Cohen & Company Reports $129,000 Net Loss for 2024, Revenue Decrease of 4%

Cohen & Company Inc. reported a net loss attributable to the company of $129,000 for the year ended December 31, 2024, compared to a net loss of $5,113,000 for the year ended December 31, 2023. Total revenues decreased by $3,383,000, or 4%, to $79,598,000 in 2024, primarily due to a $45,696,000 decrease in principal transactions and other income, which was partially offset by increases in net trading revenue ($5,483,000), asset management revenue ($1,672,000), and new issue and advisory revenue ($35,158,000). Operating expenses increased by $11,501,000, or 15%, to $87,621,000, primarily driven by increases in compensation and benefits, business development costs, and professional fees.

Significant changes compared to the previous year included a substantial decrease in principal transactions and other income, largely attributed to declines in the equity prices of SPACs and post-business combination SPACs, resulting in significant principal transaction losses and equity method losses. The increase in new issue and advisory revenue stemmed from a significant increase in revenue generated by Cohen & Company Capital Markets (CCM), the company's investment banking arm. The increase in asset management revenue was primarily due to the recognition of deferred performance fees related to certain PriDe Funds and portfolio servicing fees from the CREO JV. The company's headcount decreased to 113 full-time employees in 2024 from 118 in 2023.

During 2024, the company completed several key transactions. These included the redemption of a redeemable financial instrument, resulting in a cash payment and the issuance of a new senior promissory note; and the sale of its one-third interest in Vellar GP, an entity involved in share forward arrangements. The company also continued its activities in the SPAC market, sponsoring SPACs and investing in SPAC sponsor entities and post-business combination SPACs. The company's investment portfolio included other investments at fair value ($35.3 million), and investments in equity method affiliates ($23.4 million).

The company's operations are subject to intense competition and are significantly impacted by economic conditions, market volatility, and interest rate fluctuations. The company's regulated subsidiaries, JVB and CCFESA, are subject to extensive regulations in the U.S. and France, respectively. The company highlighted several risk factors, including market volatility, illiquidity of certain investments, the speculative nature of SPAC investments, and the potential for significant losses in its trading and principal investing activities. The company also noted its dependence on distributions from its operating LLC and the potential for conflicts of interest.

Looking ahead, the company anticipates continued volatility in the financial markets and expects competition to remain intense. The company's future performance will depend on its ability to manage risks effectively, generate sufficient revenue, control expenses, and attract and retain qualified personnel. The company's outlook is contingent upon various factors, including macroeconomic conditions, market sentiment, and regulatory developments. The company's ability to successfully navigate these challenges and capitalize on opportunities in the SPAC market and other areas will be crucial to its future success.