Summary of PJT Partners Conference Call (December 09, 2025) Company Overview - **Company**: PJT Partners (NYSE:PJT) - **Speaker**: Paul Taubman, Chairman, CEO, and founder - **Company Milestone**: Celebrated its first decade with significant growth and development as a leading investment banking firm [1][2] Key Lessons and Strategic Goals - **Key Lesson**: Building a strong foundation takes time; patience is essential for long-term success [4] - **Strategic Goals**: Focus on leveraging the foundational investments made in the first decade to accelerate growth in the next 10 years without compromising standards [5] Investment Focus - **Target Areas**: Major investment opportunities identified in healthcare, technology, and industrials, which are characterized by large wallets and high-impact potential [6][7] - **Growth Strategy**: The company aims to capitalize on previously under-invested verticals to enhance its market position [7] Hiring Outlook - **Hiring Trends**: Anticipation of continued strong hiring as the company seeks to build on its foundational growth and capitalize on new opportunities [8][9] M&A Environment - **Current Administration Impact**: The current administration's approach is more favorable for large consolidating transactions compared to the previous administration, leading to increased deal activity [12][15] - **Private Equity Dynamics**: Private equity firms are currently cautious due to a mismatch between capital invested and returns realized, but there is an expectation of increased activity as conditions improve [16][17] Financing Conditions - **AI Data Center Debt**: Concerns about the impact of AI data center debt on financing markets are noted, but the underlying credit quality remains strong [22][23] - **Market Dynamics**: The potential for disruption in various industries due to AI deployment is highlighted, with a focus on the need for companies to adapt to changing business models [23] M&A Activity Trends - **Deal Size Trends**: While the number of smaller deals has decreased, larger deals are on the rise due to strong corporate balance sheets and a favorable regulatory environment [24][25] - **Overall M&A Volume**: Current M&A activity is returning to normal levels after being suppressed by previous economic conditions and regulatory challenges [26] Restructuring and Liability Management - **Market Outlook**: Continued high levels of restructuring and liability management activity are expected due to increased debt levels and ongoing business model disruptions [31][32] - **Geographic Expansion**: The company is expanding its restructuring capabilities internationally, increasing its addressable market [33] Talent and Compensation - **Hiring Market Dynamics**: The competitive hiring environment is influenced by M&A activity levels, affecting compensation ratios and recruitment efforts [40][43] - **Productivity Gains**: Anticipated increases in productivity due to technological advancements, with a focus on enhancing client service [44][45] Conclusion - **Future Outlook**: The company is positioned for growth in the coming years, with expectations of increased M&A activity, enhanced restructuring capabilities, and a focus on leveraging productivity gains to improve client service [46][47]

Core Viewpoint - PJT Partners Inc. will have its Chairman and CEO, Paul J. Taubman, present at the Goldman Sachs 2025 Financial Services Conference on December 9, 2025, at 2:20 p.m. ET, with a live webcast available on their website [1] Company Overview - PJT Partners is described as a premier, global, advisory-focused investment bank that emphasizes a different approach to investment banking, built from the ground up [1] - The company prides itself on its highly experienced and collaborative teams that provide independent advice along with high-touch client service [1] - PJT Partners has successfully attracted top talent in the markets it operates in, allowing it to deliver leading advice to significant global companies [1] - The firm is involved in transformative transactions and restructurings, raising billions of dollars in capital to support both startups and established companies [1]

Core Viewpoint - PJT Partners Inc. will have its Chairman and CEO, Paul J. Taubman, present at the Goldman Sachs 2025 Financial Services Conference on December 9, 2025, at 2:20 p.m. ET, with a live webcast available on their website [1] Company Overview - PJT Partners is described as a premier, global, advisory-focused investment bank that emphasizes a different approach to client service and advice [1] - The company prides itself on its highly experienced and collaborative teams that provide independent advice and high-touch client service [1] - PJT Partners has successfully attracted top talent in the markets it operates in, delivering leading advice to significant companies and facilitating transformative transactions and restructurings [1] - The firm has raised billions of dollars globally to support both startups and more established companies [1]

