HENNESSY ADVISORS INC
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 2026
HNNA$10.19-3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001437749-26-015205
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001437749-26-025952
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 70 current paragraphs.
33 unchanged; 28 reworded; 7 added; 6 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
On a total return basis, the Dow Jones Industrial Average was up 14.18% for the nine months ended June 30, 2026. During the most recent quarter, equity prices advanced despite heightened geopolitical risks, predominantly in the Middle East. Strong corporate earnings reports from the first quarter have reassured investors that the fundamental backdrop for equities is sound. While investors continue to closely monitor peace talks between the United States, Israel and Iran, the increased adoption of and interest in artificial intelligence has been a boon for the stock market. Employment and wage growth also remain on firm footing. The Bureau of Labor Statistics, for June, reported that unemployment stands at 4.2% with year-over-year average hourly earnings increasing 3.5%. These reports run counter to skeptics pointing out that the adoption of artificial intelligence could wreak havoc on employment trends.
Current report
Long-term U.S. bond yields rose during the three months ended June 30, 2026. With the unrest in the Middle East and the uncertainty in the Strait of Hormuz, energy prices remain elevated, despite coming down in recent months. These disruptions have given rise to inflation concerns. According to data compiled by Bloomberg, Federal Funds futures no longer price in the chance for a rate cut in 2026. Rather, there is a reasonable chance, based on this data, that the Federal Reserve will raise its benchmark interest rate before the end of the year. This contrasts sharply with data from early January that indicated the market was pricing in roughly two interest rate cuts by the end of 2026.
Current report
Following the redemption of the 2026 Notes, as discussed in Note 8, the principal liability on our balance sheet is the net deferred tax liability of $17.4 million arising from the continued write-off of our management contracts asset for tax purposes, which creates a book-to-tax difference.
Current report
None of the Hennessy Funds had net inflows during the nine months ended June 30, 2026.
Current report
Compensation and Benefits Expense: Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, compensation and benefits expense increased by 1.9%, from $2.5 million to $2.6 million. As a percentage of total revenue, compensation and benefits expense decreased 0.7 percentage points to 30.4%. The dollar value increase in compensation and benefits expense was due to an increase in salaries due to higher headcount, partially offset by a decrease in incentive-based compensation, in the current period.
Current report
Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, income tax expense remained the same at $0.8 million.
Current report
Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, net income decreased by 5.8%, from $2.1 million to $2.0 million. The decrease in net income was primarily due to the redemption of the 2026 Notes on June 30, 2026, and the related expense of unamortized issuance costs in the current period.
Removed paragraphs (6)
Previous report
On a total return basis, the Dow Jones Industrial Average was up 0.71% for the six months ended March 31, 2026. During the most recent quarter, equity prices declined as geopolitical fears coupled with prospective interest rate cuts have seemed to cause investors to reconsider the case for continued economic growth. A joint United States and Israeli military campaign against Iran has had the effect of both spiking oil prices and closing the Strait of Hormuz, a key oil and gas shipping channel. The uncertainty around the potential length of the action and its implications for oil and gas prices has caused global unease. The immediate effect of these dynamics has been rising gasoline prices, the prospect of dampened consumer spending, and the possibility of increased inflation. While the bond market had been expecting two interest rate cuts by the Federal Reserve in 2026, currently the bond market is not pricing in any rate cuts this year on account of an expectation of elevated rates of inflation returning, according to Bloomberg.
Previous report
Long-term U.S. bond yields rose during the three months ended March 31, 2026. Higher oil and gas prices may portend a higher level of inflation, especially if a resolution with Iran is not reached soon. Before the conflict in the Middle East, inflation remained above the Federal Reserve’s 2% goal but was slowly making progress toward that goal. Projections compiled by Bloomberg estimate that the Consumer Price Index will advance by 3.1% in 2026, after increasing by 2.7% in 2025.
