PJT Partners (PJT) - 2025 Q1 - Quarterly Results

First Quarter 2025 Results First Quarter Overview PJT Partners reported strong first-quarter 2025 results despite geopolitical uncertainties, with revenues of $325 million and record earnings per share, maintaining its full-year outlook - Chairman and CEO Paul J. Taubman stated that despite geopolitical uncertainties impacting global markets, the firm delivered a strong quarter and the full-year outlook remains unchanged due to the firm's strong franchise and business mix[1] Q1 2025 Key Metrics | Metric | Value | | :--- | :--- | | Total Revenues | $325 million | | GAAP Pretax Income | $53 million | | Adjusted Pretax Income | $56 million | | GAAP Diluted EPS | $1.99 (Record) | | Adjusted EPS | $1.05 (Record) | | Shares Repurchased | 1.5 million | | Cash & Short-Term Investments | $227 million | | Funded Debt | None | Revenues Total revenues for Q1 2025 were $324.5 million, a slight 1% decrease from the prior year's record levels, driven by a 2% drop in Advisory Fees mostly offset by a 4% increase in Placement Fees Revenues by Type (Q1 2025 vs Q1 2024) | Revenue Type | Q1 2025 (Millions) | Q1 2024 (Millions) | % Change | | :--- | :--- | :--- | :--- | | Advisory Fees | $282.2 | $288.7 | (2%) | | Placement Fees | $36.0 | $34.5 | 4% | | Interest Income & Other | $6.3 | $6.2 | 1% | | Total Revenues | $324.5 | $329.4 | (1%) | - The decrease in Advisory Revenues was attributed to lower revenues from restructuring and private capital solutions, which were largely offset by an increase in strategic advisory revenues[3] - The increase in Placement Revenues was driven by higher fund placement revenues[4] Expenses Total GAAP expenses decreased slightly to $272.0 million in Q1 2025 from $275.5 million in Q1 2024, primarily due to a 3% reduction in Compensation and Benefits expense, while Non-Compensation expenses rose by 9% Expense Summary (Q1 2025 vs Q1 2024) | Expense Category | Q1 2025 GAAP (Millions) | Q1 2024 GAAP (Millions) | Q1 2025 As Adjusted (Millions) | Q1 2024 As Adjusted (Millions) | | :--- | :--- | :--- | :--- | :--- | | Compensation and Benefits | $221.1 | $228.9 | $219.1 | $228.9 | | Non-Compensation | $50.8 | $46.6 | $49.3 | $45.2 | | Total Expenses | $272.0 | $275.5 | $268.4 | $274.2 | Compensation and Benefits Expense GAAP Compensation and Benefits Expense decreased to $221 million from $229 million in the prior year, principally driven by a lower compensation accrual rate - GAAP Compensation and Benefits Expense was $221 million for Q1 2025, down from $229 million in Q1 2024[6] - The primary reason for the decrease in compensation expense was a lower accrual rate compared to the prior year[6] Non-Compensation Expense GAAP Non-Compensation Expense increased to $51 million from $47 million year-over-year, primarily due to increased spending on business travel, office expansions, and technology investments - The increase in Non-Compensation Expense was driven by higher costs in three main areas: Travel and Related, Occupancy and Related, and Communications and Information Services[8] - Specific drivers included greater business travel, expansion of London and New York offices, and investments in market data and technology infrastructure[8][9] Provision for Taxes The company recorded a significant change in its effective tax rate, with GAAP effective tax rate at -41.1% for Q1 2025 and Adjusted Net Income, If-Converted effective tax rate at 16.5%, primarily due to a larger tax benefit from vested shares Effective Tax Rate Comparison | Tax Rate Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Effective Tax Rate | -41.1% | 1.0% | | Adjusted If-Converted Rate | 16.5% | N/A (vs 20.6% for FY24) | - The decrease in both GAAP and Adjusted effective tax rates was caused by an increased tax benefit from the delivery of vested shares at a value higher than their amortized cost[11] Capital Management and Balance Sheet As of March 31, 2025, PJT Partners maintained a strong balance sheet with $227 million in cash and short-term investments and no funded debt, actively repurchasing 1.5 million shares with $151 million remaining authorization - The Company held cash, cash equivalents, and