Core Insights - Lazard, Inc. reported a preliminary asset under management (AUM) of $267.8 billion as of October 31, 2025, marking a 1.2% increase from the previous month, driven by market appreciation of $6.9 billion, offset by foreign exchange depreciation of $2.2 billion and net outflows of $1.4 billion [1][10] AUM Growth and Performance - The company has shown steady AUM growth over the years, with a compound annual growth rate (CAGR) of 1.7% from 2016 to 2024, despite experiencing declines in AUM during 2022 and early 2025 due to global uncertainties [2] - In the first nine months of 2025, Lazard's AUM increased year over year, indicating a gradual recovery following a challenging first half [2] Asset Class Breakdown - In October 2025, Lazard's equity assets rose by 1.9% month over month to $212.6 billion, while other assets increased by 1.7% to $8.9 billion; however, fixed-income assets saw a decline of 2.2% to $46.1 billion [3] Strategic Initiatives - The acquisition of Truvvo Partners in March 2023 added $3.8 billion in assets, enhancing Lazard's wealth management capabilities and expanding its high-net-worth client base [4] - The partnership with Elaia Partners in Paris led to the establishment of Lazard Elaia Capital, strengthening the firm's exposure to private market investments, particularly in the technology sector [4] - These strategic initiatives aim to diversify Lazard's asset mix and capture growth opportunities across public and private markets, supporting long-term AUM expansion [4] Competitive Landscape - Lazard's peers, Franklin Resources, Inc. and T. Rowe Price Group, Inc., have also experienced steady AUM growth, with Franklin reporting a preliminary AUM of $1.69 trillion (up 1.7% month over month) and T. Rowe Price at $1.79 trillion (up 1.3% month over month) [6][7][8] Market Performance - Over the past year, Lazard's shares have increased by 11.7%, contrasting with a 2.8% decline in the industry [9]

Core Insights - Lazard, Inc. reported preliminary assets under management (AUM) of approximately $267.8 billion as of October 31, 2025, reflecting a combination of market appreciation, net outflows, and foreign exchange depreciation [1] AUM Breakdown - The AUM included market appreciation of $6.9 billion, net outflows of $1.4 billion, and foreign exchange depreciation of $2.2 billion [1] - As of October 31, 2025, the equity AUM was $212,643 million, an increase from $208,510 million as of September 30, 2025 [1] - Fixed income AUM decreased to $46,145 million from $47,186 million during the same period [1] - Other AUM was reported at $8 million, although no comparative figure was provided [1]