Previous report
On October 20, 2021, we completed a public offering of the 2026 Notes in the aggregate principal amount of $40.25 million, which included the full exercise of the underwriters’ overallotment option. The 2026 Notes mature on December 31, 2026, and may now be redeemed in whole or in part at any time or from time to time at our option. The 2026 Notes bear interest at 4.875% per annum, payable on the last day of each calendar quarter and at maturity, beginning December 31, 2021. The 2026 Notes are direct unsecured obligations, rank equally in right of payment with any of our future unsecured unsubordinated indebtedness, senior to any of our future indebtedness that expressly provides that it is subordinate to the 2026 Notes, effectively subordinate to all of our future secured indebtedness, and structurally subordinate to all future indebtedness and other obligations of any future subsidiaries of ours.
Previous report
The 2026 Notes are the principal liability on our balance sheet at $40.0 million, net of issuance costs. At December 31, 2025, the 2026 Notes were reclassified from long-term to current as the maturity date is within twelve months.
Previous report
Total revenue comprises investment advisory fees and shareholder service fees. Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, total revenue decreased by 12.3%, from $9.3 million to $8.1 million, investment advisory fees decreased by 12.6%, from $8.7 million to $7.6 million, and shareholder service fees decreased by 8.5%, from $0.60 million to $0.55 million. Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, total revenue decreased by 13.3%, from $19.0 million to $16.5 million, investment advisory fees decreased by 13.5%, from $17.7 million to $15.3 million, and shareholder service fees decreased by 11.1%, from $1.3 million to $1.1 million.
Previous report
Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, compensation and benefits expense decreased by 7.4%, from $5.4 million to $5.0 million. As a percentage of total revenue, compensation and benefits expense increased 1.9 percentage points to 30.6%.
Reworded paragraphs (28)
Previous wording
The Japanese equity market was up 4.69% in U.S. dollar terms over the six months ended March 31, 2026, as measured by the Tokyo Stock Price Index. During the period, Japanese equities traded higher as aggressive corporate governance reforms, a weak yen boosting exporter profits, a return to moderate inflation, and renewed foreign investment drove an increase in share values.
Current wording
The Japanese equity market was up 17.24% in U.S. dollar terms over the nine months ended June 30, 2026, as measured by the Tokyo Stock Price Index. During the period, Japanese equities traded higher as the boom in artificial intelligence and semiconductor demand coupled with an accommodative political agenda seemed to have given hope to investors for sustained economic growth.
Previous wording
We provide service to nearly 170,000 fund accounts nationwide, including accounts held by investors who employ financial advisors to assist them with investing as well as accounts held by retail investors who invest directly with us. We serve approximately 10,200 financial advisors who utilize the Hennessy Funds on behalf of their clients, including roughly 200 who purchased one of our Funds for the first time during the most recent quarter. Approximately 17% of such advisors own two or more Hennessy Funds, and approximately 700 advisors hold a position of over $500,000. While numbers have declined in recent years, we continue to focus significant efforts on building and maintaining brand loyalty among our top tier of advisors.
Current wording
We provide service to nearly 170,000 fund accounts nationwide, including accounts held by investors who employ financial advisors to assist them with investing as well as accounts held by retail investors who invest directly with us. We serve approximately 10,200 financial advisors who utilize the Hennessy Funds on behalf of their clients, including roughly 150 who purchased one of our Funds for the first time during the most recent quarter. Approximately 17% of such advisors own two or more Hennessy Funds, and approximately 700 advisors hold a position of over $500,000. While numbers have declined in recent years, we continue to focus significant efforts on building and maintaining brand loyalty among our top tier of advisors.
Previous wording
Total assets under management as of March 31, 2026, was $3.9 billion, a decrease of $0.3 billion, or 7.8%, compared to March 31, 2025. The decrease in total assets was attributable to net outflows from the Hennessy Funds, partly offset by market appreciation.
Current wording
Total assets under management as of June 30, 2026, was $4.4 billion, an increase of $0.1 billion, or 2.6%, compared to June 30, 2025. The increase in total assets was attributable to market appreciation, substantially offset by net outflows from the Hennessy Funds.
Previous wording
As discussed above, on October 20, 2021, we completed a public offering of our 2026 Notes in the aggregate principal amount of $40.25 million. The 2026 Notes mature on December 31, 2026, and may now be redeemed in whole or in part at any time or from time to time at our option.
Current wording
As discussed above, on October 20, 2021, we completed a public offering of our 2026 Notes in the aggregate principal amount of $40.25 million. The 2026 Notes were redeemed in whole on June 30, 2026.
