false000159158700015915872024-07-182024-07-18

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 18, 2024
AssetMark Financial Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3898030-0774039
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
1655 Grant Street, 10th Floor
Concord, California
94520
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (925) 521-2200
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading
Symbol(s)		 Name of each exchange on which registered
Common stock, $0.001 par value AMK The New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02    Results of Operations and Financial Condition.
On July 18, 2024, AssetMark Financial Holdings, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information contained in this Item 2.02 and Item 9.01 in this Current Report on Form 8-K, including the accompanying Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.
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Item 9.01    Financial Statements and Exhibits.
(d) – Exhibits
Exhibit
Number		Description of Exhibit
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AssetMark Financial Holdings, Inc.
Date: July 18, 2024/s/ Gary Zyla
Gary Zyla
Chief Financial Officer
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EXHIBIT 99.1

AssetMark Reports $119.4B Platform Assets for Second Quarter 2024

CONCORD, Calif., July 18, 2024, (GLOBE NEWSWIRE) — AssetMark Financial Holdings, Inc. (NYSE: AMK) today announced financial results for the quarter ended June 30, 2024.

Second Quarter 2024 Financial and Operational Highlights

•Net income for the quarter was $32.3 million, or $0.43 per share.
•Adjusted net income for the quarter was $49.8 million, or $0.66 per share, on total revenue of $198.5 million.
•Adjusted EBITDA for the quarter was $71.9 million, or 36.2% of total revenue.
•Platform assets increased 18.5% year-over-year to $119.4 billion. Quarter-over-quarter platform assets were up 2.1%, due to market impact net of fees of $0.8 billion and quarterly net flows of $1.7 billion.
•Year-to-date annualized net flows as a percentage of beginning-of-year platform assets were 6.1%.
•More than 4,300 new households and 164 new producing advisors joined the AssetMark platform during the second quarter. In total, as of June 30, 2024, there were over 9,200 advisors (approximately 3,200 were engaged advisors) and over 261,000 investor households on the AssetMark platform.
•We realized a 20.2% annualized production lift from existing advisors for the second quarter, indicating that advisors continued to grow organically and increase wallet share on our platform.
•In April, we signed a definitive agreement to be acquired by GTCR. The transaction is subject to customary closing conditions and required regulatory approvals and is still expected to close in Q4 2024.





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Second Quarter 2024 Key Operating Metrics
2Q232Q24Variance
per year
Operational metrics:
Platform assets (at period-beginning) (millions of dollars)$96,203 $116,901 21.5 %
Net flows (millions of dollars)1,695 1,703 0.5 %
Market impact net of fees (millions of dollars)2,864 783 (72.7)%
Platform assets (at period-end) (millions of dollars)$100,762 $119,387 18.5 %
Net flows lift (% of beginning of year platform assets)1.9 %1.6 %-30 bps
Advisors (at period-end)9,323 9,245 (0.8)%
Engaged advisors (at period-end)3,032 3,238 6.8 %
Assets from engaged advisors (at period-end) (millions of dollars)$93,109 $111,897 20.2 %
Households (at period-end)247,934 261,341 5.4 %
New producing advisors188 164 (12.8)%
Production lift from existing advisors (annualized %)20.2 %20.2 %0 bps
Assets in custody at ATC (at period-end) (millions of dollars)$74,074 $88,681 19.7 %
ATC client cash (at period-end) (millions of dollars)$2,942 $2,933 (0.3)%
Financial metrics:
Total revenue (millions of dollars)*$175.5 $198.5 13.1 %
Net income (millions of dollars)$32.9 $32.3 (1.8)%
Net income margin (%)18.7 %16.3 %-240 bps
Capital expenditure (millions of dollars)$11.2 $13.0 16.1 %
Non-GAAP financial metrics:
Adjusted EBITDA (millions of dollars)$60.4 $71.9 19.0 %
Adjusted EBITDA margin (%)34.4 %36.2 %180 bps
Adjusted net income (millions of dollars)$41.2 $49.8 20.9 %
Note: Percentage variance based on actual numbers, not rounded results
All metrics include Adhesion data, except "New producing advisors," "Production lift from existing advisors" in 2023 and ATC related metrics
*The Company reclassified $7.7 million representing three months of 2023 spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis during the three months ended June 30, 2023.


