false000159158700015915872024-02-212024-02-21

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): February 21, 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 February 21, 2024, AssetMark Financial Holdings, Inc. issued a press release announcing its financial results for the fourth quarter ended December 31, 2023. 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.
2

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).
3

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: February 21, 2024/s/ Gary Zyla
Gary Zyla
Chief Financial Officer
4
imagea.jpg
EXHIBIT 99.1

AssetMark Reports $108.9B Platform Assets for Fourth Quarter 2023

CONCORD, Calif., February 21, 2024, (GLOBE NEWSWIRE) — AssetMark Financial Holdings, Inc. (NYSE: AMK) today announced financial results for the quarter ended December 31, 2023.

Fourth Quarter 2023 Financial and Operational Highlights

•Net income for the quarter was $34.6 million, or $0.47 per share.
•Adjusted net income for the quarter was $44.0 million, or $0.59 per share, on total revenue of $158.2 million.
•Adjusted EBITDA for the quarter was $63.8 million, or 40.3% of total revenue.
•Platform assets increased 19.1% year-over-year to $108.9 billion. Quarter-over-quarter platform assets were up 9.4%, due to market impact net of fees of $8.1 billion, and quarterly net flows of $1.3 billion.
•Annual net flows as a percentage of beginning-of-year platform assets were 6.7%.
•More than 2,600 new households and 154 new producing advisors joined the AssetMark platform during the fourth quarter. In total, as of December 31, 2023, there were over 9,300 advisors (approximately 3,100 were engaged advisors) and over 254,000 investor households on the AssetMark platform.
•We realized an 19.4% annualized production lift from existing advisors for the fourth quarter, indicating that advisors continued to grow organically and increase wallet share on our platform.

"In 2023, AssetMark reached new heights and served a record-breaking 9,300 advisors who used our platform to help more than 254,000 investor households. We achieved outstanding financial and operational results, including a record $109 billion in platform assets. Our annual Net Promoter Score of 72, an all-time high, is a true testament to AssetMark's positive impact on the lives of advisors and their clients," said Michael Kim, CEO of AssetMark. "Looking to 2024, we're committed to doubling down on our simplified strategy and will continue to deliver an industry leading experience to advisors focused on flexible, integrated technology, exceptional service and consulting, and compelling wealth solutions. I am incredibly excited about the opportunities ahead."



1

imagea.jpg
Fourth Quarter 2023 Key Operating Metrics
4Q224Q23Variance
per year
Operational metrics:
Platform assets (at period-beginning) (millions of dollars)$79,382 $99,597 25.5 %
Net flows (millions of dollars)908 1,265 39.3 %
Market impact net of fees (millions of dollars)4,284 8,067 88.3 %
Acquisition impact (millions of dollars)6,896 — NM
Platform assets (at period-end) (millions of dollars)$91,470 $108,929 19.1 %
Net flows lift (% of beginning of year platform assets)1.0 %1.4 %40 bps
Advisors (at period-end)9,297 9,323 0.3 %
Engaged advisors (at period-end)2,882 3,123 8.4 %
Assets from engaged advisors (at period-end) (millions of dollars)$83,803 $101,335 20.9 %
Households (at period-end)241,053 254,110 5.4 %
New producing advisors143 154 7.7 %
Production lift from existing advisors (annualized %)14.1 %19.4 %530 bps
Assets in custody at ATC (at period-end) (millions of dollars)$66,169 $80,325 21.4 %
ATC client cash (at period-end) (millions of dollars)$3,541 $3,054 (13.8)%
Financial metrics:
Total revenue (millions of dollars)*$164.0 $158.2 (3.5)%
Net income (millions of dollars)$25.6 $34.6 35.2 %
Net income margin (%)15.6 %21.9 %630 bps
Capital expenditure (millions of dollars)$11.3 $11.4 0.9 %
Non-GAAP financial metrics:
Adjusted EBITDA (millions of dollars)$52.9 $63.8 20.6 %
Adjusted EBITDA margin (%)32.2 %40.3 %810 bps
Adjusted net income (millions of dollars)$34.3 $44.0 28.3 %
Note: Percentage variance based on actual numbers, not rounded results
All metrics include Adhesion data, except "New producing advisors," "Production lift from existing advisors" and ATC related metrics
* The Company reclassified $30.5 million representing the full year 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 December 31, 2023. Expenses related to interest credited to customer accounts were recorded in spread-based expense in the prior year and were not material.














