12692740P90DP90DP90DP90D597928890001651052--12-312021Q2false5115871220661595P6M0001651052focs:FocusFinancialPartnersLLCMemberus-gaap:CommonClassAMemberfocs:OfferingMember2021-06-012021-06-300001651052focs:FocusFinancialPartnersLLCMemberus-gaap:CommonClassAMemberfocs:OfferingMember2021-03-012021-03-310001651052us-gaap:CommonClassAMemberus-gaap:OverAllotmentOptionMember2021-03-012021-03-310001651052us-gaap:CommonClassAMemberfocs:OfferingMember2021-03-012021-03-310001651052us-gaap:CommonClassAMember2021-03-012021-03-310001651052us-gaap:CommonClassAMemberfocs:OfferingMember2021-01-012021-06-300001651052focs:FocusFinancialPartnersLLCMemberus-gaap:CommonClassBMember2021-04-012021-06-300001651052us-gaap:RetainedEarningsMember2021-06-300001651052us-gaap:ParentMember2021-06-300001651052us-gaap:NoncontrollingInterestMember2021-06-300001651052us-gaap:AdditionalPaidInCapitalMember2021-06-300001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001651052us-gaap:RetainedEarningsMember2021-03-310001651052us-gaap:ParentMember2021-03-310001651052us-gaap:NoncontrollingInterestMember2021-03-310001651052us-gaap:AdditionalPaidInCapitalMember2021-03-310001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100016510522021-03-310001651052us-gaap:RetainedEarningsMember2020-12-310001651052us-gaap:ParentMember2020-12-310001651052us-gaap:NoncontrollingInterestMember2020-12-310001651052us-gaap:AdditionalPaidInCapitalMember2020-12-310001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001651052us-gaap:RetainedEarningsMember2020-06-300001651052us-gaap:ParentMember2020-06-300001651052us-gaap:NoncontrollingInterestMember2020-06-300001651052us-gaap:AdditionalPaidInCapitalMember2020-06-300001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001651052us-gaap:RetainedEarningsMember2020-03-310001651052us-gaap:ParentMember2020-03-310001651052us-gaap:NoncontrollingInterestMember2020-03-310001651052us-gaap:AdditionalPaidInCapitalMember2020-03-310001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001651052us-gaap:RetainedEarningsMember2019-12-310001651052us-gaap:ParentMember2019-12-310001651052us-gaap:NoncontrollingInterestMember2019-12-310001651052us-gaap:AdditionalPaidInCapitalMember2019-12-310001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-06-300001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-06-300001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-03-310001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-03-310001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-12-310001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-12-310001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-06-300001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-06-300001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-03-310001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-03-310001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2019-12-310001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2019-12-310001651052us-gaap:CommonClassAMember2021-03-310001651052us-gaap:EmployeeStockOptionMemberus-gaap:CommonStockMember2021-06-300001651052us-gaap:EmployeeStockOptionMemberus-gaap:CommonStockMember2020-12-310001651052us-gaap:RestrictedStockUnitsRSUMember2021-06-300001651052focs:FocusLLCRestrictedCommonUnitsMember2021-06-300001651052us-gaap:RestrictedStockUnitsRSUMember2020-12-310001651052focs:FocusLLCRestrictedCommonUnitsMember2020-12-310001651052us-gaap:EmployeeStockOptionMemberus-gaap:CommonStockMember2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate9.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate7.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate6.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate5.50Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate44.71Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate43.50Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate36.64Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate33.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate30.48Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate28.50Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate27.90Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate27.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate26.26Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate23.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate22.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate21.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate19.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate17.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate16.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate14.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate13.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate12.