Key Takeaways Lazard shares rose 19% in three months, topping peers Franklin Resources and Invesco.Revenue growth, deal-making prospects, and the Arini alliance are driving Lazards momentum.AUM expansion, cost cuts, and 34.33% ROE strengthen Lazard's appeal for investors.Lazard Ltd. (LAZ) shares have gained 19% in the past three months, outperforming the industry’s growth of 7.4%. Shares of its peers, Franklin Resources (BEN) and Invesco Ltd. (IVZ) , have risen 12.7% and 38.5%, respectively, in the same tim ...

Core Insights - Lazard, Inc. reported a preliminary asset under management (AUM) balance of $253.7 billion as of July 31, 2025, reflecting a 2.1% increase from June 30, 2025, driven by net inflows and market appreciation, partially offset by foreign exchange depreciation [1][9] AUM Breakdown - Lazard's equity assets increased by 3.4% from the previous month to $198.8 billion [2][9] - Other assets decreased by 1.7% from the previous month to $8.9 billion [2] - Fixed-income assets fell by 2.3% sequentially to $45.9 billion [2][9] Revenue and Cost Management - The company's high reliance on financial advisory fees is likely to impact top-line growth, but cost-management efforts are expected to support the bottom line in the near term [3] Price Performance - Over the past year, Lazard's shares have risen by 6.4%, while the industry has grown by 19.9% [6] - The company currently holds a Zacks Rank 1 (Strong Buy) [7]

Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Lazard's unaudited condensed consolidated financial statements, detailing financial condition, operations, and cash flows for H1 2025 [Condensed Consolidated Statements of Financial Condition](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Lazard's total assets decreased to $4.49 billion as of June 30, 2025, while total stockholders' equity increased to $786.5 million Financial Position Summary | Financial Position | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$4,493,386** | **$4,793,993** | **(6.3%)** | | Cash and cash equivalents | $978,259 | $1,308,218 | (25.2%) | | **Total Liabilities** | **$3,623,324** | **$4,029,210** | **(10.1%)** | | Accrued compensation and benefits | $391,048 | $844,953 | (53.7%) | | Senior debt | $1,688,631 | $1,687,052 | 0.1% | | **Total Stockholders' Equity** | **$786,484** | **$685,154** | **14.8%** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Lazard's Q2 2025 total revenue increased to $817.2 million, with H1 2025 net income attributable to Lazard rising to $115.7 million Key Operating Metrics | Metric (in thousands, except EPS) | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$817,160** | **$707,991** | **+15.4%** | **$1,486,324** | **$1,493,472** | **-0.5%** | | Investment banking fees | $493,226 | $408,773 | +20.7% | $853,593 | $861,800 | -0.9% | | Asset management fees | $275,605 | $267,914 | +2.9% | $540,221 | $544,763 | -0.8% | | **Operating Income** | **$93,081** | **$63,640** | **+46.3%** | **$147,716** | **$118,201** | **+25.0%** | | **Net Income Attributable to Lazard** | **$55,346** | **$49,909** | **+10.9%** | **$115,721** | **$85,664** | **+35.1%** | | **Diluted EPS** | **$0.52** | **$0.49** | **+6.1%** | **$1.08** | **$0.84** | **+28.6%** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $167.8 million for H1 2025, a reversal from cash provided in the prior year period Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(167,846) | $86,255 | | Net cash used in investing activities | $(49,014) | $(109,483) | | Net cash used in financing activities | $(231,548) | $(94,125) | | **Net Decrease in Cash** | **$(361,060)** | **$(140,530)** | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail Lazard's accounting policies, segment performance, senior debt, and incentive compensation plans - The company's business is divided into two main segments: Financial Advisory and Asset Management, with a Corporate segment for other activities like cash management and investments[48](index=48&type=chunk)[52](index=52&type=chunk) Net Revenue by Segment | Net Revenue by Segment (in thousands) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Financial Advisory | $864,665 | $864,815 | | Asset Management | $580,578 | $580,963 | - As of June 30, 2025, the company had **$1.689 billion** in senior debt, with maturities ranging from 2027 to 2031[152](index=152&type=chunk) - Total share-based incentive compensation expense for H1 2025 was **$184.1 million**, an increase from **$159.5 million** in H1 2024[179](index=179&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Lazard's financial performance, highlighting Q2 2025 revenue growth, H1 2025 operating income increase, and segment