M&A Transactions - Completed M&A transactions in Q3 2025 reached a total value of $1,028 billion, a 40% increase from $734 billion in Q3 2024[332] - The number of completed M&A transactions decreased by 21% to 7,663 in Q3 2025 compared to 9,640 in Q3 2024[332] - The value of announced M&A transactions in Q3 2025 was $1,276 billion, a 42% increase from $898 billion in Q3 2024[332] - The value of completed M&A transactions for the first nine months of 2025 was $2,761 billion, a 25% increase from $2,202 billion in the same period of 2024[332] - The number of announced M&A transactions for the first nine months of 2025 was 29,899, a 5% decrease from 31,447 in the same period of 2024[332] Asset Management Performance - Asset Management's AUM is significantly influenced by equity market performance, with the MSCI World Index increasing by 7% from June 30, 2025, and 17% from September 30, 2024[336] - The total AUM for Lazard's Asset Management segment is affected by market movements and foreign currency exchange rate volatility, impacting revenue levels[336] - Total assets under management (AUM) increased by $39 billion, or 17%, to $265 billion as of September 30, 2025, due to market appreciation and net inflows[410] - Approximately 84% of AUM was managed on behalf of institutional and intermediary clients as of September 30, 2025, up from 82% at the end of 2024[411] - For the three months ended September 30, 2025, total AUM increased to $264,537 million, up from $248,360 million in the same period of 2024, representing a growth of 6.5%[414] Financial Performance - Lazard's net revenue for the three months ended September 30, 2025, was $748,078,000, a decrease of 4.7% compared to $784,866,000 for the same period in 2024[361] - Operating income for the three months ended September 30, 2025, was $94,930,000, representing 12.7% of net revenue, down from 20.5% in the prior year[361] - Net income attributable to Lazard for the three months ended September 30, 2025, was $71,247,000, a decrease from $107,938,000 in the same period of 2024[361] - Net revenue decreased by $37 million, or 5%, while adjusted net revenue increased by $79 million, or 12%, compared to the 2024 period[376] - Adjusted operating income for the nine months ended September 30, 2025, was $296 million, an increase of $37 million, or 14%, compared to $259 million in 2024[407] Expenses and Compensation - Compensation and benefits expense increased to $498,212,000 for the three months ended September 30, 2025, compared to $465,405,000 in the same period of 2024[361] - Adjusted compensation and benefits expense was $1,400 million, an increase of $29 million, or 2%, with a ratio of 65.5% to adjusted net revenue[386] - Non-compensation expense increased by $35 million, or 7%, primarily due to increased marketing and technology expenses[387] - Adjusted non-compensation expense increased by $10 million, or 8%, compared to the 2024 period[379] - The ratio of adjusted compensation and benefits expense to adjusted net revenue was 65.5% for the 2025 period, compared to 66.0% for the 2024 period[378] Tax and Regulatory Compliance - The effective tax rate was 22.6%, compared to 28.0% for the 2024 period, primarily due to changes in the geographic mix of earnings[381] - The effective tax rate decreased to 18.9% in 2025 from 25.4% in 2024, primarily due to discrete benefits for share-based compensation[389] - The company is monitoring developments related to the OECD's 15% minimum tax on multinational companies, known as "Pillar Two"[356] - The company actively monitors its regulatory capital base to comply with minimum capital requirements across different jurisdictions[467] Cash and Investments - Cash provided by operating activities was $120 million for the nine months ended September 30, 2025, down from $380 million in the same period of 2024[442] - As of September 30, 2025, the company had approximately $1,172 million in cash and cash equivalents, including $658 million held outside the U.S.[448] - The company issued $300 million of 5.625% senior notes due in 2035 in Q3 2025, using the proceeds to redeem all outstanding 2027 Notes[457] - As of September 30, 2025, total investments amounted to $623.7 million, an increase from $614.9 million on December 31, 2024[497] - Seed investments totaled $294.7 million as of September 30, 2025, up from $195.2 million at the end of 2024, with equity investments increasing from $123.5 million to $225.3 million[497] Shareholder Activities - During the nine months ended September 30, 2025, the company repurchased 879,334 shares at an average price of $46.64, with $159 million remaining under the share repurchase authorization[464] - A quarterly dividend of $0.50 per share was declared on October 22, 2025, payable on November 14, 2025[465] - The company aims to offset dilution from share-based incentive compensation plans through stock repurchases, with the rate of purchases varying based on various factors[464] Credit and Risk Management - The allowance for credit losses is determined based on historical credit loss experience and client creditworthiness assessments[473] - The company recognizes liabilities for unrecognized tax benefits based on amounts likely to be settled with relevant taxing authorities, involving significant judgment[482] - The company's exposure to equity market price risk was approximately $279 million as of September 30, 2025, compared to $164 million at the end of 2024[501] - Customers and other receivables included $130 million in fully collateralized loans as of September 30, 2025, compared to $83 million at the end of 2024[508] - The company does not hedge investments associated with LFI and similar deferred compensation arrangements due to lack of net economic exposure[498]

