Executive Summary / Key Takeaways

• Differentiated Asset Management Model: Resolute Holdings Management, Inc. (RHLD) operates a unique alternative asset management platform, generating recurring, long-duration management fees by deploying its "Resolute Operating System" to enhance performance at managed businesses, currently exemplified by CompoSecure Holdings.
• Strong Financial Performance Driven by Core Business: The consolidated entity, primarily driven by CompoSecure Holdings' premium payment card business, demonstrated robust growth in Q3 and YTD 2025, with net sales increasing 13% and 8% respectively, and gross profit margins expanding significantly to 59% and 57%, reflecting improved operational execution.
• Technological Edge in Premium Payments: CompoSecure Holdings maintains a niche in the financial payment card market through its innovative metal card technology, including Arculus for secure authentication and digital asset storage, which fosters strong customer acquisition and retention for global financial institutions.
• Strategic Expansion with Husky Technologies: A significant future growth driver is the planned acquisition of Husky Technologies Limited by CompoSecure, expected to close in Q1 2026. This will expand RHLD's management purview, bringing another substantial entity under its "Resolute Operating System" and diversifying its fee-generating base.
• Balanced Liquidity and Manageable Risks: Both Resolute Holdings and CompoSecure Holdings maintain sufficient liquidity, supported by cash, investments, and credit facilities. While RHLD is reliant on CompoSecure's management fees, the underlying business's strong cash flow and strategic hedging mitigate interest rate risks.

The Architect of Value: Resolute Holdings' Differentiated Approach

Resolute Holdings Management, Inc. (NYSE:RHLD) stands as a distinctive player in the alternative asset management landscape, carving out a specialized niche through its operational management services. Formed in September 2024 and spun off from CompoSecure, Inc. (CMPO) in February 2025, RHLD's core mission is to generate recurring, long-duration management fees by systematically deploying its proprietary "Resolute Operating System" to drive performance and inorganic growth at its managed businesses. This model is currently anchored by CompoSecure Holdings, L.L.C., a leading innovator in premium financial transaction cards.

The alternative asset management sector is characterized by intense competition from established giants like Blackstone Inc. (BX), KKR & Co. Inc. (KKR), and Apollo Global Management, Inc. (APO). These firms command vast assets under management, extensive global networks, and diversified investment strategies. RHLD, as a newer entrant, positions itself with an emphasis on operational agility and a focused approach to value creation within specific, high-potential industries. While larger competitors benefit from scale and brand recognition, RHLD's differentiated strategy centers on deep operational engagement and technological leverage within its managed entities, aiming for superior efficiency and targeted growth.

CompoSecure Holdings, founded in 2000, provides the foundational operational and technological strength for the consolidated entity. It has spent over two decades establishing itself as a technology partner to global financial institutions, specializing in the design and manufacturing of complex metal, composite, and proprietary financial transaction cards. This deep-rooted expertise and long-term customer relationships in a specialized subsector of the financial technology market are critical to RHLD's investment thesis.

Technological Edge in Premium Payments and Authentication

CompoSecure Holdings' technological differentiation is a cornerstone of RHLD's value proposition. The company is a recognized leader in innovative payment card technology, particularly its metal cards with Arculus secure authentication and digital asset storage capabilities. These products are not merely payment instruments; they deliver unique, premium branded experiences, enable users to access and utilize their financial and digital assets, and ensure trust at the point of transaction. This advanced card technology allows banks and other payment card issuers to significantly enhance customer acquisition, retention, and organic customer spend.

The tangible benefits of CompoSecure's technology are evident in its market positioning. The company creates highly differentiated and customized quality financial payment products, establishing a niche in the financial payment card market. This focus on premium, secure, and technologically advanced solutions allows CompoSecure to maintain trusted, highly-embedded, and long-term customer relationships with an expanding set of global issuers. The "Resolute Operating System" further enhances these capabilities by driving improved operational execution, which directly contributes to the expanding gross profit margins observed in recent financial periods. CompoSecure's role as a "platform for next generation payment technology, security, and authentication solutions" underscores its ongoing commitment to innovation, exemplified by strategic investments such as the $1.5 million SAFE investment in Rain Cards, an issuer with the Visa Network, which converted to an equity interest in February 2025. This investment highlights RHLD's M&A expertise in driving inorganic growth and expanding its technological footprint within the payment ecosystem.

Financial Performance Reflecting Strategic Execution

The financial performance of Resolute Holdings, largely driven by its consolidated CompoSecure Holdings segment, demonstrates the effectiveness of its operational strategies. For the three months ended September 30, 2025, consolidated net sales increased by a robust 13% to $120.90 million, up from $107.10 million in the prior year period. This growth was primarily fueled by a significant 31% increase in domestic sales within CompoSecure Holdings' premium payment card business, attributed to higher volumes from new and existing customers. International sales, however, saw a 42% decrease, primarily due to the timing of certain customer orders.

Profitability metrics underscore the operational improvements. Gross profit for the quarter surged by 29% to $71.30 million, with the gross profit margin expanding notably to 59% from 52% in the prior year. This margin expansion was a direct result of "higher volumes, mix, and improved operational execution from the implementation of the Resolute Operating System." For the nine months ended September 30, 2025, net sales grew 8% to $344.30 million, and gross profit increased 17% to $194.70 million, with the gross margin expanding by 5% to 57%.