performance [Business Environment and Outlook](index=47&type=section&id=Business%20Environment%20and%20Outlook) Global economic conditions impact Lazard's M&A and restructuring businesses, with M&A deal values increasing and corporate defaults decreasing in H1 2025 Global M&A and Restructuring Activity | Global M&A and Restructuring Activity | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Announced M&A Value (>$500M)** | $1,768B | $1,293B | +37% | | **Completed M&A Value (>$500M)** | $1,320B | $1,098B | +20% | | **Completed Restructuring Value** | $171B | $246B | -30% | - The number of corporate defaults decreased to **64** in H1 2025 from **80** in H1 2024, according to Moody's[301](index=301&type=chunk) [Consolidated Results of Operations](index=51&type=section&id=Consolidated%20Results%20of%20Operations) Lazard's H1 2025 GAAP operating income increased 25% to $147.7 million, while adjusted operating income decreased 11% to $182.2 million Key Financial Metrics (H1) | Metric (in thousands) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Net Revenue (GAAP)** | **$1,444,048** | **$1,450,102** | | **Adjusted Net Revenue** | **$1,413,051** | **$1,431,207** | | **Operating Income (GAAP)** | **$147,716** | **$118,201** | | **Adjusted Operating Income** | **$182,249** | **$203,705** | | Adjusted Operating Margin | 12.9% | 14.2% | Adjusted Expense Ratios (H1) | Expense Ratios (Adjusted) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Compensation & Benefits / Net Revenue | 65.5% | 66.0% | | Non-Compensation / Net Revenue | 21.6% | 19.8% | [Business Segments](index=56&type=section&id=Business%20Segments) Financial Advisory's adjusted operating income rose 12% in H1 2025, while Asset Management's declined 12%, and Corporate's loss widened Segment Adjusted Operating Income | Segment Adjusted Operating Income (in millions) | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Financial Advisory | $198.9 | $178.2 | +11.6% | | Asset Management | $127.7 | $144.9 | -11.9% | | Corporate (Loss) | $(144.4) | $(119.4) | +20.9% | [Cash Flows, Liquidity and Capital Resources](index=64&type=section&id=Cash%20Flows,%20Liquidity%20and%20Capital%20Resources) Lazard maintains strong liquidity with $978 million in cash, while H1 2025 saw net cash used in operations and share repurchases - As of June 30, 2025, Lazard had **$978 million** in cash and cash equivalents and **$210 million** in unused credit facilities[414](index=414&type=chunk)[416](index=416&type=chunk) Share Repurchase Activity (H1) | Share Repurchases | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Shares Purchased | 859,849 | 1,055,913 | | Average Price Per Share | $46.44 | $38.66 | - On July 23, 2025, the Board declared a quarterly dividend of **$0.50** per share[429](index=429&type=chunk) [Critical Accounting Policies and Estimates](index=68&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting policies requiring significant judgment, including revenue recognition, credit losses, compensation, and income taxes - Key areas requiring significant management judgment include revenue recognition, allowance for credit losses, compensation liabilities, income taxes, the Tax Receivable Agreement (TRA) obligation, and goodwill impairment[433](index=433&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Lazard's market risk exposures include equity, interest rate, credit spread, and foreign exchange risks, partially hedged with derivatives - The company is exposed to equity market, interest rate, credit spread, and foreign exchange risks, which it partially hedges using derivatives[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk) Market Risk Sensitivity | Risk Sensitivity (as of June 30, 2025) | Exposure (in millions) | Net Impact of 10% Adverse Change (in millions) | | :--- | :--- | :--- | | Equity Market Price Risk | $270 | $(1.2) | | Foreign Exchange Rate Risk | $63 | $(2.1) | | Private Equity Risk | $27 | $(2.7) | | **Interest Rate/Credit Spread Risk** | **$18** | **$(0.7) (from 100bps change)** | [Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that Lazard's disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that as of the end of the quarter, the company's disclosure controls and procedures were effective[481](index=481&type=chunk) - No material changes were made to the internal control over financial reporting during the most recent fiscal quarter[482](index=482&type=chunk) Part II. Other Information [Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) Lazard is involved in various legal proceedings, but management expects no material adverse effect on its business or financial condition - The company states that based on