Core Insights - Lazard Inc. reported third-quarter 2025 adjusted earnings per share of 56 cents, exceeding the Zacks Consensus Estimate of 41 cents and improving from 38 cents in the same quarter last year [1][9] - The company's revenues increased by 12.4% year over year to $724.6 million, surpassing the Zacks Consensus Estimate by 3.9% [3][9] - Total assets under management (AUM) rose by 16.9% year over year to $264.5 billion, driven by record inflows and market appreciation [7][9] Revenue Performance - Adjusted operating revenues from the Financial Advisory segment were $422.3 million, up 14% from the prior year, exceeding estimates [5] - Asset Management segment adjusted operating revenues increased by 8% to $294.2 million, also surpassing estimates [5] - Corporate segment adjusted operating revenues rose significantly by 46% to $8.1 million, although it fell short of estimates [6] Expense Analysis - Operating expenses increased by 12.2% year over year to $702.9 million, reflecting growth in both Financial Advisory and Asset Management [4] - The adjusted compensation expenses to operating revenues ratio improved to 65.5% from 66% in the previous year [4] - The adjusted non-compensation expenses to operating revenues ratio also improved to 20.5% from 21.4% year over year [4] Balance Sheet and Liquidity - Cash and cash equivalents totaled $1.2 billion as of September 30, 2025, marking a 19.8% increase from the prior quarter [10] - Stockholders' equity rose to $878.6 million, up 11.7% sequentially [10] Share Repurchase Activity - In the third quarter of 2025, Lazard repurchased $1 million of common stock, with approximately $159 million remaining available for repurchase [11] Strategic Outlook - The company is focused on organic growth, as indicated by revenue increases in key segments, and a strong liquidity position alongside higher AUM is expected to support financial performance in the near term [12]

Core Viewpoint - Goldman Sachs maintains a "Sell" rating for Lazard while raising its price target from $45 to $46, indicating mixed market sentiment despite strong financial performance [1][5]. Financial Performance - Lazard reported third-quarter earnings with an EPS of $0.56, exceeding the Zacks Consensus Estimate of $0.41, marking a 47.37% increase from $0.38 in the same quarter last year [2][5]. - The company's revenue for the quarter was $724.65 million, surpassing the Zacks Consensus Estimate by 3.85% and showing a significant increase from $645.91 million in the same period last year [2][5]. Market Trends - Lazard's strong performance is attributed to a resurgence in dealmaking activities, which has positively impacted its financial results and reflects a broader recovery in the financial sector [3]. - Despite the positive earnings report, Lazard's stock price decreased by 1.35% to $49.12, with fluctuations during the trading day between a low of $47.37 and a high of $52 [4]. Stock Performance - Over the past year, Lazard's stock has experienced a high of $61.14 and a low of $31.97, with a current market capitalization of approximately $4.63 billion [4].

Core Insights - Lazard Ltd reported strong financial performance for Q3 2025, exceeding market expectations in both earnings and revenue [1][2][3] Financial Performance - Earnings Per Share (EPS) for Q3 2025 was $0.56, surpassing the estimated EPS of $0.44 and showing a significant increase from $0.38 in the previous year [2][6] - Revenue for the quarter reached $748.08 million, exceeding the estimated $726.25 million and marking a 12.2% increase from $645.91 million in the same period last year [3][6] Market Valuation - The company has a price-to-earnings (P/E) ratio of approximately 15.04, indicating how the market values its earnings [4] - The price-to-sales ratio is about 1.46, reflecting investor willingness to pay per dollar of sales [4] - The enterprise value to sales ratio stands at 1.31, showing total valuation relative to revenue [4] Financial Stability - Lazard's debt-to-equity ratio is 0.70, indicating a balanced approach to financing its assets [5] - The current ratio of 1.89 suggests a strong ability to cover short-term liabilities with short-term assets [5] - An earnings yield of 6.65% provides a comprehensive view of Lazard's financial position and potential for investors [5]

Core Insights - The restructuring liability management practice has seen a significant increase, indicating a robust demand for advisory services in this area despite some high-profile bankruptcies [2][5] - The current environment shows a wide dispersion in firm performance, allowing for mergers and acquisitions to coexist with active restructuring efforts [3][5] - The financing markets are generally accommodating, with tight risk spreads and a more favorable regulatory environment compared to previous administrations [7][8] Restructuring and Liability Management - There is a notable rise in liability management activities, which help companies avoid bankruptcy by restructuring their debts [4][5] - The majority of current activity is focused on liability management rather than formal bankruptcy proceedings, suggesting a proactive approach by firms [5][10] Deal Advisory and Market Conditions - The government shutdown is temporarily affecting the closing of some transactions but not the initiation of new deals, indicating resilience in the deal-making environment [6] - Financing is readily available for deals, supported by tight risk spreads and a more accommodating regulatory landscape [7][8] Geopolitical Considerations - Geopolitical factors are increasingly influencing business decisions, with firms needing to account for these risks in their strategies [11][12] - The oil market is experiencing modest price effects, with potential pressure on oil-producing countries to increase production in response to rising core inflation in the US [13][15]