Previous wording
Our total assets under management as of March 31, 2026, was $3.9 billion, a decrease of $0.3 billion, or 7.8%, compared to March 31, 2025. The primary sources of our revenue, liquidity, and cash flow are our investment advisory fees and shareholder service fees, which are based on and generated by our average assets under management. Our average assets under management for the six months ended March 31, 2026, was $4.2 billion, a decrease of $0.6 billion, or 12.9%, compared to the six months ended March 31, 2025. As of March 31, 2026, we had cash and cash equivalents of $73.0 million.
Current wording
Our total assets under management as of June 30, 2026, was $4.4 billion, an increase of $0.1 billion, or 2.6%, compared to June 30, 2025. The primary sources of our revenue, liquidity, and cash flow are our investment advisory fees and shareholder service fees, which are based on and generated by our average assets under management. Our average assets under management for the nine months ended June 30, 2026, was $4.2 billion, a decrease of $0.4 billion, or 7.8%, compared to the nine months ended June 30, 2025. As of June 30, 2026, we had cash and cash equivalents of $35.4 million and no debt.
Previous wording
The decrease in cash provided by operating activities of $3.0 million was primarily due to decreased net income and decreased accrued liabilities and accounts payable in the current period.
Current wording
The decrease in cash provided by operating activities of $3.3 million was primarily due to decreased net income and decreased accrued liabilities and accounts payable in the current period.
Previous wording
The decrease in cash used in investing activities of $0.1 million was due to decreased purchases of property and equipment in the current period.
Current wording
The decrease in cash used in investing activities of $0.3 million was due to capitalized costs associated with a former asset purchase agreement in the previous period.
Previous wording
The increase in cash used in financing activities of $0.1 million was due to the increased dollar amount of dividends paid as a result of an increased dividend rate and having more shares outstanding in the current period than in the prior comparable period.
Current wording
The increase in cash used in financing activities of $40.5 million was due to the redemption of the 2026 Notes on June 30, 2026.
Previous wording
In each period, the decrease in investment advisory fees was due mainly to decreased average daily net assets of the Hennessy Funds, and the decrease in shareholder service fees was due to a decrease in the average daily net assets held in Investor Class shares of the Hennessy Mutual Funds. Assets held in Investor Class shares of the Hennessy Mutual Funds are subject to a shareholder service fee, whereas assets held in Institutional Class shares of the Hennessy Mutual Funds are not subject to a shareholder service fee.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, total revenue decreased by 8.1%, from $27.0 million to $24.8 million, investment advisory fees decreased by 8.2%, from $25.2 million to $23.2 million, and shareholder service fees decreased by 6.8%, from $1.8 million to $1.7 million. In the nine-month period, the decrease in investment advisory fees was due mainly to decreased average daily net assets of the Hennessy Funds in the current period, and the decrease in shareholder service fees was due to a decrease in the average daily net assets held in Investor Class shares of the Hennessy Mutual Funds in the current period. Assets held in Investor Class shares of the Hennessy Mutual Funds are subject to a shareholder service fee, whereas assets held in Institutional Class shares of the Hennessy Mutual Funds are not subject to a shareholder service fee.
Previous wording
We collect investment advisory fees from each of the Hennessy Funds at differing annual rates. These annual rates range between 0.40% and 1.25% of average daily net assets. Average daily net assets of the Hennessy Funds for the three months ended March 31, 2026, was $4.2 billion, which represents a decrease of $0.6 billion, or 12.2%, compared to the three months ended March 31, 2025, and average daily net assets of the Hennessy Funds for the six months ended March 31, 2026, was $4.2 billion, which represents a decrease of $0.6 billion, or 12.9%, compared to the six months ended March 31, 2025. The Hennessy Fund with the largest average daily net assets for the three and six months ended March 31, 2026, was the Hennessy Cornerstone Mid Cap 30 Fund, with $1.2 billion for both periods. We collect an investment advisory fee from the Hennessy Cornerstone Mid Cap 30 Fund at an annual rate of 0.74% of average daily net assets. The Hennessy Fund with the second largest average daily assets for the three and six months ended March 31, 2026, was the Hennessy Focus Fund, with $0.5 billion for both periods. We collect an investment advisory fee from the Hennessy Focus Fund at an annual rate of 0.90% of average daily net assets. However, we pay a sub‑advisory fee at an annual rate of 0.29% to the fund’s sub-advisor, which reduces the net operating profit contribution of the fund to our financial operations.