Webcast and Conference Call Information

As previously announced, on April 25, 2024, AssetMark entered into an agreement to be acquired by GTCR (the “Transaction”). A copy of the press release announcing the Transaction can be found on the investor relations page of AssetMark’s website. Additional details and information about the Transaction are included in the Current Report on Form 8-K filed by AssetMark with the Securities and Exchange Commission ("SEC") on April 25, 2024. The Transaction is subject to customary closing conditions and required regulatory approvals and is expected to close in Q4 2024.

Given the announced Transaction, AssetMark will not be hosting an earnings call and webcast to discuss its second quarter 2024 results and is withdrawing all previously provided financial guidance. For further information about AssetMark’s financial performance please
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refer to AssetMark’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, which is expected to be filed on August 6, 2024 with the SEC.


About AssetMark Financial Holdings, Inc.

AssetMark operates a wealth management platform that powers independent financial advisors and their clients. Together with our affiliates Voyant and Adhesion Wealth, we serve advisors of all models at every stage of their journey with flexible, purpose-built solutions that champion client engagement and drive efficiency. Our ecosystem of solutions equips advisors with services and capabilities that would otherwise require significant investments of time and money, ultimately enabling them to deliver better investor outcomes and enhance their productivity, profitability and client satisfaction.

Founded in 1996 and based in Concord, California, the company has over 1,000 employees. Today, the AssetMark platform serves over 9,200 financial advisors and over 261,000 investor households. As of June 30, 2024, the company had $119.4 billion in platform assets.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating performance, which involve risks and uncertainties. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “will,” “may,” “could,” “should,” “believe,” “expect,” “estimate,” “potential” or “continue,” the negative of these terms and other comparable terminology that conveys uncertainty of future events or outcomes. Other potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, which is on file with the Securities and Exchange Commission and available on our investor relations website at http://ir.assetmark.com. Additional information will be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which is expected to be filed on August 6, 2024. All information provided in this press release is based on information available to us as of the date of this press release and any forward-looking statements contained herein are based on assumptions that we believe are reasonable as of this date. Undue reliance should not be placed on the forward-looking statements in this press release, which are inherently uncertain. We undertake no duty to update this information unless required by law.
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AssetMark Financial Holdings, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands except share data and par value)

June 30, 2024December 31, 2023
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$189,682 $217,680 
Restricted cash16,000 15,000 
Investments, at fair value21,500 18,003 
Fees and other receivables, net21,552 21,345 
Income tax receivable, net9,783 1,890 
Prepaid expenses and other current assets16,298 17,193 
Total current assets274,815 291,111 
Property, plant and equipment, net9,002 8,765 
Capitalized software, net118,577 108,955 
Other intangible assets, net678,897 684,142 
Operating lease right-of-use assets21,831 20,408 
Goodwill487,909 487,909 
Other assets26,382 19,273 
Total assets$1,617,413 $1,620,563 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$645 $288 
Accrued liabilities and other current liabilities83,360 75,554 
Total current liabilities84,005 75,842 
Long-term debt, net— 93,543 
Other long-term liabilities21,301 18,429 
Long-term portion of operating lease liabilities27,372 26,295 
Deferred income tax liabilities, net139,072 139,072 
Total long-term liabilities187,745 277,339 
Total liabilities271,750 353,181 
Stockholders’ equity:
Common stock, $0.001 par value (675,000,000 shares authorized and 74,743,985 and 74,372,889 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)75 74 
Additional paid-in capital968,702 960,700 
Retained earnings376,900 306,622 
Accumulated other comprehensive loss(14)(14)
Total stockholders’ equity1,345,663 1,267,382 
Total liabilities and stockholders’ equity$1,617,413 $1,620,563 