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate11.00Member2021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate1.42Member2021-06-300001651052srt:MinimumMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMemberfocs:ShareBasedPaymentArrangementVestingConditionsIfWeightedAveragePricePerShareWasBetweenThan42And63Member2021-02-012021-02-280001651052srt:MaximumMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMemberfocs:ShareBasedPaymentArrangementVestingConditionsIfWeightedAveragePricePerShareWasBetweenThan42And63Member2021-02-012021-02-280001651052us-gaap:ShareBasedPaymentArrangementNonemployeeMemberfocs:ShareBasedPaymentArrangementVestingConditionsIfWeightedAveragePricePerShareWasLessThan42Member2021-02-012021-02-280001651052us-gaap:ShareBasedPaymentArrangementNonemployeeMemberfocs:ShareBasedPaymentArrangementVestingConditionsIfWeightedAveragePricePerShareWasGreaterThan63Member2021-02-012021-02-280001651052focs:TimeBasedIncentiveUnitsMember2021-01-012021-06-300001651052us-gaap:EmployeeStockOptionMember2021-01-012021-06-300001651052us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001651052focs:FocusLLCRestrictedCommonUnitsMember2021-01-012021-06-300001651052us-gaap:NonUsMember2021-04-012021-06-300001651052focs:WealthManagementServicesMember2021-04-012021-06-300001651052focs:OtherServicesMember2021-04-012021-06-300001651052country:US2021-04-012021-06-300001651052us-gaap:NonUsMember2021-01-012021-06-300001651052focs:WealthManagementServicesMember2021-01-012021-06-300001651052focs:OtherServicesMember2021-01-012021-06-300001651052country:US2021-01-012021-06-300001651052us-gaap:NonUsMember2020-04-012020-06-300001651052focs:WealthManagementServicesMember2020-04-012020-06-300001651052focs:OtherServicesMember2020-04-012020-06-300001651052country:US2020-04-012020-06-300001651052us-gaap:NonUsMember2020-01-012020-06-300001651052focs:WealthManagementServicesMember2020-01-012020-06-300001651052focs:OtherServicesMember2020-01-012020-06-300001651052country:US2020-01-012020-06-300001651052us-gaap:RetainedEarningsMember2021-04-012021-06-300001651052us-gaap:RetainedEarningsMember2021-01-012021-06-300001651052us-gaap:RetainedEarningsMember2020-04-012020-06-300001651052us-gaap:RetainedEarningsMember2020-01-012020-06-300001651052focs:FocusFinancialPartnersLLCMemberus-gaap:CommonClassAMember2021-06-012021-06-300001651052focs:FocusFinancialPartnersLLCMemberus-gaap:CommonClassAMember2021-03-012021-03-310001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-06-300001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001651052us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-06-300001651052us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberus-gaap:SubsequentEventMember2021-07-012021-08-0500016510522021-01-310001651052focs:FirstLienRevolvingCreditFacilityMember2021-01-012021-06-300001651052focs:FirstLienRevolverStepDownTwoMember2021-01-012021-06-300001651052focs:FirstLienRevolverStepDownOneMember2021-01-012021-06-300001651052focs:FirstLienTermLoanTrancheBMember2021-07-310001651052us-gaap:StandbyLettersOfCreditMember2020-01-012020-12-310001651052us-gaap:StandbyLettersOfCreditMember2021-06-300001651052us-gaap:StandbyLettersOfCreditMember2020-12-310001651052us-gaap:InterestRateFloorMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-03-310001651052focs:FirstLienTermLoanTrancheMember2020-01-012020-01-310001651052us-gaap:OtherIntangibleAssetsMember2021-06-300001651052us-gaap:CustomerRelationshipsMember2021-06-300001651052us-gaap:ContractBasedIntangibleAssetsMember2021-06-300001651052us-gaap:OtherIntangibleAssetsMember2020-12-310001651052us-gaap:CustomerRelationshipsMember2020-12-310001651052us-gaap:ContractBasedIntangibleAssetsMember2020-12-310001651052us-gaap:ShareBasedPaymentArrangementNonemployeeMember2021-02-280001651052us-gaap:InterestRateSwapMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-03-310001651052us-gaap:InterestRateSwapMember2020-04-012020-04-300001651052us-gaap:InterestRateSwapMember2020-03-012020-03-310001651052us-gaap:InterestRateSwapMember2021-06-300001651052us-gaap:InterestRateSwapMember2020-12-310001651052focs:FloatingToFixedInterestRateSwapAgreementTwoMember2020-04-300001651052focs:FloatingToFixedInterestRateSwapAgreementOneMember2020-04-300001651052focs:FirstLienTermLoanTrancheMember2021-06-300001651052focs:FirstLienTermLoanTrancheMember2020-12-310001651052focs:FirstLienRevolvingCreditFacilityMember2020-12-310001651052focs:FirstLienTermLoanTrancheMember2020-01-310001651052focs:FirstLienTermLoanTrancheMember2020-01-012020-12-310001651052focs:FirstLienTermLoanMember2020-12-310001651052focs:FirstLienTermLoanMember2021-06-300001651052us-gaap:InterestRateSwapMember2020-03-310001651052focs:FirstLienTermLoanTrancheBMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-07-012021-07-310001651052focs:FirstLienTermLoanTrancheBMemberfocs:LiborFloorMember2021-07-012021-07-310001651052focs:FirstLienRevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-06-300001651052focs:FirstLienRevolvingCreditFacilityMemberus-gaap:BaseRateMember2021-01-012021-06-300001651052focs:FirstLienRevolverStepDownTwoMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-06-300001651052focs:FirstLienRevolverStepDownTwoMemberus-gaap:BaseRateMember2021-01-012021-06-300001651052focs:FirstLienRevolverStepDownThreeMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-06-300001651052focs:FirstLienRevolverStepDownThreeMemberus-gaap:BaseRateMember2021-01-012021-06-300001651052focs:FirstLienRevolverStepDownOneMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-06-300001651052focs:FirstLienRevolverStepDownOneMemberus-gaap:BaseRateMember2021-01-012021-06-300001651052focs:FirstLienTermLoanTrancheMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-01-310001651052focs:FirstLienTermLoanTrancheMemberus-gaap:BaseRateMember2020-01-012020-01-310001651052us-gaap:CommonClassBMember2021-06-300001651052us-gaap:CommonClassAMember2021-06-300001651052us-gaap:CommonClassBMember2020-12-310001651052us-gaap:CommonClassAMember2020-12-3100016510522020-06-300001651052us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2021-06-300001651052us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberus-gaap:CustomerRelationshipsMember2021-06-300001651052us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberus-gaap:ContractBasedIntangibleAssetsMember2021-06-300001651052srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2021-06-300001651052srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputInceptionDiscountRateMember2021-06-300001651052srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2021-06-300001651052srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputInceptionDiscountRateMember2021-06-300001651052srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2020-12-310001651052srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputInceptionDiscountRateMember2020-12-310001651052srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputLongTermRevenueGrowthRateMember2020-12-310001651052srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputInceptionDiscountRateMember2020-12-310001651052us-gaap:FairValueInputsLevel3Member2021-06-300001651052us-gaap:FairValueInputsLevel3Member2020-12-310001651052us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMember2021-06-300001651052us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMember2020-12-310001651052srt:MaximumMemberfocs:FirstLienTermLoanTrancheBMember2021-07-012021-07-310001651052us-gaap:EmployeeStockOptionMemberus-gaap:CommonClassAMember2021-04-012021-06-300001651052focs:IncentiveUnitsMember2021-04-012021-06-300001651052us-gaap:EmployeeStockOptionMemberus-gaap:CommonClassAMember2021-01-012021-06-300001651052us-gaap:ShareBasedPaymentArrangementNonemployeeMember2021-01-012021-06-300001651052us-gaap:EmployeeStockOptionMemberus-gaap:CommonClassAMember2020-04-012020-06-300001651052focs:IncentiveUnitsMember2020-04-012020-06-300001651052us-gaap:EmployeeStockOptionMemberus-gaap:CommonClassAMember2020-01-012020-06-300001651052focs:IncentiveUnitsMember2020-01-012020-06-300001651052us-gaap:CustomerRelationshipsMember2021-01-012021-06-300001651052us-gaap:ContractBasedIntangibleAssetsMember2021-01-012021-06-300001651052focs:FocusFinancialPartnersLLCMemberus-gaap:CommonClassBMemberfocs:OfferingMember2021-06-012021-06-300001651052us-gaap:CommonClassBMemberfocs:OfferingMember2021-06-012021-06-300001651052focs:FocusFinancialPartnersLLCMemberus-gaap:CommonClassBMemberfocs:OfferingMember2021-03-012021-03-310001651052us-gaap:CommonClassBMemberfocs:OfferingMember2021-03-012021-03-310001651052us-gaap:CommonClassBMember2021-03-012021-03-310001651052us-gaap:CommonClassBMember2021-01-012021-06-300001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-04-012020-06-300001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-01-012020-06-300001651052focs:FocusFinancialPartnersLLCMember2021-06-012021-06-300001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-04-012021-06-300001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-04-012021-06-300001651052us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-01-012021-06-300001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-01-012021-06-300001651052focs:MarketBasedStockOptionsMember2021-04-012021-06-300001651052focs:MarketBasedStockOptionsMember2021-01-012021-06-300001651052focs:MarketBasedStockOptionsMember2020-04-012020-06-300001651052focs:MarketBasedStockOptionsMember2020-01-012020-06-300001651052srt:MinimumMemberfocs:MarketBasedStockOptionsMember2021-04-012021-06-300001651052srt:MinimumMemberfocs:MarketBasedStockOptionsMember2021-01-012021-06-300001651052srt:MinimumMemberfocs:MarketBasedStockOptionsMember2020-04-012020-06-300001651052srt:MinimumMemberfocs:MarketBasedStockOptionsMember2020-01-012020-06-300001651052us-gaap:ShareBasedPaymentArrangementNonemployeeMember2021-02-012021-02-280001651052focs:IncentiveUnitsMemberfocs:HurdleRate9.