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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-08 · 188 added, 261 removed, 299 unchanged (60% of the section changed)

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Our mission is to provide our investors differentiated access to a broad set of solutions and investment vehicles across highly attractive asset classes and geographies that generate superior risk-adjusted returns.

Our success and growth have been driven by our position in the private markets’ ecosystem, providing investors with specialized private market solutions across a comprehensive set of investment strategies, including primary investment funds, secondary investment, direct investment and co-investments and advisory solutions.

Our success and growth have been driven by our position in the private markets’ ecosystem, providing investors with specialized private market solutions across a comprehensive set of investment strategies, including primary investment funds, secondary investment funds, direct investment and co-investments and advisory solutions.

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, 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 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 and President Mr.

Sarsfield to 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.

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

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

As of September 30, 2024, our private market solutions were comprised of the following:

As of March 31, 2025, our private market solutions were comprised of the following:

• Private Equity Solutions (PES) .

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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, 11,200 funds, 49,700 individual transactions, 33,000 private companies and 462,000 financial metrics.

As of September 30, 2024, PES managed $13.4 billion of Fee-Paying Assets Under Management ("FPAUM").

As of March 31, 2025, PES has raised a total of $21.7 billion assets under management ("AUM"), of which $15.0 billion are Fee-Paying Assets Under Management ("FPAUM").

AUM reflects the assets that we manage, and is calculated as the sum of:

(i) net asset value (“NAV”) of our clients’ and funds’ underlying investments as of the most recently available date;

(ii) drawn and undrawn debt (excluding capital call lines);

(iii) uncalled capital commitments (net of deferred purchase price and not in excess of total capital commitments, as applicable) as of the NAV record date;

(iv) incremental commitments raised since NAV record date.

In situations where NAV data is not available, such as with certain advisory relationships, we use FPAUM.

• Venture Capital Solutions (VCS).

Under VCS, we make investments in venture capital funds across North America and specialize in targeting high-performing, access-constrained opportunities.

The VCS investment team, which is comprised of 15 investment professionals with an average of 24+ years of experience, has deep

and long-standing investor and fund manager relationships in the venture market which it has cultivated over the past 14+ years, including over 1,900+ investors, 90+ fund managers, 95+ direct investments, 385+ private market funds and 13,100+ portfolio companies.

The VCS investment team, which is comprised of 15 investment professionals with an average of 24+ years of experience, has deep and long-standing investor and fund manager relationships in the venture market which it has cultivated over the past 17+ years, including over 1,980+ investors, 110+ fund managers, 110+ direct investments, 420+ private market funds and 15,000+ portfolio companies.

We have 21 active investment vehicles.

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In addition, since 2011, we have partnered with Forbes to publish the Midas List, a ranking of the top value-creating venture capitalists.

As of September 30, 2024, VCS managed $6.4 billion of FPAUM.

As of March 31, 2025, VCS has raised a total of $9.8 billion AUM, of which $6.5 billion are FPAUM.

• Private Credit Solutions (PCS).

Under PCS, we primarily make debt investments across North America, targeting lower middle market companies owned by leading financial sponsors and also offer certain private equity solutions.

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.

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 51 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 48 active investment vehicles and 1,800+ portfolio companies with $9.9+ billion capital deployed.

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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 providing capital to small businesses that are women or minority owned or operating in underserved communities.

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 September 30, 2024, inclusive of proprietary assets and assets managed by affiliates, Enhanced Capital has raised a total of $6.3 billion.

Of the total AUM, impact assets represent $4.2 billion invested in over 950 projects and businesses across 40 states, Washington DC, and Puerto Rico and does not include investments made by non-impact affiliates.

As of March 31, 2025, PCS has raised a total of $6.8 billion AUM, of which $4.8 billion are FPAUM.

Of the total AUM, impact assets represent $4.3 billion supporting investments in over 1,000 projects and businesses across 40 states, Washington DC, and Puerto Rico, not including 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 September 30, 2024, PCS managed approximately $5.1 billion of FPAUM.

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.

Upon completion of purchases under the prior authorizations, on February 27, 2024, the Board of Directors authorized an additional $40.0 million for repurchases under the Stock Repurchase Program.

On August 6, 2024, the Board of Directors authorized an additional $12.0 million for repurchases under the Stock Repurchase Program.

