Lazard(LAZ) - 2025 Q3 - Quarterly Results

Executive Summary Lazard reports strong Q3 and 9M 2025 results, driven by record adjusted net revenue, Financial Advisory growth, and Asset Management inflows Key Financial Highlights Lazard achieved record adjusted net revenue for Q3 2025, with record Financial Advisory revenue and Asset Management inflows year-to-date, demonstrating strong growth Selected Financial Results (GAAP and Adjusted) | Metric | Q3 2025 (GAAP) | Q3 2024 (GAAP) | % '25-'24 (GAAP) | 9M 2025 (GAAP) | 9M 2024 (GAAP) | % '25-'24 (GAAP) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $748M | $785M | (5%) | $2,192M | $2,235M | (2%) | | Financial Advisory | $427M | $371M | 15% | $1,292M | $1,236M | 5% | | Asset Management | $327M | $294M | 11% | $908M | $875M | 4% | | Net Income | $71M | $108M | (34%) | $187M | $194M | (3%) | | Per share, diluted | $0.65 | $1.02 | (36%) | $1.72 | $1.88 | (9%) | | Adjusted Financial Measures | | | | | | | | Net Revenue | $725M | $646M | 12% | $2,138M | $2,077M | 3% | | Financial Advisory | $422M | $369M | 14% | $1,283M | $1,223M | 5% | | Asset Management | $294M | $272M | 8% | $827M | $813M | 2% | | Net Income | $62M | $40M | 56% | $178M | $159M | 12% | | Per share, diluted | $0.56 | $0.38 | 47% | $1.64 | $1.54 | 6% | | Assets Under Management (AUM) | | | | | | | | Ending AUM | $265B | $248B | 7% | | | | | Average AUM | $257B | $246B | 5% | $242B | $246B | (2%) | - Record firmwide adjusted net revenue for the third quarter of $725 million, up 12% year-over-year[4] - Record Financial Advisory adjusted net revenue of $1.3 billion for the first nine months of 2025, with 20 Managing Directors hired year-to-date to support long-term growth[4] - Record Asset Management inflows for the third quarter and first nine months of the year, with positive net flows of $1.6 billion and total AUM up 17% year-to-date[4] CEO Commentary CEO Peter R. Orszag highlighted Lazard's continued momentum, noting record Financial Advisory and Asset Management performance in a constructive market - Lazard's long-term growth strategy continues to build momentum and produce results, with record Financial Advisory revenue and record Asset Management inflows year-to-date[2] - An increasingly constructive environment is observed for both businesses, with substantial client engagement firmwide[2] - Chris Hogbin will be welcomed as the new CEO of Asset Management later this year to further accelerate progress[2] Net Revenue by Segment This section details Lazard's net revenue performance across its Financial Advisory and Asset Management segments for Q3 and 9M 2025 Financial Advisory Financial Advisory reported significant adjusted net revenue growth for both Q3 and the first nine months of 2025, supported by key M&A and capital advisory mandates Financial Advisory Net Revenue | Metric | Q3 2025 | Q3 2024 | % Change | 9M 2025 | 9M 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue (GAAP) | $427M | $371M | 15% | $1,292M | $1,236M | 5% | | Adjusted Net Revenue | $422M | $369M | 14% | $1,283M | $1,223M | 5% | - Provided tailored advice and expertise through Private Capital Advisory and Capital Solutions practices, including advising Norvestor on a continuation fund and on the closing of Nexus Capital Management's Fund IV and Pacific Avenue's Fund II[6] - Advised on capital structure and capital raises for Morrisons and TenneT Holdings[7] - Engaged in preeminent restructuring and liability management mandates for debtors (e.g., Altice France, First Brands Group) and creditors (e.g., Anthology, CityFibre), and active in sovereign advisory practice[10] - Selected M&A highlights include advising Corteva Agriscience on its planned separation, Keurig Dr. Pepper's $23 billion acquisition of JDE Peet's, Mallinckrodt Pharmaceuticals' $6.7 billion combination with Endo Pharmaceuticals, Sixth Street's investment in the Boston Celtics ($6.1 billion), Caithness Energy's $3.8 billion asset sale to Talen Energy, Ferrero's $3.1 billion acquisition of WK Kellogg Co, and Arcadia's majority sale to Nordic Capital[6][7][10] Asset Management Asset Management experienced robust growth in net revenue and AUM, with