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Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-03-13 · 212 added, 224 removed, 316 unchanged (58% of the section changed)

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The following information should be read in conjunction with our selected financial and operating data and the accompanying consolidated financial statements and related notes contained elsewhere in this annual report on Form 10-K.

Our historical results discussed below, and the way we evaluate our results, may differ significantly from the descriptions of our business and key metrics used elsewhere in this annual report on Form 10-K due to the effects of acquisitions which occurred during the years ended December 31, 2023, 2022, and 2021, but may not have had a material impact on our statements of operations due to the limited period of time which they were included in our consolidated results.

This annual report reflects the historical results of operations and financial position of P10 Holdings, our predecessor for accounting purposes, prior to the Reorganization and IPO.

The following discussion may contain forward-looking statements that reflects our plans, estimates and beliefs.

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As investors entrust us with additional capital, our relationships with our fund managers are strengthened, which drives additional investment opportunities, sources more data, enables portfolio optimization and enhances returns, and in turn attracts new investors.

On October 20, 2021, P10 Holdings, in connection with its Initial Public Offering ("IPO"), completed a reorganization and restructure.

In connection with the reorganization, P10, Inc.

("P10") became the parent company and all of the existing equity of P10 Holdings, which is a wholly owned subsidiary of P10, and its consolidated subsidiaries, including the convertible preferred units of P10 Intermediate were converted into common stock of P10.

The offering and reorganization included a reverse stock split of P10 Holdings common stock on a 0.7-for-1 basis pursuant to which every outstanding share of common stock decreased to 0.7 shares.

Net proceeds from the sale of our Class A common stock, after deducting underwriting discounts and commissions but before expenses was approximately $129.4 million.

Of the proceeds, $86.8 million was used to paydown the outstanding term loan balance, $12.4 million was used to pay off the RCP Seller Notes, $1.1 million cash settled certain option awards, $1.0 million funded the dividend on P10 Intermediate's preferred stock and $4.5 million was used to pay expenses incurred in connection with the offering.

Following the reorganization and IPO, P10 has two classes of common stock, Class A common stock and Class B common stock.

Each share of Class B common stock is entitled to ten votes while each share of Class A common stock is entitled to one vote.

On December 22, 2021, P10 entered into a $250 million credit agreement with a syndicate of banks, including JP Morgan Chase Bank and Texas Capital Bank as joint lead arrangers and bookrunners, which provided for a term loan facility in an aggregate principal amount of $125 million (the "term loan") and revolving commitments in an aggregate principal amount of $125 million (the "revolver") with a four year term and an additional $125 million accordion feature.

The variable interest rate is 210 basis points over the Secured Overnight Financing Rate ("SOFR").

The facility includes the option to exercise a $125.0 million accordion feature.

The accordion feature was exercised in order to complete the acquisition of Western Technology Investment LLC ("WTI") on October 13, 2022.

The outstanding balance as of December 31, 2023 was $292.6 million.

On October 13, 2022, we completed the acquisition of WTI that again further expanded on solutions available to our investors by entering into the venture debt space.

The effect of this acquisition is reflected in our Consolidated Balance Sheets at December 31, 2022 and Consolidated Statements of Operations for the year ended December 31, 2022 beginning with the period from October 13, 2022 to December 31, 2022 and forward.

The acquisition was accounted for as a business combination and WTI is reported as a consolidated subsidiary of P10.

During 2022, the Board approved a program to repurchase up to $40.0 million of outstanding shares of our Class A and Class B common stock.

These shares may be repurchased from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades, in accordance with Rule 10b5-1 trading plans and/or through other legally permissible means.

The timing and amount of any repurchases pursuant to the program will depend on various factors including, the market price of our Class A Common Stock, trading volume, ongoing assessment of our working capital needs, general market conditions, and other factors.

As of December 31, 2023, $28.7 million has been spent to buy back shares under this program.

On October 20, 2023, the Company entered into an executive transition agreement with each of Mr.

Alpert and Mr.

Webb (each, a “Transition Agreement”).

Pursuant to the Transition Agreements, Mr.

Alpert and Mr.

Webb ceased to serve as Co-Chief Executive Officer, and Mr.

Alpert and Mr.

Webb were appointed as Executive Chairman and Executive Vice Chairman, respectively, for a one-year period.

Additionally, Mr.

Webb's Transition Agreement provides a one year transition period to continue serving the Company in a mergers and acquisitions capacity.

Effective October 23, 2023, the board of the Company appointed Luke A.

Sarsfield III as Chief Executive Officer (“CEO”) of the Company.

In connection with his appointment as CEO, the Company entered into an employment agreement with Mr.

Sarsfield (the “Employment Agreement”) setting forth the terms of his employment and compensation.

In connection with both the Transition Agreements and the Employment Agreement, provisions were made for severance and sign-on compensation, respectively.

The associated expenses were recorded in compensation and benefits on the Consolidated Statement of Operations.

As of December 31, 2024, our private market solutions were comprised of the following:

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We are further differentiated by the scale, depth, diversity and accuracy of our constantly expanding proprietary private markets database that contains comprehensive information on more than 6,000 investment firms, 11,100 funds, 49,000 individual transactions, 32,600 private companies and 458,000 financial metrics.

As of December 31, 2023, PES managed $12.3 billion of FPAUM.

As of December 31, 2024, PES managed $14.1 billion of Fee-Paying Assets Under Management ("FPAUM").

• Venture Capital Solutions (VCS).

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As of December 31, 2024, VCS managed $6.4 billion of FPAUM.

• Impact Investing Solutions (IIS).

Under IIS, we make equity, tax equity, and debt investments in impact initiatives across North America.

IIS primarily targets investments in renewable energy development and historic building renovation projects, as well as providing capital to small businesses that are women or minority owned or operating in underserved communities.

The IIS investment team, which is comprised of 15 investment professionals with an average of 23+ years of experience, has deep and long-standing relationships in the impact market which it has cultivated over the past 20 years, including deploying capital on behalf of over 110 investors.

We currently have 35 active investment vehicles.

We are differentiated in both the breadth of impact areas served, the type of capital deployed and the duration of our track record.

From inception in 1999 through December 31, 2023, inclusive of proprietary assets and assets managed by affiliates, Enhanced Capital has raised a total of $6.1 billion.

Of the total AUM, impact assets represent $4.0 billion invested in over 1,000 projects and businesses across 40 states, Washington DC, and Puerto Rico and does not include investments made by non-impact affiliates.

Investments in clean energy have generated an estimate of over 2,229 GWh of renewable energy from inception to December 31, 2023.

As of December 31, 2023, IIS managed $2.0 billion of FPAUM .

• Private Credit Solutions (PCS).

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PCS also provides loans to mid-life, growth equity, venture and other funds backed by the unrealized investments at the fund level and provide financing for companies that would otherwise require equity.