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 September 30, 2024, $78.1 million has been spent to buy back shares under this program.

Sources of Revenue

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Often, the fees are structured such that they step down, or decrease, over the life of the fund.

Our primary funds comprise approximately $13.7 billion of our FPAUM as of September 30, 2024.

Our primary funds comprise approximately $14.6 billion of our FPAUM as of March 31, 2025.

• Direct and Co-Investment Funds.

Direct and co-investments involve acquiring an equity interest in or making a loan to an operating company, project, property, alternative asset manager, or asset, typically by co-investing

alongside an investment by a fund manager or by investing directly in the underlying asset.

Direct and co-investments involve acquiring an equity interest in or making a loan to an operating company, project, property, alternative asset manager, or asset, typically by co-investing alongside an investment by a fund manager or by investing directly in the underlying asset.

P10’s direct and co- investment funds include both commingled investment vehicles with multiple investors as well as customizable separate accounts, which typically include one investor.

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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.

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

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, and private credit solutions.

Often, the fees are structured such that they step down, or decrease, over the life of the fund.

Our direct investing platform comprises approximately $9.6 billion of our FPAUM as of September 30, 2024.

• Secondaries.

Secondaries refer to investments in existing private markets funds through the acquisition of an existing interest in a private markets fund by one investor from another in a negotiated transaction.

Our direct investing platform comprises approximately $10.1 billion of our FPAUM as of March 31, 2025.

• Secondary Investment Funds.

Secondary investment funds refer to investments in existing private markets funds through the acquisition of an existing interest in a private markets fund by one investor from another in a negotiated transaction.

In so doing, the buyer agrees to take on future funding obligations in exchange for future returns and distributions.

Because secondary investments are generally made when a primary investment fund is three to seven years into its investment period and has deployed a significant portion of its capital into portfolio companies, these investments are viewed as more mature.

Because secondary investment funds are generally made when a primary investment fund is three to seven years into its investment period and has deployed a significant portion of its capital into portfolio companies, these investments are viewed as more mature.

We typically receive fees from investors on committed capital for a decade, the typical life of the fund.

We currently offer secondaries funds across our private equity solutions.

We currently offer secondary investment funds across our private equity solutions.

Often, the fees are structured such that they step down, or decrease, over the life of the fund.

Our secondary funds comprise approximately $1.6 billion of our FPAUM as of September 30, 2024.

Our secondary funds comprise approximately $1.6 billion of our FPAUM as of March 31, 2025.

Operating Segments

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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 high 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.

Additional trends driving investor demand are (a) increasing long-term investor allocations towards private market asset classes and (b) legislation that allows retirement plans to add private equity vehicles as an investment option and impact investing by the institutional and high net worth investor community, and demand from high-net-worth individuals, also known as retail investors.

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

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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.

Our ability to maintain our data advantage is dependent on several factors, including our continued access to a broad set of private market information on an on-going basis.

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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.

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.

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.

In addition, 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.

• Our ability to raise capital in order to fund acquisitions and strategic growth initiatives.

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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.

Furthermore, we believe that by offering

investors access to access-constrained investment opportunities, investors may favor our strategies as they make decisions on market exposure and allocation levels.

• Counter-cyclical strategies can thrive in a higher-rate environment.

Furthermore, we believe that by offering investors access to access-constrained investment opportunities, investors may favor our strategies as they make decisions on market exposure and allocation levels.

• All-weather strategies can thrive in a myriad of environments.

Some strategies are counter-cyclical in nature and can take advantage of a higher rate environment.

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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 in or, in select cases, deployed to our investment funds.

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.

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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.

While catch-up fees are not a significant component of our overall revenue stream, they may result in a temporary increase in our revenues in the period in which they are recognized.

While catch-up fees are not a

significant component of our overall revenue stream, they may result in a temporary increase in our revenues in the period in which they are recognized.

Other revenue consists of subscription and consulting agreements and referral fees that we offer in certain cases.

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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.

Both options 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 assets associated with the agreements and will amortize the assets against revenue over the length of the management contracts.

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

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, which was terminated by the parties on December 23, 2024.

Operating Expenses

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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 economic incentive for them to outperform on behalf of our investors.

It allows our investment professionals to receive additional benefit and provides an 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.

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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)

Other (Expense)/ Income

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.

