Evercore(EVR) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements This section presents Evercore Inc.'s unaudited condensed consolidated financial statements and related detailed notes Condensed Consolidated Statements of Financial Condition This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Statements of Financial Condition (dollars in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Assets | $3,689,659 | $4,173,971 | | Total Liabilities | $1,771,165 | $2,232,163 | | Total Equity | $1,918,494 | $1,941,808 | | Cash and Cash Equivalents | $617,298 | $873,045 | | Accrued Compensation and Benefits | $549,660 | $1,024,076 | - Total Assets decreased by $484.3 million (11.6%) from December 31, 2024, to June 30, 2025[11] - Total Liabilities decreased by $460.9 million (20.7%) from December 31, 2024, to June 30, 2025, primarily driven by a significant reduction in Accrued Compensation and Benefits[11] Condensed Consolidated Statements of Operations This statement details the company's revenues, expenses, and net income over specific periods Condensed Consolidated Statements of Operations (dollars in thousands, except per share data): | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenues | $838,040 | $693,413 | $1,537,062 | $1,278,416 | | Net Revenues | $833,830 | $689,224 | $1,528,659 | $1,270,039 | | Total Expenses | $683,441 | $580,981 | $1,267,086 | $1,077,676 | | Net Income Attributable to Evercore Inc. | $97,201 | $73,758 | $243,385 | $159,451 | | Diluted Net Income Per Share | $2.36 | $1.81 | $5.85 | $3.89 | - Net Income Attributable to Evercore Inc. increased by 32% for the three months ended June 30, 2025, and by 53% for the six months ended June 30, 2025, compared to the respective prior periods[13] - Total Revenues grew by 21% for the three months and 20% for the six months ended June 30, 2025, primarily driven by Advisory Fees[13] Condensed Consolidated Statements of Comprehensive Income This statement presents net income and other comprehensive income items, reflecting total non-owner changes in equity Condensed Consolidated Statements of Comprehensive Income (dollars in thousands): | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income | $106,939 | $81,733 | $260,729 | $174,857 | | Other Comprehensive Income (Loss) | $18,683 | ($805) | $27,169 | ($4,328) | | Comprehensive Income Attributable to Evercore Inc. | $114,494 | $73,019 | $268,525 | $155,488 | - Other Comprehensive Income (Loss) saw a significant positive shift, primarily due to foreign currency translation adjustments, moving from a loss of ($805) thousand in Q2 2024 to a gain of $18,683 thousand in Q2 2025[16] Condensed Consolidated Statements of Changes in Equity This statement outlines changes in the company's equity components, including net income, dividends, and share repurchases Key Changes in Equity (dollars in thousands): | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Balance at December 31 (prior year) | $1,941,808 | $1,782,490 | | Net Income | $260,729 | $174,857 | | Other Comprehensive Income | $27,169 | ($4,328) | | Treasury Stock Purchases | ($449,165) | ($317,485) | | Dividends | ($71,308) | ($67,977) | | Balance at June 30 | $1,918,494 | $1,727,526 | - Treasury Stock Purchases increased significantly to $449.2 million for the six months ended June 30, 2025, compared to $317.5 million in the prior year, reflecting increased share repurchase activity[19][20] - Retained Earnings increased to $2,305,996 thousand at June 30, 2025, from $2,133,919 thousand at December 31, 2024, driven by net income partially offset by dividends[19] Condensed Consolidated Statements of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (dollars in thousands): | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net Cash Provided by (Used in) Operating Activities | ($111,916) | $67,267 | | Net Cash Provided by Investing Activities | $365,608 | $383,778 | | Net Cash Provided by (Used in) Financing Activities | ($541,805) | ($410,987) | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | ($254,858) | $34,974 | | Cash, Cash Equivalents and Restricted Cash – End of Period | $627,249 | $640,458 | - Operating activities shifted from a net cash inflow of $67.3 million in H1 2024 to a net outflow of $111.9 million in H1 2025, primarily due to payments of 2024 bonus awards and deferred cash compensation[22][292] - Financing activities used more cash in H1 2025 ($541.8 million) compared to H1 2024 ($411.0 million), mainly for increased treasury stock purchases and dividends[22][292] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations of the accounting policies and specific financial statement line items Note 1 – Organization This note describes Evercore Inc. as an investment banking and investment management firm with two primary