currently available information, the results of any pending legal matters are not expected to have a material effect on its business or financial condition[485](index=485&type=chunk) [Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) There were no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes from the risk factors disclosed in the 2024 Form 10-K were reported[486](index=486&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details Lazard's Q2 2025 common stock repurchases, including shares bought under its program and those withheld for employee tax obligations Share Repurchase Activity (Q2) | Share Repurchase Activity (Q2 2025) | Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Publicly Announced Program | 85,894 | $43.81 | | Employee Tax Withholding | 215,082 | $42.93 | - As of June 30, 2025, approximately **$160.1 million** remained available for repurchase under the company's authorized plan, expiring December 31, 2026[489](index=489&type=chunk)[491](index=491&type=chunk) [Exhibits](index=77&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, contracts, and certifications

Core Insights - Lazard Inc. reported second-quarter 2025 adjusted earnings per share of 52 cents, exceeding the Zacks Consensus Estimate of 38 cents and up from 49 cents in the same quarter last year [1][8] - The company's quarterly operating revenues reached $769.8 million, reflecting a year-over-year increase of 12.4% and surpassing the Zacks Consensus Estimate of $688.5 million [3][8] Revenue Performance - Financial advisory segment adjusted operating revenues were $491.4 million, up 20.4% year-over-year [5] - Asset management segment adjusted operating revenues increased by 1.2% to $268.5 million [5] - Corporate segment adjusted operating revenues decreased by 12.8% to $10 million [5] Asset Management - Total assets under management (AUM) as of June 30, 2025, were $248.4 billion, a 1.5% increase from the prior year [6][8] - The average AUM for the reported quarter was $238.5 billion, down 2.8% year-over-year [6] Expense Analysis - Operating expenses rose to $702.9 million, an increase of 13.1% year-over-year [4] - The adjusted compensation expenses to operating revenues ratio improved to 65.5 from 66 in the previous year [4] Balance Sheet Strength - Cash and cash equivalents totaled $978.3 million, up 7.7% from the prior quarter [7] - Stockholders' equity increased by 21.3% sequentially to $786.5 million [7] Share Repurchase Activity - In the reported quarter, Lazard repurchased 0.9 million shares at an average price of $46.44 per share, with approximately $160 million remaining for future repurchases [9]

Core Insights - Lazard reported revenue of $769.87 million for the quarter ended June 2025, reflecting a 12.5% increase year-over-year and surpassing the Zacks Consensus Estimate of $688.5 million by 11.82% [1] - The company's EPS was $0.52, consistent with the previous year's quarter, and exceeded the consensus EPS estimate of $0.38 by 36.84% [1] Financial Performance - Assets under management at the end of the period reached $248.36 billion, exceeding the average estimate of $236.20 billion [4] - Total Fixed Income assets under management were $47.06 billion, above the average estimate of $45.12 billion [4] - Net flows were positive at $0.68 billion, contrasting with the estimated outflow of $3.51 billion [4] - Adjusted net revenue from Asset Management was $268.49 million, slightly above the estimated $261.01 million, marking a 1.2% increase year-over-year [4] - Adjusted net revenue from Financial Advisory was $491.36 million, significantly higher than the estimated $417.05 million, representing a 20.5% year-over-year increase [4] - Adjusted net revenue from Corporate was $10.02 million, exceeding the estimate of $9.44 million, but showing a decline of 12.8% compared to the previous year [4] Market Performance - Lazard's shares have returned 17.4% over the past month, outperforming the Zacks S&P 500 composite's 5.