Core Insights - Lazard, Inc. has appointed Retired Four-Star U.S. Army General Michael "Erik" Kurilla as Senior Advisor in its Geopolitical Advisory group, effective immediately [1] Company Summary - Lazard, Inc. is recognized as a leading global financial advisory and asset management firm [1] - The addition of General Kurilla is aimed at enhancing the firm's expertise in strategic command, particularly in complex environments such as the Middle East and Central Asia [1]

Core Insights - Lazard, Inc. has appointed Cyrille Cotte as Managing Director and Head of Insurance for its European Financial Institutions Group, based in London [1] - Cyrille Cotte previously worked at Evercore as a Partner and Senior Managing Director in the European Financial Institutions Group [1] - Cotte's career has been focused on advising within the financial institutions sector [1]

Core Insights - Lazard, Inc. is expanding its Nordic operations by appointing Jesper Jensen as Managing Director, Financial Advisory and CEO of Denmark, effective September 17 [1] - The establishment of a new office in Denmark aims to enhance Lazard's presence and strengthen client relationships in the Nordic region [1] - Jesper Jensen brings over 25 years of experience and strong local market connectivity, which will facilitate Lazard's growth in Denmark [1]

Core Insights - Lazard, Inc. reported a preliminary asset under management (AUM) of $258.4 billion as of August 31, 2025, reflecting a 1.8% increase from July 31, 2025, driven by market appreciation and foreign exchange gains, partially offset by net outflows [1][10] Group 1: AUM Performance - The company's equity assets rose 1.9% month-over-month to $202.5 billion, while fixed-income AUM also increased by 1.9% to $46.8 billion, and other assets climbed nearly 1% to $8.9 billion [2][10] - Over the past years, Lazard has shown long-term resilience in AUM growth, with a compound annual growth rate (CAGR) of 1.7% from 2016 to 2024, despite declines in 2022 and the first half of 2025 [3] Group 2: Strategic Initiatives - Lazard has taken strategic steps to enhance its asset management franchise, including the establishment of Lazard Elaia Capital, a European growth capital initiative focused on technology sector investments [4] - The company finalized an initial investment in a strategic partnership with Elaia Partners in April 2024, and acquired Truvvo Partners in March 2023, adding $3.8 billion of AUM [4][5] Group 3: Industry Context - Peers such as Franklin Resources and T. Rowe Price have also experienced AUM growth, with Franklin reporting a preliminary AUM of $1.64 trillion and T. Rowe's AUM increasing to $1.73 trillion [6][7][8] - The growth trends in the industry are supported by market appreciation and strong demand for diversified investment solutions [8] Group 4: Market Performance - Over the past year, Lazard's shares have risen 18.6%, slightly outperforming the industry's growth of 18% [9]

Economic Overview - The economy is described as being in decent shape, with some weakening in the labor market and a slight decline in consumer sentiment [2][9] - There is an expectation of upward pressure on inflation due to the gradual adjustment to tariffs, with only about 25% of the tariff impact passed through to consumer prices so far [3][4] Federal Reserve and Inflation - The Federal Reserve faces a challenging situation with conflicting mandates of managing inflation and supporting the labor market, especially if inflation pressures materialize while the job market weakens [6][5] - The market reacted positively to weaker PPI numbers, suggesting that the Fed may have room to cut rates [4] CEO Sentiment and Market Activity - CEO sentiment remains very positive despite uncertainties in the geopolitical landscape and the economy [11][12] - There is a notable increase in M&A activity as large companies consider significant transactions, driven by demand from private equity investors [13][14] Lazard's Performance and Strategy - Lazard has achieved a 100% total shareholder return over the past two years, attributed to internal steps and favorable market conditions [14] - The company is focused on recruiting high-quality talent and has met its productivity targets ahead of schedule [16] - Lazard's asset management business has seen net positive flows year-to-date, with a new CEO joining to drive further growth [17] Technological Advancements - The integration of AI is expected to enhance Lazard's growth and improve the quality of advice provided to clients [17][18]

Core Viewpoint - Lazard, Inc. reported preliminary assets under management (AUM) of approximately $258.4 billion as of August 31, 2025, reflecting a combination of market appreciation, foreign exchange appreciation, and net outflows [1] Summary by Category Assets Under Management - As of August 31, 2025, Lazard's AUM totaled approximately $258.4 billion, which included market appreciation of $2.7 billion and foreign exchange appreciation of $2.2 billion [1] - The AUM also experienced net outflows of $0.2 billion during the month [1] Breakdown of AUM - The AUM breakdown as of August 31, 2025, is as follows: - Equity: $202,509 million - Fixed Income: $46,877 million - Other: $8,982 million - For comparison, the AUM figures for July 31, 2025, were: - Equity: $198,773 million - Fixed Income: $45,980 million - Other: $8,900 million [1]

Group 1 - Lazard, Inc. is characterized as a 'good co./bad co.' type stock, with over 60% of its revenue coming from a top-notch independent M&A advisory firm and less than 40% from a traditional asset management business that is currently facing challenges [1] - The company has unique cross-border capabilities in its M&A advisory services, which distinguishes it from competitors [1]

Core Viewpoint - Lazard Ltd. (LAZ) has outperformed its peers and the industry with a 19% share price increase over the past three months, driven by solid revenue growth, strategic initiatives, and cost management efforts [1][8]. Revenue Growth - Lazard has achieved a compound annual growth rate (CAGR) of 7.9% in revenues over the past four years, with continued momentum into the first half of 2025, primarily due to growth in financial advisory revenues and a diversified asset management mix [4]. - The company aims to double its revenues by 2030 while targeting an average annual shareholder return of 10-15% [5]. Asset Management Expansion - As of July 31, 2025, Lazard's preliminary assets under management (AUM) stood at $253.7 billion, reflecting a 3.1% increase from the previous year, supported by net inflows and market appreciation [9]. - The acquisition of Truvvo Partners in 2023 added $3.8 billion in AUM, and a partnership with Elaia Partners in 2024 introduced new asset management services focused on private market solutions in the technology sector [10]. Cost Management - Lazard is implementing disciplined cost management to restore historical profitability, targeting a compensation ratio of 60% or below and a non-compensation ratio between 16% and 20% [11]. - The company has seen a decrease in non-compensation expenses in recent years, contributing to improved margins [11]. Return on Equity - Lazard reported a trailing 12-month return on equity (ROE) of 34.33%, significantly higher than the industry average of 8.73%, indicating strong operational efficiency [12]. Earnings Projections - Earnings are projected to grow by 7.69% in 2025 and 54.10% in 2026, with recent upward revisions in earnings estimates reflecting positive analyst sentiment [13]. - Current earnings estimates for 2025 and 2026 have been adjusted upward, indicating encouraging prospects for the company [14]. Valuation - Lazard is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 15.85X, which is lower than the industry average of 20.56X, making it an attractive investment opportunity [16]. - The company’s strong fundamentals and upward estimate revisions further enhance its appeal for long-term investors [19].

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