Andersen Group (NYSE:ANDG) reported second-quarter revenue that exceeded its prior outlook, driven by broad-based organic growth across service lines and U.S. regions, while management reaffirmed its full-year revenue and adjusted EBITDA guidance.
Revenue for the second quarter totaled $217.7 million, up 23.7% from the prior-year period and above the company’s prior guidance range of $190 million to $205 million. Acquisitions completed during the quarter contributed $5.5 million of revenue, leaving organic revenue growth of 20.6%, according to Chief Financial Officer Neal Livingston.
Service-Line Growth and Margin Expansion
Business tax services led the quarter’s growth, with revenue rising 36.9% year over year and accounting for 39.2% of total revenue. Andersen’s largest service line, private client services, grew approximately 17%. Livingston said consulting and global mobility revenue also increased year over year as the company continued to invest in those areas.
Management attributed growth to a combination of pricing, productivity and higher client activity. Chargeable hours increased 5% in the first half, while revenue per professional increased 16.4%, Vorsatz said. The company’s rate per hour rose 10.1% year over year, and it implemented a rate adjustment in July. Andersen also introduced a 3% tax surcharge for certain client contracts signed beginning in the second quarter.
Andersen added more than 1,300 clients on a gross basis during the first half, a 10.6% increase. However, Vorsatz said net client growth was more modest because certain assignments were completed and the company ended relationships with clients it did not view as sufficiently productive.
The company reported a GAAP net loss of $10.1 million, or $0.08 per basic share and $0.09 per diluted share, in the second quarter. That compared with a $96 million net loss a year earlier. For the first half, Andersen recorded GAAP net income of $7.6 million, compared with a $45.4 million loss in the first half of 2025.
On an adjusted basis, second-quarter net income was $39 million, with a 17.9% margin, compared with $28 million and a 16% margin a year earlier. Adjusted EBITDA rose about 55% to $45.9 million, and the adjusted EBITDA margin expanded to 21.1% from 16.9%.
Livingston said the margin improvement reflected favorable operating leverage, as revenue growth outpaced operating-cost growth. Stock-based compensation expense was $48.2 million in the quarter, including $42.3 million tied to the vesting of Class X aggregator units. He described that expense as non-cash and non-dilutive.
Acquisition Timing Slows Inorganic Revenue Contribution
Management said it has signed 16 transactions, eight of which have closed, representing more than $130 million in annualized revenue. However, Vorsatz said transaction closings are taking longer than initially expected because of regulatory requirements and the time needed to structure transactions in new jurisdictions.
The company had initially planned for roughly $55 million of inorganic revenue during 2026 but now expects approximately $25 million to $30 million. Vorsatz emphasized that the lower contribution reflects closing timing rather than a lack of acquisition opportunities. He said some revenue from signed transactions will shift into 2027 and estimated that at least $100 million of annualized revenue from existing signed deals would not be included in 2026 results.
Andersen has expanded its transaction resources, adding in-house legal and finance personnel. Vorsatz said the company has sufficient active opportunities to potentially complete two to three transactions per month through the end of next year, though it intends to remain selective and focused on cultural fit.
The company expects to focus transaction activity on the U.S., Canada, Mexico, the U.K., continental Europe, Asia, Latin America and Africa. Vorsatz said Andersen evaluates prospective partners based on existing relationships, shared values and their ability to add specialized capabilities, rather than treating the transactions as conventional acquisitions.
Outlook, Balance Sheet and AI Strategy
Andersen reaffirmed full-year 2026 revenue guidance of $980 million to $1 billion, representing approximately 18% annualized growth. It also maintained projected adjusted EBITDA of $225 million to $250 million and an adjusted EBITDA margin of 22% to 23%.
Vorsatz said organic performance remains strong enough to offset the expected reduction in 2026 inorganic revenue. He also said July was strong and noted that the third quarter is typically the company’s largest because August and September are its busiest revenue months.
As of June 30, Andersen held $175.6 million in cash and cash equivalents, plus $2.1 million of U.S. Treasury investments. The company had no third-party debt, and net working capital was $220 million.
During the question-and-answer session, Vorsatz said Andersen is training employees to use artificial intelligence in technical and nontechnical work. More than 500 employees had been trained since the company launched its internal program in May, he said. Management sees AI as a way to identify client opportunities, help source solutions and improve project execution, potentially supporting greater use of fixed-fee pricing.
Vorsatz said the company intends to maintain human oversight of AI-supported work, citing instances in which other firms had faced issues from unsupervised AI-generated work product. He said Andersen views AI as a “tailwind” and expects its workforce structure to evolve toward a flatter model with fewer professionals per partner over time.
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.