record inflows for the quarter and year-to-date, driven by market appreciation and positive net flows Asset Management Net Revenue | Metric | Q3 2025 | Q3 2024 | % Change | 9M 2025 | 9M 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue (GAAP) | $327M | $294M | 11% | $908M | $875M | 4% | | Adjusted Net Revenue | $294M | $272M | 8% | $827M | $813M | 2% | Adjusted Management and Incentive Fees | Metric (Adjusted) | Q3 2025 | Q3 2024 | % Change | 9M 2025 | 9M 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Management fees and other revenue | $285M | $269M | 6% | $806M | $806M | Up slightly | | Incentive fees | $9M | $3M | 200% | $21M | $13M | 61.5% | - Average AUM for Q3 2025 was $257 billion, 5% higher than Q3 2024 and 8% higher than Q2 2025[9] - Average AUM for the first nine months of 2025 was $242 billion, 2% lower than the first nine months of 2024[9] - AUM as of September 30, 2025, was $265 billion, 7% higher than both September 30, 2024, and June 30, 2025, and 17% higher year-to-date[11] - The sequential change in AUM from June 30, 2025, was driven by market appreciation of $12.0 billion and net inflows of $4.6 billion, partially offset by foreign exchange depreciation of $0.4 billion[11] Operating Expenses This section outlines Lazard's operating expenses, including compensation and benefits, and non-compensation costs, for Q3 and 9M 2025 Compensation and Benefits Expense Compensation and benefits expense increased on both GAAP and adjusted bases for Q3 2025, but the adjusted compensation ratio improved slightly year-over-year for both the quarter and nine-month period Compensation and Benefits Expense | Metric | Q3 2025 | Q3 2024 | % Change | 9M 2025 | 9M 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | GAAP | $498M | $465M | 7% | $1,448M | $1,469M | (1%) | | Adjusted | $475M | $426M | 11% | $1,400M | $1,371M | 2% | - The adjusted compensation ratio for Q3 2025 was 65.5%, compared to 66.0% for Q3 2024[12] - The adjusted compensation ratio for the first nine months of 2025 was 65.5%, compared to 66.0% for the first nine months of 2024[12] - Lazard's goal is to deliver an adjusted compensation ratio of 60% or below, dependent on market conditions[12] Non-Compensation Expenses Non-compensation expenses rose for both Q3 and 9M 2025 on both GAAP and adjusted bases, with the adjusted non-compensation ratio showing a slight increase for the nine-month period Non-Compensation Expenses | Metric | Q3 2025 | Q3 2024 | % Change | 9M 2025 | 9M 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | GAAP | $175M | $158M | 11% | $522M | $487M | 7% | | Adjusted | $149M | $138M | 8% | $454M | $421M | 8% | - The adjusted non-compensation ratio was 20.5% for Q3 2025, compared to 21.4% for Q3 2024[13] - The adjusted non-compensation ratio was 21.2% for the first nine months of 2025, compared to 20.3% for the first nine months of 2024[13] - Lazard's goal is to deliver an adjusted non-compensation ratio between 16% to 20%, dependent on market conditions[13] Taxes This section details Lazard's provision for income taxes and effective tax rates on both GAAP and adjusted bases for Q3 and 9M 2025 Provision for Income Taxes and Effective Tax Rates The provision for income taxes and effective tax rates varied between GAAP and adjusted bases, with adjusted effective tax rates generally lower for both the quarter and nine-month period Provision for Income Taxes (in thousands) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP | $21M | $45M | $46M | $71M | | Adjusted | $17M | $19M | $41M | $60M | Effective Tax Rates | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP | 22.6% | 27.9% | 18.9% | 25.4% | | Adjusted | 21.4% | 32.5% | 18.8% | 27.4% | Capital Management and Balance Sheet This section covers Lazard's capital management activities, including shareholder returns and dividend declarations, and its overall financial position Shareholder Returns Lazard returned a significant amount of capital to shareholders in Q3 and the first nine months of 2025, primarily through dividends and satisfaction of employee tax obligations, alongside share repurchases Shareholder Returns | Metric | Q3 2025 | 9M 2025 | | :--- | :--- | :--- | | Total returned to shareholders | $60M | $295M | | Dividends | $47M | $139M | | Common stock repurchases | $1M | $41M | | Employee tax obligations | $12M | $115M | - During the first nine months of 2025, Lazard repurchased 0.9 million shares at an average price of $46.64[16] - As of September 30, 2025, the total outstanding share repurchase authorization was approximately $159 million[16] Dividend Declaration Lazard declared a quarterly dividend of $0.50 per share on its common stock, payable in November 2025 - On October 22, 2025, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock[17] - The dividend is payable on November 14, 2025, to stockholders of record on November 3, 2025[17] Financial Position Lazard maintained a strong financial position with over $1.1 billion in cash and cash equivalents as of September 30, 2025 - As of September 30, 2025, cash and cash equivalents were $1,172 million[17] Company Information This section provides an overview of Lazard as a global financial advisory and asset management firm, along with details for its Q3 2025 earnings conference call About Lazard Lazard is a preeminent global financial advisory and asset management firm, offering services in M&A, capital markets, restructuring, and investment solutions to a diverse client base across multiple continents - Founded in 1848, Lazard is a preeminent financial advisory and asset management firm[21] - Operations are in North and South America, Europe, the Middle East, Asia, and Australia[21] - Provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions[21] - Serves institutions, corporations, governments, partnerships, family offices, and high net worth individuals[21] Conference Call Details Lazard hosted a conference call on October 23, 2025, to discuss its financial results for the third quarter and first nine months of 2025, with access provided via webcast and dial-in options - Lazard hosted a conference call at 8:00 a.m. ET on October 23, 2025, to discuss the company's financial results[19] - The conference call was accessible via a live audio webcast through Lazard's Investor Relations website and by dialing specific toll-free or international numbers[19] - A replay of the conference call was available by 10:00 a.m. ET on October 23, 2025, via the website or dial-in numbers[20] Cautionary Note Regarding Forward-Looking Statements This section provides a cautionary note regarding forward-looking statements, highlighting inherent risks, uncertainties, and assumptions that could cause actual results to differ materially from projections Risks and Uncertainties This section provides a cautionary note regarding forward-looking statements, highlighting inherent risks, uncertainties, and assumptions that could cause actual results to differ materially from projections, including economic conditions, market activity, and regulatory changes - Forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially from projections[24] - Important factors include adverse general economic conditions or adverse conditions in global or regional financial markets[25] - Other risks include changes in international trade policies, a decline in revenues (e.g., due to M&A activity or AUM), losses from third-party problems, lack of liquidity, competitive pressure, and changes in tax laws[28] U.S. GAAP Financial Statements (Unaudited) This section presents Lazard's unaudited U.S. GAAP financial statements, including condensed consolidated statements of operations and financial condition Condensed Consolidated Statement of Operations (Three Months Ended) This table presents Lazard's unaudited U.S. GAAP operating results for the third quarter of 2025, with comparative data for the prior quarter and prior year's third quarter, detailing revenues, expenses, and net income Condensed Consolidated Statement of Operations (Three Months Ended) ($ in thousands, except per share data) | ($ in thousands, except per share data) | September 30, 2025 | June 30, 2025 | September 30, 2024 | % Change From June 30, 2025 | % Change From September 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenue | $770,764 | $817,160 | $807,414 | (6%) | (5%) | | Interest expense | (22,686) | (21,163) | (22,548) | | | | Net revenue | 748,078 | 795,997 | 784,866 | (6%) | (5%) | | Operating expenses: | | | | | | | Compensation and benefits | 498,212 | 519,208 | 465,405 | (4%) | 7% | | Non-compensation expenses | 175,082 | 183,708 | 158,274 | (5%) | 11% | | Benefit pursuant to tax receivable agreement | (20,146) | – | – | | | | Operating expenses | 653,148 | 702,916 | 623,679 | (7%) | 5% | | Operating income | 94,930 | 93,081 | 161,187 | 2% | (41%) | | Provision for income taxes | 21,430 | 31,764 | 45,052 | (33%) | (52%) | | Net income | 73,500 | 61,317 | 116,135 | 20% | (37%) | | Net income attributable to Lazard, Inc. | $71,247 | $55,346 | $107,938 | 29% | (34%) | | Diluted net income per share | $0.65 | $0.52 | $1.02 | 25% | (36%) | Condensed Consolidated Statement of Operations (Nine Months Ended) This table provides Lazard's unaudited U.S. GAAP operating results for the first nine months of 2025, compared to the same period in 2024, detailing revenues, expenses, and net income Condensed Consolidated Statement of Operations (Nine Months Ended) ($ in thousands, except per share data) | ($ in thousands, except per share data) | September 30, 2025 | September 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total revenue | $2,257,088 | $2,300,886 | (2%) | | Interest expense | (64,962) | (65,918) | | | Net revenue | 2,192,126 | 2,234,968 | (2%) | | Operating expenses: | | | | | Compensation and benefits | 1,447,690 | 1,468,789 | (1%) | | Non-compensation expenses | 521,936 | 486,791 | 7% | | Benefit pursuant to tax receivable agreement | (20,146) | – | | | Operating expenses | 1,949,480 | 1,955,580 | –% | | Operating income | 242,646 | 279,388 | (13%) | | Provision for income taxes | 45,840 | 70,976 | (35%) | | Net income | 196,806 | 208,412 | (6%) | | Net income attributable to Lazard, Inc. | $186,968 | $193,602 | (3%) | | Diluted net income per share | $1.72 | $1.88 | (9%) | Condensed Consolidated Statement of Financial Condition This table details Lazard's unaudited U.S. GAAP financial position, including assets, liabilities, and stockholders' equity, as of September 30, 2025, and December 31, 2024 Condensed Consolidated Statement of Financial Condition ($ in thousands) | ($ in thousands) | As of September 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $1,171,985 | $1,308,218 | | Deposits with banks and short-term investments | 217,606 | 268,684 | | Restricted cash | 33,452 | 32,466 | | Receivables | 774,682 | 753,623 | | Investments | 623,711 | 614,947 | | Property | 173,285 | 160,402 | | Operating lease right-of-use assets | 437,014 | 434,938 | | Goodwill and other intangible assets | 395,251 | 393,575 | | Deferred tax assets | 473,879 | 479,582 | | Other assets | 333,055 | 347,558 | | Total Assets | $4,633,920 | $4,793,993 | | LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY | | | | Liabilities | | | | Deposits and other customer payables | $346,899 | $308,213 | | Accrued compensation and benefits | 505,860 | 844,953 | | Operating lease liabilities | 510,761 | 505,483 | | Tax receivable agreement obligation | 55,680 | 75,899 | | Senior debt | 1,687,281 | 1,687,052 | | Other liabilities | 570,295 | 607,610 | | Total liabilities | 3,676,776 | 4,029,210 | | Redeemable noncontrolling interests | 78,518 | 79,629 | | Stockholders' equity | | | | Total Lazard, Inc. stockholders' equity | 841,522 | 636,240 | | Noncontrolling interests | 37,104 | 48,914 | | Total stockholders' equity | 878,626 | 685,154 | | Total liabilities, redeemable noncontrolling interests and stockholders' equity | $4,633,920 | $4,793,993 | Adjusted Financial Information (Non-GAAP - Unaudited) This section provides Lazard's selected summary financial information on an adjusted (non-GAAP) basis for Q3 and 9M 2025, offering insights into underlying operational trends Selected Summary Financial Information (Three Months Ended) This table presents Lazard's adjusted (non-GAAP) financial performance for the third quarter of 2025, including net revenue, expenses, and earnings, with comparisons to prior periods, providing a view of underlying operational