PJT Partners, Inc. (NYSE:PJT) Q3 2023 Earnings Conference Call October 31, 2023 8:30 AM ET Company Participants Sharon Pearson - Head, IR Paul Taubman - Chairman & CEO Helen Meates - CFO Conference Call Participants Devin Ryan - JMP Securities James Yaro - Goldman Sachs Brian O'Brien - Wolfe Research Brennan Hawken - UBS Operator Good day, and welcome to the PJT Partners Third Quarter 2023 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sharon P ...

Company Overview - PJT Park Hill is a leading global advisor and placement agent to alternative asset managers, having raised over $480 billion in capital[6] - The company has a market capitalization of over $3 billion as of September 30, 2023[26] - PJT Partners operates in 11 countries with over 1,000 employees[27] Financial Performance - Total revenues for the latest twelve months ending Q3 2023 reached $1,105 million, a 4% increase year-over-year[36] - Adjusted EPS for the latest twelve months ending Q3 2023 was $3.39, representing a 22% decrease year-over-year[36] - Advisory revenue for the latest twelve months ending Q3 2023 was $966.8 million, compared to $825.3 million for the same period in 2022[16] - Placement revenue for the latest twelve months ending Q3 2023 was $117.7 million, compared to $228.6 million for the same period in 2022[16] - The company used approximately $142 million to pay dividends[12] - Approximately $985 million has been used to repurchase 173 million shares and share equivalents since the spin-off on October 1, 2015[95] Business Segments - LP Advisory has over $70 billion in LP portfolio sales[7] - GP Advisory has over $50 billion in GP-led secondary transactions[7]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for PJT Partners Inc [Financial Statements](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents PJT Partners Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2023 [Condensed Consolidated Statements of Financial Condition](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets increased to **$1.087 billion**, liabilities to **$321.9 million**, and equity remained stable at **$765.2 million** as of June 30, 2023 Condensed Consolidated Statements of Financial Condition (Unaudited) | (In Thousands) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $151,496 | $173,235 | | Accounts Receivable, Net | $333,059 | $317,751 | | Total Assets | **$1,087,102** | **$1,050,652** | | **Liabilities and Equity** | | | | Accrued Compensation and Benefits | $123,190 | $83,920 | | Total Liabilities | **$321,911** | **$291,094** | | Total Equity | **$765,191** | **$759,558** | | Total Liabilities and Equity | **$1,087,102** | **$1,050,652** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2023 total revenues grew **49%** to **$346.3 million**, driven by Advisory Fees, while H1 2023 revenues increased **14%** Q2 2023 vs Q2 2022 Performance (In Thousands) | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Advisory Fees | $323,794 | $186,649 | +73% | | Placement Fees | $20,028 | $49,482 | -60% | | **Total Revenues** | **$346,277** | **$233,141** | **+49%** | | Compensation and Benefits | $246,614 | $150,587 | +64% | | **Total Expenses** | **$292,108** | **$189,453** | **+54%** | | Net Income | $41,052 | $35,193 | +17% | | Net Income Attributable to PJT | $22,141 | $19,168 | +16% | | Diluted EPS | $0.86 | $0.74 | +16% | H1 2023 vs H1 2022 Performance (In Thousands) | Metric | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | Advisory Fees | $491,884 | $368,307 | +34% | | Placement Fees | $47,613 | $109,833 | -57% | | **Total Revenues** | **$546,265** | **$479,460** | **+14%** | | **Total Expenses** | **$462,903** | **$385,624** | **+20%** | | Net Income | $69,038 | $79,661 | -13% | | Net Income Attributable to PJT | $39,477 | $44,872 | -12% | | Diluted EPS | $1.53 | $1.74 | -12% | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to **$167.6 million** in H1 2023, with a net decrease in cash and cash equivalents of **$21.7 million** Six Months Ended June 30, Cash Flow Summary (In Thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $167,615 | $117,476 | | Net Cash Used in Investing Activities | ($26,922) | ($35,937) | | Net Cash Used in Financing Activities | ($164,500) | ($130,543) | | **Net Decrease in Cash and Cash Equivalents** | **($21,739)** | **($53,162)** | | Cash and Cash Equivalents, Beginning of Period | $173,235 | $200,481 | | Cash and Cash Equivalents, End of Period | $151,496 | $147,319 | - Financing activities in the first six months of 2023 included **$104.1 million** for treasury stock purchases, **$19.4 million** for cash-settled exchanges of partnership units, and **$12.3 million** for dividends[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, revenue disaggregation, equity compensation, and share repurchases, with **$98.0 million** in H1 2023 equity-based compensation Disaggregation of Revenues (Six Months Ended June 30) | (In Thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Advisory Fees | $491,884 | $368,307 | | Placement Fees | $47,613 | $109,833 | | Interest Income from Placement Fees and Other | $8,222 | $4,157 | | **Revenues from Contracts with Customers** | **$547,719** | **$482,297** | - As of June 30, 2023, there was **$206.1 million** of unrecognized compensation expense related to unvested RSU awards, expected