v3.25.1
Note 21 - Segment and Geographic Information
 3 Months Ended
Mar. 31, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

21. SEGMENT AND GEOGRAPHIC INFORMATION 

 

The Company operates within three business segments: Capital Markets, Asset Management, and Principal Investing. See note 1.  The Company's chief executive officer is the chief operating decision-maker (“CODM”) and is responsible for allocating resources and assessing the performance of the business segments.  The CODM relies on enterprise net income / (loss) to allocate resources because it provides insight into profitability for the entire enterprise including the convertible non-controlling interest but excluding non-convertible non-controlling interest.  The CODM uses enterprise net income / (loss) in the annual budgeting and forecasting process.  The CODM considers budget to actual variances on a monthly basis when making allocation decisions.  

 

The Company’s business segment information was prepared in a manner consistent with the internal reporting provided to the CODM and represents the information that is relied upon by management in its decision-making processes. Revenues and expenses directly associated with each business segment are included in determining net income / (loss) by segment.

 

The Company presents principal transactions gains and losses that relate to financial instruments that the Company received through CCM's activities as part of the Capital Markets segment with all other principal transactions gains and losses included in the Principal Investing segment. Prior to December 31, 2024, all principal transactions gains and losses were included in the Principal Investing segment.  The Company restated all prior periods presented to be consistent.  The CODM evaluates the performance of the Capital Markets segment including the gains and losses on the financial instruments received through CCM's activities.    

 

Interest expense in the table below includes non-operating interest expense.  Interest income and expense relating to operations is included in net trading revenue. See note 5. Indirect expenses (such as general and administrative expenses including executive and indirect overhead costs) not directly associated with specific business segments are not allocated to the business segments’ statements of operations.  See (1) below.

 

Beginning in 2024 annual reporting, the Company adopted ASU 2023-07 retrospectively. The following table sets forth our segment information of revenue, expenses, and income (loss) from operations. 

 

 

SEGMENT INFORMATION

Statement of Operations Information

Three Months Ended March 31, 2025

 

  

Capital

  

Asset

  

Principal

  

Segment

  

Unallocated

     
  

Markets

  

Management

  

Investing

  

Total

  

(1)

  

Total

 

Net trading

 $9,211  $-  $-  $9,211  $-  $9,211 

Asset management

  -   2,020   -   2,020   -   2,020 

New issue and advisory

  33,239   -   -   33,239   -   33,239 

Principal transactions

  (13,075)  -   (2,330)  (15,405)  -   (15,405)

Other income

  -   438   (763)  (325)  -   (325)

Total revenues

  29,375   2,458   (3,093)  28,740   -   28,740 

Compensation

  18,009   1,372   158   19,539   969   20,508 

Stock based compensation

  134   27   -   161   997   1,158 

Business development

  376   58   1   435   394   829 

Occupancy and equipment

  669   51   -   720   280   1,000 

Subscriptions, clearing, and execution

  2,009   86   26   2,121   53   2,174 

Professional fee and other operating

  1,244   372   183   1,799   993   2,792 

Depreciation and amortization

  -   2   -   2   170   172 

Total operating expenses

  22,441   1,968   368   24,777   3,856   28,633 

Operating income (loss)

  6,934   490   (3,461)  3,963   (3,856)  107 

Interest income (expense)

  (18)  -   -   (18)  (1,430)  (1,448)

Income (loss) from equity method affiliates

  -   -   2,418   2,418   -   2,418 

Income (loss) before income taxes

  6,916   490   (1,043)  6,363   (5,286)  1,077 

Income tax expense (benefit)

  -   -   -   -   139   139 

Net income (loss)

  6,916   490   (1,043)  6,363   (5,425)  938 

Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC

  -   -   (173)  (173)  -   (173)

Enterprise net income (loss)

  6,916   490   (870)  6,536   (5,425)  1,111 

Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.

  -   -   -   -   782   782 

Net income (loss) attributable to Cohen & Company Inc.

 $6,916  $490  $(870) $6,536  $(6,207) $329 
                         

Other statement of operations data

                        

Cash compensation as a percentage of revenue

  61.31%  55.82%  5.11%  67.99%  N/A   71.36%

Operating income / (loss) as a percentage of revenue

  23.61%  19.93%  111.90%  13.79%  N/A   0.37%

Net income / (loss) as a percentage of revenue

  23.54%  19.93%  33.72%  22.14%  N/A   3.26%

Net income / (loss) attributable to Cohen & Company Inc. as a percentage of revenue

  23.54%  19.93%  28.13%  22.74%  N/A   1.14%
                         

 

SEGMENT INFORMATION

Statement of Operations Information

Three Months Ended March 31, 2024

 

  

Capital

  

Asset

  

Principal

  

Segment

  

Unallocated

     
  

Markets

  

Management

  