Core Insights - Liquidity is crucial for a company's ability to meet debt obligations and can drive business growth, making it a key factor for investors [1] - Four top-ranked stocks identified for potential investment are EverQuote, Inc. (EVER), Innodata Inc. (INOD), PJT Partners Inc. (PJT), and GigaCloud Technology Inc. (GCT) [1][9] Liquidity Measures - Current Ratio: Measures current assets against current liabilities; a ratio below 1 indicates more liabilities than assets, while a range of 1-3 is ideal [3] - Quick Ratio: Indicates ability to pay short-term obligations, with a desirable ratio of more than 1 [4] - Cash Ratio: The most conservative measure, focusing on cash and equivalents relative to current liabilities; a ratio greater than 1 is desirable but may indicate inefficiency [5] Screening Parameters - Asset Utilization: A measure of efficiency, calculated as total sales over the last 12 months divided by the average total assets; a higher ratio than the industry average indicates efficiency [6] - Growth Score: A proprietary metric ensuring that selected stocks have solid growth potential; stocks with a Growth Score of A or B tend to outperform others [10] Company-Specific Insights - **EverQuote, Inc. (EVER)**: Online insurance marketplace with Q3 revenues of $173.9 million, a 20% year-over-year increase; projected Q4 revenues between $174-$180 million [12][13] - **Innodata Inc. (INOD)**: Data engineering company with Q3 revenues of $62.6 million, up 20% year-over-year; expects significant revenue growth from new contracts [15][16] - **PJT Partners Inc. (PJT)**: Advisory-focused investment bank with Q3 revenues of $447 million, a 37% year-over-year increase; management anticipates strong M&A activity due to favorable market conditions [16][17] - **GigaCloud Technology Inc. (GCT)**: Provides B2B e-commerce solutions with Q3 revenues of $333 million, a 10% year-over-year increase; expects Q4 revenues between $328 million and $344 million [19][20]

Core Viewpoint - PJT Partners has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Rising earnings estimates for PJT Partners indicate an improvement in the company's underlying business, likely leading to increased stock prices [5][8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7][9]. - PJT Partners' upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, PJT Partners is expected to earn $6.85 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 9.6% over the past three months [8].

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment Group 1: Company Earnings Estimates - Encore Capital Group, Inc. (ECPG) has seen its earnings estimate increase by 18.5% over the last 60 days [1] - PJT Partners Inc. (PJT) has experienced a 9.6% increase in its earnings estimate over the last 60 days [2] - Everus Construction Group, Inc. (ECG) has had its earnings estimate rise by 11.6% in the past 60 days [3] - United Fire Group, Inc. (UFCS) has seen a significant increase of 29.7% in its earnings estimate over the last 60 days [3] - BioLife Solutions, Inc. (BLFS) has experienced the largest increase, with a 40% rise in its earnings estimate over the last 60 days [4]