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

Income Tax 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 or deployed capital are not affected by market appreciation or depreciation.

Results of Operations

For the three and nine months ended September 30, 2024 and September 30, 2023.

For the three months

ended September 30,

For the nine months

ended September 30,

(in thousands)

For the three months ended March 31, 2025 and March 31, 2024.

For the three months ended March 31,

(in thousands)

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INCOME FROM OPERATIONS

OTHER (EXPENSE)/ INCOME

OTHER (EXPENSE)/LOSS

Interest expense, net

Other income/(loss)

Total other (expense)

Net income/(losses) before income taxes

Net income before income taxes

Income tax expense

NET INCOME/(LOSS)

For the Three Months Ended September 30, 2024 and September 30, 2023

Our total 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 three months ended September 30, 2024 and September 30, 2023.

For the three months ended September 30, 2024 compared to the three months ended September 30, 2023, revenues increased by $15.3 million or 26% due to organic FPAUM growth across Bonaccord, Enhanced, RCP, and WTI.

Management and advisory fees increased by $14.5 million, or 25%, to $72.6 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 due primarily to organic FPAUM growth generating revenues of $14.7 million at Bonaccord, Enhanced, RCP and WTI.

Catch-up fees for the three months ended September 30, 2024 were $6.2 million of the $72.6 million in management and advisory fees associated with the fund closings at Bonaccord and RCP.

Other revenues increased by $0.8 million or 91% to $1.6 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 driven by $0.6 million increase in ancillary elements of our business.

Additionally, an increase of $0.2 million of interest income in other revenue at RCP.

For the Nine Months Ended September 30, 2024 and September 30, 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 nine months ended September 30, 2024 and September 30, 2023.

For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, revenues increased by $32.8 million or 18% primarily due to organic FPAUM growth across Bonaccord, Enhanced, RCP, WTI, and TrueBridge.

Management and advisory fees increased by $29.9 million, or 17%, to $206.2 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 due to organic FPAUM growth at Bonaccord, Enhanced, WTI, and TrueBridge of $30.2 million offset slightly by a decrease of $0.7 million in management fees at Five Points.

Catch-up fees for the nine months ended September 30, 2024 were $20.0 million associated with the fund closings at Bonaccord, TrueBridge and RCP.

Other revenues increased by $2.9 million or 124% to $5.2 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 primarily driven by $2.0 million of recognized carried interest income from an uncommon pre-acquisition legacy managed fund in other revenue and an increase of $0.6 million of interest income in other revenue at RCP.

For the three months

ended September 30,

For the nine months

ended September 30,

Three Months Ended March 31, 2025 and March 31, 2024

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 three months ended March 31, 2025 and March 31, 2024.

For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, revenues increased by $1.6 million or 2% due to higher management and advisory fees across the Company.

Management and advisory fees increased by $1.6 million, or 2%, to $66.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 due to continued fundraising and deployed capital and 10% growth in average FPAUM across the Company.

Catch up fees for the three months ended March 31, 2025 were $2.8 million.

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

Other revenues, which represent ancillary elements of our business, decreased by $0.1 million or 6% to $0.9 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 driven primarily by a decrease of $0.2 million in interest income earned from certain funds offset slightly by an increase of $0.1 million of income associated with one-time ancillary services performed for certain funds in other revenue.

For the three months ended March 31,

OPERATING EXPENSES

(in thousands)

Compensation and benefits

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Operating Expenses

For the Three Months Ended September 30, 2024 and September 30, 2023

Total operating expenses increased by $6.9 million, or 12%, to $65.4 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

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

Compensation and benefits expense was relatively unchanged for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

There was a decrease in severance expense of $2.3 million and a decrease in stock compensation of $1.3 million primarily driven by a decrease in management stock compensation expense acceleration related to the executive transition that occurred in October 2023 offset by an increase in the remeasurement for the fair value of the Bonaccord Units related to the acquisition of Bonaccord.

The Bonaccord Units, which are recognized using the tranche method, had an increase in expense for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

These decreases were offset by a $1.8 million increase in profit and revenue share expense at Bonaccord and $1.3 million increase related to increases in headcount and associated benefits across the Company as well as merit-based salary raises to retain and motivate talent across the Company.

Professional fees increased by $5.8 million, or 173%, to $9.2 million.