trends Selected Summary Financial Information (Three Months Ended) ($ in thousands, except per share data) | ($ in thousands, except per share data) | September 30, 2025 | June 30, 2025 | September 30, 2024 | % Change From June 30, 2025 | % Change From September 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue: | | | | | | | Financial Advisory | $422,279 | $491,359 | $368,807 | (14%) | 14% | | Asset Management | 294,189 | 268,491 | 271,510 | 10% | 8% | | Corporate | 8,185 | 10,016 | 5,597 | (18%) | 46% | | Adjusted net revenue | $724,653 | $769,866 | $645,914 | (6%) | 12% | | Expenses: | | | | | | | Adjusted compensation and benefits expense | $474,647 | $504,263 | $426,303 | (6%) | 11% | | Adjusted compensation ratio (b) | 65.5% | 65.5% | 66.0% | | | | Adjusted non-compensation expenses | $148,665 | $157,371 | $138,239 | (6%) | 8% | | Adjusted non-compensation ratio (c) | 20.5% | 20.4% | 21.4% | | | | Earnings: | | | | | | | Adjusted operating income | $101,341 | $108,232 | $81,372 | (6%) | 25% | | Adjusted operating margin (d) | 14.0% | 14.1% | 12.6% | | | | Adjusted net income | $61,872 | $55,346 | $39,706 | 12% | 56% | | Adjusted diluted net income per share | $0.56 | $0.52 | $0.38 | 8% | 47% | | Adjusted effective tax rate (f) | 21.4% | 36.5% | 32.5% | | | Selected Summary Financial Information (Nine Months Ended) This table details Lazard's adjusted (non-GAAP) financial performance for the first nine months of 2025, compared to the same period in 2024, providing insights into year-to-date operational trends Selected Summary Financial Information (Nine Months Ended) ($ in thousands, except per share data) | ($ in thousands, except per share data) | September 30, 2025 | September 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Revenue: | | | | | Financial Advisory | $1,283,181 | $1,223,377 | 5% | | Asset Management | 827,174 | 812,663 | 2% | | Corporate | 27,349 | 41,081 | (33%) | | Adjusted net revenue | $2,137,704 | $2,077,121 | 3% | | Expenses: | | | | | Adjusted compensation and benefits expense | $1,400,196 | $1,370,900 | 2% | | Adjusted compensation ratio (b) | 65.5% | 66.0% | | | Adjusted non-compensation expenses | $453,918 | $421,144 | 8% | | Adjusted non-compensation ratio (c) | 21.2% | 20.3% | | | Earnings: | | | | | Adjusted operating income | $283,590 | $285,077 | (1%) | | Adjusted operating margin (d) | 13.3% | 13.7% | | | Adjusted net income | $177,593 | $159,181 | 12% | | Adjusted diluted net income per share | $1.64 | $1.54 | 6% | | Adjusted effective tax rate (f) | 18.8% | 27.4% | | Assets Under Management (AUM) Details This section provides a detailed breakdown of Lazard's Assets Under Management (AUM) by asset class and region, along with the drivers of AUM changes for the quarter and year-to-date, highlighting growth in equity and fixed income AUM Breakdown and Changes This section provides a detailed breakdown of Lazard's Assets Under Management (AUM) by asset class and region, along with the drivers of AUM changes for the quarter and year-to-date, highlighting growth in equity and fixed income Assets Under Management by Asset Class ($ in millions) | ($ in millions) | As of Sep 30, 2025 | As of Jun 30, 2025 | As of Dec 31, 2024 | % Change From Jun 30, 2025 | % Change From Dec 31, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity: | | | | | | | Emerging Markets | $37,737 | $33,102 | $27,926 | 14.0% | 35.1% | | Global | 66,695 | 61,166 | 49,058 | 9.0% | 36.0% | | Local | 52,445 | 49,528 | 49,750 | 5.9% | 5.4% | | Multi-Regional | 51,633 | 48,454 | 48,204 | 6.6% | 7.1% | | Total Equity | 208,510 | 192,250 | 174,938 | 8.5% | 19.2% | | Fixed Income: | | | | | | | Emerging Markets | 5,191 | 5,113 | 6,919 | 1.5% | (25.0%) | | Global | 12,625 | 13,411 | 11,138 | (5.9%) | 13.4% | | Local | 5,268 | 5,546 | 5,617 | (5.0%) | (6.2%) | | Multi-Regional | 24,102 | 22,987 | 19,612 | 4.9% | 22.9% | | Total Fixed Income | 47,186 | 47,057 | 43,286 | 0.3% | 9.0% | | Alternative Investments | 3,616 | 3,512 | 2,917 | 3.0% | 24.0% | | Private Wealth Alternative Investments | 3,163 | 3,103 | 3,097 | 1.9% | 2.1% | | Private Equity | 1,477 | 1,508 | 1,514 | (2.1%) | (2.4%) | | Cash