2

imagea.jpg

Full Year 2023 Key Operating Metrics
20222023Variance
per year
Operational metrics:
Platform assets (at period-beginning) (millions of dollars)$93,488 $91,470 (2.2)%
Net flows (millions of dollars)5,612 6,133 9.3 %
Market impact net of fees (millions of dollars)(14,526)11,326 NM
Acquisition impact (millions of dollars)6,896 — NM
Platform assets (at period-end) (millions of dollars)$91,470 $108,929 19.1 %
Net flows lift (% of beginning-of-year platform assets)6.0 %6.7 %70 bps
Advisers (at period-end)9,297 9,323 0.3 %
Engaged advisers (at period-end)2,882 3,123 8.4 %
Assets from engaged advisers (at period-end) (millions of dollars)$83,803 $101,335 20.9 %
Households (at period-end)241,053 254,110 5.4 %
New producing advisers690 666 (3.5)%
Production lift from existing advisers (annualized %)16.3 %19.3 %300 bps
Assets in custody at ATC (at period-end) (millions of dollars)$66,169 $80,325 21.4 %
ATC client cash (at period-end) (millions of dollars)$3,541 $3,054 (13.8)%
Financial metrics:
Total revenue (millions of dollars)*$618.3 $708.5 14.6 %
Net income (millions of dollars)$103.3 $123.1 19.2 %
Net income margin (%)16.7 %17.4 %NM
Capital expenditure (millions of dollars)$38.6 $44.2 14.5 %
Non-GAAP financial metrics:
Adjusted EBITDA (millions of dollars)$199.7 $249.5 24.9 %
Adjusted EBITDA margin (%)32.3 %35.2 %290 bps
Adjusted net income (millions of dollars)$130.5 $170.9 31.0 %
Note: Percentage variance based on actual numbers, not rounded results
All metrics include Adhesion data, except "New producing advisors," "Production lift from existing advisors" and ATC related metrics
* The Company reclassified $30.5 million representing the full year of 2023 spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis during the year ended December 31, 2023. Expenses related to interest credited to customer accounts were recorded in spread-based expense in the prior year and were not material.


Webcast and Conference Call Information

AssetMark will host a live conference call and webcast to discuss its fourth quarter 2023 results. In conjunction with this earnings press release, AssetMark has posted an earnings presentation on its investor relations website at http://ir.assetmark.com. Conference call and webcast details are as follows:

•Date: February 21, 2024
•Time: 2:00 p.m. PT; 5:00 p.m. ET
3

imagea.jpg
•Phone: Listeners can pre-register for the conference call here: https://www.netroadshow.com/events/login?show=a33808da&confId=59484. Upon registering, you will be provided with participant dial-in numbers, passcode and unique registrant ID. In the 10 minutes prior to the call start time, you may use the conference access information (dial in number, direct event passcode and registrant ID) provided in the confirmation email received at the point of registering to join the call directly.
•Webcast: http://ir.assetmark.com. Please access the website 10 minutes prior to the start time. The webcast will be available in recorded form at http://ir.assetmark.com for 14 days from February 21, 2024.