short-term investments of $227 million and had no funded debt as of March 31, 2025[12] - In Q1 2025, the Company repurchased a total of 1.5 million share and share equivalents at an average price of $162.61 per share[13] - The remaining share repurchase authorization stood at $151 million as of March 31, 2025[13] Dividend The Board of Directors declared a quarterly dividend of $0.25 per share of Class A common stock, scheduled to be paid on June 18, 2025, to stockholders of record as of June 4, 2025 - A quarterly dividend of $0.25 per share of Class A common stock has been declared[15] - The dividend will be paid on June 18, 2025, to stockholders of record on June 4, 2025[15] Appendix Non-GAAP Financial Measures The company uses non-GAAP measures such as Adjusted Pretax Income and Adjusted EPS to evaluate performance, excluding items like acquisition-related compensation and intangible asset amortization, also presenting an 'If-Converted' measure for tax impact - Management uses non-GAAP measures like Adjusted Pretax Income, Adjusted EPS, and Adjusted Expenses for resource allocation and compensation decisions[22][23] - Adjustments remove the impact of: (a) acquisition-related compensation, (b) acquisition-related intangible asset amortization, and (c) payments to the former Parent related to tax benefits[23] - Adjusted Net Income, If-Converted illustrates the tax impact assuming all Partnership Units are exchanged for Class A common stock, subjecting all income to corporate-level tax[24] GAAP Condensed Consolidated Statements of Operations The unaudited GAAP statement shows Total Revenues of $324.5 million and Net Income of $74.2 million for Q1 2025, resulting in Net Income Attributable to PJT Partners Inc. of $54.0 million, or $1.99 per diluted share Q1 2025 GAAP Statement of Operations Highlights (in Thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $324,531 | $329,393 | | Total Expenses | $271,953 | $275,490 | | Income Before Taxes | $52,578 | $53,903 | | Net Income | $74,163 | $53,372 | | Net Income Attributable to PJT Partners Inc. | $54,016 | $32,623 | | Diluted EPS | $1.99 | $1.22 | Reconciliations of GAAP to Non-GAAP Financial Data The reconciliation from GAAP to non-GAAP figures shows that after adjustments, Adjusted Pretax Income for Q1 2025 was $56.1 million, and Adjusted Net Income, If-Converted, was $46.9 million, or $1.05 per share GAAP to Non-GAAP Reconciliation Highlights (in Thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Pretax Income | $52,578 | $53,903 | | Total Adjustments | $3,547 | $1,321 | | Adjusted Pretax Income | $56,125 | $55,224 | | GAAP Net Income | $74,163 | $53,372 | | Adjusted Net Income, If-Converted | $46,864 | $43,075 | | Adjusted EPS | $1.05 | $0.98 | Summary of Shares Outstanding For Q1 2025, the weighted-average diluted shares outstanding on a GAAP basis were 44.5 million, and on an If-Converted basis, also 44.5 million Weighted-Average Shares Outstanding (Q1 2025 vs Q1 2024) | Share Count Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Diluted Shares Outstanding, GAAP | 44,461,727 | 28,168,504 | | If-Converted Shares Outstanding | 44,461,727 | 43,737,118 | Other Information About PJT Partners PJT Partners is a global, advisory-focused investment bank known for providing independent advice and high-touch client service, specializing in advising companies on transformative transactions, restructurings, and capital raising - PJT Partners is a premier, global, advisory-focused investment bank that provides independent advice to companies on transactions, restructurings, and capital raising[17] Forward-Looking Statements This report contains forward-looking statements regarding future results and strategies, subject to inherent risks and uncertainties such as regulatory changes, cybersecurity threats, and economic volatility, which could cause actual results to differ materially - The report includes forward-looking statements that are not historical facts and are subject to inherent uncertainties and risks[18] - Key risks that could cause actual results to differ include changes in regulations, cyber attacks, system failures, catastrophic events, and political or economic volatility[19]