The PCS investment team, which is comprised of 39 investment professionals with an average of 24+ years of experience, has deep and long-standing relationships in the private credit market which it has cultivated over the past 22 years, including 300+ investors across 11 active investment vehicles and 1,600+ portfolio companies with $9.8+ billion capital deployed.

The PCS investment team, which is comprised of 54 investment professionals with an average of 25+ years of experience, has deep and long-standing relationships in the private credit market which it has cultivated over the past 22 years, including 440+ investors across 49 active investment vehicles and 1,800+ portfolio

companies with $9.8+ billion capital deployed.

Our PCS is differentiated by our relationship-driven sourcing approach providing capital solutions for growth-oriented companies.

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We currently maintain 80+ active sponsor relationships and have 125+ platform investments.

Within PCS, the Company has investments that target renewable energy development and historic building renovation projects, as well as provide capital to small businesses that are woman or minority owned or operated in underserved communities.

These investments are differentiated in both the breadth of impact areas served, the type of capital deployed and the duration of the impact investing track record.

From the impact investing inception in 1999 through December 31, 2024, inclusive of proprietary assets and assets managed by affiliates, Enhanced Capital has raised a total of $6.4 billion.

Of the total AUM, impact assets represent $4.2 billion invested in over 1,000 projects and businesses across 40 states, Washington DC, and Puerto Rico and does not include investments made by non-impact affiliates.

Investments in clean energy have generated an estimate of over 2,900 GWh of renewable energy from inception to December 31, 2024.

As of December 31, 2024, PCS managed approximately $5.2 billion of FPAUM.

On October 20, 2023, the Company entered into an executive transition agreement with each of Mr.

Alpert and Mr.

Webb (each, a "Transition Agreement").

Pursuant to the Transition Agreements, Mr.

Alpert and Mr.

Webb ceased to serve as Co-Chief Executive Officer, and Mr.

Alpert and Mr.

Webb were appointed as Executive Chairman and Executive Vice Chairman, respectively, for a one-year period.

Additionally, Mr.

Webb's Transition Agreement provided a one year transition period to continue servicing the Company in a mergers and acquisitions capacity.

Effective October 23, 2023, the board of the Company appointed Luke A.

Sarsfield III as Chief Executive Officer ("CEO") of the Company.

In connection with his appointment as CEO, the Company entered into an employment agreement with Mr.

Sarsfield (the "Employment Agreement") setting forth the terms of his employment and compensation.

In connection with both the Transition Agreements and the Employment Agreement, provisions were made for severance and sign-on compensation, respectively.

Effective June 14, 2024, Mr.

Alpert resigned as Executive Chairman, and the Board of the Company appointed CEO, Mr.

Sarsfield, as Chairman of the Board.

In connection with Mr.

Alpert's resignation as Executive Chairman, the Company and Mr.

Alpert agreed to the early termination of Mr.

Alpert's Transition Agreement.

Webb's Transition Agreement terminated in accordance with its terms on October 23, 2024.

Effective November 7, 2024, each of Mr.

Alpert and Mr.

Webb resigned as members of the board of the Company.

The associated expenses were recorded in compensation and benefits on the Consolidated Statements of Operations.

The Board approved a program to repurchase shares of our Class A and Class B common stock.

As of December 31, 2024, the Board has approved $92.0 million, of which $52.0 million was approved during the year ending December 31, 2024, for repurchase under the Share Repurchase Program.

As of December 31, 2024, $88.5 million has been spent to buy back shares and there was $3.5 million remaining for authorized repurchases under this program.

On February 11, 2025, the Board of Directors authorized an additional $40.0 million for repurchases under the Stock Repurchase Program.

Sources of Revenue

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We typically receive fees from investors based upon committed capital, with some funds receiving fees based on invested capital.

capital commitments, typically average ten to fifteen years, though they may vary by fund.

Capital commitments from investors typically average ten to fifteen years, though they may vary by fund.

We offer direct and co-investment funds across our private equity, venture capital, impact investing and private credit solutions.

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Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions in the North American markets in which we operate, as well as changes in global economic conditions, and regulatory or other governmental policies or actions, which can materially affect the values of the funds our platforms manage, as well as our ability to effectively manage investments and attract capital.

Despite rising interest rates and the global economy outlook remaining uncertain, we continue to see investors turning towards alternative investments to achieve consistent and higher yields with our contractually guaranteed fee rate.

Despite higher interest rates and the global economy outlook remaining uncertain, we continue to see investors turning towards alternative investments to achieve asset class diversification, superior investment returns, and participation in access constrained investment opportunities.

The continued growth of our business may be influenced by several factors, including the following market trends:

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We believe the composition of public markets is fundamentally shifting and will drive growth in private markets investing as fewer companies elect to become public corporations, while more companies are choosing to stay privately held or return to being privately held.

Furthermore, investors continue to increase their exposure to passive strategies in search for lower fee alternatives as relative returns in active public market strategies have compressed.

Furthermore, investors continue to increase their exposure to passive strategies in search for lower fee alternatives.

We believe the continued move away from active public market strategies into passive strategies will support growth in private market solutions as investors seek higher risk-adjusted returns.

Additional trends driving investor demand are (a) increasing long-term investor allocations towards private market asset classes, (b) legislation that allows retirement plans to add private equity vehicles as an investment option, and (c) the adoption of Environmental, Social, and Corporate Governance (“ESG”) and impact investing by the institutional and high net worth investor community.

• Favorable lower and lower-middle market dynamics, and data driven sourcing.

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This favorable lower and lower-middle market dynamic implies a larger pool of opportunities at compelling purchase price valuations with significant return potential.

In addition, our premier data and analytic capabilities, driven by our proprietary database, support our robust and disciplined sourcing criteria, which fuels our highly selective investment process.

In addition, our premier data and analytic capabilities, driven by our proprietary

database, support our robust and disciplined sourcing criteria, which fuels our highly selective investment process.

Our database stores and organizes a universe of managers and opportunities with powerful tracking metrics that we believe drive optimal portfolio construction, management, and monitoring and enable a portfolio grading system, as well as repository of investment evaluation scorecards.

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• Increasing regulatory requirements and political uncertainty.

The complex regulatory and tax environment could restrict our operations and subject us to increased compliance costs and administrative burdens, as well as restrictions on our business activities.

The SEC recently adopted new rules and rule amendments to enhance the regulation of private fund advisers and update the existing compliance rule that applies to all investment advisers.

Compliance with these new rules is expected to increase our compliance costs and further restrict certain

business activities.

In addition, the SEC recently adopted significant new compliance requirements for investment advisers related to cybersecurity matters that are expected to increase compliance costs.

The complex regulatory and tax environment carries the potential to restrict our operations and our business activities, as well as subject us to increased compliance and administrative burdens.

The SEC recently adopted new rules and rule amendments to enhance the regulation of all investment advisors, including private fund advisers.

The task of satisfying the requirements of these updated rules is expected to increase our compliance costs and further restrict certain business activities.

