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted EBITDA for the three months ended March 31, 2024 and 2023 (unaudited).

  Three Months Ended March 31, Three Months Ended March 31,
(in thousands except for percentages)  2024   2023  2024 2023
Net income $37,964  $17,222  20.0% 10.1%
Provision for income taxes  11,764   6,716  6.2% 3.9%
Interest income  (4,023)  (2,051) (2.2)% (1.2)%
Interest expense  2,294   2,347  1.2% 1.4%
Depreciation and amortization  9,922   8,428  5.2% 5.0%
EBITDA $57,921  $32,662  30.4% 19.2%
Share-based compensation(1)  4,168   3,822  2.2% 2.2%
Reorganization and integration costs(2)  3,841   1,909  2.0% 1.1%
Acquisition expenses(3)  12   313   0.2%
Business continuity plan(4)     (6)  
Accrual for SEC settlement(5)     20,000   11.8%
Other (income) expense, net  (35)  88   
Adjusted EBITDA $65,907  $58,788  34.6% 34.5%

(1) “Share-based compensation” represents granted share-based compensation in the form of restricted stock unit and stock appreciation right grants by us to certain of our directors and employees. Although this expense occurred in each measurement period, we have added the expense back in our calculation of adjusted EBITDA because of its noncash impact.
(2) “Reorganization and integration costs” includes costs related to our functional reorganization within our Operations, Technology and Retirement functions as well as duplicate costs related to the outsourcing of back-office operations functions. While we have incurred such expenses in all periods measured, these expenses serve varied reorganization and integration initiatives, each of which is non-recurring. We do not consider these expenses to be part of our core operations.
(3) “Acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions.
(4) “Business continuity plan” includes incremental compensation and other costs that are directly related to a transition to a hybrid workforce in 2022.
(5) “Accrual for SEC settlement” represents an accrual that pertains to a settled SEC matter from 2023 discussed in Note 11 of notes to unaudited condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

Set forth below is a summary of the adjustments involved in the reconciliation from net income and net income margin, the most directly comparable GAAP financial measures, to adjusted EBITDA and adjusted EBITDA margin for three months ended March 31, 2024 and 2023 (unaudited), broken out by compensation and non-compensation expenses (unaudited).

  Three Months Ended March 31, 2024 Three Months Ended March 31, 2023
(in thousands) Compensation Non-
Compensation
 Total Compensation Non-
Compensation
 Total
Share-based compensation(1) $4,168 $  $4,168  $3,822 $  $3,822 
Reorganization and integration costs(2)  1,532  2,309   3,841   1,064  845   1,909 
Acquisition expenses(3)    12   12   100  213   313 
Business continuity plan(4)            (6)  (6)
Accrual for SEC settlement(5)            20,000   20,000 
Other (income) expense, net    (35)  (35)    88   88 
Total adjustments to adjusted EBITDA $5,700 $2,286  $7,986  $4,986 $21,140  $26,126 



  Three Months Ended March 31, 2024 Three Months Ended March 31, 2023
(in percentages) Compensation Non-
Compensation
 Total Compensation Non-
Compensation
 Total
Share-based compensation(1) 2.2%   2.2% 2.2%   2.2%
Reorganization and integration costs(2) 0.8% 1.2% 2.0% 0.6% 0.5% 1.1%
Acquisition expenses(3)       0.1% 0.1% 0.2%
Business continuity plan(4)            
Accrual for SEC settlement(5)         11.8% 11.8%
Other (income) expense, net            
Total adjustments to adjusted EBITDA margin % 3.0% 1.2% 4.2% 2.9% 12.4% 15.3%

(1) “Share-based compensation” represents granted share-based compensation in the form of restricted stock unit and stock appreciation right grants by us to certain of our directors and employees. Although this expense occurred in each measurement period, we have added the expense back in our calculation of adjusted EBITDA because of its noncash impact.
(2) “Reorganization and integration costs” includes costs related to our functional reorganization within our Operations, Technology and Retirement functions as well as duplicate costs related to the outsourcing of back-office operations functions. While we have incurred such expenses in all periods measured, these expenses serve varied reorganization and integration initiatives, each of which is non-recurring. We do not consider these expenses to be part of our core operations.
(3) “Acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions.
(4) “Business continuity plan” includes incremental compensation and other costs that are directly related to a transition to a hybrid workforce in 2022.
(5) “Accrual for SEC settlement” represents an accrual that pertains to a settled SEC matter from 2023 discussed in Note 11 of notes to unaudited condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

Adjusted Net Income

Adjusted net income represents net income before: (a) share-based compensation expense, (b) amortization of acquisition-related intangible assets, (c) acquisition and related integration expenses, (d) restructuring and conversion costs and (e) certain other expenses. Reconciled items are tax effected using the income tax rates in effect for the applicable period, adjusted for any potentially non-deductible amounts. We prepared adjusted net income to eliminate the effects of items that we do not consider indicative of our core operating performance. We believe that adjusted net income, viewed in addition to, and not in lieu of, our reported GAAP results, provides useful information to investors regarding our performance and overall results of operations for various reasons, including the following:

  • non-cash equity grants made to employees at a certain price and point in time do not necessarily reflect how our business is performing at any particular time; as such, share-based compensation expense is not a key measure of our operating performance;
  • costs associated with acquisitions and related integrations, debt refinancing, restructuring and conversions can vary from period to period and transaction to transaction; as such, expenses associated with these activities are not considered a key measure of our operating performance; and
  • amortization expenses can vary substantially from company to company and from period to period depending upon each company’s financing and accounting methods, the fair value and average expected life of acquired intangible assets and the method by which assets were acquired; as such, the amortization of intangible assets obtained in acquisitions is not considered a key measure of our operating performance.