Investing

  

Total

  

(1)

  

Total

 

Net trading

 $9,848  $-  $-  $9,848  $-  $9,848 

Asset management

  -   2,717   -   2,717   -   2,717 

New issue and advisory

  24,388   -   -   24,388   -   24,388 

Principal transactions

  (11,522)  -   (7,962)  (19,484)  -   (19,484)

Other income

  -   548   547   1,095   -   1,095 

Total revenues

  22,714   3,265   (7,415)  18,564   -   18,564 

Compensation

  12,206   1,644   494   14,344   (653)  13,691 

Stock based compensation

  140   36   -   176   972   1,148 

Business development

  301   66   13   380   76   456 

Occupancy and equipment

  682   53   -   735   250   985 

Subscriptions, clearing, and execution

  1,863   86   75   2,024   62   2,086 

Professional fee and other operating

  1,303   463   182   1,948   1,501   3,449 

Depreciation and amortization

  -   1   -   1   123   124 

Total operating expenses

  16,495   2,349   764   19,608   2,331   21,939 

Operating income / (loss)

  6,219   916   (8,179)  (1,044)  (2,331)  (3,375)

Interest (expense) income

  (20)  -   -   (20)  (1,646)  (1,666)

Income (loss) from equity method affiliates

  -   -   29,045   29,045   -   29,045 

Income (loss) before income taxes

  6,199   916   20,866   27,981   (3,977)  24,004 

Income tax expense (benefit)

  -   -   -   -   498   498 

Net income (loss)

  6,199   916   20,866   27,981   (4,475)  23,506 

Less: Net income (loss) attributable to the non-convertible non-controlling interest of the Operating LLC

  -   -   16,270   16,270   -   16,270 

Enterprise net income (loss)

  6,199   916   4,596   11,711   (4,475)  7,236 

Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen & Company Inc.

  -   -   -   -   5,213   5,213 

Net income (loss) attributable to Cohen & Company Inc.

 $6,199  $916  $4,596  $11,711  $(9,688) $2,023 
                         

Other statement of operations data

                        

Cash compensation as a percentage of revenue

  53.74%  50.35%  6.66%  77.27%  N/A   73.75%

Operating income / (loss) as a percentage of revenue

  27.38%  28.06%  110.30%  5.62%  N/A   18.18%

Net income / (loss) as a percentage of revenue

  27.29%  28.06%  281.40%  150.73%  N/A   126.62%

Net income / (loss) attributable to Cohen & Company Inc. as a percentage of revenue

  27.29%  28.06%  61.98%  63.08%  N/A   10.90%
                         

 

 

(1)

Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on debt; and (3) income taxes. Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the CODM.

 

 

BALANCE SHEET DATA

As of March 31, 2025

(Dollars in Thousands)

 

  

Capital

  

Asset

  

Principal

  

Segment

  

Unallocated

     
  

Markets

  

Management

  

Investing

  

Total

  (1)  

Total

 

Total Assets

 $904,073  $5,671  $36,858  $946,602  $31,448  $978,050 
                         

Included within total assets:

                        

Investments in equity method affiliates

 $-  $-  $24,427  $24,427  $-  $24,427 

Goodwill (2)

 $54  $55  $-  $109  $-  $109 

Intangible assets (2)

 $166  $-  $-  $166  $-  $166 

 

BALANCE SHEET DATA

December 31, 2024

(Dollars in Thousands)

 

  

Capital

  

Asset

  

Principal

  

Segment

  

Unallocated

     
  

Markets

  

Management

  

Investing

  

Total

  (1)  

Total

 

Total Assets

 $888,780  $7,371  $44,175  $940,326  $30,823  $971,149 
                         

Included within total assets:

                        

Investments in equity method affiliates

 $-  $-  $23,430  $23,430  $-  $23,430 

Goodwill (2)

 $54  $55  $-  $109  $-  $109 

Intangible assets (2)

 $166  $-  $-  $166  $-  $166 

 

(1)

Unallocated assets primarily include: (i) amounts due from related parties; (ii) furniture and equipment, net; and (iii) other assets that are not considered necessary for an understanding of business segment assets. Such amounts are excluded from the business segment reporting to the CODM.

(2)

Goodwill and intangible assets are allocated to the Capital Markets and Asset Management business segments as indicated in the tables above.

 

Geographic Information

 

The Company conducts its business activities through offices in the following locations: (1) United States and (2) Europe.  Total revenues by geographic area are summarized as follows.

 

GEOGRAPHIC DATA

(Dollars in Thousands)

 

  

Three Months Ended March 31,

 
  

2025

  

2024

 

Total Revenues:

        

United States

 $27,489  $16,743 

Europe

  1,251   1,821 

Total

 $28,740  $18,564 

 

Long-lived assets attributable to an individual country, other than the United States, are not material.