Among these new and amended rules is the SEC's significantly updated requirements for investment advisers related to cybersecurity and ensuring investor privacy.

There is additional uncertainty around potential legal, regulatory, and tax changes, which may impact our profitability or impact our ability to operate and grow our business.

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• Consolidation of Manager relationships and flight to quality.

As global financial markets continue to remain uncertain and private markets investors evaluate their exposure and allocation to private markets, a trend of consolidating managers has emerged.

As global financial markets continue to remain uncertain and private markets investors evaluate their exposure and allocation to private markets, a trend of

consolidating managers has emerged.

Our strategies, with long-track records of success, deep industry experience, well-established relationships, and high-quality investment opportunities, can benefit from a trend toward reducing the number of managers to which capital is allocated.

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See Significant Accounting Policies in Note 2 of our Consolidated Financial Statements for additional information regarding the way revenues are recognized.

We earn management and advisory fees based on a percentage of investors’ capital commitments to, in funds or deployed capital.

Management and advisory fees during the commitment period are charged on capital commitments and after the commitment period (or a defined anniversary of the fund’s initial closing) is reduced by a percentage of the management and advisory fees for the preceding years or charged on net invested capital or NAV, in selected cases.

We earn management and advisory fees based on a percentage of investors’ capital commitments, in or, in select cases, capital deployed to our investment funds.

Fee schedules are generally fixed and set for the expected life of the funds, which typically are between ten to fifteen years.

These fees are typically staged to decrease over the life of the contract due to built-in declines in contractual rates and/or as a result of lower net invested capital balances as capital is returned to investors.

We also earn revenues through catch-up fees ("catch

up fees") on the funds we manage.

We also earn revenues through catch-up fees on the funds we manage.

Catch-up fees are earned from investors that make commitments to the fund after the first fund closing occurs during the fundraising period of funds originally launched in prior periods, and as such the investors are required to pay a catch-up fee as if they had committed to the fund at the first closing.

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Referral fee revenue is recognized upon closing of opportunities where we have referred credit opportunities that do not match our investment criteria.

Incentive fees consists of carried interest income from an uncommon pre-acquisition legacy managed fund and incremental incentive revenues earned as a part of an advisory agreement between ECG and Crossroads Impact Corp.

The Company recognizes an accrued contingent liability and contingent payments to customers in our Consolidated Balance Sheets for agreements between ECG and third parties.

The agreements require ECG to share in certain revenues earned with the third party and also includes an option for the third party to sell back the revenue share to ECG at a set multiple.

The agreements require ECG to share in certain revenues earned with the third parties and also includes an option for the third parties to sell back the revenue share to ECG at a set multiple.

Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple.

The options to repurchase the revenue share are not exercisable until a certain period of time has lapsed per the agreements.

The options are exercisable starting in July 2025.

The Company believes it is probable that the third parties will exercise their options to sell back the revenue share and has recognized liabilities on the Consolidated Balance Sheets.

The Company has also recognized contingent payments to customers asset associated with the agreements and will amortize the assets against revenue over the length of the management contracts.

The Company has also recognized contingent payments to customers assets associated with the agreements and will amortize the assets against revenue over the estimated length of the management contracts.

The amortization is reported in management and advisory fees on the Consolidated Statements of Operations.

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Compensation and benefits are our largest expense and consists of salaries, bonuses, severance, stock-based compensation, earnout and bonus payments related to the acquisition of WTI, employee benefits and employer-related payroll taxes.

Despite our general operating leverage that exists, we expect to continue to experience an incremental rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain competitive compensation levels as we expand into new markets to create new products and services.

competitive compensation levels as we expand into new markets to create new products and services.

In substantially all instances, the Company does not hold carried interests in the funds that we manage.

Carried interest is typically structured to stay with the investment professionals.

As such, while this does not impact the compensation we pay to our employees, it allows our investment professionals to receive additional benefit and provides an economic incentive for them to outperform on behalf of our investors.

It allows our investment professionals to receive additional benefit and provides economic incentive for them to outperform on behalf of our investors.

This structure differs from that of most of our competitors, which we believe better aligns the objectives of our stockholders, investors and investment professionals.

Professional fees primarily consist of legal, advisory, accounting and tax fees which may include services related to our strategic development opportunities such as due diligence performed in connection with potential acquisitions.

Our professional fees will fluctuate commensurate with our strategic objectives and potential acquisitions, and certain recurring accounting advisory, audit and tax expenses are expected to increase as our Company has become an SEC registrant and we must comply with additional regulatory requirements.

As our Company is an SEC registrant, our professional fees will fluctuate commensurate with our strategic objectives and potential acquisitions, and certain recurring accounting advisory, audit and tax expenses will increase to comply with additional regulatory requirements.

General, administrative and other includes rent, travel and entertainment, technology, insurance and other general costs associated with operating our business.

Strategic alliance expense is included in operating expenses.

This expense is driven by the Strategic Alliance Agreement that Bonaccord entered into with an investor at the time Bonaccord was acquired in exchange for a portion of net management fee earnings at the time of acquisition.

This expense is driven by the Strategic Alliance Agreement that Bonaccord entered into with an investor at the time Bonaccord was acquired in exchange for a portion of net management fee earnings.

Other (Expense)/Income

Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs.

Other (expense)/income includes the accrued expenses related to litigation and regulatory activity as discussed in Note 14.

Interest expense, net includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs.

Other income (loss) includes any income from unconsolidated subsidiaries, interest income earned from bank accounts across management companies, and any accrued expenses related to litigation and regulatory activity as necessary, which would be discussed in Note 13 of our Consolidated Financial Statements.

Income Tax Benefit/(Expense)

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Our vehicles typically earn management and advisory fees based on committed capital, and in certain cases, net invested capital, depending on the fee terms.

Management and advisory fees based on committed capital are not affected by market appreciation or depreciation.

Management and advisory fees based on committed capital or deployed capital are not affected by market appreciation or depreciation.

Results of Operations

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OTHER (EXPENSE)/ INCOME

Interest expense implied on notes

payable to sellers

Interest expense, net

Loss on early extinguishment of debt

Other (expense)/income

Other (losses)/income

Total other (expense)

Net (loss)/income before income taxes

Net income/(losses) before income taxes

Income tax (expense)

NET (LOSS)/INCOME

NET INCOME/(LOSS)

Years Ended December 31, 2024 and December 31, 2023

Our revenue is composed almost entirely of recurring management and advisory fees, with the vast majority of fees earned on committed capital that is typically subject to ten to fifteen year lock up agreements, therefore our average fee rates have remained stable at approximately 1% for the years ended December 31, 2023 and December 31, 2022.

For the year ended December 31, 2023 compared to the year ended December 31, 2022, revenues increased $43.4 million or 22% due to higher management fees from the impact of inorganic growth increasing revenue by $20.3 million driven by the acquisition of WTI and $24.4 million of organic growth across Bonaccord, Hark, RCP, and TrueBridge.