operating segments - Evercore Inc. is an investment banking and investment management firm, headquartered in New York, New York[23] - The Investment Banking & Equities segment provides advice on M&A, divestitures, shareholder activism, restructuring, capital markets, underwriting, and equity research/trading[24] - The Investment Management segment offers investment advisory, wealth management, and fiduciary services for high-net-worth individuals, and holds interests in private equity funds not managed by the Company[25] Note 2 – Significant Accounting Policies This note outlines the key accounting principles and consolidation methods used in preparing the financial statements - Unaudited condensed consolidated financial statements are prepared in accordance with Form 10-Q and U.S. GAAP[27] - Evercore LP and several international entities (Evercore ISI U.K., Evercore U.K., Evercore Japan, Evercore Beijing, Evercore Canada, Evercore Hong Kong, Evercore Singapore) are consolidated as VIEs where the Company is the primary beneficiary[30][31] - Reclassified $9,851 thousand and $18,860 thousand of technology and related expenses from 'Professional Fees' to 'Technology and Information Services' for the three and six months ended June 30, 2024, respectively, with no impact on Net Income[33] Note 3 – Recent Accounting Pronouncements This note discusses recently adopted and pending accounting standards and their impact on the financial statements - Adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) on January 1, 2024, requiring incremental segment information[35] - Adopted ASU 2024-01 (Scope Application of Profits Interest and Similar Awards) on January 1, 2025, on a prospective basis, with no material impact[39] - Currently assessing the impact of ASU 2023-09 (Improvements to Income Tax Disclosures), ASU 2024-03 (Disaggregation of Income Statement Expenses), and ASU 2025-03 (Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity)[36][40][41] Note 4 – Revenue and Accounts Receivable This note details the company's revenue recognition policies and provides a breakdown of revenue by type and segment Investment Banking & Equities Revenue (dollars in thousands): | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Advisory Fees | $697,744 | $568,231 | $1,255,093 | $998,069 | | Total Investment Banking & Equities | $788,222 | $652,429 | $1,454,936 | $1,186,040 | - Advisory Fees increased by 23% for the three months and 26% for the six months ended June 30, 2025, compared to the prior year periods[42] - The allowance for credit losses increased to $3,894 thousand at June 30, 2025, from $2,253 thousand at December 31, 2024, primarily due to an increase in the reserve for credit losses and write-off of aged receivables[50] Note 5 – Business Changes and Developments This note describes significant business events, including acquisitions and strategic initiatives impacting the company - Agreement to acquire Robey Warshaw, an independent advisory firm headquartered in the United Kingdom, expected to close at the beginning of the fourth quarter 2025[54] - Consideration includes £71,250 thousand at closing (in Class A common stock), £74,813 thousand on the first anniversary (in Class A shares or cash), and contingent consideration based on performance thresholds[55] - Recognized $1,637 thousand in Acquisition and Transition Costs for the three and six months ended June 30, 2025[56] Note 6 – Related Parties This note discloses transactions and relationships with related parties, including employees and entities with shared board members - Advisory Fees include $1,271 thousand for the six months ended June 30, 2025, earned from clients with the Company's Senior Managing Directors, Senior Advisors, and executives as Board members[57] - Long-term loans receivable from certain employees totaled $32,465 thousand as of June 30, 2025, an increase from $29,357 thousand at December 31, 2024[58] Note 7 – Investment Securities and Certificates of Deposit This note provides details on the company's investment portfolio, including fair value measurements and unrealized gains/losses Investment Securities and Certificates of Deposit (dollars in thousands): | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Total Investment Securities, at fair value | $1,034,848 | $1,452,721 | | Certificates of Deposit, at contract value | $82,399 | $66,660 | | Total Investment Securities and Certificates of Deposit | $1,117,247 | $1,519,381 | - Net unrealized losses on available-for-sale debt securities (primarily U.S. Treasuries) included in Accumulated Other Comprehensive Income (Loss) were ($293) thousand for the six months ended June 30, 2025, compared to ($157) thousand for the same period in 2024[63] - Net realized and unrealized gains on investment funds (used as an economic hedge for deferred cash compensation) were $9,154 thousand for the six months ended June 30, 2025, down from $21,111 thousand in the prior year period[68] Note 8 – Investments This note details the company's equity method investments and holdings in private equity funds Equity Method Investments (dollars in thousands): | Investee | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Atalanta Sosnoff | $10,993 | $11,155 | | Seneca Evercore | $1,268 | $1,462 | | Total | $12,261 | $12,617 | - Income from Equity Method Investments decreased by 59% to $1,694 thousand for the six months ended June 30, 2025, from $4,182 thousand in the prior year, primarily due to the sale of ABS (July 2024) and redemption of Luminis (September 2024)[71][76][78] - Investments in private equity funds (Glisco and Trilantic) totaled $3,631 thousand at June 30, 2025, down from $5,431 thousand at December 31, 2024[83] Note 9 – Leases This note outlines the company's lease obligations, including operating lease costs and future lease commitments - Operating lease cost for office space was $35,392 thousand for the six months ended June 30, 2025, up from $28,839 thousand in the prior year[86] - Net operating cash outflows related to operating leases increased to $36,763 thousand for the six months ended June 30, 2025, from $21,632 thousand in the prior year[90] - Total undiscounted operating lease liabilities as of June 30, 2025, are $713,140 thousand, with a weighted-average remaining lease term of 9.7 years[90][91] - Anticipates signing a lease for London office space in 2026, with expected additional annual expense of £12,000 thousand and aggregate future payments of £175,000 thousand, ending in 2041[92] Note 10 – Fair Value Measurements This note explains the fair value hierarchy used for financial instruments and provides a breakdown of assets by measurement level Total Assets Measured At Fair Value (dollars in thousands): | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Level 1 | $1,046,180 | $1,462,688 | | Level 2 | $— | $— | | Level 3 | $— | $— | | Total | $1,046,180 | $1,462,688 | - The majority of assets measured at fair value are classified as Level 1, indicating quoted prices in active markets for identical investments[98] - Closely-held Equity Securities are classified as Level 3, with a carrying amount and estimated fair value of $1,686 thousand at June 30, 2025, and $625 thousand at December 31, 2024[103] Note 11 – Notes Payable This note details the company's outstanding debt, including maturities, recent issuances, and compliance with covenants Notes Payable (Carrying Value, dollars in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Notes Payable | $377,237 | $373,895 | | Less: Current Portion of Notes Payable | ($85,937) | ($37,951) | | Notes Payable (Long-term) | $291,300 | $335,944 | - The Company repaid $38,000 thousand aggregate principal amount of its Series I Notes in August 2025[110] - Issued $250,000 thousand of new senior notes (Series K and L) on July 24, 2025, with proceeds intended to repay maturing notes and for general corporate purposes[115] - As of June 30, 2025, the Company was in compliance with all customary financial covenants related to its notes payable[112] Note 12 – Evercore Inc. Stockholders' Equity This note provides information on dividends, share repurchases, and components of stockholders' equity - On July 29, 2025, the Board of Directors declared a quarterly cash dividend of $0.84 per share[118] - During the six months ended June 30, 2025, the Company repurchased 1,737,555 Class A Shares for an aggregate of $449,165 thousand, including shares under its repurchase program and for net settlement of stock-based compensation awards[120][302] - Accumulated Other Comprehensive Income (Loss) at June 30, 2025, was ($10,917) thousand, including a net Foreign Currency Translation Adjustment Gain (Loss) of ($10,875) thousand[124] Note 13 – Noncontrolling Interest This note details the ownership interests of noncontrolling parties in consolidated subsidiaries and related transactions Noncontrolling Ownership Interests: | Subsidiary | As of June 30, 2025 | As of June 30, 2024 | | :-------------------------- | :------------------ | :------------------ | | Evercore LP | 6 % | 6 % | | Evercore Wealth Management | 27 % | 26 % | - Net Income Attributable to Noncontrolling Interest increased by 13% to $17,344 thousand for the six months ended June 30, 2025, compared to $15,406 thousand in the prior year[127] - During the six months ended June 30, 2025, 110 LP Units were exchanged for Class A Shares, resulting in a $10,967 thousand decrease to Noncontrolling Interest[130] - The Company purchased an additional 0.1% of EWM Class A Units for $1,259 thousand during Q2 2025, decreasing Noncontrolling