Cohen & (COHN -1.08%), an investment firm with key operations in capital markets, asset management, and SPAC (special purpose acquisition company) activities, released second quarter 2025 earnings on July 31, 2025. This result, along with $0.94 adjusted pre-tax earnings per share (non-GAAP), far outstripped the firm's recent history. Actual GAAP earnings per diluted share improved to $0.81 in Q2 2025, swinging from a loss of $(1.47) in Q2 2024. the quarter featured exceptional revenue growth and profitability, underpinned by strength in investment banking, advisory, and a rebound in principal transactions. No consensus analyst estimates were available for this period. Overall, New issue and advisory revenue from CCM reached $37.4 million, up $30.9 million from Q2 2024 and serving 25 clients over the quarter, although the firm highlighted the volatility that comes with its deal-driven business model.
| Metric | Q2 2025 | Q1 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS – Diluted (GAAP) | $0.81 (diluted, non-GAAP); $0.81 (diluted, GAAP, but see explanation) | $0.19 | $(1.47) | -$2.45 |
| EPS – Diluted (Non-GAAP, Adjusted Pre-Tax Income) | $0.94 | $0.22 | $(1.51) | — |
| Revenue (GAAP) | $59.9 million | $28.7 million | $10.8 million | 454.5% |
| Operating Income (GAAP) | $7.5 million | $0.1 million | $(6.4 million) | $13.9 million |
| Net Income Attributable to COHN (GAAP) | $1.4 million | $0.3 million | $(2.3 million) | $3.7 million |
About the Business and Strategic Focus
Cohen & operates as an investment firm specializing in capital markets, asset management, and SPAC-related activities. Its capital markets business consists of fixed income sales and trading, new issue placements and advisory, with a large portion of activity executed through its Cohen & Company Capital Markets (CCM) arm. Asset management includes overseeing vehicles like collateralized debt obligations (CDOs), managed accounts, and specialized investment funds. In recent years, the firm has expanded its participation in SPAC sponsorship and related investments, adding to its revenue streams but also increasing exposure to cyclical and volatile sectors like cryptocurrency.
The company’s recent business strategy has centered on growing its capital markets operations, particularly through new issue and advisory functions, while maintaining a competitive edge against larger rivals. Cohen & also remains focused on modest asset management expansion and developing new SPAC-related solutions. Its success depends on strong client relationships, regulatory compliance, and the ability to originate and execute episodic deals that can swing results substantially quarter to quarter.
Quarter Highlights: Growth Drivers and Financial Shifts
Capital markets operations powered the quarter’s results. Principal transactions—a line item reflecting profits and losses on the firm's investment positions, including non-cash assets received as compensation—swung dramatically positive in Q2 2025. This surge reflected robust activity in financial advisory and deal placement, reinforcing CCM’s importance as the business’s growth engine. The pipeline for upcoming deals was characterized as “strong,” setting positive expectations for continued momentum in the second half of the year.
It posted $9.5 million. in the quarter, compared to significant negative results both in the first quarter and the prior year. Within this, non-cash principal transactions related to SPAC and advisory roles generated $6.7 million, which had been heavily negative in previous periods. The rebound helped support operating income growth. A key development was the debut of a new SPAC-focused trading desk, which contributed over $1.4 million in trading revenue, demonstrating the firm's ability to quickly monetize new business initiatives.
Asset management delivered modest growth, with revenue at $2.2 million—slightly ahead of the prior year and up from the previous quarter. The business recognized a one-time gain of $0.8 million on the sale of two legacy Alesco CDO contracts. However, this exit from legacy vehicles will eliminate related recurring income going forward. Assets under management were approximately $2.2 billion as of June 30, 2025, holding steady. Principal investing and affiliate contributions were mixed, with a loss of $1.4 million (GAAP) tied largely to the company's exposure to Columbus Circle Capital Corp I, a SPAC engaged in a business combination in the bitcoin sector. This highlights the ongoing volatility and risk that accompanies involvement in SPAC sponsorship and cryptocurrency-linked markets.
Expenses climbed sharply, reflecting strong linkages between revenues and pay. Compensation and benefits expense (GAAP) increased more than fourfold year-over-year to $44.3 million, mirroring the jump in deal and trading revenue. Variable incentive compensation remains the largest cost lever for the company; while it helps attract and retain talent, it also compresses operating leverage in robust periods and can intensify downside during slow quarters. Non-compensation operating expenses (GAAP) increased to $8.1 million from $6.5 million in Q2 2024. Overall, the shift in both income and costs underlines the episodic, high-variability nature of Cohen &’s earnings profile.
On the capital management front, the company declared a $0.25 per share dividend, unchanged from recent periods. This quarterly dividend remains under regular review by the board, as noted in the release. No other material changes to capital policy were disclosed. Total equity stood at $92.5 million at quarter end, a modest increase since December 2024, and cash and cash equivalents rose to $26.0 million as of June 30, 2025. Debt finished the period at $32.6 million as of June 30, 2025, little changed from recent levels.
Looking Ahead: Outlook and Investor Watchpoints
Management did not provide precise forward financial guidance for upcoming quarters or the full fiscal year. Commentary pointed to "strong momentum and a robust pipeline" in capital markets, suggesting the possibility of continued elevated activity, particularly in new issue and advisory work. However, leadership cautioned that the firm’s revenue stream is reliant on episodic deal flow and may be subject to periodic swings based on broader market activity and client needs. A continued presence in SPAC and cryptocurrency-linked markets introduces additional uncertainty subject to regulatory and sentiment shifts.
Investors should monitor the sustainability of the capital markets pipeline, potential expansions or contractions in principal transactions, and the evolution of incentive compensation expense as revenue shifts. Asset management may see reduced recurring fees as legacy CDO contracts run off, unless new strategies emerge. Changes in market conditions, regulation—especially relating to SPACs and crypto exposure—and competition from larger investment firms all remain central moving forward. Cohen & does pay a quarterly dividend, most recently $0.25 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