This was offset by a decline in revenues of $1.7 million at Five Points driven by fee expirations.

Management and advisory fees increased $42.2 million, or 21%, to $238.7 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022 due to inorganic growth from the acquisition of WTI, which increased revenue by $20.2 million, and organic FPAUM growth at Bonaccord, Hark, RCP, and TrueBridge of $26.9 million.

This was offset by a decline in revenues of $1.7 million at Five Points driven by fee expirations and a decline of revenues of

$3.0 million at Truebridge due to a contract modification that is discussed below.

Our revenue is composed almost entirely of recurring management and advisory fees, with the vast majority of fees earned on committed capital that is typically subject to ten to fifteen year lock up agreements, therefore our average fee rates have remained stable at approximately 1% of average FPAUM for the years ended December 31, 2024 and December 31, 2023.

For the year ended December 31, 2024 compared to the year ended December 31, 2023, revenues increased $54.7 million or 23% due to higher management and advisory fees as well as an increase in catch up fees due to fund closings across the Company.

Management and advisory fees increased $51.5 million, or 22%, to $290.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023 due to continued fundraising and deployed capital throughout 2024 and 10% growth in average FPAUM across the Company.

Catch up fees for the year ended December 31, 2024 were $38.9 million.

Catch up fees are associated with the fund closings at Bonaccord, TrueBridge and RCP.

Management fees are non-refundable, however, a certain fund was raised in 2022 with the objective of investing in all funds raised by an undisclosed manager across its global platform, most likely across two vintages – 2022 and 2024/2025.

Management fees are non-refundable, however, a certain fund was raised in 2022 with the objective of investing in all funds raised with an undisclosed manager across its global platform, most likely across two vintages – 2022 and 2024/2025.

The fund closed with $275.0 million of external LP capital.

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In the fourth quarter of 2023, revenue was reduced by $3.0 million.

Other revenues, which represent ancillary elements of our business, increased by $1.2 million or 66% to $3.0 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022 driven primarily by an increase of $1.3 million of interest income offset by a decrease of $0.1 million of subscription fee revenues.

Other revenues, which represent ancillary elements of our business, increased by $3.2 million or 107% to $6.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023 driven by $2.1 million of

recognized carried interest income from an uncommon pre-acquisition legacy managed fund, an increase of $0.6 million in ancillary services provided to clients, an increase of $0.4 million of interest income, and an increase of $0.1 million of subscription fee revenues.

ended December 31,

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Total operating expenses increased by $15.0 million, or 7%, to $235.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

This increase was primarily due to increases in compensation and benefits, as well as amortization expense, and general, administrative, and other expenses primarily due to the transition of the Chief Executive Officer role in October 2023 and a full year of operation with WTI, which was acquired on October 13, 2022 as well as increased operating expenses related to organizational growth.

This increase was primarily due to increases in professional fees and general, administrative, and other expenses.

Compensation and benefits expense increased by $1.0 million, or 1%, to $155.3 million, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase is due to a number of factors.

The acquisition of WTI contributed $9.6 million to the increase in compensation expense.

Stock based compensation contributed to $18.3 million of the increase in compensation expense.

This was driven primarily by the Chief Executive Officer transition which resulted in $15.7 million of stock based compensation expense.

Stock based compensation unrelated to the transition increased by $2.4 million.

The earn out and bonus accruals associated with the acquisition of WTI as discussed in Note 14 in the footnotes to the Consolidated Financial Statements contributed an increase of $17.4 million.

Cash payments of severance contributed to $5.7 million primarily related to management changes.

Finally, $9.0 million of the increase in compensation expense was driven by an increase in headcount and associated benefits across all entities.

Professional fees decreased by $0.2 million, or 1%, to $12.7 million primarily driven by a decrease of $1.6 million in legal fees and professional services offset by an increase of $1.4 in audit, tax, and employee placement fees.

General, administrative and other increased by $4.1 million, or 22% to $22.6 million, due primarily to the acquisition of WTI as well as additional placement agent fees associated with increased revenues.

The increase was driven by $21.6 million of increases in headcount and associated benefits across the Company as well as merit-based salary raises to retain and motivate talent across the Company.

The increase was offset by a change of estimate for timing of achieving the earnout payment related to the acquisition of WTI.

While the Company still expects the first two hurdles to be met, the period in which the hurdles are expected to be satisfied is anticipated to be later than previously projected, which prospectively adjusted recognition of the expense and resulted in $8.7 million decrease for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Additionally, there was a decrease in severance expense of $5.4 million and a decrease in stock compensation of $6.5 million, of which $1.0 million decrease relates to remeasurement for the fair value of the Bonaccord Units and Hark Units related to the acquisition of Bonaccord and Hark and a decrease of $3.9 million related to management stock award accelerations due to management turnover and the Executive Transition in October 2023.

In 2023, the Hark Units were fully earned and recognized, therefore, there was no correlating expense in 2024 associated with the Hark Units.

Moreover, the Bonaccord Units, which are recognized using the tranche method, had a decrease in expense for the year ended December 31, 2024 compared to the year ended December 31, 2024.

In 2024, the Bonaccord Units were fully earned and recognized.

For further discussion on the Bonaccord Units and Hark Units, please see Note 15 of the Consolidated Financial Statements.

Professional fees increased by $8.8 million, or 69%, to $21.5 million primarily driven by a $3.2 million increase in professional and legal fees associated with the Company's debt refinancing and the remaining increase attributable to the Company's transitions related to build out of management team, office locations, policies as well as normal course of business such as contract modifications, filings, and due diligence for acquisitions.

General, administrative and other increased by $6.2 million, or 27% to $28.8 million, due to $2.2 million of additional placement agent fees and other expenses associated with increased revenues, $1.4 million increase in marketing efforts, as well as $2.4 million of ongoing enhancements to infrastructure, technology, premises, and security across the Company.

Contingent consideration expense decreased $0.4 million, to $0.2 million, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This was driven by remeasurements of the fair value of contingent consideration from the acquisitions of Hark and Bonaccord.

More expense was recognized during 2022 due to increased probability of achieving performance hurdles.

Additionally, Hark's earnout was fully settled during the first half of 2023.

Amortization of intangibles increased by $2.4 million, or 9%, to $29.2 million, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

This is recognition of a full year of amortization due to the acquisition of WTI, which was acquired in October 2022, offset by decreases at ECG and RCP.

The decrease at ECG is driven by unique syndicate contracts' amortization schedule, which is based on projected revenues at the time of acquisition.

This was driven by remeasurement of contingent consideration payable in connection with the acquisitions of both Hark and Bonaccord included in 2023, compared to remeasurement of contingent consideration payable in connection with only the acquisition of Bonaccord.

The Hark contingent consideration was fully earned and paid in 2023 and the Bonaccord contingent consideration is fully earned as of December 31, 2024 with the final payment of $2.3 million made on January 24, 2025.