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AssetMark Financial Holdings, Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Income
(in thousands, except share and per share data)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Revenue:
Asset-based revenue$158,878 $137,336 $308,862 $268,375 
Spread-based revenue*28,853 29,560 58,946 61,559 
Subscription-based revenue4,306 3,693 8,558 7,237 
Other revenue6,454 4,932 12,391 8,648 
Total revenue198,491 175,521 388,757 345,819 
Operating expenses:  
Asset-based expenses48,347 39,344 93,200 76,778 
Spread-based expenses341 292 730 585 
Employee compensation51,902 48,099 101,909 95,010 
General and operating expenses27,821 24,354 55,145 50,043 
Professional fees12,732 8,372 18,813 13,765 
Depreciation and amortization10,296 8,684 20,218 17,112 
Total operating expenses151,439 129,145 290,015 253,293 
Interest expense2,202 2,137 4,496 4,484 
Other (income) expense, net(196)(288)(528)19,577 
Income before income taxes45,046 44,527 94,774 68,465 
Provision for income taxes12,732 11,650 24,496 18,366 
Net income32,314 32,877 70,278 50,099 
Net comprehensive income$32,314 $32,877 $70,278 $50,099 
Net income per share attributable to common stockholders:
Basic$0.43 $0.44 $0.94 $0.68 
Diluted$0.43 $0.44 $0.94 $0.67 
Weighted average number of common shares outstanding, basic74,487,41773,986,32674,435,34173,938,510
Weighted average number of common shares outstanding, diluted75,283,98674,505,15875,109,61174,325,580
*The Company reclassified $7.7 million and $14.0 million from spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis for the three and six months ended June 30, 2023, respectively






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AssetMark Financial Holdings, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)

Six Months Ended June 30,
20242023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$70,278 $50,099 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization20,218 17,112 
Interest expense, net
(321)(45)
Share-based compensation8,003 7,974 
Debt acquisition cost write-down255 92 
Changes in certain assets and liabilities:
Fees and other receivables, net(457)(863)
Receivables from related party250 480 
Prepaid expenses and other current assets2,812 2,954 
Accounts payable, accrued liabilities and other current liabilities6,291 13,614 
Income tax receivable and payable, net(7,893)14,062 
Net cash provided by operating activities99,436 105,479 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Adhesion Wealth
— (3,000)
Purchase of investments(2,099)(1,528)
Sale of investments179 257 
Purchase of property and equipment(1,530)(469)
Purchase of computer software(23,302)(20,920)
Purchase of convertible notes(5,932)(4,275)
Net cash used in investing activities(32,684)(29,935)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on term loan(93,750)(25,000)
Net cash used in financing activities(93,750)(25,000)
Net change in cash, cash equivalents, and restricted cash(26,998)50,544 
Cash, cash equivalents, and restricted cash at beginning of period232,680 136,274 
Cash, cash equivalents, and restricted cash at end of period$205,682 $186,818 
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid, net$32,378 $4,298 
Interest paid$4,178 $5,736 
Non-cash operating and investing activities:
Non-cash changes to right-of-use assets$4,183 $1,795 
Non-cash changes to lease liabilities$4,183 $1,795 
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Explanations and Reconciliations of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe adjusted EBITDA, adjusted EBITDA margin and adjusted net income, all of which are non-GAAP measures, are useful in evaluating our performance. We use adjusted EBITDA, adjusted EBITDA margin and adjusted net income to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that such non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, such non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is defined as EBITDA (net income plus interest expense, income tax expense, depreciation and amortization and less interest income), further adjusted to exclude certain non-cash charges and other adjustments set forth below. Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenue. Adjusted EBITDA and adjusted EBITDA margin are useful financial metrics in assessing our operating performance from period to period because they exclude certain items that we believe are not representative of our core business, such as certain material non-cash items and other adjustments such as share-based compensation, strategic initiatives and reorganization and integration costs. We believe that adjusted EBITDA and adjusted EBITDA margin, viewed in addition to, and not in lieu of, our reported GAAP results, provide useful information to investors regarding our performance and overall results of operations for various reasons, including:
•non-cash equity grants made to employees at a certain price and point in time do not necessarily reflect how our business is performing at any particular time; as such, share-based compensation expense is not a key measure of our operating performance; and
•costs associated with acquisitions and the resulting integrations, debt refinancing, restructuring, conversions, as well as other non-recurring litigation costs, can vary from period to period and transaction to transaction; as such, expenses associated with these activities are not considered a key measure of our operating performance.

