AMG's Q3 Net Income Soars 57% on Affiliate Transaction Gains

TL;DR

**AMG's Q3 earnings are a mixed bag: huge net income jump from a one-off gain, but watch that cash burn and rising expenses.**

AI Summary

AFFILIATED MANAGERS GROUP, INC. (AMG) reported a significant increase in net income for the three months ended September 30, 2025, reaching $290.9 million, up from $185.8 million in the prior year, a 56.6% increase. Diluted EPS also saw a substantial jump to $6.87 from $3.78, an 81.7% increase. This growth was primarily driven by a new 'Affiliate transaction gains' line item, contributing $127.6 million in the quarter and year-to-date. Consolidated revenue increased modestly by 2.2% to $528.0 million for the three months, and by 0.1% to $1,517.8 million for the nine months. Total consolidated expenses rose by 9.2% to $409.2 million for the quarter, largely due to a 14.8% increase in compensation and related expenses to $253.5 million. The company also saw a substantial increase in intangible amortization and impairments for the nine months, rising from $21.8 million in 2024 to $96.0 million in 2025. Cash and cash equivalents decreased significantly from $950.0 million at December 31, 2024, to $476.1 million at September 30, 2025, primarily due to substantial investments in Affiliates totaling $515.1 million and net cash used in financing activities of $948.6 million for the nine months ended September 30, 2025.

Why It Matters

AMG's strong net income growth, largely fueled by a one-time affiliate transaction gain, signals a potentially robust strategic move that could enhance long-term value for investors, though the sustainability of such gains is key. The significant reduction in cash and cash equivalents, coupled with increased investments in Affiliates, suggests a strategic reallocation of capital, which could impact future liquidity and growth prospects. For employees, increased compensation expenses could indicate a positive trend in talent retention and acquisition. In a competitive asset management landscape, these strategic investments could position AMG to expand its market share and diversify its offerings, impacting customers through potentially broader and more innovative investment products.

Risk Assessment

Risk Level: medium — The company's cash and cash equivalents decreased by $473.9 million from $950.0 million at December 31, 2024, to $476.1 million at September 30, 2025, representing a 49.9% decline. This significant reduction in liquidity, alongside a substantial increase in intangible amortization and impairments from $21.8 million to $96.0 million for the nine months ended September 30, 2025, indicates potential financial strain or aggressive investment strategies that could elevate risk.

Analyst Insight

Investors should scrutinize the nature and recurrence of the $127.6 million 'Affiliate transaction gains' to assess the sustainability of AMG's recent earnings surge. Given the substantial decrease in cash and cash equivalents and increased investments in Affiliates, investors should monitor future cash flow statements closely for signs of improved liquidity and return on these investments.

Financial Highlights

revenue

$528.0M

net Income

$290.9M

eps

$6.87

cash Position

$476.1M

revenue Growth

+2.2%

Revenue Breakdown

Key Numbers

• $290.9M — Net Income (Controlling Interest) (Increased 56.6% for Q3 2025 compared to Q3 2024)
• $6.87 — Diluted EPS (Increased 81.7% for Q3 2025 compared to Q3 2024)
• $127.6M — Affiliate Transaction Gains (New income stream for Q3 and YTD 2025)
• $528.0M — Consolidated Revenue (Increased 2.2% for Q3 2025 compared to Q3 2024)
• $409.2M — Total Consolidated Expenses (Increased 9.2% for Q3 2025 compared to Q3 2024)
• $253.5M — Compensation and Related Expenses (Increased 14.8% for Q3 2025 compared to Q3 2024)
• $96.0M — Intangible Amortization and Impairments (Increased from $21.8M for YTD 2024 to YTD 2025)
• $476.1M — Cash and Cash Equivalents (Decreased 49.9% from December 31, 2024, to September 30, 2025)
• $515.1M — Investments in Affiliates (Net cash used in investing activities for YTD 2025)
• $948.6M — Cash Flow Used in Financing Activities (For the nine months ended September 30, 2025)