Financial Performance - Total Revenues for Q3 2025 were $447.1 million, a 37% increase from $326.3 million in Q3 2024[116] - Advisory Fees reached $389.8 million in Q3 2025, up 37% from $283.8 million in Q3 2024, primarily driven by increased strategic advisory revenues[116] - Placement Fees increased by 51% to $49.2 million in Q3 2025, compared to $32.5 million in Q3 2024, mainly due to higher fund placement revenues[116] - Net Income for Q3 2025 was $74.96 million, an 82% increase from $41.07 million in Q3 2024[116] - Total Revenues for the nine months ended September 30, 2025, were $1,178.5 million, an increase of 16.0% compared to $1,015.9 million for the same period in 2024[119] - Advisory Fees increased to $1,026.5 million for the nine months ended September 30, 2025, up 16.7% from $879.6 million in 2024, primarily due to higher strategic advisory revenues[119] - Placement Fees rose to $128.4 million for the nine months ended September 30, 2025, a 12.8% increase from $113.8 million in 2024, driven by increased fund placement revenues[119] Expenses - Total Expenses for Q3 2025 were $356.1 million, a 29% increase from $276.9 million in Q3 2024[116] - Compensation and Benefits expenses increased by 34% to $303.3 million in Q3 2025, up from $226.8 million in Q3 2024[116] - Total Expenses for the nine months ended September 30, 2025, were $958.5 million, reflecting a 13.0% increase from $848.2 million in 2024[121] - The increase in Compensation and Benefits for the nine months ended September 30, 2025, was $95.3 million, attributed to higher revenues compared to the prior year[121] Income and Taxation - Income Before Provision for Taxes was $90.95 million in Q3 2025, an 84% increase from $49.39 million in Q3 2024[116] - The Company's Provision for Taxes for the nine months ended September 30, 2025, was $9.5 million, with an effective tax rate of 4.3% on pretax income of $220.0 million[123] Client Metrics - The total number of clients increased to 237 in Q3 2025 from 220 in Q3 2024[117] - The number of fees of at least $1 million from client transactions rose to 68 in Q3 2025, compared to 47 in Q3 2024[117] Cash and Investments - As of September 30, 2025, cash, cash equivalents, and short-term investments totaled $521.2 million, down from $546.8 million as of December 31, 2024[128] - Total accounts receivable, net of allowance for credit losses, was $371.3 million as of September 30, 2025, an increase from $320.8 million as of December 31, 2024[129] Share Repurchase - The Company repurchased 1.3 million shares of Class A common stock at an average price of $149.85, totaling $190.5 million during the nine months ended September 30, 2025[138] - The remaining repurchase authorization as of September 30, 2025, was $87.2 million under the $500 million share repurchase program[137] Market Outlook - The company expects market volumes for private capital solutions to reach record levels barring major changes in the macroeconomic outlook[99]

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Financial Data and Key Metrics Changes - The company reported record results with third-quarter revenue of $447 million, up 37% year-over-year, and nine-month revenues of $1.18 billion, up 16% year-over-year [3][5] - Adjusted pre-tax income for the third quarter was $94 million, up 86%, and for the nine months, it was $230 million, reflecting a 34% increase [3][8] - Adjusted EPS for the third quarter was $1.85, up 99%, and for the nine months, it was $4.43, up 43% from the previous year [9][10] Business Line Data and Key Metrics Changes - Strategic advisory revenues significantly increased for both the third quarter and the first nine months, contributing to overall revenue growth [5][14] - Restructuring revenues rose slightly in both periods, while PJT Partners' revenues were flat in the third quarter and down modestly for the first nine months [5][11] - The primary fundraising environment remains challenged, with PJT Partners' revenues comparable to the previous year, driven by strength in private capital solutions [12] Market Data and Key Metrics Changes - The macro environment has improved, with equity prices near record highs and low volatility in equities and credit, contributing to a recovery in M&A activity [3][4] - Despite favorable conditions, certain industries are experiencing stress due to high interest rates and changing consumer preferences, impacting restructuring activity [11][65] Company Strategy and Development Direction - The company aims to be the world's best investment bank, focusing on building a next-generation investment bank that addresses complex challenges with creative solutions [15] - Continued investment in strategic advisory and talent acquisition is expected to drive future growth, with a 7% increase in headcount year-over-year [15][16] - The company anticipates that restructuring bankers will remain active in addressing liability management opportunities [11] Management's Comments on Operating Environment and Future Outlook - Management expressed tempered optimism about the near-to-intermediate operating environment, acknowledging risks such as geopolitical uncertainty and high interest rates [4] - The company expects restructuring results to meet or exceed last year's record levels, despite mixed trends in the broader market [11][20] - Management believes there is potential for further margin improvement and operating leverage as revenue growth continues [40][44] Other Important Information - The company ended the quarter with $520 million in cash and equivalents, and no funded debt outstanding [10] - A quarterly dividend of $0.25 per share was approved by the board [10] Q&A Session Summary Question: Outlook on restructuring activity - Management sees no reduction in restructuring activity and expects elevated levels to continue, driven by factors such as sponsor client penetration and global expansion [20][22] Question: Partner productivity and revenue expectations - Management does not focus on specific revenue per partner targets but emphasizes hiring impactful individuals to enhance overall financial results [24][27] Question: Impact of government shutdown - Management believes the shutdown will not significantly affect business but is concerned about broader macroeconomic implications [32][34] Question: Primary fundraising business outlook - Management notes that while fundraising is improving, increased competition may arise as more firms seek to tap the market [36] Question: Operating leverage and pre-tax margin outlook - Management expects operating margins to be at the high end of historical levels and believes there is potential for further improvement [40][44] Question: Divergence of deal value versus deal count - Management attributes the increase in larger transactions to a favorable regulatory environment and anticipates a reset in sponsor activity to improve transaction counts [49][51] Question: Credit backdrop and restructuring activity - Management highlights that technological dislocation may lead to an increase in companies needing to address their balance sheets over time [65][66]

