Artisan Partners Asset Management Inc.
For the period ended Jun 30, 2026. Filed Jul 31, 2026.
View on SEC.govAbout this filing
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 Jul 31, 2026
APAM$39.13-1.6%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 2026-05-04.
0001517302-26-000091
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-31.
0001517302-26-000114
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 124 previous paragraphs and 144 current paragraphs.
82 unchanged; 37 reworded; 16 added; 4 removed; 1 previous and 9 current paragraphs rearranged.
Tables are not compared: 18 previous and 25 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 (16)
Current report
•Following the loss of two large institutional mandates in the U.S. Value team’s strategies and a comprehensive review of the long term prospects of the franchise, we determined the prudent decision was to wind down the team's business, which we expect to complete during the quarter ending September 30, 2026.
Current report
Our credit and alternative asset classes generated combined net inflows of $1.0 billion in the second quarter of 2026, while our equity strategies experienced net outflows of $11.5 billion. Although our equity strategies experienced net outflows overall, approximately $9.2 billion were concentrated in the Growth and U.S. Value teams, including $2.8 billion from the Growth team’s strategies and $6.4 billion attributable to client account terminations within our U.S. Value strategies. Following the U.S. Value outflows, the Company began an orderly wind-down of the team’s strategies, which is expected to continue through the third quarter.
Current report
The increase in total compensation and benefits was primarily due to a $7.4 million increase in long-term incentive compensation largely driven by market valuation changes, a $4.5 million increase in incentive compensation primarily attributable to higher revenues and a $3.0 million increase in employee separation related costs including those associated with the wind down of the U.S. Value Team.
Current report
Total net investment gain increased $0.9 million in aggregate for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, due to market conditions partially offset by a lower average invested balance during the 2026 period.
Current report
Six months ended June 30, 2026, compared to six months ended June 30, 2025
Current report
Investment Advisory Revenues
Current report
Operating Expenses
Current report
Compensation and Benefits
Current report
The increase in total compensation and benefits was primarily driven by a $13.3 million increase in incentive compensation largely driven by higher revenue, an $8.1 million increase in long-term incentive compensation including $4.3 million driven by market valuation changes, and a $3.6 million increase in employee separation related costs including those associated with the wind down of the U.S. Value Team.
Current report
Total compensation and benefits was 57% of our revenues for the six months ended June 30, 2026, and 2025.
Current report
Other operating expenses
Current report
Non-Operating Income (Expense)
Current report
Total net investment gain decreased $17.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to lower average invested balances during the 2026 period.
Current report
Provision for Income Taxes
Current report
Earnings Per Share
Current report
Change in fair value of contingent consideration represents the income (expense) associated with the change in fair value of acquisition-related contingent consideration.
Removed paragraphs (4)
Previous report
•We acquired Grandview Property Partners for $22.5 million of upfront cash consideration with future consideration payable upon the achievement of committed capital milestones and certain revenue run rates for future Grandview Funds as well as the underlying performance of those funds over the seven-year period following the acquisition's closing date.
Previous report
Global markets and our AUM were volatile during the period. We reached record AUM near the end of February 2026 before declining to $173 billion at March 31, 2026. Preliminary AUM as of April 30, 2026, increased to approximately $183 billion reflecting global market movements.
Previous report
The increase in total compensation and benefits was primarily driven by a $8.7 million increase in short-term incentive compensation driven by higher revenues in the three months ended March 31, 2026. A 2% increase in full-time associates, including those associated with the Grandview acquisition, also led to increases in compensation and benefit related expenses.
Previous report
Net investment gain (loss) of consolidated investment products, net investment gain (loss) on nonconsolidated seed investments and net investment gain (loss) on franchise capital investments decreased $18.5 million in aggregate for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, predominately due to market conditions.
Reworded paragraphs (37)
Previous wording
We offer our investment management capabilities primarily to sophisticated investors that operate with institutional decision-making processes and longer-term investment horizons. We employ knowledgeable and investment focused relationship managers who are directly aligned with our investment teams, and we pair them with regional and distribution channel experts. We provide access to many of our investment strategies through multiple investment vehicles, including separate accounts and different types of pooled vehicles. As of March 31, 2026, approximately 74% of our assets under management (AUM) were managed for clients and investors domiciled in the U.S. and 26% of our AUM were managed for clients and investors domiciled outside of the U.S.
