Investment management firm Cohen & Steers (NYSE: CNS) met Wall Streets revenue expectations in Q4 CY2025, with sales up 2.9% year on year to $143.8 million. Its non-GAAP profit of $0.81 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

Cohen & Steers’ fourth quarter results met Wall Street’s expectations for both revenue and non-GAAP earnings, but the market responded negatively due to a significant decline in operating margin. Management pointed to higher general and administrative expenses, largely driven by business development and talent acquisition, as a key reason for the margin compression. CEO Joseph Harvey highlighted continued net inflows and stable fee rates across most vehicles, while also acknowledging that U.S. REIT strategies underperformed other asset classes. CFO Michael Donohue noted, “Total expenses were higher compared to the prior quarter, primarily due to increased G&A expense.”

Looking forward, management’s outlook centers on harvesting returns from recent investments, particularly in new strategies, vehicles, and global distribution channels. The company expects demand for real assets and natural resource equities to rise as global growth broadens and inflation persists. CEO Joseph Harvey emphasized, “We expect to focus on harvesting ROI for investments we've made over the past several years in new strategies, vehicles and talent.” However, executives also noted ongoing competition from private credit and the need to scale recently launched active ETFs and expand institutional mandates, especially outside the U.S.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to steady net inflows, stable fee rates, and mixed asset class performance, while highlighting increased expenses and ongoing investments in distribution and product innovation.

• Net inflows across vehicles: The company reported net inflows in nearly all vehicles, with notable contributions from advisory and closed-end funds, reflecting improved client confidence and a strengthening institutional pipeline.
• Asset class performance mixed: U.S. REIT strategies lagged, returning just 3.2%, while natural resource equities and multi-strategy real assets significantly outperformed, driven by global demand for commodities and infrastructure.
• Active ETF adoption accelerating: Cohen & Steers launched five active ETFs during the year, seeing faster adoption rates with each milestone, especially in REIT and preferred strategies, as more advisors and model-driven investors shift toward ETFs.
• Geographic expansion in focus: The company doubled AUM in Australia over two years and is increasing sales resources in non-U.S. markets, particularly in Japan, the Middle East, and Asia, to diversify growth beyond the U.S.
• Higher expenses impact margins: Operating margin fell due to increased general and administrative costs, primarily from expanded business development activities and talent acquisition, as the firm invests in future growth initiatives.

Drivers of Future Performance

Cohen & Steers expects future growth to be driven by broadening demand for real assets, strategic investments in distribution, and ongoing product innovation, while managing margin headwinds from elevated costs.

• Real assets demand rising: Management anticipates that diversification needs and persistent inflation will boost allocations to listed real assets, including real estate, infrastructure, and natural resource equities, particularly as traditional equities appear overvalued.
• Distribution and institutional expansion: The firm is prioritizing investment in global distribution, targeting institutional clients in new geographies and expanding its presence in channels like RIAs (registered investment advisors), wirehouses, and sub-advisory relationships.
• Cost discipline remains key: While expenses are expected to moderate, the company aims to balance further investments in talent and product development with maintaining a compensation ratio near 40% and mid-single-digit G&A growth, as outlined by CFO Michael Donohue.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be monitoring (1) the pace of adoption and scale for active ETFs and new product vehicles, (2) progress in expanding institutional and geographic distribution—especially in Asia and the Middle East, and (3) signs of improved operating leverage as expense growth moderates. Additionally, we will track the impact of shifting client allocations between private credit and real estate on net inflows.

Cohen & Steers currently trades at $65.69, down from $68.78 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).

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