Key Players & Entities

• AFFILIATED MANAGERS GROUP, INC. (company) — registrant
• AMG (company) — registrant ticker
• New York Stock Exchange (regulator) — exchange for securities
• FASB (regulator) — Financial Accounting Standards Board
• $290.9 million (dollar_amount) — Net income for three months ended September 30, 2025
• $185.8 million (dollar_amount) — Net income for three months ended September 30, 2024
• $127.6 million (dollar_amount) — Affiliate transaction gains for three and nine months ended September 30, 2025
• $6.87 (dollar_amount) — Diluted EPS for three months ended September 30, 2025
• $3.78 (dollar_amount) — Diluted EPS for three months ended September 30, 2024
• $476.1 million (dollar_amount) — Cash and cash equivalents at September 30, 2025

FAQ

Risk Factors

• Significant Decrease in Cash Position [high — financial]: Cash and cash equivalents decreased by 49.9% from $950.0 million at December 31, 2024, to $476.1 million at September 30, 2025. This was primarily driven by substantial investments in Affiliates ($515.1 million) and significant net cash used in financing activities ($948.6 million) for the nine months ended September 30, 2025.
• Increase in Intangible Amortization and Impairments [medium — operational]: Intangible amortization and impairments rose significantly from $21.8 million for the nine months ended September 30, 2024, to $96.0 million for the same period in 2025. This substantial increase could impact future profitability.
• Rising Compensation Expenses [medium — financial]: Compensation and related expenses increased by 14.8% to $253.5 million for the three months ended September 30, 2025, compared to the prior year. This contributed to a 9.2% overall increase in total consolidated expenses.
• Dependence on Affiliate Performance [medium — market]: The significant contribution of 'Affiliate transaction gains' ($127.6 million) to net income in Q3 2025 highlights a reliance on these transactions. Volatility or underperformance in these affiliate activities could materially affect earnings.

Industry Context

The asset management industry is characterized by intense competition, fee compression, and a growing demand for alternative investment strategies. Firms are increasingly focused on scaling their businesses through acquisitions and strategic partnerships to gain market share and diversify offerings. Regulatory scrutiny and evolving investor preferences for ESG (Environmental, Social, and Governance) factors also shape the landscape.

Regulatory Implications

AMG operates within a highly regulated financial services industry. Changes in tax laws, accounting standards (like the recently adopted ASU 2023-07 and ASU 2024-01), and specific regulations governing investment advisors and asset managers can impact reporting, operations, and profitability. Compliance with these evolving regulations is a continuous operational requirement.

What Investors Should Do

1. Monitor the sustainability of 'Affiliate transaction gains' as a primary driver of net income growth, given its newness and potential volatility.
2. Analyze the drivers behind the significant increase in intangible amortization and impairments to understand its long-term impact on asset values and profitability.
3. Evaluate the strategic rationale and long-term implications of the substantial investments in Affiliates and the significant cash outflow from financing activities.
4. Assess the impact of rising compensation and related expenses on operating margins, especially in light of modest revenue growth.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported significant net income growth driven by affiliate transaction gains and a substantial decrease in cash reserves due to investments and financing activities.
• 2025-01-01: Adoption of ASU 2023-07 and ASU 2024-01 — New accounting standards adopted for segment reporting and stock compensation, with no material impact reported on financial statements.

Glossary

Affiliate transaction gains

Gains realized from transactions with affiliated companies, which can include sales, acquisitions, or other business arrangements. (A new and significant source of income for AMG in Q3 and YTD 2025, contributing $127.6 million and heavily influencing net income growth.)

Intangible amortization and impairments

The systematic expensing of the cost of intangible assets over their useful lives (amortization) or the reduction in value of an intangible asset when its carrying amount exceeds its recoverable amount (impairment). (Increased substantially from $21.8 million to $96.0 million for the nine months ended September 30, 2025, impacting profitability.)

Net income (controlling interest)

The portion of net income attributable to the parent company's shareholders, after deducting the portion attributable to non-controlling interests. (Reported at $212.4 million for Q3 2025, showing strong growth, but the overall net income figure of $290.9 million includes non-controlling interests.)

NAV

Net Asset Value, typically used for investment funds, representing the value of an investment fund's assets minus its liabilities. (Used to measure the fair value of certain investments, particularly those in private markets, with $523.8 million reported as of September 30, 2025.)

Year-Over-Year Comparison

Compared to the prior year, AMG has demonstrated robust net income growth of 56.6% for the three months ended September 30, 2025, largely due to a new 'Affiliate transaction gains' line item. While consolidated revenue saw a modest increase of 2.2%, total consolidated expenses grew by 9.2%, driven by higher compensation costs. The company's cash position has significantly declined, and intangible amortization and impairments have sharply increased year-over-year for the nine-month period.