Financial Data and Key Metrics Changes - For the first nine months of 2025, total firm-wide revenue was $2.1 billion, including record Financial Advisory revenue of $1.3 billion [4] - Third-quarter firm-wide revenue reached $725 million, up 12% year-over-year, driven by both business segments [8] - Financial Advisory revenue for the third quarter totaled $422 million, up 14% from the previous year [8] - Asset Management revenue for the third quarter was $294 million, an increase of 8% year-over-year and 10% sequentially [9] Business Line Data and Key Metrics Changes - Financial Advisory was active in M&A across healthcare, industrials, and consumer and retail sectors, with notable transactions including Mallinckrodt Pharmaceuticals' $6.7 billion deal [8] - Asset Management saw record gross inflows for the third quarter and the first nine months, achieving net positive flows of $1.6 billion year-to-date, with total AUM up 17% [6][10] - Management fees for Asset Management increased by 6% year-over-year, while incentive fees rose to $9 million from $3 million in the previous year [9][10] Market Data and Key Metrics Changes - The company reported a strong client engagement across major geographies, including the U.S., Europe, and the Middle East, indicating a diversified business model [14] - The effective tax rate for the third quarter was 21.4%, down from 32.5% in the previous year, with an expected full-year 2025 effective tax rate around 20% [12] Company Strategy and Development Direction - The company is focused on long-term growth strategies, including expanding its team of Financial Advisory Managing Directors and enhancing productivity [15][20] - The introduction of new active ETFs and a focus on quantitative and emerging market strategies are part of the Asset Management growth strategy [17][18] - The company aims to double firm-wide revenue from 2023 to 2030 and deliver an average annual shareholder return of at least 10% to 15% [20][21] Management's Comments on Operating Environment and Future Outlook - Management sees an increasingly constructive environment for advisory activity, despite potential temporary impacts from the U.S. government shutdown [13][14] - The company anticipates continued growth in both M&A and restructuring activities, driven by a diverse range of client needs and market conditions [14][72] - Management expressed confidence in achieving operating leverage and reducing the compensation ratio in the Asset Management segment [41] Other Important Information - The company has made significant strides in hiring, with 20 new Managing Directors joining in 2025, enhancing its talent pool [4][15] - The company is expanding its presence in the Middle East and Northern Europe, reflecting its commitment to growth in these regions [11] Q&A Session Summary Question: Thoughts on hiring environment and talent retention - Management noted strong success in attracting high-quality talent and reported very few regrettable departures, indicating a healthy Managing Director pool [25][26] Question: Recent success in driving net inflows in Asset Management - Management highlighted significant inflows in quantitative strategies and emerging markets, with a positive outlook for achieving net neutral flows for the year [30][31] Question: Trends in gross outflows in Asset Management - Management confirmed that gross outflows are lower than last year, primarily from sub-advised accounts, with a more promising trajectory outside that category [40] Question: Outlook for restructuring business amid credit concerns - Management does not view recent bankruptcies as indicative of broader issues and expects both M&A and restructuring activities to coexist due to varied corporate performance [67][70] Question: Differences in M&A activity between Europe and the U.S. - Management observed a tilt towards Europe in revenue mixes and emphasized the strength of European companies despite macroeconomic challenges [74][76] Question: Impact of U.S. government shutdown on advisory deals - Management indicated that deals requiring government approvals may be delayed but expect a quick catch-up once the government reopens [78][79]