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate7.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate6.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate5.50Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate44.71Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate43.50Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate36.64Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate33.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate30.48Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate28.50Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate27.90Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate27.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate26.26Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate23.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate22.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate21.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate19.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate17.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate16.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate14.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate13.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate12.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate11.00Member2021-01-012021-06-300001651052focs:IncentiveUnitsMemberfocs:HurdleRate1.42Member2021-01-012021-06-300001651052focs:IncentiveUnitsMember2020-12-310001651052focs:IncentiveUnitsMember2021-06-300001651052us-gaap:LineOfCreditMember2020-01-012020-12-310001651052focs:IncentiveUnitsMember2021-01-012021-06-300001651052focs:CertainHoldersOfClassCommonStockAndClassBCommonStockMember2021-01-012021-06-300001651052focs:ZeroToThirtyDaysFromClosingDateMemberfocs:FirstLienTermLoanTrancheBMember2021-07-012021-07-310001651052focs:ThirtyOneToSixtyDaysFromClosingDateMemberfocs:FirstLienTermLoanTrancheBMember2021-07-012021-07-310001651052focs:AfterSixtyDaysMemberfocs:FirstLienTermLoanTrancheBMember2021-07-012021-07-310001651052us-gaap:OtherLiabilitiesMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2020-01-012020-12-3100016510522021-04-012021-04-3000016510522021-02-012021-02-2800016510522020-03-3100016510522018-07-300001651052us-gaap:InterestRateSwapMember2020-04-300001651052focs:FirstLienRevolvingCreditFacilityMember2021-06-300001651052us-gaap:CommonClassAMember2021-04-012021-06-300001651052us-gaap:CommonClassAMember2021-01-012021-06-300001651052us-gaap:CommonClassAMember2020-01-012020-06-300001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-04-012020-06-300001651052us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-01-012020-06-3000016510522020-12-3100016510522019-12-310001651052focs:FirstLienTermLoanTrancheBMember2021-07-012021-07-310001651052srt:MinimumMemberfocs:FirstLienTermLoanTrancheBMember2021-07-012021-07-310001651052focs:FirstLienTermLoanTrancheMember2021-01-012021-01-3100016510522021-07-012021-07-310001651052us-gaap:LineOfCreditMember2021-06-300001651052focs:FocusFinancialPartnersLLCMemberfocs:OfferingMember2021-06-012021-06-300001651052focs:FocusFinancialPartnersLLCMemberfocs:OfferingMember2021-03-012021-03-310001651052focs:FocusFinancialPartnersLLCMember2021-03-012021-03-310001651052focs:FocusFinancialPartnersLLCMember2021-01-012021-06-300001651052focs:FocusFinancialPartnersLLCMember2021-06-300001651052focs:FocusFinancialPartnersLLCMember2020-06-300001651052us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2021-01-012021-06-300001651052us-gaap:CommonClassAMember2020-04-012020-06-3000016510522021-06-300001651052us-gaap:ParentMember2021-04-012021-06-300001651052us-gaap:NoncontrollingInterestMember2021-04-012021-06-300001651052us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-3000016510522021-04-012021-06-300001651052us-gaap:ParentMember2021-01-012021-06-300001651052us-gaap:NoncontrollingInterestMember2021-01-012021-06-300001651052us-gaap:AdditionalPaidInCapitalMember2021-01-012021-06-300001651052us-gaap:ParentMember2020-04-012020-06-300001651052us-gaap:NoncontrollingInterestMember2020-04-012020-06-300001651052us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-3000016510522020-04-012020-06-300001651052us-gaap:ParentMember2020-01-012020-06-300001651052us-gaap:NoncontrollingInterestMember2020-01-012020-06-300001651052us-gaap:AdditionalPaidInCapitalMember2020-01-012020-06-3000016510522020-01-012020-06-3000016510522020-01-012020-12-310001651052srt:MaximumMemberus-gaap:LineOfCreditMember2021-01-012021-06-300001651052us-gaap:LineOfCreditMember2021-01-012021-06-300001651052us-gaap:CommonClassBMember2021-08-020001651052us-gaap:CommonClassAMember2021-08-0200016510522021-01-012021-06-30xbrli:sharesxbrli:pureiso4217:USDfocs:itemfocs:agreementiso4217:USDxbrli:shares

