0001193125-26-128949
SEC filingRevenue grew 14.6% to $838.7M, but GAAP net loss of $130.2M due to $193M equity restructuring costs; adjusted EBITDA margin 27.0%.
Andersen is a leading independent provider of tax, valuation, and financial advisory services in the United States. Founded in 2002 by former Arthur Andersen leaders, the firm operates without an audit practice, allowing it to offer a comprehensive suite of non-audit services free from auditor independence rules. The company is the founding member of Andersen Global, a Swiss association of over 300 independent member and collaborating firms in more than 180 countries, which facilitates international client service. Andersen employs over 2,300 personnel in 26 US locations and serves approximately 12,350 client groups.
The Business section does not define formal reporting segments. However, it describes four primary end-to-end service offerings: Private Client Services, Business Tax Services, Alternative Investment Funds, and Valuation Services. These are supported by a U.S. National Tax Office and investments in AI technology. No revenue breakdown by service line is provided.
Key intellectual property includes the "Andersen" wordmark and "Door" logo, both registered in the US and internationally. The firm also leverages the "For the Record" newsletter and the Andersen Institute for Finance and Economics for thought leadership. Andersen has implemented AI platforms for due diligence, process management, and contract negotiations, and partners with third-party AI firms to enhance service delivery.
Sales are led by revenue-generating Managing Directors, who leverage deep expertise and the Andersen brand. Additional channels include inbound inquiries, referrals from existing clients and service providers (M&A advisors, wealth managers, law firms), and international referrals from Andersen Global members. Marketing focuses on sponsorships (e.g., Tax Executives Institute) and thought leadership. Customer concentration is low: the top ten client groups represent about 5% of revenue, and over 70% of revenue comes from clients with relationships lasting over three years.
Andersen competes against large global advisory firms (Deloitte, EY, KPMG, PwC), mid-tier firms (Grant Thornton, RSM), boutique tax/valuation specialists, local international providers, and in-house corporate tax departments. Competitors may have greater financial resources, geographic reach, or brand recognition. Andersen differentiates through its firm culture, global brand, integrated services, and independence from audit-related restrictions.
Andersen's growth strategy comprises five pillars: expanding existing client relationships by adding services and recruiting specialists; attracting new high-quality clients through brand strength and integrated capabilities; adding new service lines such as consulting, investment banking, global mobility, and international legal services; pursuing selective M&A with culturally aligned targets; and expanding internationally through Andersen Global and the Andersen Consulting brand.
As of December 31, 2025, Andersen has over 2,300 employees in 26 US locations. The firm emphasizes a low Managing Director-to-professional ratio and high proportion of client-facing staff. 87% of client-facing managers and above hold professional licenses (CPA, CFA, EA, LLM, JD), and 51% hold advanced degrees. Turnover is low due to investments in training (including partnerships with the University of San Francisco for graduate degrees) and a culture of stewardship. No employees are unionized.
For the year ended December 31, 2025, revenue increased 14.6% to $838.7 million, driven by broad-based growth across all service lines, customer additions, and higher volumes. GAAP net loss was $130.2 million compared to net income of $134.8 million in 2024, primarily due to $193.2 million in non-recurring equity restructuring costs from the Reorganization Transactions and $136.5 million in pre-IPO equity-based compensation. Operating loss was $135.3 million versus operating income of $129.5 million in 2024. Adjusted EBITDA rose to $226.3 million (27.0% margin) from $142.7 million (19.5% margin), excluding one-time charges. Gross margin declined to 29.0% from 36.9% due to increased non-cash equity compensation in cost of services.
All service lines contributed to revenue growth. Private Client Services generated 51.5% of revenue ($431.9 million, +18.6% YoY), benefiting from strong demand for tax and financial advisory. Business Tax Services accounted for 34.8% ($291.9 million, +11.7%), Alternative Investment Funds 8.7% ($73.0 million, +5.0%), and Valuation Services 5.0% ($41.9 million, +14.6%). Geographic mix shifted slightly: West region declined to 42.1% from 44.3%, East increased to 38.9% from 37.2%, and Central to 19.0% from 18.5%. Client groups grew 5.6% to 12,350, and high-value clients (>$250k revenue) increased to 687 from 629.
Management highlighted strategic priorities including expanding service offerings (e.g., Andersen Consulting launched February 2025), pursuing inorganic growth through acquisitions in Africa, Latin America, and Canada (expected to close Q2 2026), and leveraging relationships with Andersen Global's 400+ member firms. No specific numerical guidance was provided. The company expects to incur higher interest expense from promissory notes and continued equity-based compensation from post-IPO grants. Liquidity remains strong with $250.3 million cash and $20 million revolving credit facility.