Current wording
We collect investment advisory fees from each of the Hennessy Funds at differing annual rates. These annual rates range between 0.40% and 1.25% of average daily net assets. Average daily net assets of the Hennessy Funds for the three months ended June 30, 2026, was $4.3 billion, which represents an increase of $0.2 billion, or 4.0%, compared to the three months ended June 30, 2025, and average daily net assets of the Hennessy Funds for the nine months ended June 30, 2026, was $4.2 billion, which represents a decrease of $0.4 billion, or 7.8%, compared to the nine months ended June 30, 2025. The Hennessy Fund with the largest average daily net assets for the three and nine months ended June 30, 2026, was the Hennessy Cornerstone Mid Cap 30 Fund, with $1.3 billion and $1.2 billion, respectively. We collect an investment advisory fee from the Hennessy Cornerstone Mid Cap 30 Fund at an annual rate of 0.74% of average daily net assets. The Hennessy Fund with the second largest average daily assets for the three months ended June 30, 2026, was the Hennessy Gas Utility Fund, with $0.5 billion. We collect an investment advisory fee from the Hennessy Gas Utility Fund at an annual rate of 0.40% of average daily net assets. The Hennessy Fund with the second largest average daily assets for the nine months ended June 30, 2026 was the Hennessy Focus Fund, with $0.5 billion. We collect an investment advisory fee from the Hennessy Focus Fund at an annual rate of 0.90% of average daily net assets. However, we pay a sub‑advisory fee at an annual rate of 0.29% to the fund’s sub-advisor, which reduces the net operating profit contribution of the fund to our financial operations.
Previous wording
Total assets under management as of March 31, 2026, was $3.9 billion, a decrease of $0.3 billion, or 7.8%, compared to March 31, 2025. The decrease in total assets was attributable to net outflows from the Hennessy Funds, partly offset by market appreciation.
Current wording
Total assets under management as of June 30, 2026, was $4.4 billion, an increase of $0.1 billion, or 2.6%, compared to June 30, 2025. The increase in total assets was attributable to market appreciation, substantially offset by net outflows from the Hennessy Funds.
Previous wording
Redemptions as a percentage of assets under management decreased from an average of 5.5% per month during the three months ended March 31, 2025, to an average of 2.6% per month during the three months ended March 31, 2026. Redemptions as a percentage of assets under management decreased from an average of 4.0% per month during the six months ended March 31, 2025 to an average of 2.8% per month during the six months ended March 31, 2026.
Current wording
Redemptions as a percentage of assets under management decreased from an average of 3.6% per month during the three months ended June 30, 2025, to an average of 1.8% per month during the three months ended June 30, 2026. Redemptions as a percentage of assets under management decreased from an average of 3.9% per month during the nine months ended June 30, 2025 to an average of 2.5% per month during the nine months ended June 30, 2026.
Previous wording
Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, total operating expenses decreased by 5.2% from $5.8 million to $5.5 million. As a percentage of total revenue, total operating expenses increased 5.1 percentage points to 67.9%. The dollar value decrease in operating expenses was due to decreases in the compensation and benefits, general and administrative, fund distribution and other, and sub-advisory fees categories, partly offset by an increase in depreciation expense.
Current wording
Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, total operating expenses increased by 5.2% from $5.2 million to $5.5 million. As a percentage of total revenue, total operating expenses increased 0.7 percentage points to 65.3%. The increase in operating expenses was due to increases in the compensation and benefits, general and administrative, sub-advisory fees, and depreciation categories, partly offset by a decrease in fund distribution and other expense.
Previous wording
Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, total operating expenses decreased by 4.0% from $11.7 million to $11.2 million. As a percentage of total revenue, total operating expenses increased 6.6 percentage points to 68.3%. The dollar value decrease in operating expenses was due to decreases in the compensation and benefits, fund distribution and other, and sub-advisory fees categories, partly offset by increases in general and administrative and depreciation expense categories.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, total operating expenses decreased by 1.1% from $16.9 million to $16.7 million. As a percentage of total revenue, total operating expenses increased 4.8 percentage points to 67.3%. The dollar value decrease in operating expenses was due to decreases in the compensation and benefits, fund distribution and other, and sub-advisory fees categories, partly offset by increases in general and administrative and depreciation expense categories.