The primary increase in professional fees for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 is primarily driven by an increase in professional and legal fees associated with the Company's debt refinancing as well as the Company's transitions related to turnover at the management level, office locations, policies, as well as normal course of business such as filings and due diligence for acquisitions.

General, administrative, and other increased by $1.3 million, or 24%, to $6.6 million, due primarily to $0.5 million increase of placement agent fees at Hark, $0.4 million increase in marketing efforts, as well as $0.4 million ongoing enhancements to infrastructure, technology, and security across the Company.

Amortization of intangibles decreased by $0.9 million, or 12%, to $6.4 million, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

This is due to decreases at ECG, RCP, and TrueBridge.

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

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

For the Nine Months Ended September 30, 2024 and September 30, 2023

Total operating expenses increased by $10.6 million, or 6%, to $173.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

This increase was primarily due to increases in compensation and benefits, general, administrative and other expense, professional fees, and strategic alliance expense offset slightly by a decrease in amortization of intangibles.

Compensation and benefits expense increased by $1.8 million, or 2%, to $115.9 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

The increase was driven by $15.9 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.

This increase was offset by change of estimate for timing of achieving the earnout payment related to the acquisition of WTI, which prospectively adjusted recognition of the expense and resulted in $8.6 million decrease for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Additionally, there was a decrease in severance expense of $3.3 million and a decrease in stock compensation of $3.1 million, of which $2.1 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 $1.0 million related to management stock award accelerations in 2023 related to 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 nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Professional fees increased by $6.3 million, or 62%, to $16.5 million.

The primary driver for the increase in professional fees for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is an increase of $5.0 million in professional and legal expenses associated with the Company's debt refinancing and the Company's transitions related to turnover at the management level, office locations, policies, as well as normal course of business such as filings and due diligence for acquisitions.

Additionally, a $1.1 million increase related to audit, tax, and compliance services provided to the Company.

General, administrative and other increased by $4.5 million, or 29%, to $19.7 million, due to $1.1 million increase of placement agent fees, $0.3 million increase of rent, $0.9 million increase in marketing efforts, $0.6 million increase in conferences, travel, and entertainment expenses, and $1.1 million increase for ongoing enhancements to infrastructure, technology, and security across the Company.

Contingent consideration expense decreased by $0.4 million, to $0.2 million, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

This was driven by remeasurement of contingent consideration payable in connection with the acquisitions of Hark and Bonaccord.

The Hark contingent consideration was fully earned and paid in 2023 and the Bonaccord contingent consideration is fully earned as of September 30, 2024 and has a remaining fair value is $4.3 million as of September 30, 2024.

Amortization of intangibles decreased by $2.6 million, or 12%, to $19.3 million, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

This is due to decreases at ECG, RCP, and TrueBridge.

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

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

For the Three Months Ended March 31, 2025 and March 31, 2024

Total operating expenses increased by $2.4 million, or 4%, to $56.4 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

This increase was primarily due to increases in professional fees and general, administrative and other expenses offset slightly by decreases in amortization expense of intangibles.

Compensation and benefits expense remained flat at $37.1 million, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Professional fees increased by $2.7 million, or 73%, to $6.5 million primarily driven by an increase in legal and professional services associated with the Qualitas acquisition.

General, administrative and other increased by $0.8 million, or 13%, to $6.8 million, due primarily to increases in marketing efforts, insurance and compliance expenses, rent and office repairs and maintenance as well as ongoing enhancements to infrastructure, technology, and security.

Amortization of intangibles decreased by $1.1 million, or 17%, to $5.3 million, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

This is due to decreases at ECG, Five Points, RCP, TrueBridge, and WTI.

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

The decreases at Five Points, RCP, TrueBridge, and WTI are driven by asset management fee contracts' amortization schedule, which is based on projected revenues at the time of acquisition.

Other Expense

For the Three Months Ended September 30, 2024 and September 30, 2023

Other expenses decreased by $1.1 million, or (15)%, to $6.2 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

This decrease was driven by $3.1 million in other income/(losses) related to legal settlements incurred in the three months ended September 30, 2023 compared to no legal settlements incurred in the three months ended September 30, 2024.

This was offset by an increase in interest expense of $2.0 million on the credit facility due to higher SOFR rates and a larger outstanding debt balance in the three months ended September 30, 2024.

