On November 13, 2023, Abacus Life Inc (ABL, Financial) released its 8-K filing, detailing its financial performance for the third quarter of 2023. The company, a prominent player in the life insurance policy buying and specialty insurance products sector, showcased a robust year-over-year revenue increase of 20% to $21.1 million. This growth is attributed to a significant 43% increase in capital deployment to $51 million and a 61% rise in policy originations.
Financial Performance Overview
Abacus Life Inc's GAAP Net Income for shareholders was reported at $0.9 million, a decrease from the $11.2 million seen in the same period last year. This decline was primarily due to a non-cash expense of $4.6 million related to employee stock compensation and public company expenses that were not incurred in the prior-year period. However, the non-GAAP Adjusted Net Income was a healthy $9.2 million, slightly down from $10.2 million in the previous year. The company's Adjusted EBITDA experienced a 26% year-over-year growth, reaching $10.8 million, with an Adjusted EBITDA margin of 51.1%.
Key Financial Metrics and Commentary
Abacus Life Inc's CEO, Jay Jackson, commented on the results, stating,
Our strong third quarter results continue to validate Abacus' differentiated business model and further contributes to our solid track record of sustained growth."He also highlighted the company's strategic initiatives, including the successful completion of a public bond offering and the launch of the new wealth division, ABL Wealth, in partnership with Dynasty Financial Partners.
Income Statement and Balance Sheet Highlights
The company's active management revenue saw a substantial increase of 70% to $18.9 million, primarily due to increased policy acquisition and realized trade revenue. However, total Originations revenue declined to $2.0 million from $6.0 million in the prior-year period, mainly due to fewer policies sold to third parties. Total operating expenses for the quarter were $12.9 million, a significant increase from the $1.4 million reported in the prior-year period, largely driven by the aforementioned non-cash expenses.
As of September 30, 2023, Abacus Life Inc's balance sheet showed cash and cash equivalents of $36.6 million and policy assets of $87.7 million. The company's long-term debt stood at $118.8 million.
Analysis of Company's Performance
Despite the decrease in GAAP Net Income, Abacus Life Inc's overall financial health appears strong, with substantial growth in revenue and adjusted EBITDA. The company's strategic moves, such as the bond offering and the expansion into wealth management, indicate a forward-looking approach aimed at diversifying revenue streams and enhancing shareholder value. The increase in operating expenses is noteworthy but can be attributed to the company's transition to a public entity and investments in growth.
For investors seeking detailed financial data and further insights into Abacus Life Inc's performance, the full earnings report and additional financial information can be accessed through the company's investor relations website.
Abacus Life Inc's commitment to innovation in the life insurance market and its strategic growth initiatives position it as a notable company for value investors to watch. The company's ability to adapt and expand in a complex industry underscores its potential for long-term value creation.
Explore the complete 8-K earnings release (here) from Abacus Life Inc for further details.