to be recognized over a weighted-average period of **1.9 years**[57](index=57&type=chunk) - During the first six months of 2023, the company repurchased **1.4 million** shares of Class A common stock for **$104.0 million**. The remaining repurchase authorization was **$69.7 million** as of June 30, 2023[54](index=54&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=23&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) MD&A highlights **49%** Q2 2023 revenue growth driven by restructuring, a challenging M&A and fundraising environment, and strong liquidity [Business Environment](index=23&type=section&id=Business%20Environment) H1 2023 saw a **37%** decline in M&A volumes, elevated restructuring activity, and a challenging fundraising environment for alternative assets - Worldwide M&A announced volumes during the first half of 2023 were down **37%** compared with the first half of 2022[98](index=98&type=chunk) - Global restructuring activity remained elevated during Q2 2023 due to adverse macroeconomic conditions and higher interest rates[99](index=99&type=chunk) - The fundraising environment remains challenging as limited partners have become more discerning, with a continued flight to quality and focus on existing relationships[100](index=100&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q2 2023 total revenues grew **49%** to **$346.3 million**, driven by Advisory Fees, while H1 revenues increased **14%** with an **11%** decline in income before taxes Condensed Consolidated Results of Operations (In Thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2023** | **2022** | **2023** | **2022** | | **Total Revenues** | **$346,277** | **$233,141** | **$546,265** | **$479,460** | | Advisory Fees | $323,794 | $186,649 | $491,884 | $368,307 | | Placement Fees | $20,028 | $49,482 | $47,613 | $109,833 | | **Total Expenses** | **$292,108** | **$189,453** | **$462,903** | **$385,624** | | Compensation and Benefits | $246,614 | $150,587 | $379,657 | $309,819 | | **Income Before Provision for Taxes** | **$54,169** | **$43,688** | **$83,362** | **$93,836** | - The increase in Advisory Fees for both the three and six-month periods was principally due to an increase in restructuring revenues[118](index=118&type=chunk)[119](index=119&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$225.6 million** in cash and investments and an undrawn **$60 million** credit facility - As of June 30, 2023, the company had cash, cash equivalents, and short-term investments of **$225.6 million**[129](index=129&type=chunk) - The company's revolving credit facility of **$60.0 million** was extended to mature on October 1, 2024, and remained undrawn as of June 30, 2023[128](index=128&type=chunk) - During the first six months of 2023, the company repurchased **1.4 million** shares for **$104.0 million** under its share repurchase program[139](index=139&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces exchange rate risk, resulting in a **$3.1 million** gain in OCI and a **$2.7 million** loss in Interest Income and Other for H1 2023 - The company is not subject to significant market risk (interest rate, commodity price) or credit risk as its business is not capital-intensive and it does not use derivative instruments[150](index=150&type=chunk) - The company is exposed to exchange rate risk. For the six months ended June 30, 2023, the impact of foreign currency fluctuation was a gain of **$3.1 million** in Other Comprehensive Income and a loss of **$2.7 million** in Interest Income and Other[153](index=153&type=chunk) [Controls and Procedures](index=32&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by the report[154](index=154&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the most recent quarter[155](index=155&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, and other corporate information [Legal Proceedings](index=33&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company faces a reinstated claim for negligent supervision related to a former employee's fraudulent conduct, which it intends to defend - In June 2023, the New York Court of Appeals reversed lower court dismissals and reinstated a claim for negligent supervision and retention against the company in a case filed by affiliates of Moore Capital concerning the actions of a former employee[158](index=158&type=chunk) - The company believes the remaining claim is without merit and will continue to vigorously oppose it[158](index=158&type=chunk) [Risk Factors](index=33&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes were reported to the risk factors previously disclosed in the Annual Report on Form 10-K for 2022 - No material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022 were reported[159](index=159&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) In Q2 2023, the company repurchased **592,343** shares for **$37.9 million**, with **$69.7 million** remaining under authorization Issuer Purchases of Equity Securities in Q2 2023 | Period | Total Number of Shares Repurchased | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Yet Be Purchased | | :--- | :--- | :--- | :--- | | April 2023 | — | $— | $107.5 million | | May 2023 | 507,598 | $63.29 | $75.4 million | | June 2023 | 84,745 | $67.76 | $69.7 million | | **Total Q2** | **592,343** | **$63.93** | **$69.7 million** | [Other Information](index=34&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No Rule 10b5-1 trading arrangement changes by directors or officers occurred in Q2 2023, and a Restated Certificate was filed - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the three months ended June 30, 2023[166](index=166&type=chunk) - On July 27, 2023, the Company filed a Restated Certificate of Incorporation, which integrated prior amendments without further changes[167](index=167&type=chunk)

