Andersen Group (NYSE:ANDG) reported first-quarter 2026 revenue and adjusted EBITDA above its prior guidance, with management pointing to broad-based organic growth across tax service lines, higher revenue per professional and an active acquisition pipeline expected to contribute more meaningfully in the second half of the year.
Global Chairman and CEO Mark Vorsatz said the firm had “a very solid first quarter,” with revenue of just under $241 million, up 15.7% from the prior year. He said the result did not include any inorganic growth from completed acquisitions and was about 4.5% better than the projections previously provided to analysts.
“The financial performance was broad-based,” Vorsatz said, noting that all four major tax service lines grew by double digits. He highlighted revenue per professional as the metric he watches most closely, saying it increased 12.7% in the quarter due to “some moderate improvement in productivity” and “moderate improvement in pricing.”
Revenue Growth Led by Private Client Services
CFO Neal Livingston said first-quarter revenue was $240.7 million, an increase of $32.7 million, or 15.7%, from the same quarter last year. That exceeded the company’s prior first-quarter revenue guidance of $230 million to $235 million by approximately $8.2 million.
Livingston said revenue increased across Andersen’s key service lines: private client services, business tax, alternative investment funds and valuation services. Private client services, the company’s largest service line, grew 18.2% and represented about 51.2% of total revenue, up from 50.1% a year earlier.
At the regional level, all three regions posted revenue increases, with the East region delivering 22.4% growth. Livingston said the quarter’s growth was driven by a “balanced mix of drivers” and did not include any large one-time or project-related items.
Management also said the company’s newer Andersen Consulting and Global Mobility practices posted revenue growth, though Vorsatz said those practices are still expected to lose money this year as the company continues investing in expansion.
Adjusted EBITDA Rises, GAAP Net Income Falls
Adjusted EBITDA for the quarter was $72.3 million, up 26.4% from the year-earlier period, according to Vorsatz. The adjusted EBITDA margin was 30%, compared with 27.5% in the first quarter of 2025. Management said the margin would have been 33% excluding an approximately $7.4 million loss in Global Mobility and Consulting.
On a GAAP basis, net income was $17.7 million, or a 7.4% margin, compared with $50.6 million, or a 24.3% margin, in the same quarter last year. Livingston attributed the decline primarily to $41.2 million of non-cash equity-based compensation expense tied to equity granted in connection with Andersen’s IPO and reorganization. He said those expenses were not present in the prior-year quarter, when the firm was still privately held.
Interest expense increased by $6 million due to related-party notes issued as part of the IPO reorganization, while transaction costs rose by $2.6 million as the company pursued inorganic expansion plans. Earnings per share were $0.04 on a basic basis and $0.03 on a diluted basis.
Adjusted net income was $62.9 million, up about 14% from $55.2 million a year earlier. Adjusted net income margin was 26.1%, compared with 26.5% in the prior-year period.
Guidance Raised for Full-Year Revenue and Inorganic Contribution
For the second quarter of 2026, Andersen expects revenue of $190 million to $205 million, representing approximately 13% growth. Livingston said the company expects a net loss and negative EPS in the quarter because of seasonality and non-cash equity-based compensation expenses.
For the full year, the company expects revenue of $980 million to $1 billion, representing approximately 18% growth. Andersen anticipates positive net income and EPS for the full year, and adjusted EBITDA of $225 million to $250 million, with an adjusted EBITDA margin of 23% to 25%.
Livingston said Andersen raised its full-year inorganic revenue guidance to $55 million from $33 million, reflecting announced combinations in the pipeline. Vorsatz later clarified that this figure is not annualized revenue, but rather the amount expected to hit Andersen’s financials in 2026. He said acquisition-related revenue is expected to be “almost exclusively in the second half of the year,” with less than $7 million included in second-quarter guidance.
M&A Pipeline Focused on Existing Relationships
During the question-and-answer session, analysts pressed management on Andersen’s acquisition strategy. Vorsatz said the company is focused on adding quality platforms where it already has relationships, including groups affiliated with Andersen’s Swiss Verein structure.
He said the company’s biggest challenge is execution rather than opportunity. Andersen is adding another full-time attorney to its transaction group, bringing the group to three full-time attorneys, with additional legal and finance resources available to support deals.
“We do not lack opportunity,” Vorsatz said. “It’s just a question of how fast can we manage the opportunities.”
Vorsatz said the firm currently has about 436 groups across consulting, legal, tax and other practices outside the U.S. and within consulting in the U.S. Not all are expected to join the public company, he said, due to size or market considerations. However, he said the existing pipeline could keep the company occupied for the next several years if it had full capacity to execute.
Management said acquisitions may temporarily pressure margins because of transition and integration costs, but Vorsatz emphasized that first-quarter margin expansion was entirely organic because no acquisition revenue was recorded during the period.
AI and Productivity Efforts Remain Early
Vorsatz said Andersen began implementing its artificial intelligence technology plan shortly before the call, starting internal training in increments of 500 employees. He said two additional AI pilots with the University of San Francisco are underway or planned, one in May and another in June.
Management said AI is expected over time to improve efficiency, with some benefits going to clients and some retained by the firm. Vorsatz declined to provide specific targets or milestones, saying it was too early to quantify the impact.
In response to a question about whether AI could change Andersen’s billing model, Vorsatz said the firm expects to use a mix of time-and-materials billing and more fixed-fee arrangements. He said technology could help Andersen deliver services more efficiently and support value-based fees in some client situations.
Vorsatz said the company expects revenue per professional to remain an important measure of progress. “Pay attention to that each quarter because that’s the number one factor I look at,” he said.
Management also discussed state-level tax proposals and wealth tax discussions, but Vorsatz said those issues have not yet been a material revenue driver. He said clients are evaluating alternatives, and some California clients decided last year to relocate, but he attributed stronger private client services growth more to new and larger clients than to tax-policy changes.
Vorsatz closed the call by thanking investors, analysts, partners and employees, while Livingston said the first-quarter results represented a second consecutive quarter as a public company in which Andersen exceeded prior guidance.
About Andersen Group (NYSE:ANDG)
Our mission is to deliver exceptional client service grounded in integrity, transparency, and excellence. Since our founding in 2002, we have experienced rapid and sustained growth, powered by our people, our values and our relentless commitment to innovative, client-focused solutions. Building on the rich traditions and culture of the former Arthur Andersen, we are driven by a bold vision to lead in a complex global marketplace, creating lasting value for our clients, our people and our investors.
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