Management | 585 | 930 | 569 | (37.1%) | 2.8% | | Total AUM | $264,537 | $248,360 | $226,321 | 6.5% | 16.9% | AUM Changes and Average AUM ($ in millions) | ($ in millions) | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | AUM - Beginning of Period | $248,360 | $227,427 | $244,670 | $226,321 | $246,651 | | Net Flows | 4,575 | 677 | (12,379) | 1,593 | (25,608) | | Market and foreign exchange appreciation | 11,602 | 20,256 | 15,366 | 36,623 | 26,614 | | AUM - End of Period | $264,537 | $248,360 | $247,657 | $264,537 | $247,657 | | Average AUM | $257,358 | $238,552 | $245,958 | $242,142 | $246,070 | | % Change in Average AUM (QoQ/YoY) | 7.9% (QoQ) | | 4.6% (YoY) | | (1.6%) (YoY) | Reconciliation of U.S. GAAP to Adjusted Results (Unaudited) This section provides a detailed reconciliation of Lazard's U.S. GAAP financial results to adjusted (non-GAAP) figures for net revenue, operating expenses, and net income, offering transparency on non-GAAP calculations Net Revenue Reconciliation This section details the adjustments made to U.S. GAAP net revenue to arrive at adjusted net revenue for Financial Advisory, Asset Management, and Corporate segments, providing transparency on non-GAAP calculations Net Revenue Reconciliation ($ in thousands) | ($ in thousands) | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Advisory net revenue - U.S. GAAP Basis | $427,335 | $497,306 | $370,917 | $1,292,000 | $1,235,732 | | Adjustments | (5,056) | (5,947) | (2,110) | (8,819) | (12,355) | | Adjusted Financial Advisory net revenue | $422,279 | $491,359 | $368,807 | $1,283,181 | $1,223,377 | | Asset Management net revenue - U.S. GAAP Basis | $327,029 | $292,478 | $293,878 | $907,607 | $874,841 | | Adjustments | (32,840) | (23,987) | (22,368) | (80,433) | (62,178) | | Adjusted Asset Management net revenue | $294,189 | $268,491 | $271,510 | $827,174 | $812,663 | | Corporate net revenue - U.S. GAAP Basis | ($6,286) | $6,213 | $120,071 | ($7,481) | $124,395 | | Adjustments | 14,471 | 3,809 | (114,474) | 34,830 | (83,314) | | Adjusted Corporate net revenue | $8,185 | $10,016 | $5,597 | $27,349 | $41,081 | | Net revenue - U.S. GAAP Basis | $748,078 | $795,997 | $784,866 | $2,192,126 | $2,234,968 | | Adjustments | (23,425) | (26,131) | (138,952) | (54,422) | (157,847) | | Adjusted net revenue | $724,653 | $769,866 | $645,914 | $2,137,704 | $2,077,121 | Operating Expenses Reconciliation This section reconciles U.S. GAAP compensation and benefits expense and non-compensation expenses to their adjusted counterparts, outlining specific adjustments for a clearer view of operational costs Compensation and Benefits Expense Reconciliation ($ in thousands) | ($ in thousands) | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Compensation and benefits expense - U.S. GAAP Basis | $498,212 | $519,208 | $465,405 | $1,447,690 | $1,468,789 | | Adjustments | (23,565) | (14,945) | (39,102) | (47,494) | (97,889) | | Adjusted compensation and benefits expense | $474,647 | $504,263 | $426,303 | $1,400,196 | $1,370,900 | Non-Compensation Expenses Reconciliation ($ in thousands) | ($ in thousands) | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Non-compensation expenses - U.S. GAAP Basis | $175,082 | $183,708 | $158,274 | $521,936 | $486,791 | | Adjustments | (26,417) | (26,337) | (20,035) | (68,018) | (65,647) | | Adjusted non-compensation expenses | $148,665 | $157,371 | $138,239 | $453,918 | $421,144 | Operating Income and Net Income Reconciliation This section provides reconciliation for U.S. GAAP operating income, provision for income taxes, and net income attributable to Lazard, Inc. to their adjusted figures, including diluted weighted average shares and per share data, for a comprehensive adjusted financial view Operating Income Reconciliation ($ in thousands) | ($ in thousands) | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating income - U.S. GAAP Basis | $94,930 | $93,081 | $161,187 | $242,646 | $279,388 | | Adjustments | 6,411 | 15,151 | (79,815) | 40,944 | 5,689 | | Adjusted operating income | $101,341 | $108,232 | $81,372 | $283,590 | $285,077 | Provision for Income Taxes Reconciliation ($ in thousands) | ($ in