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 nearly 1,000 employees. Today, the AssetMark platform serves over 9,300 financial advisors and over 254,000 investor households. As of December 31, 2023, the company had $108.9 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. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to differ materially from statements made in this presentation, including our ability to advance our growth strategy, deliver an industry leading experience to advisors and meet our operating and financial performance guidance. 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 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 Annual Report on Form 10-K for the year end December 31, 2023, which is expected to be filed in mid-March. All information provided in this presentation is based on information available to us as of the date of this presentation and any forward-looking statements contained herein are based on assumptions that we believe are
4

imagea.jpg
reasonable as of this date. Undue reliance should not be placed on the forward-looking statements in this presentation, which are inherently uncertain. We undertake no duty to update this information unless required by law.
5

imagea.jpg

AssetMark Financial Holdings, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands except share data and par value)

December 31
20232022
ASSETS
Current assets:
Cash and cash equivalents$217,680 $123,274 
Restricted cash15,000 13,000 
Investments, at fair value18,003 13,714 
Fees and other receivables, net21,345 20,082 
Income tax receivable, net1,890 265 
Prepaid expenses and other current assets17,193 16,870 
Total current assets291,111 187,205 
Property, plant and equipment, net8,765 8,495 
Capitalized software, net108,955 89,959 
Other intangible assets, net684,142 694,627 
Operating lease right-of-use assets20,408 22,002 
Goodwill487,909 487,225 
Other assets19,273 13,417 
Total assets$1,620,563 $1,502,930 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$288 $4,624 
Accrued liabilities and other current liabilities75,554 69,196 
Total current liabilities75,842 73,820 
Long-term debt, net93,543 112,138 
Other long-term liabilities18,429 15,185 
Long-term portion of operating lease liabilities26,295 27,924 
Deferred income tax liabilities, net139,072 147,497 
Total long-term liabilities277,339 302,744 
Total liabilities353,181 376,564 
Commitments and contingencies— — 
Stockholders’ equity:
Common stock, $0.001 par value (675,000,000 shares authorized and 74,372,889 and 73,847,596 shares issued and outstanding as of December 31, 2023 and 2022, respectively)74 74 
Additional paid-in capital960,700 942,946 
Retained earnings306,622 183,503 
Accumulated other comprehensive loss
(14)(157)
Total stockholders’ equity1,267,382 1,126,366 
Total liabilities and stockholders’ equity$1,620,563 $1,502,930 


6

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

Three Months Ended December 31,Year Ended December 31,
2023202220232022
Revenue:
Asset-based revenue$141,268 $124,684 $553,483 $534,182 
Spread-based revenue*7,399 33,144 120,262 63,409 
Subscription-based revenue4,051 3,317 15,179 13,020 
Other revenue5,465 2,988 19,575 7,695 
Total revenue158,183 164,133 708,499 618,306 
Operating expenses:  
Asset-based expenses42,550 35,671 162,420 154,100 
Spread-based expenses*(21,808)4,994 1,244 8,182 
Employee compensation48,993 44,478 190,616 166,330 
General and operating expenses25,545 24,173 98,302 90,122 
Professional fees5,718 8,082 26,852 25,186 
Depreciation and amortization9,467 8,008 35,544 31,149 
Total operating expenses110,465 125,406 514,978 475,069 
Interest expense2,319 2,313 9,108 6,520 
Other (income) expense, net(438)(238)16,947 (43)
Income before income taxes45,837 36,652 167,466 136,760 
Provision for income taxes11,202 11,059 44,347 33,499 
Net income34,635 25,593 123,119 103,261 
Change in fair value of convertible notes receivable, net143 (157)143 (157)
Net comprehensive income$34,778 $25,436 $123,262 $103,104 
Net income per share attributable to common stockholders:
Basic$0.47 $0.35 $1.66 $1.40 
Diluted$0.46 $0.35 $1.65 $1.40 
Weighted average number of common shares outstanding, basic74,309,97073,847,37174,113,59173,724,341
Weighted average number of common shares outstanding, diluted74,565,58973,943,31874,438,33273,872,828
* The Company reclassified $30.5 million representing the full year 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 and year ended December 31, 2023. Expenses related to interest credited to customer accounts were recorded in spread-based expense in the prior year and were not material.