Financial Data and Key Metrics Changes - Third quarter revenue reached $447 million, up 37% year-over-year, while nine-month revenues increased 16% to $1.18 billion [3][5] - Adjusted pre-tax income for the third quarter was $94 million, up 86%, and for the nine months, it increased 34% [3][8] - Adjusted EPS for the third quarter was $1.85, up 99%, and for the nine months, it was $4.43, up 43% [9] Business Line Data and Key Metrics Changes - Strategic Advisory revenues significantly increased for both the third quarter and nine months, contributing to overall revenue growth [5][14] - Restructuring revenues rose slightly in both periods, while PJT Partners' revenues were flat in the third quarter and down modestly for the first nine months [5][12] Market Data and Key Metrics Changes - The macro environment has improved, with equity prices near record highs and low volatility in equities and credit [3][4] - The IPO market has reopened, contributing to M&A recovery, although geopolitical uncertainties and high interest rates pose risks [4][11] Company Strategy and Development Direction - The company aims to be the world's best investment bank, focusing on building a next-generation investment bank that addresses complex challenges with creative solutions [15] - Continued investment in Strategic Advisory and expansion into global markets are key growth strategies [22][12] Management's Comments on Operating Environment and Future Outlook - Management expresses tempered optimism about the near-to-intermediate operating environment, acknowledging risks such as geopolitical uncertainty and high interest rates [4][16] - The company expects restructuring results to meet or exceed last year's record levels, driven by ongoing demand [11] Other Important Information - The company ended the quarter with $520 million in cash and no funded debt outstanding [10] - A quarterly dividend of $0.25 per share has been approved by the board [10] Q&A Session Summary Question: Restructuring outlook and market position - Management sees no reduction in restructuring activity and expects elevated levels to continue, driven by various growth pillars [20][21] Question: Partner productivity and revenue expectations - Management does not focus on specific revenue per partner numbers but emphasizes the importance of hiring impactful individuals [24][27] Question: Impact of government shutdown on business - Management believes the shutdown will not significantly affect business but is concerned about broader macroeconomic implications [32][33] Question: Primary fundraising outlook - Management notes that while fundraising is improving, increased competition may arise as more firms seek to tap the market [34][35] Question: Operating leverage and pre-tax margin outlook - Management expects continued operating leverage and margin improvement, emphasizing long-term growth over short-term metrics [39][41] Question: Divergence of deal value versus deal count - Management attributes the increase in larger transactions to a favorable regulatory environment and anticipates a reset in sponsor activity to improve transaction counts [49][51] Question: Credit backdrop and restructuring activity - Management highlights the potential for increased restructuring needs due to technological dislocation and changing market dynamics [65][66] Question: Pull forward in revenue - Management indicated a modest pull forward of $8 million this quarter, similar to the previous year [73]