Operating expenses increased by 32% to $29.90 million for the quarter and 28% to $87 million for the nine months, primarily due to incremental salaries and equity-based compensation expenses from hiring employees at Resolute Holdings as it scaled its management platform. Despite these investments, income from operations for the quarter rose 26% to $41.50 million, and the operating margin improved by 3% to 34%. For the nine-month period, operating income increased 9% to $107.70 million, with the operating margin remaining flat at 31%. Other expenses decreased significantly due to lower interest expense following the extinguishment of exchangeable notes in late 2024. The effective tax rate for the consolidated entity remains low, primarily due to the non-controlling interest adjustment, as CompoSecure Holdings' income is largely pass-through to its 100% owner, CompoSecure.

Robust Liquidity and Strategic Capital Management

Resolute Holdings and CompoSecure Holdings operate as distinct legal entities, each maintaining independent liquidity. As of September 30, 2025, the consolidated entity held $98.20 million in cash and cash equivalents and $49.70 million in short-term investments. CompoSecure Holdings had $190 million in total debt outstanding, primarily from its term loan, with a $130 million revolving credit facility available. Resolute Holdings itself has a $5 million senior secured revolving credit facility, which remained undrawn as of September 30, 2025.

Management asserts that both entities possess sufficient liquidity to meet their needs for at least the next 12 months, supported by cash flows from operations, existing cash, short-term investments, and available credit facilities. Resolute Holdings' dependence on the CompoSecure Management Fee for its liquidity highlights the critical importance of CompoSecure Holdings' operational performance. To mitigate interest rate risk on its variable-rate debt, CompoSecure Holdings utilizes an interest rate swap agreement, hedging a notional amount of $125 million at a fixed rate of 1.90% until December 2025. This proactive financial management helps stabilize interest expenses in a volatile rate environment.

Strategic Expansion and Future Outlook

RHLD's strategic trajectory is poised for significant expansion. On November 2, 2025, CompoSecure announced a planned business combination with Husky Technologies Limited, a transaction valued at approximately $4.98 million, comprising cash and CompoSecure Class A Common Stock. This acquisition, expected to close in the first quarter of 2026, is a pivotal event. Upon closing, Husky will become a wholly-owned subsidiary of CompoSecure Holdings, and crucially, Resolute Holdings will enter into a management agreement with Husky on substantially the same terms as the CompoSecure Management Agreement. This move directly expands RHLD's alternative asset management platform, bringing another substantial operating company under its "Resolute Operating System" and diversifying its fee-generating base.

The "Resolute Operating System" is central to RHLD's growth strategy, aiming to drive performance and value creation across its managed businesses. This systematic approach, combined with RHLD's M&A and capital markets expertise, positions the company for inorganic growth. The addition of Husky Technologies is a concrete step in this direction, signaling RHLD's intent to scale its management services beyond its initial anchor. The appointment of two new independent directors in July 2025 further strengthens the company's governance as it prepares for this expanded role.

Competitive Landscape and Strategic Positioning

Resolute Holdings operates in a competitive environment, but its unique structure and focus provide distinct advantages. CompoSecure Holdings has cultivated a "niche position in the financial payment card market" over two decades, characterized by "trusted, highly-embedded and long-term customer relationships" with leading international and domestic banks. This deep integration with its customer base, including three customers individually accounting for over 10% of revenue, creates a significant barrier to entry and fosters stability.

Compared to large, diversified alternative asset managers like Blackstone, KKR, and Apollo, RHLD's strength lies in its specialized operational management model. While these larger firms offer broad investment strategies and immense capital, RHLD's "Resolute Operating System" provides a hands-on, value-creation approach for specific operating companies. This agility and focused expertise can allow RHLD to identify and integrate businesses more efficiently, particularly in rapidly evolving sectors like next-generation payment technology and potentially AI infrastructure, where speed and specialized knowledge are paramount. However, RHLD's smaller scale and more recent public market presence mean it currently lags in overall market share and brand recognition compared to these established players. Its financial performance, while strong, reflects a more concentrated revenue stream, making it more sensitive to the performance of its managed entities.

Risks and Considerations

Investing in RHLD carries inherent risks, primarily stemming from its unique operational structure. The company's reliance on the CompoSecure Management Fee for its liquidity means that any underperformance by CompoSecure Holdings, or issues with the management agreement itself, could materially impact RHLD's financial health. Furthermore, CompoSecure Holdings' business is subject to market cycles, which have introduced "uncertainty in the timing of CompoSecure Holdings’ planned ramp-up of its Arculus offering."

Global economic and political developments, including inflationary pressures, volatile interest rates, and geopolitical conflicts, could also affect the business of CompoSecure Holdings and, by extension, RHLD's fee generation. The concentration of revenue among a few key customers for CompoSecure Holdings presents a risk, as the loss of any major client could significantly impact sales. While the company employs an interest rate swap to hedge against variable debt, the effectiveness and duration of such instruments are finite.

Conclusion

Resolute Holdings Management, Inc. presents a compelling investment narrative built on a differentiated alternative asset management model. By leveraging its "Resolute Operating System" and M&A expertise, RHLD aims to unlock and amplify value within its managed businesses, currently exemplified by the technologically advanced and operationally efficient CompoSecure Holdings. The strong financial performance, characterized by robust revenue growth and expanding gross margins, underscores the success of this approach.

The impending integration of Husky Technologies Limited marks a pivotal strategic expansion, promising to diversify RHLD's fee base and further validate its value-creation platform. While the company operates in the shadow of alternative asset management giants, its specialized focus on operational excellence and technological leadership in niche markets provides a distinct competitive edge. Investors should recognize RHLD's potential as a growth-oriented platform, carefully weighing its strategic expansion and operational strengths against the inherent risks associated with its concentrated revenue streams and dependence on managed entity performance. The future success of RHLD hinges on its continued ability to identify, integrate, and optimize high-potential operating businesses, cementing its position as a specialized architect of value.