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The total firm-wide adjusted net revenue for the first half of 2025 was $1.4 billion, with a second quarter adjusted net revenue of $770 million, up 12% year-over-year [4][8] - Financial Advisory achieved a record first half adjusted net revenue of $861 million, with second quarter adjusted net revenue of $491 million, up 20% from the previous year [4][8] - Asset Management reported adjusted net revenue of $533 million for the first half of the year, with second quarter adjusted net revenue of $268 million, up 1% year-over-year [5][10] Business Line Data and Key Metrics Changes - Financial Advisory revenue demonstrated geographic and product diversity, with record revenue in France and Germany [4] - Revenue from private capital accounted for over 40% of total financial advisory revenue, reflecting increased emphasis on this business [5] - Asset Management AUM increased by 10% year-to-date, reaching $248 billion as of June 30, 2025, with positive net flows and record gross inflows for the first half of the year [5][10] Market Data and Key Metrics Changes - The second quarter saw market appreciation of $11.9 billion and foreign exchange appreciation of $8.4 billion, contributing to overall asset management performance [11] - Notable new mandates included significant inflows from various institutional clients across different strategies, indicating robust client engagement [11] Company Strategy and Development Direction - The company is diversifying its advisory business model, now comprising approximately 60% M&A and 40% non-M&A activities, with a focus on expanding product offerings [24] - The outlook for M&A activity is improving, driven by strong corporate balance sheets and ongoing dialogue with corporate strategics [14][29] - The company is investing in talent acquisition, having hired 14 financial advisory managing directors in 2025, aiming to expand its team by 10 to 15 net per year [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving environment for financial advisory activity, citing strong underlying drivers such as innovation and technology [14][26] - The regulatory environment is expected to clarify, which may enhance M&A activity, particularly from private equity [78] - Management highlighted the importance of human relationships in an AI-enabled world, emphasizing the need for deep client connectivity [74] Other Important Information - The adjusted effective tax rate for the second quarter was 36.5%, with expectations for the full year to be in the mid-twenty percent range [13] - The company returned $60 million to shareholders in the second quarter, including a quarterly dividend of $0.50 per share [13] Q&A Session Summary Question: Advisory outlook and recovery trajectory - Management noted that while the M&A market is improving, the business mix is diversifying, with a current ratio of 60% M&A and 40% non-M&A [24][26] Question: Asset management distribution momentum - Management highlighted changes in sales and distribution teams and increased clarity and accountability in setting sales goals, contributing to positive net inflows [35][36] Question: Advisory compensation ratio and hiring - The compensation ratio was held flat at 65.5%, with management cautious about quarter-to-quarter fluctuations, aiming for a long-term goal of 60% [42][43] Question: M&A activity in Europe vs. the U.S. - Management indicated that while European activity remains strong, they expect a disproportionate pickup in U.S. activity in the latter half of the year [54] Question: Impact of inflows on asset management fee rates - The fee rate increased slightly quarter-over-quarter, with expectations for stability or an increase due to shifts in AUM mix [83] Question: Restructuring and liability management activity - Management noted that even in a constructive environment, challenges remain for certain companies, leading to continued activity in liability management [92]

Financial Data and Key Metrics Changes - The company reported total firm-wide adjusted net revenue of $1.4 billion for the first half of the year, with a record first half in Financial Advisory generating adjusted net revenue of $861 million [2][3] - For the second quarter, firm-wide adjusted net revenue was $770 million, up 12% year-over-year, driven by Financial Advisory, which achieved adjusted net revenue of $491 million, up 20% from the previous year [5][6] - Adjusted compensation expense for the second quarter was $504 million, resulting in a compensation ratio of 65.5%, compared to 66% for the same quarter last year [9][10] Business Line Data and Key Metrics Changes - Financial Advisory revenue represented over 40% of total financial advisory revenue from private capital, reflecting a strategic shift towards this area [3] - Asset Management reported adjusted net revenue of $533 million for the first half of the year, with a positive net flow in the second quarter and AUM increasing by 10% year-to-date [3][4] - The second quarter adjusted net revenue for Asset Management was $268 million, up 1% year-over-year, with average AUM of $239 billion, which was 3% lower than the previous year [7][8] Market Data and Key Metrics Changes - The company noted strong client engagement across both businesses, with corporate leaders becoming more comfortable making decisions in the current