Abacus Life Reports 33% Revenue Growth, Net Loss in Latest Quarter

Abacus Life, Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company experienced a notable increase in total revenues, which reached $28.1 million for the three months ended September 30, 2024, compared to $21.1 million for the same period in 2023. For the nine months ended September 30, 2024, total revenues were $78.7 million, up from $42.7 million in the prior year. This growth was primarily driven by a substantial increase in active management revenue, which rose to $27.0 million in Q3 2024 from $18.9 million in Q3 2023, reflecting a 42.5% increase.

Despite the revenue growth, Abacus reported a net loss of $5.3 million for the three months ended September 30, 2024, a stark contrast to a net income of $1.1 million in the same period of 2023. For the nine-month period, the net loss was $5.9 million, compared to a net income of $15.4 million in the previous year. The decline in profitability was attributed to increased operating expenses, which rose to $19.1 million in Q3 2024 from $11.5 million in Q3 2023, driven by higher non-cash stock-based compensation and payroll expenses.

The company’s total assets increased significantly to $477.3 million as of September 30, 2024, up from $331.8 million at the end of 2023. This growth was largely due to an increase in life settlement policies at fair value, which surged to $273.2 million from $122.3 million. However, total liabilities also rose to $219.4 million, compared to $167.8 million at the end of 2023, primarily due to increased long-term debt.

Strategically, Abacus has been active in acquisitions, agreeing to acquire Carlisle Management Company for approximately $200 million and FCF Advisors, pending regulatory approval. The company also completed a merger with LMA on June 30, 2023, which has contributed to its current operational structure and financial performance.

In terms of cash flow, net cash used in operating activities for the nine months ended September 30, 2024, was $(116.8 million), a significant increase from $(50.2 million) in the same period of 2023. This increase was primarily due to higher net life settlement purchases. Conversely, net cash provided by financing activities rose to $111.8 million, largely due to proceeds from a follow-on stock issuance.

Overall, while Abacus Life, Inc. has shown strong revenue growth, it faces challenges in profitability and cash flow management, necessitating close monitoring of its operational and strategic initiatives moving forward.