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2021

OR

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-38604

Focus Financial Partners Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

47-4780811

(State or Other Jurisdiction
of Incorporation or Organization)

(I.R.S. Employer
Identification No.)

875 Third Avenue, 28th Floor

New York, NY

10022

(Address of Principal Executive Offices)

(Zip Code)

(646519-2456

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Class A common stock, par value
$0.01 per share

FOCS

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes No 

As of August 2, 2021, the registrant had 59,800,243 shares of Class A common stock and 12,692,740 shares of Class B common stock outstanding.

Table of Contents

FOCUS FINANCIAL PARTNERS INC.

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2021

    

Page No.

PART I: FINANCIAL INFORMATION

Item 1.

Financial Statements

2

Unaudited condensed consolidated balance sheets

2

Unaudited condensed consolidated statements of operations

3

Unaudited condensed consolidated statements of comprehensive income

4

Unaudited condensed consolidated statements of cash flows

5

Unaudited condensed consolidated statements of changes in equity

6

Notes to unaudited condensed consolidated financial statements

12

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

30

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

51

Item 4.

Controls and Procedures

52

PART II: OTHER INFORMATION

Item 1.

Legal Proceedings

52

Item 1A.

Risk Factors

52

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

53

Item 6.

Exhibits

53

SIGNATURES

54

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated balance sheets

(In thousands, except share and per share amounts)

    

December 31, 

    

June 30, 

2020

2021

ASSETS

 

  

 

  

Cash and cash equivalents

$

65,858

$

143,981

Accounts receivable less allowances of $2,178 at 2020 and $2,372 at 2021

 

169,220

 

178,300

Prepaid expenses and other assets

 

65,581

 

126,855

Fixed assets—net

 

49,209

 

46,994

Operating lease assets

229,748

228,617

Debt financing costs—net

 

6,950

 

5,602

Deferred tax assets—net

107,289

229,031

Goodwill

 

1,255,559

 

1,316,160

Other intangible assets—net

 

1,113,467

 

1,111,014

TOTAL ASSETS

$

3,062,881

$

3,386,554

LIABILITIES AND EQUITY

 

  

LIABILITIES

 

  

Accounts payable

$

9,634

$

8,595

Accrued expenses

 

53,862

 

70,011

Due to affiliates

 

66,428

 

56,747

Deferred revenue

 

9,190

 

9,630

Other liabilities

 

222,911

 

288,410

Operating lease liabilities

253,295

255,324

Borrowings under credit facilities (stated value of $1,507,622 and $1,619,275 at December 31, 2020 and June 30, 2021, respectively)