Key Financial Figures

• $0.01 — nge on which registered Common Stock ($0.01 par value) AMG New York Stock Excha

Filing Documents

• amg-20250930.htm (10-Q) — 3391KB
• amg_09302025xexhibit311.htm (EX-31.1) — 11KB
• amg_09302025xexhibit312.htm (EX-31.2) — 11KB
• amg_09302025xexhibit321.htm (EX-32.1) — 6KB
• amg_09302025xexhibit322.htm (EX-32.2) — 6KB
• amg-20250930_g1.gif (GRAPHIC) — 15KB
• 0001628280-25-050206.txt ( ) — 13296KB
• amg-20250930.xsd (EX-101.SCH) — 80KB
• amg-20250930_cal.xml (EX-101.CAL) — 83KB
• amg-20250930_def.xml (EX-101.DEF) — 347KB
• amg-20250930_lab.xml (EX-101.LAB) — 744KB
• amg-20250930_pre.xml (EX-101.PRE) — 541KB
• amg-20250930_htm.xml (XML) — 2664KB

Financial Statements (unaudited)

Financial Statements (unaudited) 2 Consolidated Statements of Income 2 Consolidated Statements of Comprehensive Income 3 Consolidated Balance Sheets 4 Consolidated Statements of Changes in Equity 5 Consolidated Statements of Cash Flows 7 Notes to the Consolidated Financial Statements (unaudited) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 42 Item 4.

Controls and Procedures

Controls and Procedures 42 PART II OTHER INFORMATION 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43 Item 6. Exhibits 43

Signatures

Signatures 45 2 Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements AFFILIATED MANAGERS GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data) (unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2024 2025 2024 2025 Consolidated revenue $ 516.4 $ 528.0 $ 1,516.6 $ 1,517.8 Consolidated expenses: Compensation and related expenses 220.8 253.5 676.5 747.6 Selling, general and administrative 97.0 100.5 278.1 290.8 Intangible amortization and impairments 7.3 6.3 21.8 96.0 Interest expense 34.7 33.2 98.1 101.8 Depreciation and other amortization 3.3 2.6 9.4 7.9 Other expenses (net) 11.6 13.1 31.5 34.7 Total consolidated expenses 374.7 409.2 1,115.4 1,278.8 Equity method income (net) 52.6 88.5 188.3 229.5 Affiliate transaction gains (Note 9) — 127.6 — 127.6 Investment and other income 22.8 27.6 60.0 64.7 Income before income taxes 217.1 362.5 649.5 660.8 Income tax expense 31.3 71.6 130.0 134.7 Net income 185.8 290.9 519.5 526.1 Net income (non-controlling interests) ( 62.2 ) ( 78.5 ) ( 170.0 ) ( 157.1 ) Net income (controlling interest) $ 123.6 $ 212.4 $ 349.5 $ 369.0 Average shares outstanding (basic) 30.1 28.4 31.4 28.7 Average shares outstanding (diluted) 35.0 32.9 35.2 33.0 Earnings per share (basic) $ 4.11 $ 7.47 $ 11.11 $ 12.85 Earnings per share (diluted) $ 3.78 $ 6.87 $ 10.25 $ 11.83 The accompanying notes are an integral part of the Consolidated Financial Statements. 3 Table of Contents AFFILIATED MANAGERS GROUP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) (unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2024 2025 2024 2025 Net income $ 185.8 $ 290.9 $ 519.5 $ 526.1 Other comprehensive income, net of tax: Foreign c

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation and Use of Estimates The Consolidated Financial Statements of Affiliated Managers Group, Inc. ("AMG" or the "Company") have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for full year financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair statement of the Company's interim financial position and results of operations have been included and all intercompany balances and transactions have been eliminated. Certain reclassifications have been made to the prior period's financial statements to conform to the current period's presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for any other period or for the full year. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 includes additional information about its operations, financial position, and accounting policies, and should be read in conjunction with this Quarterly Report on Form 10-Q. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. All dollar amounts, except per share, per unit, and per option data in the text and tables herein, are stated in millions unless otherwise indicated . 2. Accounting Standards and Policies Recently Adopted Accounting Standards Effective for the financial year ended December 31, 2024 and for interim periods beginning January 1, 2025, the Company adopted Accounting Standard Update ("ASU") 2023-07

