Asked if annual price increases went through, if clients are pushing back due to AI efficiencies, and if new acquisitions adhere to the previously discussed economic framework.

Mark Vorsatz confirmed that acquisitions follow the previously communicated economic framework, including using stock. He acknowledged some pricing pushback in commodity-like service areas but stated the firm aims to avoid those spaces, focusing on high-value solutions. Neal Livingstone added that the 3% technology surcharge is tracking better than expected, with 2/3 of clients adopting it, exceeding the initial 50% expectation. “The basic model of the acquisitions, Mark, is not different than what we had previously communicated. And quite frankly, we have so much interest not only within our organization... But I'm getting solicited by groups outside of our organization that are much larger that get the strategy we're pursuing.”

Inquired about the embedded pricing contribution in FY26 guidance and the split of the $33 million inorganic revenue between already acquired firms and future acquisitions.

Neal Livingstone stated that the pricing outlook for FY26 is high single digits, consistent with prior guidance, but noted the run rate is exceeding this. Mark Vorsatz clarified that $15 million of the $33 million inorganic revenue is 'in the bank' from the four recently signed deals, which become effective April 1. He expects to 'substantially outperform' the $33 million target. “So the 4 deals that we just implemented are about $21 million. Those deals will be effective April 1. So call it, $15 million of the $33 million is already in the bank.”

Inquired if the firm is seeing competition from AI players in its high-end, value-added services.

Mark Vorsatz stated that while AI is used internally for efficiency (e.g., financial analysis in minutes), they haven't seen extensive AI solutions implemented in the high-value corporate or planning areas by competitors. He emphasized a measured approach to AI adoption to avoid regulatory pitfalls, believing it will drive greater value and profitability. “On the value side of the business, we don't -- we have not seen solutions in that area in artificial intelligence being implemented in a very extensive way.”

ANDG

Andersen Group (ANDG) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Consumer Discretionary· Mar 17, 2026

Source: earnings call transcript

Executive summary

Andersen Group Q4 FY25 — Strong Revenue Growth and Strategic Acquisitions

Andersen Group delivered a strong Q4 FY25, marked by significant revenue growth across all segments and substantial adjusted profitability expansion, reinforcing its resilient business model. The company is strategically focused on productivity, profitability, and integration, while actively pursuing inorganic growth through targeted acquisitions of long-standing network affiliates. Despite GAAP losses driven by IPO-related equity restructuring, management maintains a conservative yet optimistic outlook, anticipating elevated guidance for FY26 as strategic initiatives and technology integration progress.

Highlights

Q4 FY25 revenue reached $170.3 million, a 19.6% year-over-year increase, exceeding internal expectations.
FY25 adjusted net income was $217 million, representing a 48% increase year-over-year, or 64% on a pro forma basis excluding startup losses.
Adjusted EBITDA margin expanded by 75 basis points to 27.7% for FY25.
Net cash flow from operations increased 21% year-over-year to $184.6 million in FY25.
Secured $21 million in inorganic revenue from 4 strategic acquisitions, already exceeding initial H2 FY26 projections.