Previous wording
Compensation and Benefits Expense: Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, compensation and benefits expense decreased by 4.2%, from $2.7 million to $2.6 million. As a percentage of total revenue, compensation and benefits expense increased 2.7 percentage points to 31.5%.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, compensation and benefits expense decreased by 4.5%, from $7.9 million to $7.6 million. As a percentage of total revenue, compensation and benefits expense increased 1.2 percentage points to 30.6%. The dollar value decrease in compensation and benefits expense was due to a decrease in incentive-based compensation in the current period.
Previous wording
General and Administrative Expense: Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, general and administrative expense decreased by 9.0%, from $1.8 million to $1.6 million. As a percentage of total revenue, general and administrative expense increased 0.6 percentage points to 20.1%. The dollar value decrease in general and administrative expense was primarily due to decreased sales and distribution expense in the current period.
Current wording
General and Administrative Expense: Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, general and administrative expense increased by 10.3%, from $1.4 million to $1.6 million. As a percentage of total revenue, general and administrative expense increased 1.1 percentage points to 18.9%. The increase in general and administrative expense was primarily due to increased business development expense in the current period.
Previous wording
Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, general and administrative expense increased by 2.9%, from $3.5 million to $3.6 million. As a percentage of total revenue, general and administrative expense increased 3.4 percentage points to 21.6%. The increase in general and administrative expense was primarily due to the termination on January 1, 2026, of the definitive agreement signed with STF Management, LP in March 2025 and the related expense of previously capitalized costs in the current period.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, general and administrative expense increased by 5.1%, from $4.9 million to $5.1 million. As a percentage of total revenue, general and administrative expense increased 2.5 percentage points to 20.6%. The increase in general and administrative expense was primarily due to the termination on January 1, 2026, of the definitive agreement signed with STF Management, LP in March 2025 and the related expense of previously capitalized costs in the current period.
Previous wording
Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, fund distribution and other expense decreased by 7.2%, from $0.3 million to $0.2 million. As a percentage of total revenue, fund distribution and other expense increased 0.2 percentage points to 2.9%.
Current wording
Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, fund distribution and other expense decreased by 3.6%, from $0.3 million to $0.2 million. As a percentage of total revenue, fund distribution and other expense decreased 0.2 percentage points to 2.9%.
Previous wording
Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, fund distribution and other expense decreased by 12.8%, from $0.52 million to $0.45 million. As a percentage of total revenue, fund distribution and other expense increased 0.1 percentage points to 2.8%.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, fund distribution and other expense decreased by 9.8%, from $0.77 million to $0.69 million. As a percentage of total revenue, fund distribution and other expense remained the same at 2.8%.
Previous wording
In each period, the dollar value decrease in fund distribution and other expense was primarily due to decreased average daily net assets across the Hennessy Funds in the current period, which in turn decreases the fees we pay to financial institutions.
Current wording
In both periods, the dollar value decrease in fund distribution and other expense was primarily due to decreased operating expenses relating to the Hennessy Sustainable ETF in the current period.
Previous wording
Sub-Advisory Fees Expense: Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, sub-advisory fees expense decreased by 2.7%, from $1.03 million to $1.00 million. As a percentage of total revenue, sub-advisory fees expense increased 1.2 percentage points to 12.3%.
Current wording
Sub-Advisory Fees Expense: Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, sub-advisory fees expense increased by 8.7%, from $0.94 million to $1.02 million. As a percentage of total revenue, sub-advisory fees expense increased 0.5 percentage points to 12.2%. The increase in sub-advisory fees expense was due to increased average daily net assets of the sub‑advised Hennessy Funds in the current period.
Previous wording
Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, sub-advisory fees expense decreased by 5.4%, from $2.2 million to $2.0 million. As a percentage of total revenue, sub-advisory fees expense increased 1.0 percentage points to 12.4%.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, sub-advisory fees expense remained the same at $3.1 million. As a percentage of total revenue, sub-advisory fees expense increased 1.0 percentage points to 12.4%.