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We use adjusted EBITDA and adjusted EBITDA margin:
•as measures of operating performance;
•for planning purposes, including the preparation of budgets and forecasts;
•to allocate resources to enhance the financial performance of our business;
•to evaluate the effectiveness of our business strategies;
•in communications with our board of directors concerning our financial performance; and
•as considerations in determining compensation for certain employees.
Adjusted EBITDA and adjusted EBITDA margin have limitations as analytical tools, and should not be considered in isolation to, or as substitutes for, analysis of our results as reported under GAAP. Some of these limitations are:
•adjusted EBITDA and adjusted EBITDA margin do not reflect all cash expenditures, future requirements for capital expenditures or contractual commitments;
•adjusted EBITDA and adjusted EBITDA margin do not reflect changes in, or cash requirements for, working capital needs;
•adjusted EBITDA and adjusted EBITDA margin do not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments; and
•the definitions of adjusted EBITDA and adjusted EBITDA margin can differ significantly from company to company and as a result have limitations when comparing similarly titled measures across companies.
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Set forth below is a reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted EBITDA for the three and six months ended June 30, 2024 and 2023 (unaudited).

Three Months Ended June 30,Three Months Ended June 30,
(in thousands except for percentages)2024202320242023
Net income$32,314 $32,877 16.3 %18.7 %
Provision for income taxes12,732 11,650 6.4 %6.6 %
Interest income(4,362)(2,509)(2.1)%(1.4)%
Interest expense2,202 2,137 1.1 %1.2 %
Depreciation and amortization10,296 8,684 5.2 %5.0 %
EBITDA$53,182 $52,839 26.9 %30.1 %
Share-based compensation(1)
3,835 4,152 1.9 %2.4 %
Reorganization and integration costs(2)
3,200 3,556 1.6 %2.0 %
Merger and acquisition expenses(3)
11,002 (140)5.5 %(0.1)%
Long-term incentive cash awards(4)
398 — 0.2 %— 
Other (income) expense, net256 (10)0.1 %— 
Adjusted EBITDA$71,873 $60,397 36.2 %34.4 %