Amortization of intangibles decreased by $3.6 million, or 12%, to $25.6 million, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This is due to decreases at ECG and RCP.

The decrease at ECG is driven by syndicate contracts' amortization schedule, which is based on projected revenues at the time of acquisition.

The decrease at RCP is driven by asset management fee contracts' amortization schedule, which is based on projected revenues at the time of acquisition.

Strategic alliance expense increased by $3.0 million, or 201%, to $4.5 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This is due to an increase in net management fee earnings that was driven by additional fundraising and management fee revenue in 2024.

Other (Expense)/Income

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Other expenses increased by $8.2 million, or 34%, to $32.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

This increase was driven by a rise in interest expense of $12.4 million.

The increase in interest expense correlates to a rise in interest rates throughout 2023, with the principal balance outstanding staying fairly consistent year over year with only a decrease of $0.8 million.

The increase was also driven by a legal settlement, primarily related to Oregon Department of Justice, for $2.4 million.

Income Tax Benefit/(Expense)

This increase was driven by $10.1 million in other (losses)/income related to the measurement expense of contra-revenue put option related to incentive fees.

Additionally, an increase in interest expense of $3.6 million due to a higher average of SOFR rates and a larger average outstanding debt balance for the year ended December 31, 2024 compared to the year ended December 31, 2023.

This was offset slightly by $2.4 million in other (losses)/income related to legal settlement expenses incurred in the year ended December 31, 2023 compared to a $1.2 million legal settlement gain recognized in the year ended December 31, 2024.

The legal settlements in both 2023 and 2024 were primarily related to a matter with the Oregon Department of Justice.

The increase was also slightly offset by $2.0 million increase in other (losses)/income related to interest earned for money market accounts and income from unconsolidated subsidiaries.

Income Tax Expense

Years Ended December 31, 2024 and December 31, 2023

Income tax expense decreased by $1.4 million to an expense of $4.6 million for the year ended December 31, 2023 compared to an expense of $6.1 million for the year ended December 31, 2022.

The decrease in income tax expense from 2022 to 2023 was due to a reduction in overall taxable income in 2023.

The following table provides a period-to-period roll-forward of our fee paying assets under management on a pro forma basis as if WTI was acquired on January 1, 2022.

ended December 31,

(in millions)

Balance, Beginning of Period

Capital raised (1)

Capital deployed (2)

Net Asset Value Change (3)

Scheduled fee base stepdowns

Expiration of fee period

Balance, End of period

(1) Represents new commitments from funds that earn fees on a committed capital fee base.

(2) In certain vehicles, fees are based on capital deployed, as such increasing FPAUM.

(3) Net asset value change consists primarily of the impact of market value appreciation (depreciation) from funds that earn fees on a net asset value basis.

Income tax expense increased by $4.1 million to an expense of $8.7 million for the year ended December 31, 2024 compared to an expense of $4.6 million for the year ended December 31, 2023.

The increase in income tax expense from 2023 to 2024 was due to an increase in overall net operating income and flow-through income from underlying investments in 2024.

The following table provides a period-to-period roll-forward of our fee paying assets under management on an actual basis.

ended December 31,

(in millions)

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FPAUM as of December 31, 2024

FPAUM increased by $2.1 billion, or 9.7%, to $23.3 billion on a pro forma basis and $2.1 billion or 9.7% to $23.3 billion on an actual basis for the year ended December 31, 2023, due primarily to an increase in capital raised and capital deployed from our private equity and venture capital solutions, which was offset by a decline of fees related to scheduled fee stepdowns and expiration of fees.

FPAUM increased by $2.4 billion or 10% to $25.7 billion for the year ended December 31, 2024, due primarily to an increase in capital raised and capital deployed from our private equity and venture capital solutions, which was offset by a decline of fees related to scheduled fee stepdowns and expiration of fees.

Our FPAUM growth and concentration across solutions and vehicles has been relatively consistent over time but can vary in particular periods due to the systematic fundraising cycles of new funds, which typically lasts 12-24 months.

We expect to continue to expand our fundraising efforts and grow FPAUM with the launch of new specialized investment vehicles and asset class solutions.

Results of Operations for Years Ended December 31, 2023 and 2022

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Other companies may calculate these measures differently than we do, limiting their usefulness as a comparative measure.

We use Adjusted Net Income, or ANI, as well as Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to provide additional measures of profitability.

We use Fee-Related Revenue ("FRR"), Fee-Related Earnings ("FRE"), Adjusted Net Income ("ANI"), as well as Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to provide additional measures of profitability.

We use the measures to assess our performance relative to our intended strategies, expected patterns of profitability, and budgets, and use the results of that assessment to adjust our future activities to the extent we deem necessary.

FRR is calculated as Total Revenues less any incentive fees.

FRE is a non-GAAP performance measure used to monitor our baseline earnings less any incentive fee revenue and excluding any incentive fee-related expenses.

ANI reflects our actual cash flows generated by our core operations.

ANI is calculated as Adjusted EBITDA, less actual cash paid for interest and federal and state income taxes.

In order to compute Adjusted EBITDA, we adjust our GAAP net (loss)/income for the following items:

In order to compute Adjusted EBITDA, we adjust our GAAP net income/(loss) for the following items:

• Expenses that typically do not require us to pay them in cash in the current period (such as depreciation, amortization and stock-based compensation);

• The cost of financing our business;

• One-time expenses related to restructuring of the management team including signing bonus, severance, and placement/search fees;

• One-time expenses related to restructuring of the management team including placement/search fees;

• Expenses related to the debt refinancing completed in August 2024;

• Acquisition-related expenses which reflects the actual costs incurred during the period for the acquisition of new businesses, which primarily consists of fees for professional services including legal, accounting, and advisory, as well as bonuses paid to employees directly related to the acquisition;

• Registration-related expenses includes professional services associated with our prospectus process incurred during the period, and does not reflect expected regulatory, compliance, and other costs associated with those that were incurred subsequent to our Initial Public Offering, and

• The effects of income taxes.

Adjusted Net Income in 2021 reflects the cash payments made for interest, which differs significantly from total interest expense that includes non-cash interest on the non-interest-bearing Seller Notes related to our acquisitions of RCP 2 and RCP 3.

Similarly, the cash income taxes paid during the 2022 and 2021 periods differ significantly from the net income tax benefit, which is primarily comprised of deferred tax expense as described in the results of operations.

The 2021 cash paid for interest includes a loss on extinguishment of $4.8 million.

The cash income taxes paid during the 2024 and 2023 periods differ significantly from the net income tax expense, which is primarily comprised of deferred tax expense as described in the results of operations.