Adjusted net income does not purport to be an alternative to net income or cash flows from operating activities. The term adjusted net income is not defined under GAAP, and adjusted net income is not a measure of net income, operating income or any other performance or liquidity measure derived in accordance with GAAP. Therefore, adjusted net income has limitations as an analytical tool and should not be considered in isolation to, or as a substitute for, analysis of our results as reported under GAAP. Some of these limitations are:

  • adjusted net income does not reflect all cash expenditures, future requirements for capital expenditures or contractual commitments;
  • adjusted net income does not reflect changes in, or cash requirements for, working capital needs; and
  • other companies in the financial services industry may calculate adjusted net income differently than we do, limiting its usefulness as a comparative measure.

The schedule set forth below presents the Company’s GAAP results from the Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 31, 2024 and 2023, with certain line items adjusted for the items described above. Included below is also a reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted net income for the three months ended March 31, 2024 and 2023 (unaudited).

 Three Months Ended
March 31,
  2024   2023 
Revenue:   
Asset-based revenue$149,984  $131,039 
Spread-based revenue(1) 30,093   31,999 
Subscription-based revenue 4,252   3,544 
Other revenue 5,937   3,716 
Total revenue 190,266   170,298 
Operating expenses:   
Asset-based expenses 44,853   37,434 
Spread-based expenses 389   293 
Adjusted employee compensation(2) 44,307   41,925 
Adjusted general and operating expenses(2) 25,614   24,805 
Adjusted professional fees(2) 5,470   5,225 
Adjusted depreciation and amortization(3) 7,742   6,254 
Total adjusted operating expenses 128,375   115,936 
Interest expense 2,294   2,347 
Adjusted other expenses, net(2) (297)  (223)
Adjusted income before income taxes 59,894   52,238 
Adjusted provision for income taxes(4) 14,674   12,537 
Adjusted net income$45,220  $39,701 
Net income per share attributable to common stockholders:   
Adjusted earnings per share$0.60  $0.53 
Weighted average number of common shares outstanding, diluted 75,269,626   74,370,353 

(1) The Company reclassified $6.3 million from spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis for the three months March 31, 2023.
(2) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above.
(3) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(4) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.

Set forth below is a reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted net income for the three months ended March 31, 2024 and 2023 (unaudited).

 Three months ended March 31, 2024 Three months ended March 31, 2023
Reconciliation of Non-GAAP PresentationGAAP Adjustments Adjusted GAAP Adjustments Adjusted
Revenue:           
Asset-based revenue$149,984  $  $149,984  $131,039 $  $131,039 
Spread-based revenue(1) 30,093      30,093   31,999     31,999 
Subscription-based revenue 4,252      4,252   3,544     3,544 
Other revenue 5,937      5,937   3,716     3,716 
Total revenue 190,266      190,266   170,298     170,298 
Operating expenses:           
Asset-based expenses 44,853      44,853   37,434     37,434 
Spread-based expenses 389      389   293     293 
Employee compensation(2)  50,007   (5,700)  44,307   46,911  (4,986)  41,925 
General and operating expenses(2) 27,324   (1,710)  25,614   25,689  (884)  24,805 
Professional fees(2) 6,081   (611)  5,470   5,393  (168)  5,225 
Depreciation and amortization(3) 9,922   (2,180)  7,742   8,428  (2,174)  6,254 
Total operating expenses 138,576   (10,201)  128,375   124,148  (8,212)  115,936 
Interest expense 2,294      2,294   2,347     2,347 
Other expenses, net(2) (332)  35   (297)  19,865  (20,088)  (223)
Income before income taxes 49,728   10,166   59,894   23,938  28,300   52,238 
Provision for income taxes(4) 11,764   2,910   14,674   6,716  5,821   12,537 
Net income$37,964    $45,220  $17,222   $39,701 

(1) The Company reclassified $6.3 million from spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis for the three months March 31, 2023.
(2) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above.
(3) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(4) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.

Set forth below is a summary of the adjustments involved in the reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted net income for three months ended March 31, 2024 and 2023 (unaudited), broken out by compensation and non-compensation expenses (unaudited).

  Three Months Ended March 31, 2024 Three Months Ended March 31, 2023
(in thousands) Compensation Non-
Compensation
 Total Compensation Non-
Compensation
 Total
Net income     $        37,964              $        17,222         
Acquisition-related amortization(1) $  $2,180   2,180  $  $2,174   2,174 
Expense adjustments(2)  1,532   2,321   3,853   1,164   21,052   22,216 
Share-based compensation  4,168      4,168   3,822      3,822 
Other (income) expense, net     (35)  (35)     88   88 
Tax effect of adjustments(3)  (1,397)  (1,513)  (2,910)  (1,197)  (4,624)  (5,821)
Adjusted net income $4,303  $2,953  $45,220  $3,789  $18,690  $39,701 

(1) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(2) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above other than share-based compensation.
(3) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.

Contacts
Investors:
Taylor J. Hamilton, CFA
Head of Investor Relations
InvestorRelations@assetmark.com 

Media:
Alaina Kleinman
Head of PR & Communications
alaina.kleinman@assetmark.com 

SOURCE: AssetMark Financial Holdings, Inc.


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