SAMG

Silvercrest is a durable, fee-based wealth manager for ultra-high-net-worth clients, and the franchise metric that matters most is intact: AUM hit a record $37.0B at year-end 2025 (+1.4%), with average AUM up to $36.8B from $34.9B. The balance sheet is pristine — $44.1M cash, negligible long-term debt, and management is returning capital aggressively ($30.5M of buybacks, +559%, plus $7.07M of dividends, against $18.6M of operating cash flow). On cash flow and sales the stock looks cheap: P/S of 0.7 and roughly an 18% operating-cash-flow yield on the $90M market cap, with the share count already shrinking 7.8%. That capital return at a depressed price is a real total-return tailwind and signals insider conviction in the value.

The problem is the income statement underneath the AUM headline. Despite revenue rising 1.3% to $125M, the 10-K shows income before other income collapsing to $9.3M from $17.6M, net income margin halving from 12.7% to 6.4%, and adjusted EBITDA margin falling from 21.1% to 15.7%. Net income attributable to Silvercrest fell 48.8% to $4.88M and diluted EPS dropped 44% to $0.56. This is cost growth, not a revenue shock — the firm is spending heavily (capex +114%) while fees stagnate, and the multi-year top line is flat-to-down (revenue is still below the $132M of FY2021). The market's 11.3% one-day drop reflects exactly this margin disappointment.