Interest by $39 thousand[134] Note 14 – Net Income Per Share Attributable to Evercore Inc. Common Shareholders This note presents the calculation of basic and diluted net income per share for common shareholders Net Income Per Share Attributable to Evercore Inc. Common Shareholders: | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $2.51 | $1.92 | $6.29 | $4.14 | | Diluted EPS | $2.36 | $1.81 | $5.85 | $3.89 | | Diluted Weighted Average Class A Shares Outstanding | 41,213 | 40,857 | 41,636 | 40,969 | - Diluted EPS increased by 30% for the three months and 50% for the six months ended June 30, 2025, compared to the prior year periods[139] - LP Units were anti-dilutive and consequently excluded from the calculation of diluted net income per share for both periods[139] Note 15 – Share-Based and Other Deferred Compensation This note describes the company's various compensation programs, including equity awards and deferred cash compensation - Compensation expense related to Class K-P Units increased to $31,500 thousand for the six months ended June 30, 2025, from $15,255 thousand in the prior year[146] - Service-based RSU Awards granted in H1 2025 had an aggregate fair value of $435,238 thousand, with compensation expense of $180,132 thousand for the six months ended June 30, 2025[154] - Compensation expense for the Deferred Cash Compensation Program was $76,892 thousand for the six months ended June 30, 2025, down from $88,105 thousand in the prior year, with $215,394 thousand remaining unrecognized[157] - Accrued $122,271 thousand for Long-term Incentive Plans as of June 30, 2025, with $260,193 thousand total remaining expense to be recognized for the 2025 plan[160][161] Note 16 – Commitments and Contingencies This note discloses the company's unfunded commitments, credit facilities, and potential legal and regulatory liabilities - Unfunded commitments for capital contributions to private equity funds totaled $2,552 thousand as of June 30, 2025[167] - The PNC revolving credit facility was increased from $85,000 thousand to $225,000 thousand, with maturity extended to July 10, 2028[168] - Restricted Cash, primarily for lease collateral, was $9,951 thousand at June 30, 2025[170] - The Company believes it is not currently party to any material pending legal proceedings that would have a material effect on the Company[174] Note 17 – Regulatory Authorities This note confirms the company's compliance with capital and regulatory requirements for its regulated entities - EGL's regulatory net capital was $368,623 thousand at June 30, 2025, exceeding the minimum requirement by $368,373 thousand[176] - Evercore Trust Company, N.A. (ETC) is in compliance with OCC agreements regarding Tier 1 capital and liquid assets[177] - The aggregate regulatory net capital of UK affiliates (Evercore U.K., Evercore ISI U.K.) was $298,795 thousand at June 30, 2025, exceeding the minimum requirement by $196,896 thousand[178] Note 18 – Income Taxes This note details the provision for income taxes, effective tax rate, and the impact of tax benefits and new tax pronouncements Provision for Income Taxes and Effective Tax Rate: | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Provision for Income Taxes | $44,265 | $28,367 | $2,538 | $21,688 | | Effective Tax Rate | 29.3 % | 25.8 % | 1.0 % | 11.0 % | - The effective tax rate for the six months ended June 30, 2025, was reduced by 28.5 percentage points due to net excess tax benefits from share-based awards[181] - The impact of OECD's Pillar Two, GILTI provisions, and the recently enacted U.S. House Resolution 1 is not expected to materially affect the Company's effective tax rate[182][183][186] Note 19 – Segment Operating Results This note provides a breakdown of financial performance by the company's Investment Banking & Equities and Investment Management segments Segment Operating Results (6 Months Ended June 30, dollars in thousands): | Segment | Net Revenues (2025) | Net Revenues (2024) | Pre-Tax Income (2025) | Pre-Tax Income (2024) | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :-------------------- | | Investment Banking & Equities | $1,486,703 | $1,231,738 | $252,653 | $183,367 | | Investment Management | $41,956 | $38,301 | $10,614 | $13,178 | - Investment Banking & Equities Net Revenues increased by 21% and Pre-Tax Income increased by 38% for the six months ended June 30, 2025[197] - Investment Management Net Revenues increased by 10%, but Pre-Tax Income decreased by 19% for the six months ended June 30, 2025[197] - Geographic Net Revenues for the six months ended June 30, 2025, were primarily from the Americas ($1,262,750 thousand), followed by EMEA ($199,085 thousand) and Asia-Pacific ($34,768 thousand)[205] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, operating results, liquidity, and risks Forward-Looking Statements This section cautions that the report contains forward-looking statements subject to risks and uncertainties, with no obligation to update - The report contains forward-looking statements reflecting current views on operations and financial performance, identifiable by words like 'outlook,' 'believes,' 'expects,' 'potential,' etc[210] - These statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual outcomes to differ materially from those indicated[211] - The Company undertakes no obligation to publicly update or review any forward-looking statement, except as required by law[211] Key Financial Measures This section defines the company's primary revenue and expense categories, explaining their components and drivers - Total revenues include fees for services, transaction-related client reimbursements, and other revenue; Net revenues subtract interest expense[212] - Investment Banking & Equities revenue is largely driven by advisory fees (M&A, restructuring, capital raising), underwriting fees, and commissions from research and sales & trading activities[213] - Investment Management revenue primarily consists of management fees (percentage of AUM), fiduciary fees, and gains/losses on principal investments[215][216] - Employee Compensation and Benefits include base salary, cash, deferred cash, and equity bonus awards, managed to competitive levels and reflecting new hires[219][220] Results of Operations This section analyzes the company's consolidated financial performance, highlighting revenue, expense, and net income trends Consolidated Results of Operations (dollars in thousands, except per share data): | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Revenues | $833,830 | $689,224 | $1,528,659 | $1,270,039 | | Net Income Attributable to Evercore Inc. | $97,201 | $73,758 | $243,385 | $159,451 | | Diluted Net Income Per Share | $2.36 | $1.81 | $5.85 | $3.89 | | Employee Compensation and Benefits (% of Net Revenues) | 65.8% | 66.6% | 66.0% | 66.7% | | Provision for Income Taxes | $44,265 | $28,367 | $2,538 | $21,688 | - Net Income Attributable to Evercore Inc. increased by 32% for the three months and 53% for the six months ended June 30, 2025[240][249] - Net Revenues increased by 21% for the three months and 20% for the six months ended June 30, 2025, primarily driven by Advisory Fees[241][250] - The effective tax rate for the six months ended June 30, 2025, was 1.0%, significantly lower than 11.0% in the prior year, largely due to $75.0 million in net excess tax benefits from share-based awards[255][256] Three Months Ended June 30, 2025 versus June 30, 2024 This section compares the company's financial performance for the three months ended June 30, 2025, against the prior year - Advisory Fees increased by $129.5 million (23%), reflecting higher revenue across M&A and non-M&A assignments and large transactions[241][266] - Other Revenue, Including Interest and Investments, increased by 34% to $29.1 million, primarily due to higher performance of the investment funds portfolio[242] - Employee Compensation and Benefits Expense increased by 20% to $548.6 million, reflecting higher incentive compensation accrual, base salaries, and amortization of deferred compensation awards[243] - Non-compensation expenses increased by 10% to $134.8 million, driven by technology and information services, occupancy, and travel expenses[244] Six Months Ended June 30, 2025 versus June 30, 2024 This section compares the company's financial performance for the six months ended June 30, 2025, against the prior year - Advisory Fees increased by $257.0 million (26%), reflecting higher revenue across M&A and non-M&A assignments and large transactions[250][269] - Other Revenue, Including Interest and Investments, decreased by 26% to $40.5 million, primarily due to lower performance of investment funds and fixed income portfolios[251] - Employee Compensation and Benefits Expense increased by 19% to $1.01 billion, reflecting higher incentive compensation accrual, base salaries, and amortization of deferred compensation awards[252] - Income from Equity Method Investments decreased by 59% to $1.7 million, primarily due to the sale of ABS and redemption of Luminis[254] Business Segments This section analyzes the financial performance of the company's Investment Banking & Equities and Investment Management segments - No client accounted for more than 10% of the Company's Consolidated Net Revenues for the three and six months ended June 30, 2025 and 2024[194] Geographic Net Revenues (6 Months Ended June 30, dollars in thousands): | Region | 2025 | 2024 | | :------------- | :----------- | :----------- | | Americas | $1,262,750 | $1,048,219 | | EMEA | $199,085 | $162,596 | | Asia-Pacific | $34,768 | $13,124 | | Total | $1,496,603 | $1,223,939 | Identifiable Segment Assets (June 30, dollars in thousands): | Segment | 2025 | 2024 | | :-------------------------- | :----------- | :----------- | | Investment Banking & Equities | $3,575,400 | $3,176,797 | | Investment Management | $114,259 | $139,201 | | Total | $3,689,659 | $3,315,998 | Investment Banking & Equities This segment analysis details revenue and income growth, driven by advisory fees and increased business activity Investment Banking & Equities Operating Results (dollars in thousands): | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Revenues | $812,171 | $670,010 | $1,486,703 | $1,231,738 | | Advisory Fees | $697,744 | $568,231 | $1,255,093 | $998,069 | | Pre-Tax Income | $145,962 | $103,789 | $252,653 | $183,367 | | Employee Compensation and Benefits | $535,447 | $448,064 | $983,476 | $825,351 | | Non-Compensation | $130,773 | $118,304 | $250,547 | $223,855 | - Advisory Fees increased by 23% for the three months and 26% for the six months ended June 30, 2025, reflecting increased revenue from M&A and non-M&A assignments and large transactions[266][269] - Pre-Tax Income increased by 41% for the three months and 38% for the six months ended June 30, 2025[261] - Total Number of Fees of at Least $1 million from Advisory and Underwriting Client Transactions increased by 17% for the three months and 11% for the six months ended June 30, 2025[265] Investment Management This segment analysis covers revenue and AUM growth, alongside changes in pre-tax income and equity method investments Investment Management Operating Results (dollars in thousands): | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Revenues | $21,659 | $19,214 | $41,956 | $38,301 | | Asset Management and Administration Fees | $20,684 | $19,200 | $41,667 | $37,899 | | Pre-Tax Income | $5,242 | $6,311 | $10,614 | $13,178 | | Employee Compensation and Benefits | $13,164 | $10,871 | $24,960 | $21,289 | | Non-Compensation | $4,057 | $3,742 | $8,103 | $7,181 | - Assets Under Management (AUM) in Wealth Management increased 4% to $14.5 billion at June 30, 2025, from $13.9 billion at December 31, 2024, reflecting 3% market appreciation and 1% net inflows[277][279][282] - Income from Equity Method Investments decreased by 53% for the three months and 49% for the six months ended June 30, 2025, primarily due to the sale of ABS in Q3 2024[286][290] Cash Flows This section analyzes the company's cash inflows and outflows from operating, investing, and financing activities Summary of Cash Flows (6 Months Ended June 30, dollars in thousands): | Activity | 2025 | 2024 | | :------------------------------------------ | :----------- | :----------- | | Operating activities | ($111,916) | $67,267 | | Investing activities | $365,608 | $383,778 | | Financing activities | ($541,805) | ($410,987) | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | ($254,858) | $34,974 | | Cash, Cash Equivalents and Restricted Cash – End of Period | $627,249 | $640,458 | - Operating activities resulted in a net outflow of $111.9 million in H1 2025, primarily related to the payment of 2024 bonus awards and deferred cash compensation[292] - Financing activities used $541.8 million in H1 2025, primarily for purchases of treasury stock (including for net settlement of RSUs) and noncontrolling interests, and dividend payments[292] Liquidity and Capital Resources This section discusses the company's ability to meet financial obligations, manage capital, and fund operations - Liquidity is highly dependent on the Company's revenue stream from operations, principally from its Investment Banking & Equities segment, which is irregular and dependent on external factors[296] - On April 29, 2025, the Board authorized a new share repurchase program for up to $1.6 billion worth of Class A Shares and/or LP Units or 8.0 million Class A Shares and/or LP Units[300] - During the six months ended June 30, 2025, the Company repurchased 1,737,555 Class A Shares for $449.2 million, including shares under its repurchase program and for minimum tax withholding[302] - Issued $250.0 million of new senior notes (Series K and L) on July 24, 2025, to repay maturing notes and for general corporate purposes[310] - Amended its revolving credit facility with PNC, increasing the aggregate principal amount to $225.0 million, and EGL's subordinated revolving credit facility to $75.0 million[313][314] Market Risk and Credit Risk This section outlines the company's exposure to market fluctuations, investment risks, and credit exposures - The Company is generally not a capital-intensive organization and is not subject to significant market or credit risks[323] - A hypothetical 10% adverse change in the market value of investments would result in an estimated decrease in pre-tax income of approximately $15.9 million for the three months ended June 30, 2025[325] - Foreign currency translation adjustment resulted in a net gain of $27.4 million (net of tax) for the six months ended June 30, 2025[328] - Credit risk is managed by limiting concentration and maintaining investment-grade credit quality for its Investment Securities portfolio, of which 85% were U.S. Treasury securities at June 30, 2025[335] - Bad debt expense was $3.5 million for the six months ended June 30, 2025, compared to $1.0 million in the prior year[332] Critical Accounting Policies and Estimates This section highlights key accounting policies requiring significant management judgment and estimation - Unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP, requiring management to make estimates and assumptions[336] - Actual results could differ materially from these estimates[336] - A detailed discussion of critical accounting policies and estimates is provided in the Annual Report on Form 10-K for the year ended December 31, 2024[336] Recently Issued Accounting Standards This section refers to Note 3 for a discussion of new accounting standards and their impact - Refers to Note 3 for a discussion of recently issued accounting standards and their impact or potential impact on the consolidated financial statements[337] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to management's discussion for disclosures on market risk, affirming no other material risks - Refers to the 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Market Risk and Credit Risk' section for disclosures[338] - The Company does not believe it faces any material interest rate risk, foreign currency exchange risk, equity price risk, or other market risk except as disclosed[338] Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and the absence of material changes in internal controls - The design and operation of the Company's disclosure controls and procedures were effective as of June 30, 2025[339] - No changes materially affecting internal control over financial reporting occurred during the three months ended June 30, 2025[340] PART II. OTHER INFORMATION This section provides additional information on legal proceedings, equity sales, and other corporate matters Item 1. Legal Proceedings This section confirms the company is not currently party to any material legal proceedings that would significantly impact operations - The Company and its affiliates are involved in judicial or regulatory proceedings, arbitration, or mediation concerning matters arising in connection with its businesses[342] - The Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company[342] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's share repurchase activities and new repurchase program authorization Issuer Purchases of Equity Securities (2025): | Period | Total Number of Shares (or Units) Purchased | Average Price Paid Per Share | | :-------------------------- | :---------------------------------------- | :--------------------------- | | January 1 to March 31 | 1,554,522 | $261.15 | | April 1 to June 30 | 183,033 | $236.05 | | Total January 1 to June 30 | 1,737,555 | $258.50 | - Total repurchases for the six months ended June 30, 2025, amounted to 1,737,555 Class A Shares for $449.2 million[343] - Repurchases included 808,559 shares under publicly announced plans and 915,963 shares for net settlement of equity awards to satisfy minimum tax obligations[343] - On April 29, 2025, the Board authorized a new repurchase program for up to $1.6 billion or 8.0 million Class A Shares and/or LP Units[344] Item 5. Other Information This section confirms no Rule 10b5-1(c) trading arrangements were adopted or terminated by executives in Q2 2025 - None of the Company's trustees or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities intended to satisfy Rule 10b5-1(c) conditions during the three months ended June 30, 2025[345] Item 6. Exhibits and Financial Statement Schedules This section lists all exhibits filed with the Form 10-Q, including certifications from the CEO and CFO, and the Inline XBRL formatted financial statements and taxonomy extensions - Includes certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350[346] - The Condensed Consolidated Financial Statements for the quarter ended June 30, 2025, are formatted in Inline XBRL[346] - Agreements and other documents filed as exhibits are not intended to provide factual information or other disclosure beyond their terms[346] SIGNATURES This section provides the official signatures of the Chief Executive Officer and Chief Financial Officer for the report - The report was signed on August 7, 2025, by John S. Weinberg, Chief Executive Officer and Chairman, and Tim LaLonde, Chief Financial Officer[349][350]