7

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

Three Months Ended December 31,Year Ended December 31,
2023202220232022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$34,635 $25,593 $123,119 $103,261 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization9,467 8,008 35,544 31,149 
Interest (income) expense, net
(157)(66)(341)541 
Deferred income taxes(9,132)(6,673)(9,132)(6,673)
Share-based compensation4,126 3,780 16,388 13,876 
Debt acquisition cost write-down— — 92 130 
Changes in certain assets and liabilities:
Fees and other receivables, net(855)(3,380)(1,734)(10,718)
Receivables from related party— — 480 568 
Prepaid expenses and other current assets(3,014)(4,386)4,737 2,346 
Income tax receivable and payable, net
(27,506)9,414 (1,486)6,073 
Accounts payable, accrued liabilities and other liabilities7,681 12,412 7,006 (252)
Net cash provided by operating activities15,245 44,702 174,673 140,301 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Adhesion Wealth, net of cash received— (43,861)(3,000)(43,861)
Purchase of convertible notes(1,159)(1,700)(5,434)(10,300)
Purchase of investments(393)(481)(2,329)(2,692)
Sale of investments167 534 456 918 
Purchase of property and equipment(1,698)(1,621)(2,853)(3,061)
Purchase of computer software(9,602)(9,947)(41,473)(35,996)
Net cash used in investing activities(12,685)(57,076)(54,633)(94,992)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt, net— — — 122,508 
Payments on revolving credit facility— — (50,000)(115,000)
Payments on term loan
— (1,562)(25,000)(6,250)
Proceeds from credit facility draw down— — 50,000 — 
Proceeds from exercise of stock options1,366 — 1,366 — 
Net cash (used in) provided by financing activities1,366 (1,562)(23,634)1,258 
Net change in cash, cash equivalents, and restricted cash3,926 (13,936)96,406 46,567 
Cash, cash equivalents, and restricted cash at beginning of period228,754 150,210 136,274 89,707 
Cash, cash equivalents, and restricted cash at end of period$232,680 $136,274 $232,680 $136,274 
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid, net$47,558 $7,461 $54,520 $33,637 
Interest paid$2,110 $1,373 $9,947 $4,087 
Non-cash operating, investing, and financing activities:
Non-cash changes to right-of-use assets$— $379 $3,360 $3,775 
Non-cash changes to lease liabilities$— $379 $3,360 $3,775 
Non-cash change in fair value of convertible notes$143 $(157)$143 $(157)
8

imagea.jpg
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.
We use adjusted EBITDA and adjusted EBITDA margin:
9

imagea.jpg
•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.
10

imagea.jpg
Set forth below is a reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted EBITDA for the three months and year ended December 31, 2023 and 2022 (unaudited).

Three Months Ended December 31,Three Months Ended December 31,
(in thousands except for percentages)2023202220232022
Net income$34,635 $25,593 21.9 %15.6 %
Provision for income taxes11,202 11,059 7.1 %6.7 %
Interest income(3,617)(1,557)(2.3)%(1.0)%
Interest expense2,319 2,313 1.4 %1.4 %
Amortization and depreciation
9,467 8,008 6.0 %4.9 %
EBITDA$54,006 $45,416 34.1 %27.6 %
Share-based compensation(1)
4,126 3,780 2.6 %2.3 %
Reorganization and integration costs(2)
4,817 1,818 3.0 %1.1 %
Acquisition expenses(3)
959 2,098 0.6 %1.3 %
Business continuity plan(4)
— (173)— (0.1)%
Other (income) expense, net(79)(60)— — 
Adjusted EBITDA$63,829 $52,879 40.3 %32.2 %