Concerns

GAAP net loss of $195.9 million in Q4 FY25 and $130.2 million for FY25 due to one-off equity restructuring costs and IPO-related expenses.
Anticipated net loss and negative EPS for FY26 primarily due to non-cash equity-based compensation expense.
Global Mobility and Consulting businesses are expected to incur losses for the next two years due to continued investment in infrastructure.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue	$955 million to $970 million high materiality	FY26	Medium
Full-year 2026 Adjusted EBITDA	$213 million to $220 million high materiality	FY26	Medium
Full-year 2026 Net Income	Net loss expected high materiality	FY26	High
Q1 2026 Revenue	$230 million to $235 million medium materiality	Q1 · FY26	Medium
Q1 2026 Adjusted EBITDA	$55 million to $60 million medium materiality	Q1 · FY26	Medium
Technology Surcharge	3% medium materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Private Client Services Largest service line, representing 51.5% of total revenue in FY25. Achieved double-digit growth in Q4 FY25.	51.5%	double-digit growth	—	—
Commercial Achieved double-digit growth in Q4 FY25.	—	double-digit growth	—	—
Alternative Investment Funds Achieved double-digit growth in Q4 FY25.	—	double-digit growth	—	—
Valuation Achieved double-digit growth in Q4 FY25.	—	double-digit growth	—	—
Andersen Consulting Combined revenue growth of approximately 38% in 2025 (with Global Mobility). Expected to lose money for the next two years due to continued investment in infrastructure. Lost $22 million combined with Global Mobility in FY25.	—	38% combined growth	—	loss expected
Global Mobility Combined revenue growth of approximately 38% in 2025 (with Andersen Consulting). Expected to lose money for the next two years due to continued investment in infrastructure. Lost $22 million combined with Andersen Consulting in FY25.	—	38% combined growth	—	loss expected

Deals & partnerships

Canada practice (Vancouver) Acquisition of a Private Client Services (PCS) focused practice in West Canada, based in Vancouver, led by Steve Flynn and Christa Rabadu.

The group was originally Ernst & Young and has been part of Andersen's network for over 7 years, with strong synergy with the U.S. business.

Nigeria tax practice Acquisition of a tax practice in Nigeria, led by Leah, who is also the co-managing partner in charge of Africa.

Leah was a director at Arthur Andersen. The practice grew from 13 to 128 people since joining the network. This acquisition prioritizes global management integration.

Uruguay legal practice Acquisition of a legal practice in Uruguay, led by Juan Federico Fischer.

Juan Federico Fischer is also on the global Board of Andersen's Swiss Vine. The group has been with Andersen for over 8 years.

Uruguay tax practice Acquisition of a tax and accounting practice in Uruguay, led by Cecilia Riciardi.

The group has been with Andersen for over 8 years.

Risks & headwinds

GAAP Net Loss due to Equity Restructuring Q4 FY25 and FY25

$195.9 million in Q4 FY25; $130.2 million for FY25

Mitigation:These are one-off, non-cash accounting-driven charges primarily related to IPO-related equity restructuring costs ($193.2 million) and stock-based compensation, with no impact on company operations.

Negative EPS and Net Loss in FY26 FY26

Net loss and negative EPS expected

Mitigation:Primarily due to non-cash equity-based compensation expense associated with the vesting of Class X aggregator units, which has no impact on company operations.

Startup Business Losses Next 2 years

$22 million combined loss in FY25

Mitigation:Global Mobility and Consulting are strategic investments in infrastructure and are expected to continue incurring losses for the next two years as they scale. Management views this as a measured approach to long-term growth.

Regulatory Problems from AI Implementation

Fines by regulators for incorrect AI solutions observed in two international firms

Mitigation:Andersen is taking a measured, thoughtful, and deliberate approach to AI adoption, conducting pilot programs and evaluating multiple solutions to avoid precipitous actions and regulatory pitfalls.

Pricing Pressure in Commodity Service Areas

Pushback on pricing in scenarios where service models are competitive and clients seek multiple proposals

Mitigation:The firm aims to avoid commodity-driven spaces and focus on high-value solutions where it can drive significant client benefits and justify premium pricing. It is also implementing a 3% technology surcharge.

What to watch in Q1 FY26

FY26 Revenue Guidance Revision

Next quarter (Q1 FY26 earnings call)

Current $955M-$970M

Target Elevated from current range

Why it matters

Management explicitly stated they would elevate guidance, indicating potential for stronger performance than initially projected.

I will tell you that when we have this call in a couple of months and cover our first quarter financials, I would anticipate because we've already gone through a few drafts, we're having conversations with outside directors on, we will elevate both the revenue objectives as well as the adjusted EBITDA objectives.