 

1,507,119

 

1,615,930

Tax receivable agreements obligations

81,563

182,822

TOTAL LIABILITIES

 

2,204,002

 

2,487,469

COMMITMENTS AND CONTINGENCIES (Note 12)

 

  

EQUITY

Class A common stock, par value $0.01, 500,000,000 shares authorized; 51,158,712 and 59,792,889 shares issued and outstanding at December 31, 2020 and June 30, 2021, respectively

512

598

Class B common stock, par value $0.01, 500,000,000 shares authorized; 20,661,595 and 12,692,740 shares issued and outstanding at December 31, 2020 and June 30, 2021, respectively

207

127

Additional paid-in capital

526,664

650,421

Retained earnings

14,583

16,816

Accumulated other comprehensive income (loss)

(2,167)

734

Total shareholders' equity

539,799

668,696

Non-controlling interest

319,080

230,389

Total equity

858,879

899,085

TOTAL LIABILITIES AND EQUITY

$

3,062,881

$

3,386,554

See notes to unaudited condensed consolidated financial statements

2

Table of Contents

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of operations

(In thousands, except share and per share amounts)

For the three months ended

For the six months ended

June 30, 

June 30, 

    

2020

    

2021

    

2020

    

2021

REVENUES:

  

  

  

  

Wealth management fees

$

295,119

$

404,970

$

613,722

$

779,815

Other

 

17,990

 

20,385

 

36,441

 

39,715

 

Total revenues

 

313,109

 

425,355

 

650,163

 

819,530

 

OPERATING EXPENSES:

 

 

 

 

 

Compensation and related expenses

 

113,914

 

139,045

 

231,758

 

280,088

 

Management fees

 

76,987

 

116,205

 

160,680

 

218,277

 

Selling, general and administrative

 

52,752

 

69,018

 

115,347

 

132,844

 

Intangible amortization

 

36,012

 

44,003

 

71,735

 

86,986

 

Non-cash changes in fair value of estimated contingent consideration

 

16,472

 

34,062

 

(14,901)

 

59,998

 

Depreciation and other amortization

 

3,029

 

3,606

 

6,011

 

7,213

 

Total operating expenses

 

299,166

 

405,939

 

570,630

 

785,406

 

INCOME FROM OPERATIONS

 

13,943

 

19,416

 

79,533

 

34,124

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

Interest income

 

66

 

57

 

351

 

104

 

Interest expense

 

(10,057)

 

(10,829)

 

(23,643)

 

(21,350)

 

Amortization of debt financing costs

 

(709)

 

(902)

 

(1,491)

 

(1,754)

 

Loss on extinguishment of borrowings

 

 

 

(6,094)

 

 

Other income (expense)—net

 

70

 

(534)

 

682

 

(531)

 

Income from equity method investments

52

140

116

423

Total other expense—net

 

(10,578)

 

(12,068)

 

(30,079)

 

(23,108)

 

INCOME BEFORE INCOME TAX

 

3,365

7,348

 

49,454

 

11,016

 

INCOME TAX EXPENSE

 

37

2,174

 

12,107

 

3,360

 

NET INCOME

3,328

5,174

37,347

7,656

Non-controlling interest

(919)

(3,197)

(14,542)

(5,423)

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

$

2,409

$

1,977

$

22,805

$

2,233

Income per share of Class A common stock:

Basic

$

0.05

$

0.04

$

0.48

$

0.04

Diluted

$

0.03

$

0.04

$

0.48

$

0.04

Weighted average shares of Class A common stock outstanding:

Basic

47,847,756

55,710,666

47,642,156

53,965,045

Diluted

73,418,108

56,162,822

47,651,057

54,418,520

See notes to unaudited condensed consolidated financial statements

3

Table of Contents

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of comprehensive income

(In thousands)

For the three months ended

For the six months ended

 

June 30, 

June 30, 

    

2020

    

2021

    

2020

    

2021

 

Net income

$

3,328

$

5,174

$

37,347

$

7,656

Other comprehensive income (loss), net of tax:

 

 

 

 

 

