Evercore(US:EVR)2025-05-08 20:24Revenue and Income - Total revenues for the Investment Banking & Equities and Investment Management segments include fees for services, transaction-related client reimbursements, and other revenue, with net revenues reflecting total revenues less interest expense[182]. - Revenue trends in the advisory business are correlated to M&A activity, restructuring activity, and capital advisory activity, with fluctuations based on market conditions and client transaction completions[184]. - The Investment Management segment generates revenue primarily from management fees, fiduciary fees, and gains or losses on investments, with management fees typically representing a percentage of assets under management (AUM)[185][186]. - Net Income Attributable to Evercore Inc. was $146.2 million for the three months ended March 31, 2025, an increase of $60.5 million, or 71%, compared to $85.7 million for the same period in 2024[209]. - Net Revenues were $694.8 million for the three months ended March 31, 2025, an increase of $114.0 million, or 20%, versus $580.8 million for the same period in 2024[210]. - Advisory Fees increased by $127.5 million, or 30%, to $557.3 million, while Underwriting Fees decreased by $1.3 million, or 2%, to $54.3 million[210]. - Operating Income for the Investment Banking & Equities segment was $106.7 million for the three months ended March 31, 2025, an increase of $27.8 million, or 35%, compared to $78.9 million for the same period in 2024[219]. - Net Revenues for the three months ended March 31, 2025, were $20.3 million, an increase of $1.2 million, or 6%, compared to $19.1 million for the same period in 2024[235]. Expenses - Employee Compensation and Benefits Expense was $459.8 million for the three months ended March 31, 2025, an increase of $72.1 million, or 19%, compared to $387.7 million for the same period in 2024[212]. - Non-compensation expenses were $123.8 million for the three months ended March 31, 2025, an increase of $14.8 million, or 14%, versus $109.0 million for the same period in 2024[213]. - Total Expenses increased by $86.9 million, or 18%, to $583.6 million for the three months ended March 31, 2025, compared to $496.7 million for the same period in 2024[212]. - Employee Compensation and Benefits Expense was $11.8 million for the three months ended March 31, 2025, an increase of $1.4 million, or 13%, compared to $10.5 million for the same period in 2024[236]. - Non-Compensation expenses rose to $4.0 million for the three months ended March 31, 2025, an increase of $0.6 million, or 18%, compared to $3.4 million for the same period in 2024[237]. Investments and Assets - Income from equity method investments includes the company's share of income or loss from equity interests in various partnerships, contributing to income before income taxes[201]. - Assets Under Management (AUM) in Wealth Management decreased by $0.2 billion, or 1%, to $13.7 billion as of March 31, 2025, compared to $13.9 billion at December 31, 2024[230]. - The composition of AUM for Wealth Management as of March 31, 2025, was 65% Equities, 20% Fixed Income, 10% Liquidity, and 5% Alternatives[232]. - Investment Securities as of March 31, 2025, totaled $794.6 million, with 82% being U.S. Treasury securities[281]. - Total receivables in Accounts Receivable as of March 31, 2025, amounted to $469.1 million, an increase from $421.5 million as of December 31, 2024[279]. Cash and Liquidity - Cash, Cash Equivalents, and Restricted Cash were $562.7 million at March 31, 2025, a decrease of $319.4 million from $882.1 million at December 31, 2024[241]. - The company’s liquidity is highly dependent on revenue from its Investment Banking & Equities segment, which is irregular and influenced by external factors[245]. - The company’s Management Committee regularly reviews liquidity and cash positions to inform recommendations for quarterly dividend payments[245]. - Operating activities resulted in a net outflow of $549.7 million, primarily related to the payment of 2024 bonus awards and deferred cash compensation[241]. Taxation - The provision for income taxes for the three months ended March 31, 2025 was ($41.7) million, reflecting an effective tax rate of (37.2%) compared to ($6.7) million and (7.7%) for the same period in 2024[215]. Foreign Currency and Hedging - The net impact of foreign currency fluctuations for the three months ended March 31, 2025, was a gain of $8.7 million, net of tax[275]. - The company has not entered into transactions to hedge foreign exchange fluctuations, which may impact financial results[275]. - A foreign currency exchange forward contract was entered into during Q3 2023 to buy 30.0 million British Pounds for $36.7 million, resulting in a loss of $0.3 million for the three months ended March 31, 2024[276]. Share Repurchase and Capital Contributions - During the three months ended March 31, 2025, the company repurchased a total of 1,554,522 Class A Shares for an aggregate purchase consideration of $406.0 million, at an average cost per share of $261.15[252]. - The company has total commitments of $2.6 million relating to future capital contributions to private equity funds as of March 31, 2025[266]. - The company established a revolving credit facility with PNC for up to $85.0 million, which is unsecured and has a maturity date of October 27, 2026[260]. - The company issued $67.0 million of 4.61% Series J Notes on June 28, 2022, as part of a private placement[256]. Market Performance - The Wealth Management business lagged the S&P 500 by approximately 8% and 3% on a 1 and 3-year basis, respectively[240]. - A hypothetical 10%, 20%, and 30% adverse change in the market value of investments would have resulted in a decrease in pre-tax income of approximately $14.3 million, $28.7 million, and $43.0 million, respectively[272]. - A hypothetical 10% adverse change in the value of private equity funds would decrease pre-tax income by approximately $0.3 million for the three months ended March 31, 2025[274]. Credit Losses - The company maintains an allowance for credit losses based on historical credit loss experience and current market conditions[278]. - Bad debt expense recorded for the three months ended March 31, 2025, was $2.6 million, while a reversal of bad debt expense of $0.6 million was noted for the same period in 2024[278]. - The collection period for receivables generally is within 90 days, with some fees related to private funds capital raising potentially exceeding one year[278].