Current wording
We offer our investment management capabilities primarily to sophisticated investors that operate with institutional decision-making processes and longer-term investment horizons. We employ knowledgeable and investment focused relationship managers who are directly aligned with our investment teams, and we pair them with regional and distribution channel experts. We provide access to many of our investment strategies through multiple investment vehicles, including separate accounts and different types of pooled vehicles. As of June 30, 2026, approximately 73% of our assets under management (AUM) were managed for clients and investors domiciled in the U.S. and 27% of our AUM were managed for clients and investors domiciled outside of the U.S.
Previous wording
•During the three months ended March 31, 2026, our AUM declined to $173.0 billion, a decrease of $6.9 billion, or 4%, compared to $179.9 billion at December 31, 2025, primarily due to $4.6 billion of market depreciation, $3.1 billion of net client cash outflows and $0.1 billion of Artisan Funds’ distributions not reinvested, partially offset by the acquisition of $0.9 billion from Grandview Property Partners.
Current wording
•During the three months ended June 30, 2026, our AUM increased to $183.4 billion, an increase of $10.4 billion, or 6%, compared to $173.0 billion at March 31, 2026, primarily due to $21.2 billion of market appreciation, partially offset by $10.5 billion of net client cash outflows.
Previous wording
•Average AUM for the three months ended March 31, 2026 was $182.4 billion, an increase of 1% from the average of $180.9 billion for the three months ended December 31, 2025, and an increase of 9% from the average of $166.7 billion for the three months ended March 31, 2025.
Current wording
•Average AUM for the three months ended June 30, 2026 was $181.9 billion, a decrease of 0.3% from the average of $182.4 billion for the three months ended March 31, 2026, and an increase of 9% from the average of $166.8 billion for the three months ended June 30, 2025.
Previous wording
•We earned $303.0 million in revenue for the three months ended March 31, 2026, an increase of 9% from revenues of $277.1 million for the three months ended March 31, 2025.
Current wording
•We earned $307.9 million in revenue for the three months ended June 30, 2026, an increase of 9% from revenues of $282.8 million for the three months ended June 30, 2025.
Previous wording
•Our GAAP operating margin was 31.1% for the three months ended March 31, 2026, compared to 31.2% for the three months ended March 31, 2025. Adjusted operating margin was 31.1% for the three months ended March 31, 2026, compared to 32.1% for the three months ended March 31, 2025.
Current wording
•Our GAAP operating margin was 27.5% for the three months ended June 30, 2026, compared to 28.2% for the three months ended June 30, 2025. Adjusted operating margin was 32.9% for the three months ended June 30, 2026, compared to 31.7% for the three months ended June 30, 2025.
Previous wording
•We generated $0.76 of earnings per basic and diluted share and $0.87 of adjusted EPS.
Current wording
•We generated $1.11 of earnings per basic and diluted share and $0.94 of adjusted EPS.
Previous wording
•We declared and distributed dividends of $1.58 per share of Class A common stock during the three months ended March 31, 2026.
Current wording
•We declared and distributed dividends of $0.77 per share of Class A common stock during the three months ended June 30, 2026.
Previous wording
•We declared, effective April 28, 2026, a quarterly dividend with respect to the three months ended March 31, 2026, of $0.77 per share of Class A common stock.
Current wording
•We declared, effective July 28, 2026, a quarterly dividend with respect to the three months ended June 30, 2026, of $0.80 per share of Class A common stock.
Previous wording
During the three months ended March 31, 2026, certain limited partners of Holdings exchanged 160,114 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 160,114 shares of Class A common stock. In connection with the exchanges, APAM received 160,114 GP units of Holdings increasing its ownership interest in Holdings.
Current wording
During the six months ended June 30, 2026, certain limited partners of Holdings exchanged 167,614 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 167,614 shares of Class A common stock. In connection with the exchanges, APAM received 167,614 GP units of Holdings increasing its ownership interest in Holdings.
Previous wording
Global market conditions can materially impact our financial performance. Because the revenue we earn is based on the value of our AUM, fluctuations in our AUM due to changes in the economic environment and financial markets will result in corresponding fluctuations in our revenue and earnings.
Current wording
Global market conditions can materially impact our financial performance. Because the revenue we earn is based on the value of our AUM, fluctuations in our AUM due to changes in the economic environment and financial markets will result in fluctuations in our revenue and earnings.