Ended December 31,

(in thousands)

Net (loss)/income

Net Income/(Loss)

Depreciation & amortization

Interest expense, net

Income tax expense (benefit)

Income tax expense

Non-recurring expenses

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Adjusted EBITDA

Cash interest expense

Cash income taxes, net of taxes related to

Cash interest expense, net

Cash income taxes, net of taxes related to acquisitions

Adjusted Net Income

Total Revenues

Non-Fee Related Revenue

Fee-Related Revenue

Adjusted EBITDA

Non-Fee Related Income

Fee-Related Earnings

Financial Position, Liquidity and Capital Resources

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Debt obligations

There was an increase in cash and cash equivalents from $29.5 million as of December 31, 2022 to $32.1 million as of December 31, 2023 due to operating cash flows largely offset by cash used in financing activities.

There was a decrease in

goodwill and intangible assets of $29.2 million driven by amortization of intangible assets during the year ended December 31, 2023.

Remaining total assets also increased in the same period by $34.4 million primarily due to $21.2 million increase in due from related parties and a $9.9 million increase in prepaid expenses and other assets.

These are driven by the Advisory Agreement at Enhanced and inventory assets for tax credit programs at Enhanced, respectively.

Additionally, deferred tax assets decreased by $3.8 million driven primarily by an increase in non-deductible expenses such as executive compensation and the Oregon DOJ settlement.

which resulted in usage of the NOLs leading to a reduction of deferred tax assets.

There was an increase in cash and cash equivalents from $32.1 million as of December 31, 2023 to $68.1 million as of December 31, 2024 due to operating cash flows offset by cash used for open market repurchases for the Company's stock.

There was a decrease in goodwill and intangible assets of $25.6 million driven by amortization of intangible assets during the year ended December 31, 2024.

Remaining total assets also increased in the same period by $24.7 million due to $35.9 million increase in due from related parties and accounts receivable offset by a $9.9 million decrease in prepaid expenses and other assets.

The increase in due from related parties is driven by the Advisory Agreements with Enhanced Permanent Capital and the increase in accounts receivable is driven by an increase in revenues across the Company.

The decrease in prepaid expenses and other assets was related to the sale of inventory assets for tax credit programs at Enhanced.

Liquidity and Capital Resources

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However, to fund our continued growth, we have utilized capital obtained through debt and equity raises.

Our ability to continue to raise funds will be critical as we pursue additional business development opportunities and new acquisitions.

Our ability to continue to raise funds or issue new shares as consideration will be critical as we pursue additional business development opportunities and new acquisitions.

On December 22, 2021, P10, Inc.

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The accordion was not drawn until October 2022, at which point it was divided to $87.5 million of term loan and $37.5 million of revolver.

The Company incurred $1.4 million of up front fees during the exercise which are reflected as debt obligations on the Consolidated Balance Sheets.

Both facilities are Term SOFR Loans.

The Company can elect one or three months for the Revolver Facility and three or six months for the Term Loan.

Principal is contractually repaid at a rate of 1.25% on the term loan quarterly effective March 31, 2023.

The Revolving Credit Facility has no contractual principal repayments until maturity, which is December 22, 2025 for both facilities.

As of December 31, 2023, the Term Loan with a balance of $201.9 million is incurring interest at a weighted average SOFR rate of 7.39%.

As of December 31, 2023, the Revolver Facility is split into thirteen tranches.

The total principal outstanding is $90.7 million and the weighted average SOFR rate amongst the tranches is 7.56%.

The tranches are all incurring interest at a set rate for one, three, or six month periods and are subsequently reset at the current SOFR rate.

Refer to Note 12 for further details provided on the tranches and associated interest periods.

The Credit Agreement contains affirmative and negative covenants typical of such financing transactions, and specific financial covenants which require P10 to maintain a minimum leverage ratio of less than or equal to 3.50.

As of December 31, 2023, P10 was in compliance with its financial covenants required under the facility.

On August 1, 2024, the Company entered into the Amended and Restated Credit Agreement, which provides for a new senior secured revolving credit facility in the amount of $175.0 million with a $10.0 million sublimit for the issuance of letters of credit, and a new senior secured loan facility in the amount of $325.0 million.

The New Credit Facilities are to be used to refinance and replace the credit facilities under the Credit Agreement and for general corporate purposes, including acquisitions.

The New Credit Facilities are Term SOFR Loans meaning loans bearing interest based upon the "Adjusted Term SOFR Rate".

The Adjusted Term SOFR Rate is the Secured Overnight Financing Rate ("SOFR") at the date of election, plus 2.60%.The Company can elect one or three months for the Revolver Facility and one, three, or six months for the Term Loan.

Principal is contractually repaid at a rate of 1.25% on the term loan quarterly effective December 31, 2025.

The New Revolving Facility has no contractual principal repayments until maturity, which is August 1, 2028 for both facilities.

As of December 31, 2024, the Term Loan with a balance of $325.0 million is incurring interest at a weighted average Adjusted Term SOFR Rate of 7.68%.

As of December 31, 2024, there is no outstanding balance for the Revolver Facility.

Refer to Note 11 of the Consolidated Financial Statements for further details provided on the debt and associated interest periods.

The Amended and Restated Credit Agreement contains affirmative and negative covenants typical of such financing transactions, and specific financial covenants which require P10 to maintain a minimum FPAUM of the sum of $16.7 million plus 70% of the aggregate amount of FPAUM acquired or not constituted as organic growth as well as a minimum leverage ratio of less than or equal to 3.50.

As of December 31, 2024, P10 was in compliance with its financial and other covenants required under the facility.

The Company has incurred $24.1 million in interest expense for the year ended December 31, 2024.

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Net cash (used in) investing activities

Net cash (used in)/ provided by financing activities

Increase (decrease) in cash, cash equivalents and

Net cash (used in) financing activities

Increase in cash, cash equivalents and

restricted cash

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Years Ended December 31, 2024 and December 31, 2023

Cash from operating activities decreased $14.0 million or 23%, to $47.7 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.

The components of this net increase primarily consisted of the following changes in revenue and operating assets and liabilities:

• An increase in revenues of $43.4 million associated with the acquisition of WTI as well as additional fund closings which is offset by an increase of $21.2 million in the current year of due from related parties that has not been received as of December 31, 2023 related to the Advisory Agreement at Enhanced compared to the year ended December 31, 2022;

• An increase of $9.7 million in prepaid expenses and other assets primarily driven by inventory assets related to Enhanced tax credit projects;

• An increase in cash used for certain deposits for investments held for customers from December 31, 2022 of $7.9 million;

• An increase in cash used for interest payments of $13.3 million.

The Company's operating activities generally reflect the Company's earnings in the respective periods after adjusting for significant non-cash activity, including income of unconsolidated subsidiaries, stock-based compensation, depreciation, amortization, and deferred tax expense, all of which are included in net income/(loss).

Cash from operating activities increased $53.3 million or 112%, to $101.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

For the years ended December 31, 2024 and 2023, our net cash provided by operating activities was driven primarily by receipts of management fees and advisory fees, partially offset by payment of operating expenses, which includes professional fees, compensation and benefits, as well as general, administrative and other expenses.