For the Nine Months Ended September 30, 2024 and September 30, 2023

Other expenses decreased by $1.6 million, or 8%, to $17.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

This decrease was driven by $2.3 million in other income/(losses) related to legal settlements incurred in the nine months ended September 30, 2023 compared to no legal settlements incurred in the nine months ended September 30, 2024 and $1.7 million increase in other income driven by interest earned for money market accounts and income from unconsolidated subsidiaries.

This was offset by an increase in interest expense of $2.5 million due to higher SOFR rates and a larger average outstanding debt balance for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

For the Three Months Ended March 31, 2025 and March 31, 2024

Other expense increased by $1.2 million, or 23%, to $6.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

This increase was driven by an increase in interest expense of $0.6 million on the debt facility due to a larger outstanding balance on the term loan for the first three months ended March 31, 2025.

Additionally, other income decreased by $0.5 million primarily due to a $0.3 million decrease in income from unconsolidated subsidiaries as well as a $0.2 million loss related to the guarantee for the Clifford incremental fee.

Income Tax Expense

For the Three Months Ended September 30, 2024 and September 30, 2023

Income tax expense decreased by $0.5 million to $1.3 million for the three months ended September 30, 2024 compared to the expense of $1.8 million for the three months ended September 30, 2023.

The decrease was primarily due to discrete period recognition of windfall tax adjustments related to options exercised and RSU vesting during the period.

For the Nine Months Ended September 30, 2024 and September 30, 2023

Income tax expense increased by $3.9 million to $6.7 million for the nine months ended September 30, 2024 compared to an expense of $2.8 million for the nine months ended September 30, 2023.

The increase was primarily due to additional income during the period.

For the Three Months Ended March 31, 2025 and March 31, 2024

Income tax expense was $0.3 million for the three months ended March 31, 2025, a decrease of $1.5 million from $1.8 million for the three months ended March 31, 2024.

This reduction was mainly due to lower pre-tax income and the recognition of a higher discrete windfall tax benefit related to RSU vesting and options exercised in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

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

For the three months

ended September 30,

For the nine months

ended September 30,

(in millions)

ended March 31,

(in millions)

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(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.

FPAUM as of September 30, 2024

FPAUM increased by $1.1 million to $24.9 million for the three months ended September 30, 2024, due primarily to an increase in capital raised from our private equity and venture capital solutions being offset by scheduled fee stepdowns.

FPAUM increased by $1.7 billion, or 7.2%, to $24.9 billion for the nine months ended September 30, 2024, due primarily to an increase in capital raised from our private equity and venture capital solutions.

FPAUM as of March 31, 2025

FPAUM increased by $0.6 billion, or 3%, to $26.3 billion for the three months ended March 31, 2025, 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 expirations 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.

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

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 Fee-Related Revenue ("FRR"), Fee-Related Earnings ("FRE"), and Adjusted Net Income, or ANI, 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.

FRR is calculated as Total Revenues less any non-fee related revenue.

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:

ANI is calculated as FRE, plus non-fee related income less actual cash paid for interest and federal and state income taxes.

In order to compute FRE, we adjust our GAAP net income 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);

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

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

• Expenses related to one-time technical accounting matters

• 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;

• The effects of income taxes.

The cash income taxes paid during the three months ended September 30, 2024 and September 30, 2023 as well as during the nine months ended September 30, 2024 and September 30, 2023 differ significantly from the net income tax expense, which is primarily comprised of deferred tax expense as described in the results of operations.

For the Three

September 30,

(in thousands)

• Non-fee related income

The cash income taxes paid during the three months ended March 31, 2025 and March 31, 2024 differ significantly from the net income tax expense, which is primarily comprised of deferred tax expense as described in the results of operations.

For the Three Months

Ended March 31,

(in thousands)

Net Income/(Loss)

Depreciation & amortization

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Non-cash stock based compensation - acquisitions

Non-cash stock based compensation - CEO transition

Earn out related compensation

Adjusted EBITDA

Cash interest expense, net

Non-fee related income

Fee-Related Earnings

Non-fee related income

Cash interest expense

Cash income taxes, net of taxes related to acquisitions

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Fee-Related Revenue

Adjusted EBITDA

Non-Fee Related Income

Fee-Related Earnings

Financial Position, Liquidity and Capital Resources

Selected Statements of Financial Position

September 30,

(in thousands)

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Debt obligations

Cash and cash equivalents increased from $32.1 million as of December 31, 2023 to $63.3 million as of September 30, 2024 primarily due to the Company's debt refinancing.