Previous wording
The following table presents the total returns of relevant market indices for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents the total returns of relevant market indices for the three and six months ended June 30, 2026 and 2025:
Previous wording
Our equity strategies experienced net outflows of $4.2 billion in the first quarter of 2026, while our credit and alternative asset classes generated combined net inflows of $1.1 billion. While net flows are inherently difficult to predict, if recent performance and market trends persist, we could continue to experience net outflows in our equity strategies and net inflows in our credit and alternative strategies throughout the remainder of 2026. Over the long term, we expect to generate the majority of our AUM growth through investment returns, which has been our historical experience.
Current wording
While net flows are inherently difficult to predict, if recent performance and market trends persist, we could continue to experience net inflows in our credit and alternative strategies and net outflows in our equity strategies during the remainder of 2026. Over the long term, we expect investment returns to be the primary driver of AUM growth, consistent with our historical experience.
Previous wording
The following table sets forth our AUM by asset class:
Current wording
The following tables set forth our AUM by asset class:
Previous wording
Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark. We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 4% of our $173.0 billion of AUM as of March 31, 2026 are subject to performance fee billing arrangements, of which substantially all performance fees are recognized in the fourth quarter.
Current wording
Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark. We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 4% of our $183.4 billion of AUM as of June 30, 2026 are subject to performance fee billing arrangements, of which substantially all performance fees are recognized in the fourth quarter.
Previous wording
The increase in revenues of $25.9 million, or 9%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was driven primarily by a $15.7 billion, or 9% increase in our average AUM.
Current wording
The increase in revenues of $25.1 million, or 9%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, was driven primarily by a $15.1 billion, or 9% increase in our average AUM.
Previous wording
The weighted average fee rate, inclusive of performance fees, was 67.4 basis points for the three months ended March 31, 2026, compared to 67.5 basis points for the three months ended March 31, 2025.
Current wording
The weighted average fee rate, inclusive of performance fees, was 67.9 basis points for the three months ended June 30, 2026, compared to 68.1 basis points for the three months ended June 30, 2025.
Previous wording
Total compensation and benefits was 56% of our revenues for the three months ended March 31, 2026 and 2025.
Current wording
Total compensation and benefits was 59% of our revenues for the three months ended June 30, 2026 and 2025.
Previous wording
Other operating expenses increased $4.7 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to an increase in general and administrative costs, most notably increases in professional fees.
Current wording
Other operating expenses increased $4.1 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to an increase in general and administrative costs, most notably increases in professional fees.
Previous wording
Artisan's share of the $7.6 million total investment losses for the three months ended March 31, 2026 was comprised of $6.3 million of losses on investments to hedge compensation plans and $0.2 million of gains on seed investments. $1.5 million of the total investment losses for the three months ended March 31, 2026 were attributable to noncontrolling interests.
Current wording
Artisan's share of the $42.2 million total investment gains for the three months ended June 30, 2026 was comprised of $30.3 million of gains on investments to hedge compensation plans and $7.0 million of gains on seed investments. $4.9 million of the total investment gains for the three months ended June 30, 2026 were attributable to noncontrolling interests.
Previous wording
The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate for the three months ended March 31, 2026 and 2025 was 21.7% and 20.6%, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the three months ended March 31, 2026 and 2025. Thus, income before income taxes includes amounts that are attributable to noncontrolling interests and not taxable to APAM and its subsidiaries, which reduces the effective tax rate. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes.
Current wording
The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate for the three months ended June 30, 2026 and 2025 was 20.4% and 20.6%, respectively. APAM’s effective income tax rate was less than the U.S. federal statutory rate of 21% as (i) the rate benefit attributable to the fact that, for the three months ended June 30, 2026, approximately 14% of Artisan Partners Holdings’ full year projected taxable earnings were attributable to other partners and not subject to corporate-level taxes and (ii) the rate benefit from tax deductible dividends paid on unvested restricted share-based awards, which was partially offset by the incremental impact to the rate from state and local taxes and limits on executive compensation. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes.
Previous wording
Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, (4) non-recurring expenses (if any) and (5) adjustments to deferred taxes as a result of the enactment of tax laws (if any). These adjusted measures also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the Company.
Current wording
Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, (4) change in fair value of contingent consideration, (5) non-recurring expenses (if any) and (6) adjustments to deferred taxes as a result of the enactment of tax laws (if any). These adjusted measures also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the Company.
Previous wording
•Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, (4) non-recurring expenses (if any) and (5) adjustments to deferred taxes as a result of the enactment of tax laws (if any). Adjusted net income also reflects income taxes assuming the vesting of all unvested Class A share-based awards and as if all outstanding limited partnership units of Artisan Partners Holdings had been exchanged for Class A common stock of APAM on a one-for-one basis. Assuming full vesting and exchange, all income of Artisan Partners Holdings is treated as if it were allocated to APAM, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting APAM’s current federal, state and local income statutory tax rates. The adjusted tax rate was 24.7% for all periods presented.
