Hennessy Advisors Reports 58% Revenue Growth and 136% Net Income Increase for December 2024 Quarter

Hennessy Advisors, Inc. reported significant financial growth for the three months ended December 31, 2024, with total revenue reaching $9.7 million, a 58% increase from $6.1 million in the same period last year. The rise in revenue was primarily driven by a 60% increase in investment advisory fees, which amounted to $9.1 million, up from $5.7 million. Shareholder service fees also saw a notable increase of 35% to $647,000, reflecting the growth in average daily net assets of the Hennessy Funds. The company's net income for the quarter was $2.8 million, a 136% increase compared to $1.2 million in the prior year, attributed to higher revenues and improved operational efficiency.

The company's total assets under management (AUM) as of December 31, 2024, stood at $4.8 billion, marking a 45.7% increase from $3.3 billion a year earlier. This growth in AUM was fueled by net inflows into the Hennessy Funds, market appreciation, and the acquisition of assets related to the management of the CCM Funds. The Hennessy Cornerstone Mid Cap 30 Fund led the inflows with $220 million, while the Hennessy Focus Fund experienced the largest outflow at $50 million. The overall redemption rate decreased slightly from 2.8% to 2.6% per month, indicating improved retention of assets.

Operationally, Hennessy Advisors has expanded its reach, serving over 210,000 fund accounts and approximately 11,000 financial advisors. The company has implemented a robust marketing strategy, utilizing advanced technology to enhance customer engagement and retention. The average daily net assets for the three months ended December 31, 2024, were $4.8 billion, a substantial increase of 58.8% compared to the same period in 2023. The firm continues to focus on maintaining brand loyalty among its top-tier advisors, with over 700 advisors holding significant positions in the funds.

In terms of expenses, total operating expenses rose to $5.9 million, a 24.6% increase from $4.7 million in the previous year. However, as a percentage of total revenue, operating expenses decreased to 60.5%, down from 76.8%, reflecting improved operational efficiency. Compensation and benefits expenses increased by 48.2% to $2.8 million, driven by higher incentive-based compensation. The company also reported a slight increase in interest expense due to the amortization of issuance costs related to its 2026 Notes.

Looking ahead, Hennessy Advisors remains optimistic about its growth trajectory, focusing on both organic growth and potential acquisitions. The company anticipates that its cash and liquid assets will be sufficient to meet capital requirements for the upcoming year. Management is committed to enhancing the investment performance of the Hennessy Funds and providing high-quality service to investors, despite the challenges posed by market conditions and regulatory environments.