Foreign currency translation adjustments

 

5,778

 

(378)

 

(2,787)

 

(819)

Unrealized gain (loss) on interest rate swap designated as a cash flow hedge

(5,383)

254

(8,327)

5,505

Comprehensive income

3,723

5,050

26,233

12,342

Less: Comprehensive income attributable to non-controlling interest

(1,084)

(3,256)

(10,645)

(7,208)

Comprehensive income attributable to common shareholders

$

2,639

$

1,794

$

15,588

$

5,134

See notes to unaudited condensed consolidated financial statements

4

Table of Contents

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of cash flows

(In thousands)

For the six months ended

June 30, 

    

2020

    

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

  

 

  

Net income

$

37,347

$

7,656

Adjustments to reconcile net income to net cash provided by operating activities—net of effect of acquisitions:

 

 

  

Intangible amortization

 

71,735

 

86,986

Depreciation and other amortization

 

6,011

 

7,213

Amortization of debt financing costs

 

1,491

 

1,754

Non-cash equity compensation expense

 

10,282

 

18,631

Non-cash changes in fair value of estimated contingent consideration

 

(14,901)

 

59,998

Income from equity method investments

 

(116)

 

(423)

Distributions received from equity method investments

 

52

 

403

Deferred taxes and other non-cash items

 

3,333

 

1,425

Loss on extinguishment of borrowings

 

6,094

 

Changes in cash resulting from changes in operating assets and liabilities:

 

 

  

Accounts receivable

 

(15,905)

 

(10,038)

Prepaid expenses and other assets

 

2,780

 

(14,450)

Accounts payable

 

(981)

 

(527)

Accrued expenses

 

7,600

 

16,883

Due to affiliates

 

(31,225)

 

(9,765)

Other liabilities

 

(18,406)

 

(13,986)

Deferred revenue

 

(813)

 

200

Net cash provided by operating activities

 

64,378

 

151,960

CASH FLOWS FROM INVESTING ACTIVITIES:

 

  

 

  

Cash paid for acquisitions and contingent consideration—net of cash acquired

 

(59,000)

 

(82,106)

Purchase of fixed assets

 

(5,947)

 

(4,318)

Investment and other, net

 

 

(19,132)

Net cash used in investing activities

 

(64,947)

 

(105,556)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

  

 

  

Borrowings under credit facilities

 

285,000

 

524,375

Repayments of borrowings under credit facilities

 

(270,783)

 

(413,347)

Proceeds from issuance of common stock, net

25,767

Payments in connection with unit redemption, net

(25,767)

Payments in connection with tax receivable agreements

(4,423)

Contingent consideration paid

 

(34,992)

 

(57,030)

Payments of debt financing costs

 

(634)

 

(2,700)

Proceeds from exercise of stock options

167

4,017

Payments on finance lease obligations

(59)

(39)

Distributions for unitholders

 

(7,643)

 

(19,108)

Net cash provided by (used in) financing activities

 

(28,944)

 

31,745

EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS

 

(336)

 

(26)

CHANGE IN CASH AND CASH EQUIVALENTS

 

(29,849)

 

78,123

CASH AND CASH EQUIVALENTS:

 

  

 

  

Beginning of period

 

65,178

 

65,858

End of period

$

35,329

$

143,981

See Note 13 for supplemental cash flow disclosure

See notes to unaudited condensed consolidated financial statements

5

Table of Contents

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of changes in equity

Three months ended June 30, 2020 and 2021

(In thousands, except share amounts)

Accumulated

 

Class A

Class B

Additional

Other

Total

Common Stock

Common Stock

Paid-In

Retained

Comprehensive

Shareholders’

Non-controlling

    

Shares

    

Amount

    

Shares

    

Amount

    

 Capital

    

Earnings

    

Income (Loss)

    

Equity

    

Interest

    

Total  Equity

Balance at April 1, 2020

47,807,029

$

478

21,759,379

$

218

$

520,281

$

6,934

$

(8,746)

$

519,165

$

307,881

$

827,046

Net income

2,409

2,409

919

3,328

Issuance (cancellation) of common stock in connection with exercise of Focus LLC common unit exchange rights