Current wording
•Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, (4) change in fair value of contingent consideration, (5) non-recurring expenses (if any) and (6) adjustments to deferred taxes as a result of the enactment of tax laws (if any). Adjusted net income also reflects income taxes assuming the vesting of all unvested Class A share-based awards and as if all outstanding limited partnership units of Artisan Partners Holdings had been exchanged for Class A common stock of APAM on a one-for-one basis. Assuming full vesting and exchange, all income of Artisan Partners Holdings is treated as if it were allocated to APAM, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting APAM’s current federal, state and local income statutory tax rates. The adjusted tax rate was 24.7% for all periods presented.
Previous wording
We manage our cash balances in order to fund our day-to-day operations. We mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $243.1 million of our cash and cash equivalents balance was invested in money market funds as of March 31, 2026.
Current wording
We manage our cash balances in order to fund our day-to-day operations. We mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $312.2 million of our cash and cash equivalents balance was invested in money market funds as of June 30, 2026.
Previous wording
We utilize cash to make seed investments in Artisan-sponsored investment products to support the development of new investment strategies and vehicles. As of March 31, 2026, the balance of all seed investments, including investments in consolidated investment products, was $109.9 million. The seed investments are generally redeemable at our discretion, though subject to certain monthly or quarterly timing restrictions for certain Artisan Private Funds. We monitor for opportunities to redeem our seed investments as sufficient scale in each investment strategy, vehicle and class, as applicable, is achieved.
Current wording
We utilize cash to make seed investments in Artisan-sponsored investment products to support the development of new investment strategies and vehicles. As of June 30, 2026, the balance of all seed investments, including investments in consolidated investment products, was $96.2 million. The seed investments are generally redeemable at our discretion, though subject to certain monthly or quarterly timing restrictions for certain Artisan Private Funds. We monitor for opportunities to redeem our seed investments as sufficient scale in each investment strategy, vehicle and class, as applicable, is achieved.
Previous wording
During the three months ended March 31, 2026, we made investments of $50.6 million related to funded long-term incentive compensation plans. As of March 31, 2026, the value of investments held in connection with funded long-term incentive compensation plans was $255.0 million.
Current wording
During the six months ended June 30, 2026, we made investments of $50.6 million related to funded long-term incentive compensation plans. As of June 30, 2026, the value of investments held in connection with funded long-term incentive compensation plans was $259.6 million.
Previous wording
We have $190 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending in August 2027. The notes are comprised of three series, Series E, Series F and Series G, each with a balloon payment at maturity. The $100 million revolving credit facility was unused as of and for the three months ended March 31, 2026.
Current wording
We have $190 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending in August 2027. The notes are comprised of three series, Series E, Series F and Series G, each with a balloon payment at maturity. The $100 million revolving credit facility was unused as of and for the six months ended June 30, 2026.
Previous wording
Artisan Partners Holdings’ distributions, including distributions to APAM for the three months ended March 31, 2026 and 2025, were as follows:
Current wording
Artisan Partners Holdings’ distributions, including distributions to APAM for the three and six months ended June 30, 2026 and 2025, were as follows:
Previous wording
On April 28, 2026, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $40.7 million, payable by Artisan Partners Holdings to holders of its partnership units, including APAM.
Current wording
On July 28, 2026, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $59.1 million, payable by Artisan Partners Holdings to holders of its partnership units, including APAM.
Previous wording
APAM declared and paid the following dividends per share during the three months ended March 31, 2026 and 2025:
Current wording
APAM declared and paid the following dividends per share during the three and six months ended June 30, 2026 and 2025:
Previous wording
Our board of directors declared, effective April 28, 2026, a variable quarterly dividend of $0.77 per share of Class A common stock with respect to the March quarter of 2026, payable on May 29, 2026 to stockholders of record as of the close of business on May 15, 2026. The variable quarterly dividend represents approximately 80% of the cash generated in the March quarter of 2026 and a pro-rata portion of 2026 tax savings related to our tax receivable agreements.
Current wording
Our board of directors declared, effective July 28, 2026, a variable quarterly dividend of $0.80 per share of Class A common stock with respect to the June quarter of 2026, payable on August 31, 2026 to stockholders of record as of the close of business on August 17, 2026. The variable quarterly dividend represents approximately 80% of the cash generated in the June quarter of 2026 and a pro-rata portion of 2026 tax savings related to our tax receivable agreements.