Financial Data and Key Metrics Changes - For the first nine months of 2025, total firm-wide revenue was $2.1 billion, including record Financial Advisory revenue of $1.3 billion [4] - Third-quarter firm-wide revenue reached $725 million, up 12% year-over-year, driven by both business segments [8] - Financial Advisory revenue for the third quarter totaled $422 million, up 14% from the previous year [8] - Asset Management revenue for the third quarter was $294 million, an increase of 8% year-over-year and 10% sequentially [9] Business Line Data and Key Metrics Changes - Financial Advisory was active in M&A across healthcare, industrials, and consumer sectors, with notable transactions including Mallinckrodt Pharmaceuticals' $6.7 billion deal [8] - Asset Management saw record gross inflows for the third quarter, with total AUM increasing by 17% year-to-date [6][10] - Management fees for Asset Management increased by 6% year-over-year, while incentive fees rose to $9 million from $3 million [9][10] Market Data and Key Metrics Changes - The company reported net positive flows of $1.6 billion year-to-date in Asset Management, with AUM reaching $265 billion, a 7% increase from both September 2023 and June 2023 [10] - The effective tax rate for the third quarter was 21.4%, down from 32.5% in the same quarter last year [12] Company Strategy and Development Direction - The company is focused on long-term growth strategies, including expanding its team of Financial Advisory Managing Directors and enhancing productivity [15][20] - The introduction of new active ETFs and a focus on quantitative and emerging market strategies are part of the Asset Management growth strategy [17][18] - The company aims to double firm-wide revenue from 2023 to 2030 and deliver an average annual shareholder return of 10% to 15% [20][21] Management's Comments on Operating Environment and Future Outlook - Management sees an increasingly constructive environment for advisory activity, despite potential impacts from the U.S. government shutdown [13][14] - The company anticipates continued growth in both M&A and restructuring activities, driven by a diverse range of client needs [14][16] - Management expressed confidence in achieving or exceeding productivity goals, with average revenue per Managing Director increasing to nearly $9 million [15] Other Important Information - The company returned $60 million to shareholders in the third quarter, including a quarterly dividend of $47 million [12] - Chris Hogan will join as CEO of Lazard Asset Management in December, expected to accelerate growth [6][18] Q&A Session Summary Question: Hiring environment and talent retention - Management noted strong success in attracting high-quality talent and minimal regrettable departures, indicating a healthy Managing Director pool [25][26] Question: Recent success in Asset Management net inflows - Inflows are primarily from quantitative strategies and emerging markets, with a strong geographic mix outside the U.S. [30][31] Question: Trends in gross outflows - Gross outflows have decreased compared to last year, particularly from sub-advised accounts, with a more promising trajectory outside that category [40] Question: Operating leverage and achieving 60% comp ratio - Management is confident in achieving operating leverage in 2026, driven by improved productivity and strategic hiring [42] Question: Secondary market outlook - The company expects strong trends in the secondary market to continue, with no signs of slowing down [84] Question: Fee rates on inflows and outflows - A small increase in average fee rates was noted, with expectations for stability in the near term [86]

Core Insights - Lazard Ltd is set to release its quarterly earnings on October 23, 2025, with an estimated EPS of $0.44 and revenue of $726.25 million, reflecting a year-over-year EPS increase of 7.9% and revenue growth of 8% [1][5] Earnings Estimates - Analysts have revised the consensus EPS estimate downwards by 1.8% over the past 30 days, which may affect investor sentiment [1][5] Market Reaction - The market's response to earnings estimate revisions is significant; if Lazard's actual earnings exceed expectations, the stock may experience an upward trend, while disappointing earnings could lead to a decline [2] Financial Metrics - Lazard's financial metrics include a price-to-earnings (P/E) ratio of 15.67, a price-to-sales ratio of 1.52, and an enterprise value to sales ratio of 1.37, indicating how the market values its earnings and sales [3] Financial Health - The company has a debt-to-equity ratio of 0.70 and a current ratio of 1.89, suggesting a balanced approach to financing and the ability to cover short-term liabilities with short-term assets [4]