263,276

3

(263,276)

(3)

7,330

7,330

7,330

Issuance of common stock in connection with exercise of Focus LLC incentive unit exchange rights

19,071

531

531

531

Forfeiture of unvested Class A common stock

(834)

(27)

(27)

(27)

Exercise of stock options

3,165

90

90

90

Change in non-controlling interest allocation

(26,215)

(26,215)

17,513

(8,702)

Non-cash equity compensation expenses

1,173

1,173

1,173

Currency translation adjustment-net of tax

3,714

3,714

2,064

5,778

6

Table of Contents

Unrealized loss on interest rate swaps designated as a cash flow hedges-net of tax

(3,484)

(3,484)

(1,899)

(5,383)

Adjustments of deferred taxes, net of amounts payable under tax receivable agreements and changes from Focus LLC interest transactions

46

46

46

Balance at June 30, 2020

48,091,707

$

481

21,496,103

$

215

$

503,209

$

9,343

$

(8,516)

$

504,732

$

326,478

$

831,210

Balance at April 1, 2021

55,114,842

551

17,019,104

170

590,022

14,839

917

$

606,499

$

271,148

$

877,647

Net income

1,977

1,977

3,197

5,174

Issuance of units in connection with an acquisition

168,392

1

1

1

Issuance (cancellation) of common stock in connection with offering, net

3,927,729

39

(3,845,569)

(38)

195,875

195,876

195,876

Issuance (cancellation) of common stock in connection with exercise of Focus LLC common unit exchange rights

649,187

6

(649,187)

(6)

32,907

32,907

32,907

Issuance of common stock in connection with exercise of Focus LLC incentive unit exchange rights

64,167

1

3,252

3,253

3,253

7

Table of Contents

Exercise of stock options

36,964

1

1,153

1,154

1,154

Change in non-controlling interest allocation

(183,649)

(183,649)

(44,015)

(227,664)

Non-cash equity compensation expenses

1,126

1,126

1,126

Currency translation adjustment-net of tax

(469)

(469)

91

(378)

Unrealized gain (loss) on interest rate swaps designated as a cash flow hedges-net of tax

286

286

(32)

254

Adjustments of deferred taxes, net of amounts payable under tax receivable agreements and changes from Focus LLC interest transactions

9,735

9,735

9,735

Balance at June 30, 2021

59,792,889

$

598

12,692,740

$

127

$

650,421

$

16,816

$

734

$

668,696

$

230,389

$

899,085

See notes to unaudited condensed consolidated financial statements

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of changes in equity

Six months ended June 30, 2020 and 2021

(In thousands, except share amounts)

Accumulated

Class A

Class B

Additional

Retained

Other

Total

Common Stock

Common Stock

Paid-In

Earnings

Comprehensive

Shareholders’

Non-controlling

    

Shares

    

Amount

    

Shares

    

Amount

    

 Capital

    

(Deficit)

    

Income (Loss)

    

Equity

    

Interest

    

Total Equity

8

Table of Contents

Balance at January 1, 2020

47,421,315

$

474

22,075,749

$

221

$

498,186

$

(13,462)

$

(1,299)

$

484,120

$

319,850

$

803,970

Net income

22,805

22,805

14,542

37,347

Issuance (cancellation) of common stock in connection with exercise of Focus LLC common unit exchange rights

579,646

6

(579,646)

(6)

13,366

13,366

13,366

Issuance of common stock in connection with exercise of Focus LLC incentive unit exchange rights

85,702

1

1,802

1,803

1,803

Forfeiture of unvested Class A common stock

(834)

(27)

(27)

(27)

Exercise of stock options

5,878

167

167

167

Change in non-controlling interest allocation

(12,128)

(12,128)

(4,017)

(16,145)

Non-cash equity compensation expenses

2,190

2,190

2,190

Currency translation adjustment-net of tax

(1,810)

(1,810)

(977)

(2,787)

Unrealized loss on interest rate swaps designated as a cash flow hedges-net of tax

(5,407)

(5,407)

(2,920)

(8,327)

Adjustments of deferred taxes, net of amounts payable under tax receivable agreements

(347)

(347)

(347)

9

Table of Contents