Year Ended December 31,Year Ended December 31,
(in thousands except for percentages)2023202220232022
Net income$123,119 $103,261 17.4 %16.7 %
Provision for income taxes44,347 33,499 6.3 %5.4 %
Interest income(11,363)(2,664)(1.6)%(0.4)%
Interest expense9,108 6,520 1.3 %1.1 %
Amortization and depreciation
35,544 31,149 5.0 %5.0 %
EBITDA$200,755 $171,765 28.4 %27.8 %
Share-based compensation(1)
16,388 13,876 2.3 %2.2 %
Reorganization and integration costs(2)
12,944 10,418 1.8 %1.7 %
Acquisition expenses(3)
1,327 3,411 0.1 %0.6 %
Business continuity plan(4)
(6)61 — — 
SEC settlement(5)
18,327 — 2.6 %— 
Other (income) expense, net(265)135 — — 
Adjusted EBITDA$249,470 $199,666 35.2 %32.3 %
(1)“Share-based compensation” represents granted share-based compensation in the form of restricted stock unit, stock option 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)“Acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions.
(4)“Business continuity plan” includes incremental compensation and other costs that are directly related to a transition to a hybrid workforce in 2022.
(5)“SEC settlement” represents the amount paid by us pursuant to our settlement with the SEC discussed in Note 12 of notes to unaudited condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
11

imagea.jpg
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 months and year ended December 31, 2023 and 2022 (unaudited), broken out by compensation and non-compensation expenses (unaudited).

Three Months Ended December 31, 2023Three Months Ended December 31, 2022
(in thousands)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Share-based compensation(1)
$4,126 $— $4,126 $3,780 $— $3,780 
Reorganization and integration costs(2)
2,534 2,283 4,817 1,512 306 1,818 
Acquisition expenses(3)
839 120 959 4 2,094 2,098 
Business continuity plan(4)
— — — — (173)(173)
Other (income) expense, net— (79)(79)— (60)(60)
Total adjustments to adjusted EBITDA$7,499 $2,324 $9,823 $5,296 $2,167 $7,463 

Three Months Ended December 31, 2023Three Months Ended December 31, 2022
(in percentages)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Share-based compensation(1)
2.6 %— 2.6 %2.3 %— 2.3 %
Reorganization and integration costs(2)
1.6 %1.4 %3.0 %0.9 %0.2 %1.1 %
Acquisition expenses(3)
0.5 %0.1 %0.6 %— 1.3 %1.3 %
Business continuity plan(4)
— — — — (0.1)%(0.1)%
Other (income) expense, net— — — — — — 
Total adjustments to adjusted EBITDA margin %4.7 %1.5 %6.2 %3.2 %1.4 %4.6 %
(1)“Share-based compensation” represents granted share-based compensation in the form of restricted stock unit, stock option 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)“Acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions.
(4)“Business continuity plan” includes incremental compensation and other costs that are directly related to a transition to a hybrid workforce in 2022.

12

imagea.jpg

Year Ended December 31, 2023Year Ended December 31, 2022
(in thousands)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Share-based compensation(1)
$16,388 $— $16,388 $13,876 $— $13,876 
Reorganization and integration costs(2)
5,904 7,040 12,944 4,335 6,083 10,418 
Acquisition expenses(3)
939 388 1,327 — 3,411 3,411 
Business continuity plan(4)
— (6)(6)(2)63 61 
SEC settlement(5)
— 18,327 18,327 — — — 
Other (income) expense, net— (265)(265)— 135 135 
Total adjustments to adjusted EBITDA$23,231 $25,484 $48,715 $18,209 $9,692 $27,901 

Year Ended December 31, 2023Year Ended December 31, 2022
(in percentages)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Share-based compensation(1)
2.3 %— 2.3 %2.2 %— 2.2 %
Reorganization and integration costs(2)
0.8 %1.0 %1.8 %0.7 %1.0 %1.7 %
Acquisition expenses(3)
0.1 %— 0.1 %— 0.6 %0.6 %
Business continuity plan(4)
— — — — — — 
SEC settlement(5)
— 2.6 %2.6 %— — — 
Other (income) expense, net— — — — — — 
Total adjustments to adjusted EBITDA margin %3.2 %3.6 %6.8 %2.9 %1.6 %4.5 %
(1)“Share-based compensation” represents granted share-based compensation in the form of restricted stock unit, stock option 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)“Acquisition expenses” includes employee severance, transition and retention expenses, duplicative general and administrative expenses and other professional fees related to acquisitions.
(4)“Business continuity plan” includes incremental compensation and other costs that are directly related to a transition to a hybrid workforce in 2022.
(5)“SEC settlement” represents the amount paid by us pursuant to our settlement with the SEC discussed in Note 12 of notes to unaudited condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.