Six Months Ended June 30,Six Months Ended June 30,
(in thousands except for percentages)2024202320242023
Net income$70,278 $50,099 18.1 %14.5 %
Provision for income taxes24,496 18,366 6.3 %5.3 %
Interest income(8,385)(4,560)(2.2)%(1.3)%
Interest expense4,496 4,484 1.2 %1.3 %
Depreciation and amortization20,218 17,112 5.2 %5.0 %
EBITDA$111,103 $85,501 28.6 %24.8 %
Share-based compensation(1)
8,003 7,974 2.1 %2.3 %
Reorganization and integration costs(2)
5,962 5,465 1.5 %1.6 %
Merger and acquisition expenses(3)
12,090 173 3.1 %— 
Long-term incentive cash awards(4)
398 — 0.1 %— 
Business continuity plan(5)
— (6)— — 
Accrual for SEC settlement(6)
— 20,000 — 5.8 %
Other (income) expense, net224 77 — — 
Adjusted EBITDA$137,780 $119,184 35.4 %34.5 %
(1)“Share-based compensation” represents granted share-based compensation in the form of restricted stock unit and stock appreciation right grants by us to certain of our directors and employees. Although this expense occurred in each measurement period, we have added the expense back in our calculation of adjusted EBITDA because of its noncash impact.
(2)“Reorganization and integration costs” includes costs related to our functional reorganization within our Operations, Technology and Retirement functions as well as duplicate costs related to the outsourcing of back-office operations functions. While we have incurred such expenses in all periods measured, these expenses serve varied reorganization and integration initiatives, each of which is non-recurring. We do not consider these expenses to be part of our core operations.
(3)“Merger and acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions and costs related to the merger with GTCR.
(4) “Long-term incentive cash awards” represents deferred cash bonuses granted in June 2024 in lieu of share-based compensation to certain of our directors and employees. The bonuses vest on the earlier of the one-year anniversary of the grant or our completed merger with GTCR.
(5)“Business continuity plan” includes incremental compensation and other costs that are directly related to a transition to a hybrid workforce in 2022.
(6)“Accrual for SEC settlement” represents an accrual that pertains to a settled SEC matter from 2023 discussed in Note 12 of notes to unaudited condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.
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Set forth below is a summary of the adjustments involved in the reconciliation from net income and net income margin, the most directly comparable GAAP financial measures, to adjusted EBITDA and adjusted EBITDA margin for three and six months ended June 30, 2024 and 2023 (unaudited), broken out by compensation and non-compensation expenses (unaudited).

Three Months Ended June 30, 2024Three Months Ended June 30, 2023
(in thousands)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Share-based compensation(1)
$3,835 $— $3,835 $4,152 $— $4,152 
Reorganization and integration costs(2)
1,675 1,525 3,200 1,204 2,352 3,556 
Merger and acquisition expenses(3)
— 11,002 11,002 — (140)(140)
Long-term incentive cash awards(4)
398 — 398 — — — 
Other (income) expense, net— 256 256 — (10)(10)
Total adjustments to adjusted EBITDA$5,908 $12,783 $18,691 $5,356 $2,202 $7,558 

Three Months Ended June 30, 2024Three Months Ended June 30, 2023
(in percentages)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Share-based compensation(1)
1.9 %— 1.9 %2.4 %— 2.4 %
Reorganization and integration costs(2)
0.8 %0.8 %1.6 %0.7 %1.3 %2.0 %
Merger and acquisition expenses(3)
— 5.5 %5.5 %— (0.1)%(0.1)%
Long-term incentive cash awards(4)
0.2 %— 0.2 %— — — 
Other (income) expense, net— 0.1 %0.1 %— — — 
Total adjustments to adjusted EBITDA margin %2.9 %6.4 %9.3 %3.1 %1.2 %4.3 %
(1)Share-based compensation” represents granted share-based compensation in the form of restricted stock unit and stock appreciation right grants by us to certain of our directors and employees. Although this expense occurred in each measurement period, we have added the expense back in our calculation of adjusted EBITDA because of its noncash impact.
(2)“Reorganization and integration costs” includes costs related to our functional reorganization within our Operations, Technology and Retirement functions as well as duplicate costs related to the outsourcing of back-office operations functions. While we have incurred such expenses in all periods measured, these expenses serve varied reorganization and integration initiatives, each of which is non-recurring. We do not consider these expenses to be part of our core operations.
(3)“Merger and acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions and costs related to the merger with GTCR.
(4)“Long-term incentive cash awards” represents deferred cash bonuses granted in June 2024 in lieu of share-based compensation to certain of our directors and employees. The bonuses vest on the earlier of the one-year anniversary of the grant or our completed merger with GTCR.