Investing Activities

Years Ended December 31, 2024 and December 31, 2023

The cash used in investing activities decreased by $96.3 million, or 98% to $2.3 million, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

This decrease in cash used in investing activities was due almost entirely to the 2022 acquisition of WTI.

The acquisition of WTI resulted in net cash payments of $96.5 million.

The cash used in investing activities increased by $3.6 million, or 158% to $5.8 million, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This increase in cash used in investing activities was due to purchases of leasehold improvements, included in property and equipment during the year ended December 31, 2024.

Financing Activities

Years Ended December 31, 2024 and December 31, 2023

We used a net $42.9 million in cash for financing activities for the year ended December 31, 2023, as compared to cash provided by financing activities of $22.9 million for the year ended December 31, 2022 due to the following factors:

(1) net repayments of $0.8 million in 2023 as compared to net borrowings of $77.5 million in 2022 on the Term Loan and Revolver Facility, (2) repurchases of common stock of $18.6 million in 2023 as compared to $22.4 million in 2022, (3) cash settlement of stock options of $12.5 million in 2022, and (4) dividends paid of $14.8 million in 2023 as compared to $10.5 million in 2022.

We used a net $59.1 million in cash for financing activities for the year ended December 31, 2024, as compared to cash used in financing activities of $42.9 million for the year ended December 31, 2023.

The change is driven by the increase in open market repurchases of the Company's stock in the year ended December 31, 2024 compared to the year ended December 31, 2023 offset by the cash provided by debt refinancing during 2024.

Future Sources and Uses of Liquidity

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We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our consolidated financial statements.

Contractual Obligations, Commitments and Contingencies

In the ordinary course of business, we enter contractual arrangements that require future cash payments.

The following table sets forth information regarding our anticipated future cash payments under our contractual obligations as of December 31, 2023:

(in thousands)

Operating lease obligations (1)

Debt obligations (2)

1) We lease office space under agreements that expire periodically through 2032.

The table only includes guaranteed minimum lease payments under these agreements and does not project other related payments.

2) Debt obligations presented in the table reflect scheduled principal payments related to the various debt instruments of the Company.

Critical Accounting Policies and Estimates

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Accordingly, the carrying value of the Company’s equity method investments in such entities retains the specialized accounting treatment.

Principles of Consolidation

The Company performs the variable interest analysis for all entities in which it has a potential variable interest.

If the Company has a variable interest in the entity and the entity is a variable interest entity (“VIE”), we will also analyze whether the Company is the primary beneficiary of this entity and if consolidation is required.

Generally, VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties, or whose equity holders, as a group, lack one or more of the following characteristics:

(a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns.

A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

To determine a VIE’s primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits.

This assessment involves identifying the activities that most significantly impact the VIE’s economic performance and determine whether we, or another party, has the power to direct those activities.

When evaluating whether we are the primary beneficiary of a VIE,

we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties.

See Note 7 of our consolidated financial statements for further information.

The Company has determined that certain of its subsidiaries are VIEs, and that the Company is the primary beneficiary of the entities, because it has the power to direct activities of the entities that most significantly impact the VIE’s economic performance and has a controlling financial interest in each entity.

Accordingly, the Company consolidates these entities, which include P10 Intermediate, Holdco, RCP 2, RCP 3, TrueBridge, Hark, Bonaccord, and WTI.

The assets and liabilities of the consolidated VIEs are presented gross in the Consolidated Balance Sheets.

The liabilities of our consolidated VIE’s are obligations of those entities and their creditors do not generally have recourse to the assets of P10.

See Note 7 of our consolidated financial statements for more information on both consolidated and unconsolidated VIEs.

Entities that do not qualify as VIEs are assessed for consolidation as voting interest entities under the voting interest model.

Under the voting interest model, the Company consolidates those entities it controls through a majority voting interest or other means.

Five Points, P10 Holdings, and ECG are concluded to be consolidated subsidiaries of P10 under the voting interest model.

Revenue Recognition of Management Fees and Management Fees Received in Advance

Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services.

While the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts.

Management and Advisory Fees

Current Expected Credit Losses for Due from Related Parties

The Company evaluates accounts receivable, due from related parties, and notes receivable using the current expected credit loss model.

The Company determines a current estimate of all expected credit losses over the life of each financial instrument, which may result in recognition of credit losses on loans and receivables before an actual event of default.

The Company establishes reserves for any estimated credit losses with a corresponding charge in the Consolidated Statements of Operations.

If accounts are subsequently determined to be uncollectible, they will be expensed in the period that determination is made.

Due from related parties represents receivables from the Funds for reimbursable expenses, and management fees collected by a related party of RCP 2 that are owed to RCP 2.

Additionally, fees owed to the Company for the advisory agreement entered into upon the closing of the acquisitions of ECG and ECP and any supplemental agreements entered into after acquisition ("Advisory Agreements"), where ECG provides advisory services to Enhanced Permanent Capital, LLC ("Enhanced PC") are reflected in due from related parties on the Consolidated Balance Sheets.

The Company estimates that accounts receivable, due from related parties, and notes receivable are fully collectible based on historical events, current conditions, and reasonable and supportable forecasts.

The estimate for the Enhanced PC Advisory Agreements require more judgment than other receivables due to the size of the outstanding receivable and the Company's reliance on reasonable and supportable forecasts on this particular receivable bucket.

Revenue Recognition of Management and Advisory Fees

The Company earns management fees for asset management services provided to the Funds where the Company has discretion over investment decisions.

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Management and advisory fees received in advance reflects the amount of fees that have been received prior to the period the fees are earned.

These fees are recorded as deferred revenue on the Consolidated Balance Sheets.

For asset management and advisory services, the Company typically satisfies its performance obligations over time as the services are rendered, since the customers simultaneously receive and consume the benefits provided as the Company performs the service.

The transaction price is the amount of consideration to which the Company expects to be entitled based on the terms of the arrangement.

For certain funds, management fees are initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term.

Additionally, the management fee may step down for certain funds depending on the contractual arrangement.

Advisory services are generally based upon fixed amounts and billed quarterly.

These fees are recorded as deferred revenues on the Consolidated Balance Sheets due to the performance obligations not being satisfied at the time of collection.

For asset management and advisory services, the Company typically satisfies its performance obligations over time as the services are provided as a distinct series of daily performance obligations that the customer simultaneously benefits from as they are performed.

Asset management fees are based on the contractual terms of each contract which differ, such as fees calculated based on committed capital or deployed capital, fees initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term, fees that step down during specified periods of the fund's term, or in limited instances, fees based on assets under management.

At contract inception, no revenue is estimated as the fees are dependent variable amounts which are susceptible to factors outside of our control.

Fees are recognized for services provided during the period, which are distinct from services provided in other periods.

In certain asset

management and advisory agreements progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice.

Advisory service fees are determined using fixed-rate fees and are recognized over time as the related services are delivered.

Other advisory services include transaction and management fees associated with managing the origination and ongoing compliance of certain investments.