environment [4] - Market appreciation contributed $11.9 billion to AUM, with foreign exchange appreciation adding $8.4 billion and net inflows of $700 million during the quarter [8] Company Strategy and Development Direction - The company is focusing on diversifying its advisory business model, with a current mix of approximately 60% M&A and 40% non-M&A activities [19] - There is an emphasis on enhancing the Asset Management business through improved sales and distribution strategies, with record gross inflows in the first half of the year [13][14] - The company is well-positioned to benefit from ongoing investments in private capital coverage and expects private equity to play a more active role in M&A [12][73] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving environment for financial advisory activity, citing strong corporate balance sheets and a constructive financing market [11][24] - The company anticipates that the regulatory environment will clarify, which should facilitate M&A activity, particularly from private equity [73] - Management highlighted the importance of human relationships in an AI-enabled world, emphasizing that deep client connectivity will remain crucial [69] Other Important Information - The company has returned $60 million to shareholders in the second quarter, including a quarterly dividend of $47 million [10] - The adjusted effective tax rate for the second quarter was 36.5%, with expectations for the full year to be in the mid-twenty percent range [10] Q&A Session Summary Question: Advisory outlook and recovery trajectory - Management emphasized the diversification of the advisory business model, now at a mix of 60% M&A and 40% non-M&A, and noted that while the environment is improving, it may not be linear [19][20] Question: Asset management distribution momentum - Management discussed changes in sales and distribution teams, highlighting clarity and accountability in setting specific goals, which have contributed to improved performance [29][30] Question: Timing to hit compensation ratio goals - Management stated that achieving the goal of a 60% compensation ratio will depend on market conditions and performance, with no specific timetable provided [36][37] Question: M&A activity in Europe vs. the U.S. - Management noted that while European activity remains strong, they expect a disproportionate pickup in U.S. activity in the latter half of the year [46][47] Question: Impact of recent inflows on asset management fee rates - Management indicated that the fee rate increased slightly quarter-over-quarter and year-over-year, with expectations for stability or an increase in average fee rates due to shifts in AUM [78][79]

Core Viewpoint - Lazard reported quarterly earnings of $0.52 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, with a year-over-year comparison showing no change in earnings per share [1][2] Financial Performance - The company achieved revenues of $769.87 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 11.82%, compared to $684.64 million in the same quarter last year [2] - Over the last four quarters, Lazard has exceeded consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - Lazard shares have increased approximately 6.8% since the beginning of the year, while the S&P 500 has gained 8.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $741.66 million, and for the current fiscal year, it is $2.35 on revenues of $3.01 billion [7] - The trend of estimate revisions for Lazard was mixed prior to the earnings release, which may change following the recent results [6] Industry Context - The Financial - Miscellaneous Services industry, to which Lazard belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Lazard's Business Overview - Lazard is an independent financial advisory and asset management firm[11] - Asset Management AUM reached $248 billion in 2Q25, with 63% in non-USD securities[19] - Financial Advisory had >200 clients in FY24 with fees >$1M[19] Financial Performance & Strategy - Lazard aims to double revenue by 2030 and achieve a 10-15% average annual total shareholder return (TSR)[31] - In 2024, Financial Advisory net revenue was $1731 million and Asset Management net revenue was $1100 million[161] - Lazard targets an $85 million annual revenue per MD in Financial Advisory by 2025, increasing to $10 million by 2028[34] Financial Metrics - Adjusted net revenue for 2024 was $2890 million[159] - The adjusted compensation ratio for 2024 was 659%[154] - The adjusted non-compensation ratio for 2024 was 199%[156]