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Six Months Ended June 30, 2024Six Months Ended June 30, 2023
(in thousands)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Share-based compensation(1)
$8,003 $— $8,003 $7,974 $— $7,974 
Reorganization and integration costs(2)
3,206 2,756 5,962 2,269 3,196 5,465 
Merger and acquisition expenses(3)
— 12,090 12,090 100 73 173 
Long-term incentive cash awards(4)
398 — 398 — — — 
Business continuity plan(5)
— — — — (6)(6)
Accrual for SEC settlement(6)
— — — — 20,000 20,000 
Other (income) expense, net— 224 224 — 77 77 
Total adjustments to adjusted EBITDA$11,607 $15,070 $26,677 $10,343 $23,340 $33,683 

Six Months Ended June 30, 2024Six Months Ended June 30, 2023
(in percentages)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Share-based compensation(1)
2.1 %— 2.1 %2.3 %— 2.3 %
Reorganization and integration costs(2)
0.8 %0.7 %1.5 %0.7 %0.9 %1.6 %
Merger and acquisition expenses(3)
— 3.1 %3.1 %— — — 
Long-term incentive cash awards(4)
0.1 %— 0.1 %— — — 
Business continuity plan(5)
— — — — — — 
Accrual for SEC settlement(6)
— — — — 5.8 %5.8 %
Other (income) expense, net— — — — — — 
Total adjustments to adjusted EBITDA margin %3.0 %3.8 %6.8 %3.0 %6.7 %9.7 %
(1) “Share-based compensation” represents granted share-based compensation in the form of restricted stock unit and stock appreciation right grants by us to certain of our directors and employees. Although this expense occurred in each measurement period, we have added the expense back in our calculation of adjusted EBITDA because of its noncash impact.
(2)“Reorganization and integration costs” includes costs related to our functional reorganization within our Operations, Technology and Retirement functions as well as duplicate costs related to the outsourcing of back-office operations functions. While we have incurred such expenses in all periods measured, these expenses serve varied reorganization and integration initiatives, each of which is non-recurring. We do not consider these expenses to be part of our core operations.
(3)“Merger and acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions and costs related to the merger with GTCR.
(4) “Long-term incentive cash awards” represents deferred cash bonuses granted in June 2024 in lieu of share-based compensation to certain of our directors and employees. The bonuses vest on the earlier of the one-year anniversary of the grant or our completed merger with GTCR.
(5)“Business continuity plan” includes incremental compensation and other costs that are directly related to a transition to a hybrid workforce in 2022.
(6)“Accrual for SEC settlement” represents an accrual that pertains to a settled SEC matter from 2023 discussed in Note 12 of notes to unaudited condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.


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Adjusted Net Income
Adjusted net income represents net income before: (a) share-based compensation expense, (b) amortization of acquisition-related intangible assets, (c) acquisition and related integration expenses, (d) restructuring and conversion costs and (e) certain other expenses. Reconciled items are tax effected using the income tax rates in effect for the applicable period, adjusted for any potentially non-deductible amounts. We prepared adjusted net income to eliminate the effects of items that we do not consider indicative of our core operating performance. We believe that adjusted net income, viewed in addition to, and not in lieu of, our reported GAAP results, provides useful information to investors regarding our performance and overall results of operations for various reasons, including the following:
•non-cash equity grants made to employees at a certain price and point in time do not necessarily reflect how our business is performing at any particular time; as such, share-based compensation expense is not a key measure of our operating performance;
•costs associated with acquisitions and related integrations, debt refinancing, restructuring and conversions can vary from period to period and transaction to transaction; as such, expenses associated with these activities are not considered a key measure of our operating performance; and
•amortization expenses can vary substantially from company to company and from period to period depending upon each company’s financing and accounting methods, the fair value and average expected life of acquired intangible assets and the method by which assets were acquired; as such, the amortization of intangible assets obtained in acquisitions is not considered a key measure of our operating performance.
Adjusted net income does not purport to be an alternative to net income or cash flows from operating activities. The term adjusted net income is not defined under GAAP, and adjusted net income is not a measure of net income, operating income or any other performance or liquidity measure derived in accordance with GAAP. Therefore, adjusted net income has limitations as an analytical tool and should not be considered in isolation to, or as a substitute for, analysis of our results as reported under GAAP. Some of these limitations are:
•adjusted net income does not reflect all cash expenditures, future requirements for capital expenditures or contractual commitments;
•adjusted net income does not reflect changes in, or cash requirements for, working capital needs; and
•other companies in the financial services industry may calculate adjusted net income differently than we do, limiting its usefulness as a comparative measure.
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The schedule set forth below presents the Company’s GAAP results from the Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2024 and 2023, with certain line items adjusted for the items described above. Included below is also a reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted net income for the three and six months ended June 30, 2024 and 2023 (unaudited).