Find out whether ANDG delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about the sustainability of Q4's 19.6% revenue growth momentum into FY26 and if the current FY26 guidance is conservative given various initiatives and strong recurring revenue trends.

Mark Vorsatz stated that the company operates conservatively and expects to elevate FY26 revenue and adjusted EBITDA objectives in the next quarter's earnings call, implying current guidance is conservative. He noted strong recurring revenue growth in Q3/Q4 2025 (18% in September, 17% in October) as indicators. He also highlighted significant interest in acquisitions, expecting to 'substantially outperform' the $33 million inorganic revenue target.

“I would say, when we have this conversation in a couple of months on first quarter, we will elevate those numbers. I'm not going to get into specifics. I'm just going to generally say that we are further ahead of where I had anticipated that we would be.”

asked by Mark Marcon · answered by Mark Vorsatz

3 min read 6 chapters

Detailed narrative

Q4 and FY25 Financial Highlights

Mark Vorsatz highlighted Q4 FY25 revenue of $170 million, a 19.6% increase, surpassing the analyst projection of $157 million. FY25 revenue reached $839 million, growing 14.6%. Net income for FY25 was $199 million, a 48% increase, or 64% on a pro forma basis excluding startup losses from Mobility and Consulting.

All four business segments (Private Client Services, Commercial, Alternative Investment Funds, Valuation) achieved double-digit growth. The company's average revenue growth over 24 years has been 15%, and average net income growth over the last 8 private years has been over 25%.

Strategic Focus for 2026

The company will focus on productivity, led by Dan DePaoli, aiming to add $42 million to net income by improving client service by one hour per week. Profitability and cost control, led by Peter Kasha, will target reducing GS&A by 1% annually from the current high 14s to 18%.

Integration efforts, spearheaded by James Frost, will focus on leveraging the global platform for cross-client solutions. The company's culture, underscored by 100% partner unanimity in unvesting 59% of equity, is seen as a key differentiator.

Acquisition Strategy and Recent Deals

Andersen Group is selectively rolling up its network affiliates, prioritizing groups with established relationships and strategic alignment. Four deals were recently signed, including practices in West Canada (Vancouver), Nigeria (tax), and Uruguay (legal and tax), totaling 270 people and $21 million in revenue.

These deals, effective April 1, already contribute significantly to the $33 million inorganic revenue projected for H2 FY26. The strategy emphasizes cost-effectiveness and deep familiarity with acquired teams, with many more conversations in process.

Technology as a Competitive Advantage

The company views technology, not just AI, as a massive opportunity. Pilot programs with Anthropic are underway, with a measured and thoughtful approach to implementation to avoid regulatory issues observed with other firms. The goal is to increase the leverage model from 2.5:1 to 3-3.5:1, enhancing productivity of senior staff and potentially shifting hiring towards lateral hires.

The firm expects technology to significantly change its business model over the next 3 to 4 years, driving greater value and profitability.

Value-Driven Client Solutions

Mark Vorsatz emphasized client selection and value solutions, citing examples like securing 64 cost segregation projects in Q4, one of which saved a client $19 million in front-end costs. Other initiatives include cybersecurity for family offices (230 qualified introductions in two months), tax transformation, and tariff refund services.

The firm also highlighted opportunities arising from potential wealth taxes in various US states, such as California's proposed 5% tax on net worth over $1 billion, Senator Sanders' bill on unrealized appreciation, and New York's proposed 90% increase in inheritance tax, leveraging its technical capabilities and national resources.

Seasonal Business Pattern

Neal Livingstone detailed the seasonal nature of the business, driven by tax filing deadlines. Historically, the core tax business generates approximately 25% of revenue in Q1, 21% in Q2, 34% in Q3, and 20% in Q4. Q3 is a bellwether quarter, historically generating significantly more than 50%, sometimes up to 2/3, of annual net income, while Q4 can often be a loss period.

This seasonality necessitates conservatism in projections for earlier quarters.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.