Previous wording
Depreciation Expense: Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, depreciation expense increased by 24.6% from $0.07 million to $0.09 million. As a percentage of total revenue, depreciation expense increased 0.4 percentage points to 1.1%.
Current wording
Depreciation Expense: Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, depreciation expense increased by 4.1% from $0.07 million to $0.08 million. As a percentage of total revenue, depreciation expense remained the same at 0.9%.
Previous wording
Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, depreciation expense increased by 16.9% from $0.13 million to $0.15 million. As a percentage of total revenue, depreciation expense increased 0.2 percentage points to 0.9%.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, depreciation expense increased by 12.3% from $0.20 million to $0.23 million. As a percentage of total revenue, depreciation expense increased 0.1 percentage points to 0.9%.
Previous wording
Interest income consists of interest earned on cash and cash equivalents. Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, interest income decreased from $0.7 million to $0.6 million. Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, interest income decreased from $1.4 million to $1.3 million. In each period, the decrease in interest income resulted from decreased interest rates in the current period.
Current wording
Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, interest income decreased from $0.7 million to $0.6 million. Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, interest income decreased from $2.1 million to $1.9 million. In each period, the decrease in interest income resulted from decreased interest rates in the current period.
Previous wording
Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, interest expense increased from $0.57 million to $0.58 million. Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, interest expense increased from $1.14 million to $1.15 million. In each period, the increase in interest expense was due to the manner in which interest expense is calculated under U.S. GAAP. The issuance costs related to the 2026 Notes that have been capitalized are amortized over time and therefore increase the carrying amount of the 2026 Notes. As the carrying amount of the 2026 Notes increases, the interest expense on the 2026 Notes for financial statement purposes also increases.
Current wording
Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, interest expense increased from $0.57 million to $0.76 million. Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, interest expense increased from $1.72 million to $1.91 million. In each period, the increase in interest expense was primarily due to the redemption of the 2026 Notes on June 30, 2026, and the related expense of unamortized issuance costs in the current period.
Previous wording
Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, income tax expense decreased by 24.4%, from $1.0 million to $0.7 million. Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, income tax expense decreased by 29.5%, from $2.1 million to $1.5 million. In each period, the decrease in income tax expense was due to decreased net operating income.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, income tax expense decreased by 23.3%, from $2.9 million to $2.3 million. The decrease in income tax expense was due to decreased net operating income in the current period.
Previous wording
Comparing the three months ended March 31, 2025, to the three months ended March 31, 2026, net income decreased by 26.1%, from $2.6 million to $1.9 million. Comparing the six months ended March 31, 2025, to the six months ended March 31, 2026, net income decreased by 29.1%, from $5.4 million to $3.8 million. In each period, the decrease in net income was primarily due to decreased revenue in the current period.
Current wording
Comparing the nine months ended June 30, 2025, to the nine months ended June 30, 2026, net income decreased by 22.5%, from $7.5 million to $5.8 million. The decrease in net income was primarily due to decreased revenue in the current period.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Total revenue comprises investment advisory fees and shareholder service fees. Comparing the three months ended June 30, 2025, to the three months ended June 30, 2026, total revenue increased by 4.2%, from $8.1 million to $8.4 million, investment advisory fees increased by 4.2%, from $7.5 million to $7.8 million, and shareholder service fees increased by 3.1%, from $0.5 million to $0.6 million. In the three-month period, the increase in investment advisory fees was due mainly to increased average daily net assets of the Hennessy Funds in the current period, and the increase in shareholder service fees was due to an increase in the average daily net assets held in Investor Class shares of the Hennessy Mutual Funds in the current period. Assets held in Investor Class shares of the Hennessy Mutual Funds are subject to a shareholder service fee, whereas assets held in Institutional Class shares of the Hennessy Mutual Funds are not subject to a shareholder service fee.
Current report — wording carried from elsewhere
Interest income consists of interest earned on cash and cash equivalents.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
In each period, the dollar value decrease in compensation and benefit expense was due to a decrease in incentive-based compensation in the current period.
Previous report — wording carried elsewhere
In each period, the dollar value decrease in sub-advisory fees expense was due to decreased average daily net assets of the sub‑advised Hennessy Funds in the current period.