Cowen Group (COWN) Tops Q1 EPS by 25c, Beats on Revenues

Cowen Group (NASDAQ: COWN) reported Q1 EPS of $0.79, $0.25 better than the analyst estimate of $0.54. Revenue for the quarter came in at $251.4 million versus the consensus estimate of $207.05 million.

Financial Highlights

GAAP

• Revenue rose 119% year over year to a record $251.4 million compared to $115.0 million in the prior year period.
• Net income attributable to common stockholders was $15.2 million or $0.50 per diluted common share compared to $1.3 million or $0.05 per diluted common share in the prior year period.
• The Company adopted ASC Topic 606 Revenue from Contracts with Customers, ("ASC Topic 606") as amended. The Company applied this new revenue recognition guidance using the modified retrospective method effective January 1, 2018 and therefore there is no impact on previously issued results. The effect on the current quarter results is outlined within this press release.

Economic Income (Non-GAAP)

• The Company achieved a new revenue quarterly high. Revenue increased 88% year over year to $241.5 million compared to $128.6 million in the prior year period.
• The Company also generated record Economic Income of $24.1 million or $0.79 per diluted share compared to Economic Income of $5.5 million or $0.19 per diluted share in the prior year period.

Operating Highlights

• On a GAAP and economic income basis, investment banking revenue increased 168% and 157% year over year to $98.0 million and $93.9 million, respectively. The quarter was led by very strong performance in equity financings as well as a growing contribution from advisory and non-healthcare sectors.
• Brokerage revenue rose 109% and 118% year over year to $105.7 million and $114.1 million on a GAAP and economic income basis, respectively. The increase was primarily attributable to the acquisition of Convergex in June 2017.
• As of April 1, 2018, assets under management were $10.8 billion, a $0.2 billion decrease from January 1, 2018.
• On a GAAP basis, the compensation to revenue ratio was 47% compared to 50% in the prior year period. On an economic income basis, the compensation to revenue ratio declined to 56% from 58% due to a shift in business mix as a result of the Convergex acquisition.
• Book value per share was $22.27 as of March 31, 2018, compared to $21.82 as of December 31, 2017. Tangible book value per share was $19.25 as of March 31, 2018 compared to $18.77 as of December 31, 2017.

For earnings history and earnings-related data on Cowen Group (COWN) click here.

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