thousands) | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Provision for income taxes - U.S. GAAP Basis | $21,430 | $31,764 | $45,052 | $45,840 | $70,976 | | Adjustment: Tax effect of adjustments | (4,623) | – | (25,915) | (4,623) | (10,997) | | Adjusted provision for income taxes | $16,807 | $31,764 | $19,137 | $41,217 | $59,979 | Net Income attributable to Lazard, Inc. Reconciliation ($ in thousands) | ($ in thousands) | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net income attributable to Lazard, Inc. - U.S. GAAP Basis | $71,247 | $55,346 | $107,938 | $186,968 | $193,602 | | Adjustments | (9,375) | – | (68,232) | (9,375) | (34,421) | | Adjusted net income | $61,872 | $55,346 | $39,706 | $177,593 | $159,181 | Diluted Weighted Average Shares Outstanding Reconciliation | | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Diluted Weighted Average Shares Outstanding - U.S. GAAP Basis | 108,001,762 | 104,911,633 | 103,475,234 | 105,914,050 | 101,151,624 | | Adjustment: participating securities | 2,352,920 | 1,785,023 | 2,039,002 | 2,328,475 | 1,926,855 | | Adjusted Diluted Weighted Average Shares Outstanding | 110,354,682 | 106,696,656 | 105,514,236 | 108,242,524 | 103,078,479 | Reconciliation of Non-Compensation Expenses U.S. GAAP to Adjusted (Unaudited) This section provides a detailed reconciliation of Lazard's non-compensation expenses from U.S. GAAP to adjusted figures, categorized by type, for the three and nine months ended September 30, 2025 Non-Compensation Expenses Reconciliation by Type This section provides a detailed breakdown of non-compensation expenses on both U.S. GAAP and adjusted bases, categorized by type, for the three and nine months ended September 30, 2025, illustrating the impact of adjustments on various expense categories Non-Compensation Expenses U.S. GAAP to Adjusted ($ in thousands) | ($ in thousands) | Q3 2025 (GAAP) | Q3 2025 (Adjusted) | Q3 2024 (GAAP) | Q3 2024 (Adjusted) | 9M 2025 (GAAP) | 9M 2025 (Adjusted) | 9M 2024 (GAAP) | 9M 2024 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Occupancy and equipment | $31,908 | $31,810 | $34,249 | $34,161 | $101,024 | $100,736 | $99,137 | $97,381 | | Marketing and business development | 26,085 | 22,096 | 21,782 | 18,718 | 83,409 | 72,731 | 70,874 | 62,787 | | Technology and information services | 48,862 | 48,823 | 44,628 | 44,562 | 144,350 | 144,248 | 135,951 | 135,801 | | Professional services | 20,951 | 19,994 | 19,541 | 18,271 | 64,377 | 60,753 | 63,155 | 59,927 | | Fund administration and outsourced services | 32,390 | 13,576 | 27,996 | 11,336 | 88,989 | 36,588 | 81,250 | 33,967 | | Other | 14,886 | 12,366 | 10,078 | 11,191 | 39,787 | 38,862 | 36,424 | 31,281 | | Total Non-compensation expenses | $175,082 | $148,665 | $158,274 | $138,239 | $521,936 | $453,918 | $486,791 | $421,144 | Notes to Financial Schedules This section provides explanatory notes for the financial schedules, clarifying the purpose and methodology behind Lazard's non-GAAP measures and detailing the specific adjustments made to reconcile U.S. GAAP to adjusted results Explanation of Non-GAAP Measures and Adjustments This section provides explanatory notes for the financial schedules, clarifying the purpose and methodology behind Lazard's non-GAAP measures and detailing the specific adjustments made to reconcile U.S. GAAP to adjusted results - Non-GAAP measures are presented to provide a meaningful and useful basis for comparing operating results across periods, but should not be considered in isolation or as a substitute for U.S. GAAP measures[55] - Definitions are provided for adjusted compensation ratio, adjusted non-compensation ratio, adjusted operating margin, and adjusted effective tax rate[55] - Detailed explanations of adjustments include: reimbursable deal costs, interest expense, losses associated with cost-saving initiatives, revenue and expenses related to noncontrolling interests, gains/charges related to Lazard Fund Interests (LFI), gain on sale of property, expenses associated with senior management transition, estimated statutory profit-sharing expenses, and benefit pursuant to tax receivable agreement obligation (TRA)[55]