As of December 31, 2025, the Company held $250.3M in cash and cash equivalents, a significant increase from $88.0M in 2024, primarily driven by IPO proceeds of $188.2M and strong operating cash flow of $184.6M. Marketable securities (held-to-maturity U.S. Treasuries) total $8.2M. Total assets were $565.1M. The Company has negative shareholders' equity of ($134.7M) due to accumulated deficit and large debt issuance. Long-term debt consists of $350.1M from Capital Account Notes ($187.8M, 2-7 year maturities, 6.31%-7.50% interest) and Holdover Note ($162.3M, 8-year maturity, 7.63% interest). The Company also has a $20.0M revolving credit facility with $0 drawn.
Purchase commitments total $20.9M, including $17.1M for software licenses and cloud hosting services through 2031 and $3.8M for a training center agreement through 2030. Operating lease liabilities total $110.4M (current $4.0M, noncurrent $106.4M) with weighted-average remaining term of 6.90 years and discount rate of 6.3%. The Company also has a deferred consideration liability of $0.7M for a business combination.
Capital expenditures were $11.1M (1.3% of revenue), primarily for leasehold improvements and computer equipment. No share repurchase program was disclosed. Dividends/distributions: $264.9M declared to pre-IPO owners, with $212.2M paid and $52.7M payable. Debt issuance of $350.1M was used to fund the reorganization. The Company paid $0.8M in deferred consideration for a prior business combination.
The Company operates as a single reporting segment. Revenue is disaggregated by service line: Private Client Services $431.8M (51.5%), Business Tax Services $291.8M (34.8%), Alternative Investment Funds $72.9M (8.7%), Valuation Services $42.2M (5.0%). Geographically, revenue is split among East $325.9M (38.9%), Central $159.5M (19.0%), and West $353.3M (42.1%), all within the United States. The segment reported an operating loss of $135.3M due to $193.2M in equity restructuring costs from the IPO-related reorganization, which are non-recurring.
The company highlights its inability to maintain historical revenue growth or achieve profitability, as evidenced by a net loss of $130.2 million in 2025 driven by equity restructuring costs. Growth depends on generating client demand amid technological changes, and failure to adapt could reduce revenue. Dependence on CEO Mark Vorsatz and senior Managing Directors is critical; their departure could disrupt operations and client relationships. The loss of key personnel, inability to recruit qualified talent, and failure to maintain firm culture pose additional risks. The company also faces risks from rapid technological changes, especially AI, which may reduce demand for services or require costly investments to remain competitive.
Rapid technological changes, including AI, could significantly impact competitive position. AI tools may generate biased or incorrect results, create intellectual property risks, and increase security vulnerabilities. The company expects to invest in generative AI but may not successfully recoup costs. Cybersecurity threats are evolving; past incidents were not material, but future attacks could lead to data breaches, reputational harm, and significant liabilities. Reliance on third-party cloud and software providers introduces additional operational and security risks.
Material weaknesses in internal control over financial reporting were identified related to IT general controls and detective controls over period-end reporting. Remediation is ongoing, but there is no assurance of effectiveness. Failure to maintain effective controls could impair accurate financial reporting and lead to regulatory scrutiny. Additionally, the company's goodwill and intangible assets carry significant value; any impairment could result in non-cash charges. The organizational structure creates risks from the Tax Receivable Agreement (estimated payments of $694.9 million over 15 years), which may limit liquidity and affect change of control transactions.
Changes in tax laws, privacy regulations (CCPA, GDPR), anti-corruption laws, and trade policies could increase compliance costs and reduce demand. The SEC-regulated investment advisor subsidiary faces additional regulatory obligations. International expansion into Africa, Latin America, and Canada introduces risks including regulatory compliance, currency fluctuations, political instability, and integration challenges. Geopolitical events (e.g., conflict in Iran, tariffs) could disrupt operations or reduce client spending.
The dual-class stock structure concentrates voting control with Aggregator (98.7% combined voting power), limiting minority shareholder influence. The holding company depends on distributions from AT Umbrella LLC to meet tax and expense obligations, including TRA payments. Restrictions on distributions could impair the company's ability to pay taxes or dividends. Additionally, the Tax Receivable Agreement accelerates payments upon change of control, potentially deterring acquisitions.
The provided document excerpt does not include the Consolidated Statements of Cash Flows. Only the Consolidated Balance Sheets and Consolidated Statements of Operations are presented. Without the cash flow statement, it is impossible to analyze operating cash flow trends, capital expenditures, free cash flow, or capital returns. The income statement shows a significant net loss in 2025 driven by equity restructuring costs, but the cash impact of these items cannot be assessed. The balance sheet indicates a large increase in cash and cash equivalents from $87,993k in 2024 to $250,280k in 2025, but the sources and uses of cash (operating, investing, financing activities) remain unknown. Further information is required to perform a meaningful cash flow analysis.