Orion Advisor Solutions Inc.

Overview Key strengths Key risks Favorable industry dynamics with an increasing number of registered investment advisors (RIAs). Significant potential for earnings volatility caused by financial market cyclicality. Solid growth and recurring revenue in the wealth technology business line. Intense competition from the highly fragmented technology outsourcing market for wealth managers. Relatively high EBITDA margin. High leverage and minimal free cash flow expected over the next few years due to rising interest expense. Orion generates about 60% of its revenue from its wealth management business line, which earns fees based on its assets under administration (AUA) or assets under management (AUM). The downturn in capital markets in 2022 negatively affected Orion?s EBITDA because of lower AUM. Reported EBITDA declined about 23%

...Orion Advisor Solutions Inc. is underperforming our EBITDA and cash flow forecasts because of weaker equity markets and higher interest expense, though liquidity remains sufficient. Orion generates about 60% of its revenue from its wealth management business line, which earns fees based on its assets under administration (AUA) or assets under management (AUM). The downturn in capital markets in 2022 negatively affected Orion's EBITDA because of lower AUM. Reported EBITDA declined about 23% through the first three quarters ended Sept. 30, 2022, due to lower revenue from the market downturn combined with higher expenses related to new product introductions, its cloud migration, and other restructuring and transaction expenses. Orion's cash flow was down...

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