There was a decrease in goodwill and intangible assets of $19.3 million due to amortization of intangibles during the nine months ended September 30, 2024.

There was an increase in cash and cash equivalents of $7.3 million from December 31, 2024 to $75.4 million as of March 31, 2025 primarily due to drawing on the revolver offset by Class A common stock repurchases and liabilities payment.

There was a decrease in goodwill and intangible assets of $5.3 million due to amortization of intangibles during the

three months ended March 31, 2025.

Remaining total assets increased in the same period by $6.1 million.

The increase is driven by an increase in accounts receivable and due from related parties which is primarily due to ECG's Advisory Agreement with Enhanced PC and Crossroads.

The increase in remaining total assets was offset by a decrease in deferred tax assets, net due to utilization of the net operating losses and a decrease in prepaid expenses and other assets, which is primarily due to Enhanced's sale of state tax credits during the nine months ended September 30, 2024.

Debt obligations increased by $30.4 million which is driven by the Company's debt refinancing during the nine months ended September 30, 2024.

The increase is driven by an increase in accounts receivable from related parties which is primarily due to ECG's Advisory Agreement with Enhanced PC.

Additionally, there was an increase in right of use assets related to a new office lease as well as an increase in prepaid expenses and other assets associated with the purchase of allocable state tax credits.

Debt obligations increased by $37.4 million which is driven by revolver activity due to the Qualitas acquisition that closed in early April 2025.

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 or issue new shares as consideration will be critical as we pursue additional business development opportunities and new acquisitions.

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

On December 22, 2021, P10, Inc.

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

As of September 30, 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 September 30, 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.

As of September 30, 2024, P10 was in compliance with its financial and other covenants required under the facility.

The Company has incurred $17.5 million in interest expense for the nine months ended September 30, 2024.

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

The following table reflects our cash flows for the nine months ended September 30, 2024 and 2023:

For the Nine Months

Ended September 30,

As of March 31, 2025, the Term Loan with a balance of $325.0 million is incurring interest at a weighted average SOFR rate of 6.89%.

As of March 31, 2025, the New Revolving Facility is split into one tranche.

The total principal outstanding is $37.0 million and the weighted average SOFR rate amongst the tranches is 6.92%.

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

Refer to Note 11 of our 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 March 31, 2025, P10 was in compliance with its financial and other covenants required under the facility.

The Company has incurred $6.0 million in interest expense for the three months ended March 31, 2025.

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

The following table reflects our cash flows for the three months ended March 31, 2025 and 2024:

For the Three Months

Ended March 31,

(in thousands)

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Net cash used in investing activities

Net cash (used in) financing activities

Increase (Decrease) in cash, cash equivalents and

Net cash provided by (used in) financing activities

Increase in cash, cash equivalents and

restricted cash

Operating Activities

Nine Months Ended September 30, 2024 and September 30, 2023

Three Months Ended March 31, 2025 and March 31, 2024

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.

Cash from operating activities increased by $27.5 million, or 60%, to $73.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

For the nine months ended September 30, 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.

Additionally, the nine months ended September 30, 2024 was impacted by cash received for the sale of tax credits while the nine months ended September 30, 2023 was impacted by repaying deposit liabilities to third parties related to pending tax credit projects.

Cash from operating activities decreased by $15.7 million to $4.7 million used in operating activities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

For the three months ended March 31, 2025 and 2024, our net cash (used in) provided by operating activities was driven primarily by receipts of management fees and advisory fees, offset by a purchase of allocable state tax credits and payment of operating expenses, which includes professional fees, compensation and benefits, as well as general, administrative and other expenses.

Investing activities

Nine Months Ended September 30, 2024 and September 30, 2023

The cash used in investing activities increased by $2.6 million, or 362%, to $3.4 million, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

This increase in cash used was primarily due to purchases of leasehold improvements, included in property and equipment during the nine months ended September 30, 2024.