The Company allocates a portion of consideration received under an arrangement to a financing component when it determines that a significant financing component exists.

The Company does not adjust the promised amount of consideration for the effects of a significant financing component if, at each contract inception the Company expects that the period between services being provided and cash collection would be less than one year.

To the extent the Company determines that there is a significant financing component in a contract with a customer, it determines the impact of the time value of money in adjusting the transaction price to account for the income associated with the financing component by estimating the discount rate that would be reflected in a separate financing transaction between the customer and the Company at contract inception, based upon the credit characteristics of the customer receiving financing in the contract.

The Company is applying the optional disclosure exemption for variable consideration for unsatisfied performance obligations, as the variable consideration relates to these unsatisfied performance obligations being fulfilled as a series.

The performance obligations related to these contracts are expected to be satisfied over the next 1-10 years as services are provided to the customer.

Catch-up fees are earned from investors that make commitments to previously launched fund after the first fund closing occurs, but during the fundraising period.

Contractual terms require the investors to pay a catch-up fee as if they had committed to the fund at the first closing.

Catch-up fees are recorded as revenue when such commitments are made as variable consideration in which the constraint is relieved at the time of the commitment.

Stock-Based Compensation Expense

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For awards with graded vesting, and vesting only requires a service condition, the Company elected, in accordance with ASC 718, to treat these awards as single awards for recognition purposes and recognize compensation on a straight-line basis over the requisite service period of the entire award.

For awards with graded vesting and require either a performance condition or market condition to vest, the Company treats each expected vesting tranche as an individual award and recognizes expense ratably over the vesting period at the fair market value of the grant date.

For awards with graded vesting and require a market condition to vest, the Company treats each expected vesting tranche as an individual award and recognizes expense ratably over the vesting period at the fair market value of the grant date.

Certain acquisition-related RSUs vest after meeting certain performance metrics.

For these, the Company uses the tranche method and recognizes expense for each tranche of RSU's deemed probable of vesting on a straight-line basis over the expected vesting period.

For these, the Company uses the tranche method and recognizes expense for each tranche of RSUs deemed probable of vesting on a straight-line basis over the expected vesting period.

The Company evaluates the probability of vesting at each reporting period.

Unvested units are remeasured quarterly against performance metrics as a liability on the Consolidated Balance Sheets.

Refer to Note 16 for further discussion.

Unvested RSUs are remeasured quarterly against performance metrics as a liability on the Consolidated Balance Sheets.

Refer to Note 15 to the Consolidated Financial Statements for further discussion.

Forfeitures are recognized as they occur.

Current income tax expense represents our estimated taxes to be paid or refunded for the current period.

In accordance with ASC 740, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse.

Valuation allowances are recorded to reduce deferred tax assets to the amount we believe is more likely than not to be realized.

Uncertain tax positions are recognized only when we believe it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position.

We recognize interest and penalties, if any, related to uncertain tax positions in income tax expense.

We file various federal and state and local tax returns based on federal and state local consolidation and stand- alone tax rules as applicable.

Accrued Compensation and Benefits

Accrued compensation and benefits consists of employee salaries, bonuses, benefits, severance, and acquisition-related earnouts (contingent on employment) that has not yet been paid.

The estimate for the acquisition-related earnouts require more judgment than the other components in accrued compensation and benefits.

The acquisition-related earnout for WTI is an earnout payment of up to $70.0 million of cash and common stock may be earned upon meeting certain performance metrics.

Upon the achievement of $20.0 million, $22.5 million, and $25.0 million of EBTIDA, $35.0 million, $17.5 million, and $17.5 million are earned, respectively.

Of the total amount, $50.0 million can be earned by the sellers and the remaining $20.0 million would be allocated to employees of the Company at the time the earnout is earned.

Payment to both sellers and employees is contingent on continued employment and, therefore, these earnout payments are recorded as compensation and benefits expense on the Consolidated Statements of Operations.

Payments will be made in cash, with the option to pay up to 50.0% in units of P10 Intermediate, no later than 90 days following the last day of the calendar quarter in which a milestone payment is achieved.

Total payments will not exceed $70.0 million and any amounts paid will be paid by October 2027.

The Company will evaluate whether each earn-out hurdle is probable of occurring and recognize an expense over the period the hurdle is expected to be achieved.

As of December 31, 2024, the Company has determined that only the first two EBITDA hurdles are probable of being achieved.

Additionally in connection with the acquisition of WTI, certain

employees entered into employment agreements.

As part of these employment agreements, certain employees may receive a one-time bonus payment if the employee is employed by the Company as of the fifth anniversary of the effective date and the trailing-twelve month EBITDA of WTI at that time is equal to or greater than $20.0 million.

Payment can be made in cash or stock of P10, provided that no more than $5.0 million will be payable in cash.

Total payment will not exceed $10.0 million and any amounts will be paid in October 2027, the fifth anniversary of the effective date.

Revenue Share and Repurchase Agreement

The Company recognizes accrued contingent liabilities and contingent payments to customers asset in our Consolidated Balance Sheets for an agreement between ECG and various third parties.

The agreement requires ECG to share in certain revenues earned with the third parties and also includes an option for the third parties to sell back the revenue share to ECG at a set multiple.

Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple.

The options to repurchase the revenue share are exercisable starting in July 2025.

The Company believes it is probable that the third parties will exercise its option to sell back the revenue share and has recognized a liability on the Consolidated Balance Sheets.

The Company has also recognized a contingent payment to customers associated with the agreement and will amortize the asset against revenue over the estimated term of the management contract.

The amortization is reported in management and advisory fees on the Consolidated Statements of Operations.

The Company will reassess at each reporting period and recognize all changes.

On December 23, 2024, the Company became a guarantor for a related party on a related put option and call option with the same third party customers and terms.

The Company would be required to settle either the put or call options if either are exercised and the related party does not have the means to settle themselves.

The Company’s accrued contingent liabilities are recognized once determined that it is probable the Company would need to settle as guarantor and estimable and would record a loss at the same time.

The Company will reassess at each reporting period and recognize all changes.

Refer to Note 13 to the Consolidated Financial Statements for further discussion.

Qualitative and Quantitative Disclosures about Market Risk.

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Interest Rate Risk

As of December 31, 2023, we had $201.9 million in outstanding principal in Term debt under our Term Loan and Revolving Credit Facility.

As of December 31, 2024, we had $325.0 million in outstanding principal in Term Loans under our Term Loan and $0 under our Revolving Credit Facility.

The annual interest rate on the Term Loan is based on SOFR, subject to a floor of 0.10%, plus 2.50%.

On December 31, 2024, the interest rate on these borrowings was 2.6% + SOFR.

The Company remains exposed to interest rate risk if there is a shift in the environment.

We estimate that a 100-basis point increase in the interest rate would result in an approximately $3.4 million increase in interest expense related to the loan over the next 12 months.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis