Lazard(LAZ) - 2025 Q2 - Quarterly Results

Financial Highlights Q2 & H1 2025 Performance Summary Lazard achieved strong Q2 2025 performance with 12% YoY adjusted net revenue growth, record Financial Advisory revenue, and positive Asset Management net flows Selected Results (Three Months Ended June 30) | (Selected results, $ in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % '25-'24 | | :--- | :--- | :--- | :--- | | Adjusted Net Revenue | $770 | $685 | 12% | | - Financial Advisory | $491 | $408 | 20% | | - Asset Management | $268 | $265 | 1% | | Adjusted Net Income | $55 | $53 | 5% | | Adjusted Per share, diluted | $0.52 | $0.52 | –% | | Ending AUM ($ in billions) | $248 | $245 | 2% | Selected Results (Six Months Ended June 30) | (Selected results, $ in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % '25-'24 | | :--- | :--- | :--- | :--- | | Adjusted Net Revenue | $1,413 | $1,431 | (1%) | | - Financial Advisory | $861 | $855 | 1% | | - Asset Management | $533 | $541 | (2%) | | Adjusted Net Income | $116 | $119 | (3%) | | Adjusted Per share, diluted | $1.08 | $1.17 | (8%) | - The CEO highlighted record revenue in Financial Advisory for Q2 and H1, and an inflection point for Asset Management with positive net flows and record gross inflows[2] - The firm has hired 14 Managing Directors in Financial Advisory year-to-date to support long-term growth[3] Segment Performance Financial Advisory Financial Advisory achieved record Q2 2025 adjusted net revenue of $491 million, up 20% YoY, driven by robust M&A and advisory mandates Adjusted Net Revenue | Period | Adjusted Net Revenue ($M) | YoY Change | | :--- | :--- | :--- | | Q2 2025 | $491 | 20% | | H1 2025 | $861 | 1% | - Key M&A advisory roles included CD&R's €16 billion acquisition of a stake in Sanofi's consumer health unit, Berry Global's $15.0 billion combination with Amcor, and Ferrero's $3.1 billion acquisition of WK Kellogg Co[9] - The firm's Private Capital Advisory, Capital Solutions, and Restructuring practices were actively engaged, advising clients including Accel-KKR, ZF Friedrichshafen, Solo Brands, and Southern Water[5][6] Asset Management Asset Management reported Q2 2025 adjusted net revenue of $268 million, with AUM reaching $248 billion and positive net inflows of $0.7 billion Adjusted Net Revenue | Period | Adjusted Net Revenue ($M) | YoY Change | | :--- | :--- | :--- | | Q2 2025 | $268 | 1% | | H1 2025 | $533 | (2%) | Assets Under Management | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Average AUM ($B) | $239 | $245 | (3%) | | Ending AUM ($B) | $248 | $245 | 2% | - AUM increased by $21 billion sequentially from March 31, 2025, driven by market appreciation ($11.9 billion), foreign exchange appreciation ($8.4 billion), and net inflows ($0.7 billion)[10] Operating Expenses Compensation and Benefits Expense Adjusted compensation and benefits expense for Q2 2025 was $504 million, with the compensation ratio improving to 65.5% and a long-term goal of 60% or below Adjusted Compensation and Benefits | Period | Adjusted Comp & Benefits ($M) | Adjusted Comp Ratio | | :--- | :--- | :--- | | Q2 2025 | $504 | 65.5% | | Q2 2024 | $452 | 66.0% | | H1 2025 | $926 | 65.5% | | H1 2024 | $945 | 66.0% | - Lazard's stated goal is to deliver an adjusted compensation ratio of 60% or below, with the timing dependent on market conditions[11] Non-Compensation Expenses Adjusted non-compensation expenses rose to $157 million in Q2 2025, with the ratio improving to 20.4% and a target range of 16% to 20% Adjusted Non-Compensation Expenses | Period | Adjusted Non-Comp Expense ($M) | Adjusted Non-Comp Ratio | | :--- | :--- | :--- | | Q2 2025 | $157 | 20.4% | | Q2 2024 | $149 (approx) | 21.7% | | H1 2025 | $305 | 21.6% | | H1 2024 | $283 (approx) | 19.8% | - Lazard's goal is to achieve an adjusted non-compensation ratio between 16% and 20%, with timing dependent on market conditions[12] Financial Position and Capital Management Taxes Q2 2025 income tax provision was $32 million, with an adjusted effective tax rate of 36.5%, while H1 2025 saw a 17.4% adjusted effective tax rate Tax Information | Period | Tax Provision ($M) | U.S. GAAP ETR | Adjusted ETR | | :--- | :--- | :--- | :--- | | Q2 2025 | $32 | 34.1% | 36.5% | | H1 2025 | $24 | 16.5% | 17.4% | Capital Management and Balance Sheet Lazard returned $60 million to shareholders in Q2 2025, maintaining a strong balance sheet with $978 million in cash and equivalents Shareholder Returns | Shareholder Returns ($M) | Q2 2025 | H1 2025 | | :--- | :--- | :--- | | Dividends | $47 | $92 | | Share Repurchases | $4 | $40 | | Employee Tax Obligations | $9 | $103 | | Total Returned | $60 | $235 | - A quarterly dividend of $0.50 per share was declared, payable on August 15, 2025[16] - As of June 30, 2025, cash and cash equivalents stood at $978 million, and the total outstanding share repurchase authorization was approximately $160 million[15][16] Financial Statements and Reconciliations Condensed Consolidated Statement of Operations (U.S. GAAP) This section presents the unaudited U.S. GAAP consolidated statement of operations for Q2 and H1 2025, detailing revenues, expenses, and net income Three Months Ended June 30 | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net revenue | $795,997 | $685,349 | | Operating income | $93,081 | $63,640 | | Net income attributable to Lazard, Inc. | $55,346 | $49,909 | | Diluted net income per share | $0.52 | $0.49 | Six Months Ended June 30 | ($ in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net revenue | $1,444,048 | $1,450,102 | | Operating income | $147,716 | $118,201 | | Net income attributable to Lazard, Inc. | $115,721 | $85,664 | | Diluted net income per share | $1.08 | $0.84 | Condensed Consolidated Statement of Financial Condition (U.S. GAAP) This section presents the unaudited U.S. GAAP balance sheet as of June 30, 2025, detailing the company's assets, liabilities, and equity As of June 30, 2025 and December 31, 2024 | ($ in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $4,493,386 | $4,793,993 | | Cash and cash equivalents | $978,259 | $1,308,218 | | Senior debt | $1,688,631 | $1,687,052 | | Total liabilities | $3,623,324 | $4,029,210 | | Total stockholders' equity | $786,484 | $685,154 | Selected Summary Financial Information (Adjusted Basis) This section summarizes the company's adjusted (non-GAAP) financial performance for Q2 and H1 2025, including revenue by segment and key earnings metrics Three Months Ended June 30 | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Adjusted net revenue | $769,866 | $684,642 | | Adjusted operating income | $108,232 | $84,166 | | Adjusted net income | $55,346 | $52,869 | | Adjusted diluted net income per share | $0.52 | $0.52 | Six Months Ended June 30 | ($ in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Adjusted net revenue | $1,413,051 | $1,431,207 | | Adjusted operating income | $182,249 | $203,705 | | Adjusted net income | $115,721 | $119,475 | | Adjusted diluted net income per share | $1.08 | $1.17 | Assets Under Management (AUM) This section details the composition and changes in Assets Under Management (AUM), totaling $248.4 billion as of June 30, 2025 AUM by Asset Class | ($ in millions) | As of June 30, 2025 | As of March 31, 2025 | | :--- | :--- | :--- | | Total Equity | $192,250 | $174,130 | | Total Fixed Income | $47,057 | $44,024 | | Total AUM | $248,360 | $227,427 | AUM Roll-Forward Q2 2025 | AUM Roll-Forward Q2 2025 ($M) | Amount | | :--- | :--- | | AUM - Beginning of Period | $227,427 | | Net Flows | $677 | | Market and foreign exchange appreciation | $20,256 | | AUM - End of Period | $248,360 | Reconciliation of U.S. GAAP to Adjusted Results This section provides detailed tables reconciling U.S. GAAP financial figures to adjusted (non-GAAP) results, specifying adjustments for key metrics - Key adjustments to reconcile GAAP to Adjusted Net Revenue include items related to noncontrolling interests, Lazard Fund Interests (LFI), distribution fees, reimbursable deal costs, and corporate interest expense[44] - Adjustments to reconcile GAAP to Adjusted Operating Income include removing operating income related to noncontrolling interests, adding back corporate interest expense, and excluding amortization and costs associated with cost-saving initiatives[47]