Three Months Ended March 31, 2025 and March 31, 2024

The cash used in investing activities increased by $1.0 million, or 388%, to ($1.3) million, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

This increase in cash used in investing activities was due to purchases of additional property and equipment in the first quarter of 2025.

Financing Activities

Nine Months Ended September 30, 2024 and September 30, 2023

We recorded a net $38.7 million for the nine months ended September 30, 2024 for cash used in financing activities, as compared to cash used in financing activities of $52.4 million for the nine months ended September 30, 2023.

The change is driven by the cash provided by debt refinancing during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Three Months Ended March 31, 2025 and March 31, 2024

Cash from financing activities for the three months ended March 31, 2025 was $13.3 million, as compared to cash used in financing activities of $12.7 million for the three months ended March 31, 2024.

The change is driven by less repurchases of common stock paired with an increase in net cash activity from the debt facility to prepare for the Qualitas acquisition.

Future Sources and Uses of Liquidity

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We believe that we will be able to continue to meet our current and long-term liquidity and capital requirements through our cash flows from operating activities, existing cash and cash equivalents, and our external financing activities which may include refinancing of existing indebtedness or the pay down of debt using proceeds of equity offerings.

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

As of March 31, 2025, the Board has approved $132.0 million since inception of the program, of which $40 million was approved during the three months ended March 31, 2025, for repurchase under the Share Repurchase Program.

As of March 31, 2025, $103.5 million has been spent to buy back shares since the inception of the program and there was $28.5 million remaining for authorized repurchases under this program.

Off Balance Sheet Arrangements

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Actual results could differ from those estimates.

We believe the following critical accounting policies could potentially produce materially different results if we were to change the underlying assumptions, estimates, or judgments.

We believe the following critical accounting policies could

potentially produce materially different results if we were to change the underlying assumptions, estimates, or judgments.

See Note 2 of our consolidated financial statements for a summary of our significant accounting policies.

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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 6 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 such VIEs' 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 VIEs' are obligations of those entities and their creditors do not generally have recourse to the assets of P10.

See Note 6 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.

Accounts Receivable and Due from Related Parties

Accounts receivable is equal to contractual amounts reduced for allowances, if applicable.

Management fees are collected on a quarterly basis.

Certain subsidiaries management fee contracts are collected at the beginning of the quarter, while others are collected in arrears.

The management fees reflected in accounts receivable at period end are those that are collected in arrears.

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.

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

Additionally, fees owed to the Company for the advisory agreement entered into upon the closing of the acquisition of ECG 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 revenues on the Consolidated Balance Sheets due to the performance obligation not being satisfied at the time of collection.

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.

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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 completed.

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.

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.

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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 recorded as revenue when such commitments are made as variable consideration.

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

Stock-based compensation relates to grants for shares of P10 awarded to our employees through stock options as well as RSUs awarded to employees and RSAs issued to non-employee directors as compensation for service on the Company's board.

Stock compensation expense for awards that cliff-vest after a service period is recorded ratably over the vesting period at the fair market value on the grant date.

Stock compensation expense for awards that cliff-vest after either a service period or both a service period and performance condition is recorded ratably over the vesting period at the fair market value on the grant date.

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.

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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.

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 March 31, 2025, 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 September 30, 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 September 30, 2024, the interest rate on these borrowings was 2.6% + SOFR.

Despite the current interest rate environment displaying an interest rate cut by 50-basis points, the Company is still exposed to interest rate risk if there is a shift in the environment.

As of March 31, 2025, we had $325.0 million in outstanding principal in Term Loans under our Term Loan and $37.0 million under our Revolving Credit Facility.

The annual interest rate on the Term Loan is based on SOFR plus 2.60%.

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

We estimate that a 100-basis point increase in the interest rate would result in an approximately $3.3 million increase in interest expense related to the loan over the next 12 months.

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Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (as amended, the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as

appropriate, to allow timely decisions regarding required disclosure.

In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

4 unchanged sentences

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

1 unchanged sentence

The information required with respect to this item can be found under “Contingencies” in Note 13, Commitments and Contingencies, to our consolidated financial statements included elsewhere in this annual report, and such information is incorporated by reference into this Item 1.

Risk Factors.

There have been no material changes from the risk factors previously disclosed in “Risk Factors” included in our annual report on Form 10-K for the year ended December 31, 2024.

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-Q

Item 2. Management’s Discussion and Analysis