Financial Highlights [Q2 & H1 2025 Performance Summary](index=1&type=section&id=Q2%20%26%20H1%202025%20Performance%20Summary) Lazard achieved strong Q2 2025 performance with 12% YoY adjusted net revenue growth, record Financial Advisory revenue, and positive Asset Management net flows Selected Results (Three Months Ended June 30) | (Selected results, $ in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % '25-'24 | | :--- | :--- | :--- | :--- | | **Adjusted Net Revenue** | $770 | $685 | 12% | | - Financial Advisory | $491 | $408 | 20% | | - Asset Management | $268 | $265 | 1% | | **Adjusted Net Income** | $55 | $53 | 5% | | **Adjusted Per share, diluted** | $0.52 | $0.52 | –% | | **Ending AUM ($ in billions)** | $248 | $245 | 2% | Selected Results (Six Months Ended June 30) | (Selected results, $ in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % '25-'24 | | :--- | :--- | :--- | :--- | | **Adjusted Net Revenue** | $1,413 | $1,431 | (1%) | | - Financial Advisory | $861 | $855 | 1% | | - Asset Management | $533 | $541 | (2%) | | **Adjusted Net Income** | $116 | $119 | (3%) | | **Adjusted Per share, diluted** | $1.08 | $1.17 | (8%) | - The CEO highlighted **record revenue in Financial Advisory** for Q2 and H1, and an inflection point for Asset Management with **positive net flows** and **record gross inflows**[2](index=2&type=chunk) - The firm has hired **14 Managing Directors** in Financial Advisory year-to-date to support long-term growth[3](index=3&type=chunk) Segment Performance [Financial Advisory](index=2&type=section&id=Financial%20Advisory) Financial Advisory achieved record Q2 2025 adjusted net revenue of $491 million, up 20% YoY, driven by robust M&A and advisory mandates Adjusted Net Revenue | Period | Adjusted Net Revenue ($M) | YoY Change | | :--- | :--- | :--- | | Q2 2025 | $491 | 20% | | H1 2025 | $861 | 1% | - Key M&A advisory roles included CD&R's **€16 billion acquisition** of a stake in Sanofi's consumer health unit, Berry Global's **$15.0 billion combination** with Amcor, and Ferrero's **$3.1 billion acquisition** of WK Kellogg Co[9](index=9&type=chunk) - The firm's Private Capital Advisory, Capital Solutions, and Restructuring practices were actively engaged, advising clients including Accel-KKR, ZF Friedrichshafen, Solo Brands, and Southern Water[5](index=5&type=chunk)[6](index=6&type=chunk) [Asset Management](index=2&type=section&id=Asset%20Management) Asset Management reported Q2 2025 adjusted net revenue of $268 million, with AUM reaching $248 billion and positive net inflows of $0.7 billion Adjusted Net Revenue | Period | Adjusted Net Revenue ($M) | YoY Change | | :--- | :--- | :--- | | Q2 2025 | $268 | 1% | | H1 2025 | $533 | (2%) | Assets Under Management | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Average AUM ($B) | $239 | $245 | (3%) | | Ending AUM ($B) | $248 | $245 | 2% | - AUM increased by **$21 billion sequentially** from March 31, 2025, driven by **market appreciation ($11.9 billion)**, **foreign exchange appreciation ($8.4 billion)**, and **net inflows ($0.7 billion)**[10](index=10&type=chunk) Operating Expenses [Compensation and Benefits Expense](index=3&type=section&id=Compensation%20and%20Benefits%20Expense) Adjusted compensation and benefits expense for Q2 2025 was $504 million, with the compensation ratio improving to 65.5% and a long-term goal of 60% or below Adjusted Compensation and Benefits | Period | Adjusted Comp & Benefits ($M) | Adjusted Comp Ratio | | :--- | :--- | :--- | | Q2 2025 | $504 | 65.5% | | Q2 2024 | $452 | 66.0% | | H1 2025 | $926 | 65.5% | | H1 2024 | $945 | 66.0% | - Lazard's stated goal is to deliver an adjusted compensation ratio of **60% or below**, with the timing dependent on market conditions[11](index=11&type=chunk) [Non-Compensation Expenses](index=3&type=section&id=Non-Compensation%20Expenses) Adjusted non-compensation expenses rose to $157 million in Q2 2025, with the ratio improving to 20.4% and a target range of 16% to 20% Adjusted Non-Compensation Expenses | Period | Adjusted Non-Comp Expense ($M) | Adjusted Non-Comp Ratio | | :--- | :--- | :--- | | Q2 2025 | $157 | 20.4% | | Q2 2024 | $149 (approx) | 21.7% | | H1 2025 | $305 | 21.6% | | H1 2024 | $283 (approx) | 19.8% | - Lazard's goal is to achieve an adjusted non-compensation ratio between **16% and 20%**, with timing dependent on market conditions[12](index=12&type=chunk) Financial Position and Capital Management [Taxes](index=3&type=section&id=Taxes) Q2 2025 income tax provision was $32 million, with an adjusted effective tax rate of 36.5%, while H1 2025 saw a 17.4% adjusted effective tax rate Tax Information | Period | Tax Provision ($M) | U.S. GAAP ETR | Adjusted ETR | | :--- | :--- | :--- | :--- | | Q2 2025 | $32 | 34.1% | 36.5% | | H1 2025 | $24 | 16.5% | 17.4% | [Capital