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Revenue:
Asset-based revenue$158,878 $137,336 $308,862 $268,375 
Spread-based revenue(1)
28,85329,560 58,94661,559 
Subscription-based revenue4,3063,693 8,5587,237 
Other revenue6,4544,932 12,3918,648 
Total revenue198,491175,521 388,757345,819 
Operating expenses:
Asset-based expenses48,34739,344 93,20076,778 
Spread-based expenses341292 730585 
Adjusted employee compensation(2)
45,99442,743 90,30284,667 
Adjusted general and operating expenses(2)
21,96623,731 47,58248,536 
Adjusted professional fees(2)
6,0606,783 11,53012,009 
Adjusted depreciation and amortization(3)
8,1166,504 15,85812,758 
Total adjusted operating expenses130,824119,397 259,202235,333 
Interest expense2,2022,137 4,4964,484 
Adjusted other expenses, net(2)
(452)(278)(752)(500)
Adjusted income before income taxes65,91754,265 125,811106,502 
Adjusted provision for income taxes(4)
16,15013,023 30,82425,560 
Adjusted net income$49,767 $41,242 $94,987 $80,942 
Net income per share attributable to common stockholders:
Adjusted earnings per share$0.66 $0.55 $1.26 $1.09 
Weighted average number of common shares outstanding, diluted75,283,98674,505,15875,109,61174,325,580
(1) The Company reclassified $7.7 million and $14.0 million from spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis for the three and six months ended June 30, 2023, respectively.
(2) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above.
(3) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(4) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.







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Set forth below is a reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted net income for the three and six months ended June 30, 2024 and 2023 (unaudited).

Three months ended June 30, 2024Three months ended June 30, 2023
Reconciliation of Non-GAAP PresentationGAAPAdjustmentsAdjustedGAAPAdjustmentsAdjusted
Revenue:
Asset-based revenue$158,878 $— $158,878 $137,336 $— $137,336 
Spread-based revenue(1)
28,853 — 28,853 29,560 — 29,560 
Subscription-based revenue4,306 — 4,306 3,693 — 3,693 
Other revenue6,454 — 6,454 4,932 — 4,932 
Total revenue198,491 — 198,491 175,521 — 175,521 
Operating expenses:
Asset-based expenses48,347 — 48,347 39,344 — 39,344 
Spread-based expenses341 — 341 292 — 292 
Employee compensation(2)
51,902 (5,908)45,994 48,099 (5,356)42,743 
General and operating expenses(2)
27,821 (5,855)21,966 24,354 (623)23,731 
Professional fees(2)
12,732 (6,672)6,060 8,372 (1,589)6,783 
Depreciation and amortization(3)
10,296 (2,180)8,116 8,684 (2,180)6,504 
Total operating expenses151,439 (20,615)130,824 129,145 (9,748)119,397 
Interest expense2,202 — 2,202 2,137 — 2,137 
Other expenses, net(2)
(196)(256)(452)(288)10(278)
Income before income taxes45,046 20,871 65,917 44,527 9,738 54,265 
Provision for income taxes(4)
12,732 3,418 16,150 11,650 1,373 13,023 
Net income$32,314 $49,767 $32,877 $41,242 
(1) The Company reclassified $7.7 million and $14.0 million from spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis for the three and six months ended June 30, 2023, respectively.
(2) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above.
(3) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(4) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.