13

imagea.jpg
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.


14

imagea.jpg
The schedule set forth below presents the Company’s GAAP results from the Condensed Consolidated Statements of Income (unaudited) for the three months and year ended December 31, 2023 and 2022, 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 months and year ended December 31, 2023 and 2022 (unaudited).

Three Months Ended
December 31,		Year Ended December 31
2023202220232022
Revenue:
Asset-based revenue$141,268 $124,684 $553,483 $534,182 
Spread-based revenue(4)
7,39933,144 120,26263,409 
Subscription-based revenue4,0513,317 15,17913,020 
Other revenue5,4652,988 19,5757,695 
Total revenue158,183164,133 708,499618,306 
Operating expenses:
Asset-based expenses42,55035,671 162,420154,100 
Spread-based expenses(4)
(21,808)4,994 1,2448,182 
Adjusted employee compensation(1)
41,49439,182 167,385148,121 
Adjusted general and operating expenses(1)
23,57323,927 93,22785,800 
Adjusted professional fees(1)
5,2876,101 24,50519,951 
Adjusted depreciation and amortization(2)
7,2876,198 26,82924,153 
Total adjusted operating expenses98,383116,073 475,610440,307 
Interest expense2,3192,313 9,1086,520 
Adjusted other (income) expenses, net(1)
(359)(178)(1,115)(178)
Adjusted income before income taxes57,84045,925 224,896171,657 
Adjusted provision for income taxes(3)
13,88311,650 53,97641,198 
Adjusted net income$43,957 $34,275 $170,920 $130,459 
Net income per share attributable to common stockholders:
Adjusted earnings per share$0.59 $0.46 $2.30 $1.77 
Weighted average number of common shares outstanding, diluted74,565,58974,943,31874,438,33273,872,828
(1) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above.
(2) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(3) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.
(4) The Company reclassified $30.5 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 months and year ended December 31, 2023. Expenses related to interest credited to customer accounts were recorded in spread-based expense in prior periods and were not material.







15

imagea.jpg
Set forth below is a reconciliation from net income, the most directly comparable GAAP financial measure, to adjusted net income for the three months and year ended December 31, 2023 and 2022 (unaudited).

Three months ended December 31, 2023Three months ended December 31, 2022
Reconciliation of Non-GAAP PresentationGAAPAdjustmentsAdjustedGAAPAdjustmentsAdjusted
Revenue:
Asset-based revenue$141,268 $— $141,268 $124,684 $— $124,684 
Spread-based revenue(4)
7,399 — 7,399 33,144 — 33,144 
Subscription-based revenue4,051 — 4,051 3,317 — 3,317 
Other revenue5,465 — 5,465 2,988 — 2,988 
Total revenue158,183 — 158,183 164,133 — 164,133 
Operating expenses:
Asset-based expenses42,550 — 42,550 35,671 — 35,671 
Spread-based expenses(4)
(21,808)— (21,808)4,994 — 4,994 
Employee compensation(1)
48,993 (7,499)41,494 44,478 (5,296)39,182 
General and operating expenses(1)
25,545 (1,972)23,573 24,173 (246)23,927 
Professional fees(1)
5,718 (431)5,287 8,082 (1,981)6,101 
Depreciation and amortization(2)
9,467 (2,180)7,287 8,008 (1,810)6,198 
Total operating expenses110,465 (12,082)98,383 125,406 (9,333)116,073 
Interest expense2,319 — 2,319 2,313 — 2,313 
Other expenses, net(1)
(438)79 (359)(238)60 (178)
Income before income taxes45,837 12,003 57,840 36,652 9,273 45,925 
Provision for income taxes(3)
11,202 2,681 13,883 11,059 591 11,650 
Net income$34,635 $43,957 $25,593 $34,275 
(1) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above.
(2) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(3) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.
(4) The Company reclassified $30.5 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 months ended December 31, 2023. Expenses related to interest credited to customer accounts were recorded in spread-based expense in prior periods and were not material.