Management and Balance Sheet](index=4&type=section&id=Capital%20Management%20and%20Balance%20Sheet) Lazard returned $60 million to shareholders in Q2 2025, maintaining a strong balance sheet with $978 million in cash and equivalents Shareholder Returns | Shareholder Returns ($M) | Q2 2025 | H1 2025 | | :--- | :--- | :--- | | Dividends | $47 | $92 | | Share Repurchases | $4 | $40 | | Employee Tax Obligations | $9 | $103 | | **Total Returned** | **$60** | **$235** | - A quarterly dividend of **$0.50 per share** was declared, payable on August 15, 2025[16](index=16&type=chunk) - As of June 30, 2025, cash and cash equivalents stood at **$978 million**, and the total outstanding share repurchase authorization was approximately **$160 million**[15](index=15&type=chunk)[16](index=16&type=chunk) Financial Statements and Reconciliations [Condensed Consolidated Statement of Operations (U.S. GAAP)](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations%20(U.S.%20GAAP)) This section presents the unaudited U.S. GAAP consolidated statement of operations for Q2 and H1 2025, detailing revenues, expenses, and net income Three Months Ended June 30 | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net revenue | $795,997 | $685,349 | | Operating income | $93,081 | $63,640 | | Net income attributable to Lazard, Inc. | $55,346 | $49,909 | | Diluted net income per share | $0.52 | $0.49 | Six Months Ended June 30 | ($ in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net revenue | $1,444,048 | $1,450,102 | | Operating income | $147,716 | $118,201 | | Net income attributable to Lazard, Inc. | $115,721 | $85,664 | | Diluted net income per share | $1.08 | $0.84 | [Condensed Consolidated Statement of Financial Condition (U.S. GAAP)](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Condition%20(U.S.%20GAAP)) This section presents the unaudited U.S. GAAP balance sheet as of June 30, 2025, detailing the company's assets, liabilities, and equity As of June 30, 2025 and December 31, 2024 | ($ in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$4,493,386** | **$4,793,993** | | Cash and cash equivalents | $978,259 | $1,308,218 | | Senior debt | $1,688,631 | $1,687,052 | | **Total liabilities** | **$3,623,324** | **$4,029,210** | | **Total stockholders' equity** | **$786,484** | **$685,154** | [Selected Summary Financial Information (Adjusted Basis)](index=11&type=section&id=Selected%20Summary%20Financial%20Information%20(Adjusted%20Basis)) This section summarizes the company's adjusted (non-GAAP) financial performance for Q2 and H1 2025, including revenue by segment and key earnings metrics Three Months Ended June 30 | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Adjusted net revenue | $769,866 | $684,642 | | Adjusted operating income | $108,232 | $84,166 | | Adjusted net income | $55,346 | $52,869 | | Adjusted diluted net income per share | $0.52 | $0.52 | Six Months Ended June 30 | ($ in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Adjusted net revenue | $1,413,051 | $1,431,207 | | Adjusted operating income | $182,249 | $203,705 | | Adjusted net income | $115,721 | $119,475 | | Adjusted diluted net income per share | $1.08 | $1.17 | [Assets Under Management (AUM)](index=13&type=section&id=Assets%20Under%20Management%20(AUM)) This section details the composition and changes in Assets Under Management (AUM), totaling $248.4 billion as of June 30, 2025 AUM by Asset Class | ($ in millions) | As of June 30, 2025 | As of March 31, 2025 | | :--- | :--- | :--- | | Total Equity | $192,250 | $174,130 | | Total Fixed Income | $47,057 | $44,024 | | **Total AUM** | **$248,360** | **$227,427** | AUM Roll-Forward Q2 2025 | AUM Roll-Forward Q2 2025 ($M) | Amount | | :--- | :--- | | AUM - Beginning of Period | $227,427 | | Net Flows | $677 | | Market and foreign exchange appreciation | $20,256 | | **AUM - End of Period** | **$248,360** | [Reconciliation of U.S. GAAP to Adjusted Results](index=14&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20to%20Adjusted%20Results) This section provides detailed tables reconciling U.S. GAAP financial figures to adjusted (non-GAAP) results, specifying adjustments for key metrics - Key adjustments to reconcile GAAP to Adjusted Net Revenue include items related to noncontrolling interests, Lazard Fund Interests (LFI), distribution fees, reimbursable deal costs, and corporate interest expense[44](index=44&type=chunk) - Adjustments to reconcile GAAP to Adjusted Operating Income include removing operating income related to noncontrolling interests, adding back corporate interest expense, and excluding amortization and costs associated with cost-saving initiatives[47](index=47&type=chunk)