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Six months ended June 30, 2024Six months ended June 30, 2023
Reconciliation of Non-GAAP PresentationGAAPAdjustmentsAdjustedGAAPAdjustmentsAdjusted
Revenue:
Asset-based revenue$308,862 $— $308,862 $268,375 $— $268,375 
Spread-based revenue(1)
58,946 — 58,946 61,559 — 61,559 
Subscription-based revenue8,558 — 8,558 7,237 — 7,237 
Other revenue12,391 — 12,391 8,648 — 8,648 
Total revenue388,757 — 388,757 345,819 — 345,819 
Operating expenses:
Asset-based expenses93,200 — 93,200 76,778 — 76,778 
Spread-based expenses730 — 730 585 — 585 
Employee compensation(2)
101,909 (11,607)90,302 95,010 (10,343)84,667 
General and operating expenses(2)
55,145 (7,563)47,582 50,043 (1,507)48,536 
Professional fees(2)
18,813 (7,283)11,530 13,765 (1,756)12,009 
Depreciation and amortization(3)
20,218 (4,360)15,858 17,112 (4,354)12,758 
Total operating expenses290,015 (30,813)259,202 253,293 (17,960)235,333 
Interest expense4,496 — 4,496 4,484 — 4,484 
Other expenses, net(2)
(528)(224)(752)19,577 (20,077)(500)
Income before income taxes94,774 31,037 125,811 68,465 38,037 106,502 
Provision for income taxes(4)
24,496 6,328 30,824 18,366 7,194 25,560 
Net income$70,278 $94,987 $50,099 $80,942 
(1) The Company reclassified $7.7 million and $14.0 million from spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis for the three and six months ended June 30, 2023, respectively.
(2) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above.
(3) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(4) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.
















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Set forth below is a summary of the adjustments involved in the reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted net income for three and six months ended June 30, 2024 and 2023 (unaudited), broken out by compensation and non-compensation expenses (unaudited).

Three Months Ended June 30, 2024Three Months Ended June 30, 2023
(in thousands)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Net income$32,314 $32,877 
Acquisition-related amortization(1)
$— $2,180 2,180 $— $2,180 2,180 
Expense adjustments(2)
2,073 12,527 14,600 1,204 2,212 3,416 
Share-based compensation3,835 — 3,835 4,152 — 4,152 
Other (income) expense, net— 256 256 — (10)(10)
Tax effect of adjustments(3)
(1,447)(1,971)(3,418)(1,285)(88)(1,373)
Adjusted net income$4,461 $12,992 $49,767 $4,071 $4,294 $41,242 

Six Months Ended June 30, 2024Six Months Ended June 30, 2023
(in thousands)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Net income$70,278 $50,099 
Acquisition-related amortization(1)
$— $4,360 4,360 $— $4,354 4,354 
Expense adjustments(2)
3,604 14,846 18,450 2,369 23,263 25,632 
Share-based compensation8,003 — 8,003 7,974 — 7,974 
Other (income) expense, net— 224 224 — 77 77 
Tax effect of adjustments(3)
(2,844)(3,484)(6,328)(2,482)(4,712)(7,194)
Adjusted net income$8,763 $15,946 $94,987 $7,861 $22,982 $80,942 
(1)Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(2)Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above other than share-based compensation.
(3)Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.
.

Contacts
Investors:
Taylor J. Hamilton, CFA
Head of Investor Relations
InvestorRelations@assetmark.com

Media:
Alaina Kleinman
Head of PR & Communications
alaina.kleinman@assetmark.com

SOURCE: AssetMark Financial Holdings, Inc.
16

v3.24.2
Cover
Jul. 18, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 18, 2024
Entity Registrant Name AssetMark Financial Holdings, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-38980
Entity Tax Identification Number 30-0774039
Entity Address, Address Line One 1655 Grant Street
Entity Address, Address Line Two 10th Floor
Entity Address, City or Town Concord
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94520
City Area Code 925
Local Phone Number 521-2200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.001 par value
Trading Symbol AMK
Security Exchange Name NYSE
Entity Emerging Growth Company true
Entity Ex Transition Period false
Amendment Flag false
Entity Central Index Key 0001591587
AssetMark Financial (NYSE:AMK)
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