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which increases the operability of the recognition guidance considering different methods of software development. The standard is effective for annual periods beginning after December 15, 2027 and interim periods within those annual reporting periods. The Company is currently evaluating the potential impact that this standard may have on its Consolidated Financial Statements. 3. Investments The following table summarizes the Company's Investments: December 31, 2024 September 30, 2025 Investments in marketable securities Equity securities $ 32.3 $ 37.1 Debt securities 24.3 48.4 Total investments in marketable securities 56.6 85.5 Other investments Investments measured at NAV as a practical expedient $ 488.6 $ 523.8 Investments without readily determinable fair values 50.4 50.4 Total other investments 539.0 574.2 Investments $ 595.6 $ 659.7 Investments in Marketable Securities Equity Securities The following table summarizes the cost, gross unrealized gains, gross unrealized losses, and fair value of investments in equity securities: December 31, 2024 September 30, 2025 Cost $ 30.0 $ 37.8 Unrealized gains 3.7 7.9 Unrealized losses ( 1.4 ) ( 8.6 ) Fair value $ 32.3 $ 37.1 As of December 31, 2024 and September 30, 2025 , investments in equity securities include consolidated Affiliate sponsored investment products with fair values of $ 10.9 million and $ 8.5 million , respectively. For the three and nine months ended September 30, 2024 , the Company recognized net unrealized gains on equity securities still held as of September 30, 2024 of $ 2.0 million and $ 3.5 million , respectively. For the three and nine months ended September

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) For the three and nine months ended September 30, 2024 , the Company recognized net unrealized gains on debt securities classified as trading still held as of September 30, 2024 of $ 0.8 million and $ 1.4 million , respectively. For the three and nine months ended September 30, 2025 , the Company recognized net unrealized gains (losses) on debt securities classified as trading still held as of September 30, 2025 of $( 0.4 ) million and $ 1.8 million , respectively. Other Investments Investments Measured at NAV as a Practical Expedient The following table summarizes the fair values of investments that are measured at net asset value ("NAV") as a practical expedient and any related unfunded commitments: December 31, 2024 September 30, 2025 Fair Value Unfunded Commitments Fair Value Unfunded Commitments Investments with limited liquidity (1) $ 486.9 $ 205.5 $ 474.8 $ 240.6 Investments with periodic liquidity (2) 1.7 — 49.0 24.7 Total (3) $ 488.6 $ 205.5 $ 523.8 $ 265.3 ___________________________ (1) The Company expects to receive distributions related to its interests in investments with limited liquidity as the underlying assets are liquidated over the life of the investments, which is generally up to 15 years . The Company accounts for the majority of its interests in investments with limited liquidity one quarter in arrears (adjusted for current period calls and distributions). (2) Investments with periodic liquidity are generally redeemable on a daily, monthly, or quarterly basis. (3) Investments measured at NAV as a practical expedient primarily invest in a broad range of private markets. Fair value attributable to the controlling interest was $ 370.1 million and $ 405.2 million as of December 31, 2024 and September 30, 2025 , respectively. Investments Without Readily Determinable Fair Values The following table summarizes the cost, cumulative u

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) For the Nine Months Ended September 30, 2024 2025 Measured at NAV as a Practical Expedient Without Readily Determinable Fair Values Total Measured at NAV as a Practical Expedient Without Readily Determinable Fair Values Total Balance, beginning of period $ 430.5 $ 50.4 $ 480.9 $ 488.6 $ 50.4 $ 539.0 Purchases and commitments funded 78.1 — 78.1 68.5 — 68.5 Sales and distributions ( 47.1 ) — ( 47.1 ) ( 67.3 ) — ( 67.3 ) Net realized and unrealized gains 20.9 — 20.9 34.0 — 34.0 Balance, end of period $ 482.4 $ 50.4 $ 532.8 $ 523.8 $ 50.4 $ 574.2 4. Fair Value Measurements The following tables summarize financial assets and liabilities that are measured at fair value on a recurring basis: Fair Value Measurements December 31, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets Investments in equity securities (1) $ 32.3 $ 32.3 $ — $ — Investments in debt securities (1) 24.3 — 24.3 — Financial Liabilities (2) Contingent payment obligations $ 5.7 $ — $ — $ 5.7 Affiliate equity purchase obligations 54.8 — — 54.8 Fair Value Measurements September 30, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1)

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