Previous wording
In addition to funding our normal operations, we will be required to fund amounts payable under the TRAs that we entered into in connection with the IPO, which resulted in the recognition of a $305.2 million liability as of March 31, 2026. The liability generally represents 85% of the tax benefits APAM expects to realize as a result of the merger of an entity into APAM as part of the IPO Reorganization, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units (for shares of Class A common stock or other consideration). The estimated liability assumes no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs. An increase or decrease in future tax rates will increase or decrease, respectively, the expected tax benefits APAM would realize and the amounts payable under the TRAs. Changes in the estimate of expected tax benefits APAM would realize and the amounts payable under the TRAs as a result of change in tax rates have been and will be recorded in net income.
Current wording
In addition to funding our normal operations, we will be required to fund amounts payable under the TRAs that we entered into in connection with the IPO, which resulted in the recognition of a $275.0 million liability as of June 30, 2026. The liability generally represents 85% of the tax benefits APAM expects to realize as a result of the merger of an entity into APAM as part of the IPO Reorganization, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units (for shares of Class A common stock or other consideration). The estimated liability assumes no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs. An increase or decrease in future tax rates will increase or decrease, respectively, the expected tax benefits APAM would realize and the amounts payable under the TRAs. Changes in the estimate of expected tax benefits APAM would realize and the amounts payable under the TRAs as a result of change in tax rates have been and will be recorded in net income.
Previous wording
The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of sales or exchanges by the holders of limited partnership units, the price of the Class A common stock at the time of such sales or exchanges, whether such sales or exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest or depreciable basis or amortizable basis. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs. In such cases, we intend to fund those payments with cash on hand, although we may have to borrow funds depending on the amount and timing of the payments. We did not make payments related to the TRAs during the three months ended March 31,
Current wording
The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of sales or exchanges by the holders of limited partnership units, the price of the Class A common stock at the time of such sales or exchanges, whether such sales or exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest or depreciable basis or amortizable basis. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs. In such cases, we intend to fund those payments with cash on hand, although we may have to borrow funds depending on the amount and timing of the payments. In fiscal 2026, we expect to make TRA payments totaling approximately $40.4 million, $30.3 million of which was paid during the quarter ended June 30, 2026.
Previous wording
Net cash provided by operating activities increased $23.9 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to changes in working capital of $18.8 million, which included the collection, in the first quarter, of higher performance fees generated in the three months ended December 31, 2025 and a $7.7 million increase in operating income. This is partially offset by a $3.5 million increase in net purchase activity within our consolidated investment products.
Current wording
Net cash provided by operating activities increased $88.8 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to changes in working capital of $46.8 million and a $12.5 million increase in operating income. Additionally, there was a $32.1 million increase in net sale activity within our consolidated investment products.
Previous wording
Investing activities consist of the purchase and sale of investment securities, the acquisition of property and equipment, leasehold improvements, and cash paid for business acquisitions. Net cash used in investing activities decreased $26.3 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to a $49.1 million increase in cash from net security investment activity in the three months ended March 31, 2026. This was offset by $22.5 million of cash paid in connection with the acquisition of Grandview in the current year.
Current wording
Investing activities consist of the purchase and sale of investment securities, the acquisition of property and equipment, leasehold improvements, and cash paid for business acquisitions. Net cash provided by investing activities increased $28.3 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to a $51.6 million increase in cash provided by the purchase and sale activity within seed investments during the six months ended June 30, 2026. This was offset by $22.5 million of cash paid in connection with the acquisition of Grandview in the current year.
Previous wording
Financing activities consist primarily of dividend payments to holders of our Class A common stock, partnership distributions to noncontrolling interests, contributions to and distributions from consolidated investment products, and payments owed under the tax receivable agreements. Net cash used in financing activities increased $3.2 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Dividend and distribution payments increased by $17.3 million which was partially offset by a $10.0 million increase in investment subscriptions into consolidated investment products and a $4.0 million decrease in taxes paid related to employee net share settlements.
Current wording
Financing activities consist primarily of dividend payments to holders of our Class A common stock, partnership distributions to noncontrolling interests, contributions to and distributions from consolidated investment products, and payments owed under the tax receivable agreements. Net cash used in financing activities increased $72.7 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Dividend and distribution payments increased by $24.2 million and investment subscriptions into consolidated investment products decreased by $51.8 million. These were slightly offset by a $4.5 million decrease in taxes paid related to employee net share settlements.
