Focus Financial Partners Inc. (FOCS) Tops Q2 EPS by 10c, Revenues Beat

Focus Financial Partners Inc. (NASDAQ: FOCS) reported Q2 EPS of $0.71, $0.10 better than the analyst estimate of $0.61. Revenue for the quarter came in at $313.1 million versus the consensus estimate of $301.44 million.

Second Quarter 2020 Highlights

• Total revenues of $313.1 million, 3.8% growth year over year
• Organic revenue growth(1) rate essentially flat year over year
• GAAP net income of $3.3 million, 7.3% growth year over year
• GAAP basic and diluted net income per share attributable to common shareholders of $0.05 and $0.03, respectively
• Adjusted Net Income(2) of $54.3 million, 31.7% growth year over year
• Adjusted Net Income Per Share(2) of $0.71, 29.1% growth year over year
• Net cash provided by operating activities for the trailing 4-quarters ended June 30, 2020 was $203.9 million, 64.5% higher than the prior year period
• LTM Cash Flow Available For Capital Allocation(2) for the trailing 4-quarters ended June 30, 2020 was $192.4 million, 65.0% higher than the prior year period
• Repaid $200 million drawn under First Lien Revolver in March 2020 as market liquidity stabilized
• Net Leverage Ratio(3) of 3.85x
• Reaffirmed Net Leverage Ratio(3) target range of 3.5x - 4.5x

"Our 2020 second quarter results exceeded the high end of our expectations and are a powerful affirmation of the resiliency of our business," said Rudy Adolf, Founder, CEO and Chairman. "Our business is weathering the volatile markets well. Our partner firms are doing an outstanding job of helping their clients navigate the ongoing uncertainty. The crisis has made clear the value of holistic and highly personalized service, especially for ultra-high and high net worth clients. Our partner firms are well suited to this, which is reflected in the referrals they are seeing. We anticipate that the flight to quality of advice will accelerate further and be a catalyst for industry growth above historical levels in the next several years. I am confident that we will benefit disproportionately."

"Our second quarter results were a testament to the strength of our business," said Jim Shanahan, Chief Financial Officer. "We needed a market crisis to demonstrate the performance of our model under pressure. Our Q2 financial performance exceeded the high end of our estimated range. Our net leverage ratio declined to 3.85x during the quarter, and we again reaffirmed our targeted range of 3.5x to 4.5x. Although Covid-19 uncertainty persisted throughout the quarter, our partner firms continued to deliver excellent service to their clients and manage their businesses well, while simultaneously positioning themselves for future growth. We believe the opportunity set post-crisis will be substantial."

For earnings history and earnings-related data on Focus Financial Partners Inc. (FOCS) click here.

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