16

imagea.jpg
Year Ended December 31, 2023Year Ended December 31, 2022
Reconciliation of Non-GAAP PresentationGAAPAdjustmentsAdjustedGAAPAdjustmentsAdjusted
Revenue:
Asset-based revenue$553,483 $— $553,483 $534,182 $— $534,182 
Spread-based revenue(4)
120,262 — 120,262 63,409 — 63,409 
Subscription-based revenue15,179 — 15,179 13,020 — 13,020 
Other revenue19,575 — 19,575 7,695 — 7,695 
Total revenue708,499 — 708,499 618,306 — 618,306 
Operating expenses:
Asset-based expenses162,420 — 162,420 154,100 — 154,100 
Spread-based expenses(4)
1,244 — 1,244 8,182 — 8,182 
Employee compensation(1)
190,616 (23,231)167,385 166,330 (18,209)148,121 
General and operating expenses(1)
98,302 (5,075)93,227 90,122 (4,322)85,800 
Professional fees(1)
26,852 (2,347)24,505 25,186 (5,235)19,951 
Depreciation and amortization(2)
35,544 (8,715)26,829 31,149 (6,996)24,153 
Total operating expenses514,978 (39,368)475,610 475,069 (34,762)440,307 
Interest expense9,108 — 9,108 6,520 — 6,520 
Other expenses, net(1)
16,947 (18,062)(1,115)(43)(135)(178)
Income before income taxes167,466 57,430 224,896 136,760 34,897 171,657 
Provision for income taxes(3)
44,347 9,629 53,976 33,499 7,699 41,198 
Net income$123,119 $170,920 $103,261 $130,459 
(1) Consists of the adjustments to EBITDA listed in the adjusted EBITDA reconciliation table above.
(2) Relates to intangible assets established in connection with HTSC’s acquisition of our Company in 2016.
(3) Consists of adjustments to normalize our estimated tax rate in determining adjusted net income.
(4) The Company reclassified $30.5 million from spread-based expenses to offset spread-based revenue to account for interest credited to customer accounts on a net basis for the year ended December 31, 2023. Expenses related to interest credited to customer accounts were recorded in spread-based expense in prior periods and were not material.


















17

imagea.jpg
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 months and year ended December 31, 2023 and 2022 (unaudited), broken out by compensation and non-compensation expenses (unaudited).

Three Months Ended December 31, 2023Three Months Ended December 31, 2022
(in thousands)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Net income$34,635 $25,593 
Acquisition-related amortization(1)
$— $2,180 2,180 $— $1,810 1,810 
Expense adjustments(2)
3,373 2,403 5,776 1,516 2,227 3,743 
Share-based compensation4,126 — 4,126 3,780 — 3,780 
Other (income) expense, net
— (79)(79)— (60)(60)
Tax effect of adjustments(3)
(1,799)(882)(2,681)(1,335)744 (591)
Adjusted net income$5,700 $3,622 $43,957 $3,961 $4,721 $34,275 

Year Ended December 31, 2023Year Ended December 31, 2022
(in thousands)CompensationNon-
Compensation		TotalCompensationNon-
Compensation		Total
Net income$123,119 $103,261 
Acquisition-related amortization(1)
$— $8,715 8,715 $— $6,996 6,996 
Expense adjustments(2)
6,843 25,749 32,592 4,333 9,557 13,890 
Share-based compensation16,388 — 16,388 13,876 — 13,876 
Other (income) expense, net
— (265)(265)— 135 135 
Tax effect of adjustments(3)
(5,575)(4,054)(9,629)(4,370)(3,329)(7,699)
Adjusted net income$17,656 $30,145 $170,920 $13,839 $13,359 $130,459 
(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.
18

v3.24.0.1
Cover
Feb. 21, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 21, 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)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more AssetMark Financial Charts.
AssetMark Financial (NYSE:AMK)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more AssetMark Financial Charts.