Previous wording
During each of the three months ended March 31, 2026 and March 31, 2025, the Company determined that it no longer had a controlling financial interest in investment products that were previously consolidated and therefore deconsolidated those products. The deconsolidation in the three months ended March 31, 2026 resulted in a decrease in cash and cash equivalents of $29.7 million compared to a decrease of $37.0 million in three months ended March 31, 2025.
Current wording
During each of the six months ended June 30, 2026 and June 30, 2025, the Company determined that it no longer had a controlling financial interest in investment products that were previously consolidated and therefore deconsolidated those products. The deconsolidation resulted in a decrease in cash and cash equivalents of $29.7 million and $37.0 million during the six months ended June 30, 2026 and 2025, respectively.
Previous wording
As previously discussed in this report, the TRA liability increased from $303.4 million at December 31, 2025 to $305.2 million at March 31, 2026. Amounts payable under the TRAs will increase upon exchanges of Holdings units for our Class A common stock or sales of Holdings units to us, with the increase representing 85% of the estimated future tax benefits, if any, resulting from such exchanges or sales and decrease when payments are made. The actual amount and timing of payments associated with our existing payable under the TRAs or future exchanges or sales, and associated tax benefits, will vary depending upon a number of factors as described under “Liquidity and Capital Resources.” As a result, the timing of payments by period is currently unknown. We did not make payments related to the TRA during the three months ended March 31, 2026. In fiscal 2026, we expect to make TRA payments totaling approximately $40.4 million, $30.3 million of which was paid during April 2026.
Current wording
As previously discussed in this report, the TRA liability decreased from $303.4 million at December 31, 2025 to $275.0 million at June 30, 2026. Amounts payable under the TRAs will increase upon exchanges of Holdings units for our Class A common stock or sales of Holdings units to us, with the increase representing 85% of the estimated future tax benefits, if any, resulting from such exchanges or sales and decrease when payments are made. The actual amount and timing of payments associated with our existing payable under the TRAs or future exchanges or sales, and associated tax benefits, will vary depending upon a number of factors as described under “Liquidity and Capital Resources.” As a result, the timing of payments by period is currently unknown. In fiscal 2026, we expect to make TRA payments totaling approximately $40.4 million, $30.3 million of which was paid during the quarter ended June 30, 2026.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
The increase in revenues of $51.0 million, or 9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was driven primarily by a $15.4 billion, or 9%, increase in our average AUM.
Current report — wording carried from elsewhere
The weighted average fee rate, inclusive of performance fees, was 67.7 basis points for the six months ended June 30, 2026, compared to 67.8 basis points for the six months ended June 30, 2025.
Current report — wording carried from elsewhere
The following table sets forth the investment advisory fees and the weighted average fee earned by investment vehicles. The weighted average fee rate for Artisan Funds and Artisan Global Funds reflects the additional services we provide to these pooled vehicles.
Current report — wording carried from elsewhere
Other operating expenses increased $8.8 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to an increase in general and administrative costs, most notably increases in professional fees.
Current report — wording carried from elsewhere
Non-operating income (expense) consisted of the following:
Current report — wording carried from elsewhere
Artisan's share of the $34.6 million total investment gains for the six months ended June 30, 2026, was comprised of $24.0 million of gains on investments to hedge compensation plans and $7.2 million of gains on seed investments. $3.4 million of the total investment gains for the six months ended June 30, 2026, were attributable to noncontrolling interests.
Current report — wording carried from elsewhere
The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate was 21.0% and 20.6% for the six months ended June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
Several factors contribute to APAM's effective income tax rate. For the six months ended June 30, 2026, the incremental impact of state and local taxes and limits on executive compensation was effectively offset by (i) a rate benefit attributable to the fact that approximately 14% of Artisan Partners Holdings' full year projected taxable earnings were attributable to other partners and not subject to corporate-level taxes and (ii) a rate benefit from tax deductible dividends paid on unvested restricted share-based awards. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes.
Current report — wording carried from elsewhere
Weighted average basic and diluted shares of Class A common stock outstanding were higher for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, as a result of Holdings’ unit exchanges and equity award grants. See Note 13, “Earnings Per Share” in the Notes to the unaudited consolidated financial statements for further discussion of earnings per share.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In fiscal 2026 we expect to make TRA payments totaling approximately $40.4 million, $30.3 million of which was paid during April 2026.