ABX

Abacus Global Management is a vertically integrated life-settlement originator and alternative asset manager whose FY2025 results show a dramatic operational inflection: revenue more than doubled to $235M (+110.2% YoY), operating income swung to $88.8M (from a sliver the prior year), net income hit $36.5M after a $24.0M FY2024 loss, and diluted EPS reached $0.36. Gross margin (87.7%) and operating margin (37.7%) are characteristic of an asset-light financial-services model, and management's MD&A frames the business as a three-segment platform (Life Solutions, Asset Management, Technology Services) earning ~2% origination fees on face value plus portfolio-servicing and balance-sheet maturity gains. At $9.37, the stock trades at 26x trailing EPS and 3.8x sales — not cheap on earnings, but reasonable if the FY2025 run-rate is durable.

The accounting picture is meaningfully weaker than the income statement suggests, and the 10-K Risk Factors make clear why. Operating cash flow was -$25.7M in FY2025 despite reported GAAP profitability — typical of a balance-sheet life-settlement holder where policy valuations are mark-to-model and cash arrives only at policy maturity. Management itself flags that 'many life insurance policies values are tied to their actual maturity date and any erroneous valuations could have a material adverse impact,' and that the company could 'fail to accurately forecast life expectancies.' The balance sheet has tightened: cash fell 71% to $38.1M, current assets dropped 56% to $69.6M against current liabilities of $149M (current ratio ~0.47), and the current portion of long-term debt tripled to $116M. Retained earnings remain in deficit at -$41.6M.