PJT Partners, Inc. (NYSE:PJT) Q2 2023 Earnings Conference Call July 25, 2023 8:30 AM ET Company Participants Sharon Pearson - Head, IR Paul Taubman - Chairman & CEO Helen Meates - CFO Conference Call Participants Devin Ryan - JMP Securities James Yaro - Goldman Sachs Steven Chubak - Wolfe Research Jim Mitchell - Seaport Global Securities Operator Good day, and welcome to the PJT Partners Second Quarter 2023 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conferenc ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2023 were $200 million, down 19% year-over-year, primarily due to a significant decline in PJT Park Hill revenues [83][3] - Adjusted pre-tax income was $30 million, compared to $56 million in the same period last year, with an adjusted pre-tax margin of 15.2% versus 22.8% a year ago [25] - Adjusted compensation expense was 66.5% of revenues for Q1 2023, up from 64.1% for the full year 2022, reflecting increased fixed compensation against lower revenues [24][5] Business Line Data and Key Metrics Changes - Restructuring revenues for Q1 2023 were comparable to the previous year, benefiting from higher levels of restructuring activity expected to remain elevated [8] - Strategic advisory revenues were modestly lower year-over-year, significantly less than the decline in industry-wide completed volumes, indicating relative outperformance [87][88] - PJT Park Hill revenues declined nearly $40 million from year-ago levels due to limited fund closings and a challenging fundraising environment [86] Market Data and Key Metrics Changes - The current market environment is described as treacherous, with unprecedented Fed rate hikes impacting financial institutions and leading to a restrictive credit environment [23][103] - Worldwide M&A activity has fallen to levels not seen in nearly 15 years, attributed to challenging credit conditions [103] Company Strategy and Development Direction - The company is focused on investing in human capital, emphasizing the importance of attracting and integrating top talent to strengthen its operations [10][82] - There is a strategic intent to expand in Europe and consumer retail, leveraging existing strengths while exploring new opportunities [44][64] - The firm expects to navigate 2023 better than the macro backdrop suggests, with anticipated modest declines in strategic advisory revenues offset by growth in restructuring activity [90] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the broader M&A market but remains optimistic about the firm's ability to capitalize on restructuring opportunities [9][12] - The firm anticipates a record recruiting year, with significant progress in hiring senior talent, which is expected to enhance future performance [93][94] - There is a cautious outlook on the performance of the strategic advisory business in 2023 due to the fragile nature of the M&A market [9] Other Important Information - The effective tax rate for Q1 2023 was 26%, consistent with the full-year 2022 rate, with expectations to maintain this rate for the full year [6] - The company ended the quarter with $99 million in cash and no funded debt outstanding, indicating a strong liquidity position [26] Q&A Session Summary Question: What is the outlook for recruiting in the current environment? - Management indicated that they are experiencing unprecedented levels of senior recruiting dialogues and expect 2023 to be a record year for hiring at senior levels [93][94] Question: How does the compensation ratio interplay with the current recruiting environment? - The compensation ratio of 66.5% reflects higher fixed costs against lower revenues, with expectations for a higher full-year ratio due to increased hiring [24][51] Question: What is the outlook for the M&A environment? - Management noted that while M&A activity remains muted, there is increased dialogue and potential for recovery as macro conditions improve [39][69] Question: How is the restructuring business performing relative to strategic advisory? - Restructuring activity is expected to grow significantly, potentially surpassing strategic advisory contributions, although exact quantification is not yet available [60][96]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-36869 PJT Partners Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer ...

> ESG Transition > Out-of-Court Restructurings > Distressed M&A and Asset Sales Partners in success Collaboration with impact | --- | --- | |---------------------------------|-----------------------------------------| | | | | Global reach | Partnership culture | | Collaboration & teamwork | Concentration of top practitioners | | Brand recognition | Entrepreneurial at all levels | | Complex transaction flow | Opportunity for meaningful impact | | Cross-product capabilities | Advice is the main event | | Focu ...

