Hennessy Advisors Reports 14.3% Revenue Decline and 31.9% Drop in Net Income

Hennessy Advisors, Inc. reported a decline in financial performance for the three months ended December 31, 2025, with total revenue decreasing by 14.3% to $8.3 million, down from $9.7 million in the same period last year. The drop in revenue was primarily driven by a 14.3% decrease in investment advisory fees, which fell to $7.8 million from $9.1 million, and a 13.6% decline in shareholder service fees, which decreased to $0.56 million. The company's net income also saw a significant reduction, dropping 31.9% to $1.93 million compared to $2.83 million in the prior year.

In terms of operational metrics, Hennessy Advisors experienced a notable decrease in total assets under management, which fell to $4.1 billion, a decline of $0.7 billion or 14.3% year-over-year. This decrease was attributed to net outflows from the Hennessy Funds, which were partially offset by market appreciation. The company reported that none of the Hennessy Funds had net inflows during the quarter, with the Hennessy Cornerstone Mid Cap 30 Fund, Hennessy Focus Fund, and Hennessy Japan Fund experiencing the largest outflows.

The company’s operating expenses for the quarter decreased slightly by 2.8% to $5.72 million, although as a percentage of total revenue, they increased to 68.7%. The decrease in operating expenses was primarily due to reductions in compensation and benefits, as well as sub-advisory fees, which were offset by increases in general and administrative expenses. The company noted that general and administrative expenses rose due to costs associated with the termination of a definitive agreement with STF Management, LP.

Hennessy Advisors continues to focus on its strategic objectives, which include enhancing customer service and maintaining a disciplined investment approach. The company serves approximately 175,000 fund accounts and 10,300 financial advisors, with ongoing efforts to build brand loyalty among top-tier advisors. Looking ahead, management anticipates that cash and liquid assets will be sufficient to meet capital requirements for the upcoming year, although they remain open to raising additional capital if necessary. The company’s outlook reflects a commitment to improving investment performance and customer service, despite the challenges posed by market conditions and investor behavior.