25 3 26 27 See "Notes to Financials" on page 29 for footnote detail 2. This adjustment adds back to GAAP Pretax Income (Loss) amounts for the amortization of intangible assets that are associated with Blackstone's IPO, the acquisition of PJT Capital LP on October 1, 2015 and the acquisition of CamberView on October 1, 2018. 6. Represents taxes on Adjusted Pretax Income, assuming all Partnership Units (excluding the unvested Partnership Units that have yet to satisfy market conditions) were exchanged for sha ...

Financial Performance - Total Revenues for the year ended December 31, 2022, were $1,025.5 million, a 3% increase from $991.9 million in 2021[197] - Advisory Fees increased to $823.5 million in 2022, up $60.8 million or 8% compared to $762.7 million in 2021, primarily due to higher restructuring revenues[197] - Placement Fees decreased to $192.9 million in 2022, down $23.8 million or 11% from $216.7 million in 2021, attributed to a decline in corporate placement revenues[197] - Net Income attributable to PJT Partners Inc. was $90.5 million in 2022, a decrease of 15% from $106.2 million in 2021[195] Expenses - Compensation and Benefits expenses rose to $669.1 million in 2022, an increase of 5% from $640.0 million in 2021[195] - Total Expenses for 2022 were $824.0 million, reflecting a 7% increase from $772.5 million in 2021[195] - The company experienced a significant increase in Travel and Related expenses, which rose by 178% to $25.2 million in 2022 from $9.1 million in 2021[195] - Total expenses for the year ended December 31, 2022, were $824.0 million, an increase of $51.5 million (6.7%) compared to $772.5 million for 2021, primarily due to higher Compensation and Benefits and Travel expenses[198] Taxation - The provision for taxes increased by 24% to $36.7 million in 2022 from $29.5 million in 2021[195] - Provision for Taxes for the year ended December 31, 2022, was $36.7 million, resulting in an effective tax rate of 18.2%, up from 13.4% in 2021, driven by increased permanent differences related to equity-based compensation[199] Client Metrics - The total number of clients increased to 405 in 2022 from 399 in 2021, while the number of fees of at least $1 million from client transactions rose to 187 from 159[196] Cash and Investments - As of December 31, 2022, cash, cash equivalents, and short-term investments totaled $223.5 million, an increase from $200.5 million in 2021[207] - Total accounts receivable, net of allowance for credit losses, increased to $317.8 million as of December 31, 2022, compared to $289.3 million in 2021[208] - The company had a remaining repurchase authorization of $173.7 million under its $200 million share repurchase program as of December 31, 2022[215] - The amount due under the tax receivable agreement was estimated at $30.3 million as of December 31, 2022[221] Compliance and Risk Management - The company is in compliance with debt covenants under its revolving credit facility as of December 31, 2022[205] - The company actively monitors its regulatory capital base to ensure compliance with minimum capital requirements[211] - The allowance for credit losses was $1.9 million as of December 31, 2022 and 2021[237] - The company does not engage in significant market risk or credit risk due to its non-capital-intensive business model[235] - Cash and cash equivalents are primarily held at four major financial institutions, with no material interest rate risk identified[236] - The company has not entered into any transactions to hedge exposure to foreign currency fluctuations[239] - The company assesses potential risk of forfeiture and records provisions for forfeitures as necessary[233] - Compensation costs related to equity-based awards are expensed over the requisite service period[232] - The company is exposed to exchange rate risk, particularly with currencies such as the pound sterling, euro, Hong Kong dollar, and Japanese yen[239] - The company maintains an allowance for credit losses that reflects current expected credit losses based on available information[237] Other Comprehensive Income - For the year ended December 31, 2022, the impact of foreign currency fluctuations resulted in losses of $5.3 million in Other Comprehensive Income[239] - Recent accounting developments and their impact on the company can be found in the financial statements[234]

PJT Partners Inc. (NYSE:PJT) Q4 2022 Earnings Conference Call February 7, 2023 8:30 AM ET Company Participants Sharon Pearson - Head, Investor Relations Paul Taubman - Chairman and CEO Helen Meates - Chief Financial Officer Conference Call Participants Devin Ryan - JMP Securities James Yaro - Goldman Sachs Brendan O'Brien - Wolfe Research Jim Mitchell - Seaport Global Matt Moon - KBW Operator Please standby. Good day. And welcome to the PJT Partners Full Year and Fourth Quarter 2022 Earnings Call. Today’s c ...