Question-and-Answer SessionAnd maybe just to kick it off, Peter, like I've talked about you as not your typical investment banking CEO. You have an amazing sort of background, trained as an economist, worked in the White House formerly and now at Lazard. Just talk to us in terms of when you look through the lens of your experiences, like how -- what brought you to Lazard and just kind of what's shaping sort of your approach, and we can dig into some of these strategic initiatives you laid out.Peter OrszagCE ...

Financial Data and Key Metrics Changes - For the full year 2025, the company reported firm-wide revenue of $3 billion, an increase of 5% from 2024, with fourth-quarter revenue of $892 million, up 10% year-over-year [12][5] - Financial advisory revenue reached $1.8 billion for the year, with fourth-quarter revenue of $542 million, up 7% from the previous year [12][7] - Asset management revenue was $1.2 billion for the year, with fourth-quarter revenue of $339 million, up 18% year-over-year [14][9] - The average revenue per Managing Director (MD) increased to $8.9 million, up $2.5 million since 2023 [8][20] - The adjusted effective tax rate for the full year was 22.7% [17] Business Line Data and Key Metrics Changes - In financial advisory, record revenue was achieved in EMEA and the Private Capital Advisory group, with strong performance in restructuring and liability management [7][12] - Asset management saw a 12% year-over-year increase in assets under management (AUM), reaching $254 billion as of December 31, 2025 [15][9] - The company reported record gross inflows exceeding $50 billion in asset management, supported by a focus on sales and distribution [9][10] Market Data and Key Metrics Changes - The company noted a current level of won but not yet funded mandates at $13 billion, indicating strong demand for its services [7][10] - The company anticipates positive net flows in both financial advisory and asset management for 2026, driven by ongoing client demand and market conditions [6][10] Company Strategy and Development Direction - The company is focused on executing its Lazard 2030 long-term growth strategy, emphasizing investments in talent and operational efficiency [5][6] - There is a strategic shift towards enhancing advisory services related to private capital, aiming to increase the share of advisory revenue from private capital to 50% over time [22][32] - The company plans to expand its presence in North America, Europe, and the Middle East, with new offices opened in Denmark and the UAE [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the M&A cycle, expecting acceleration in 2026 despite geopolitical uncertainties [24][60] - The company highlighted the importance of contextual alpha in navigating complex market conditions, which is seen as a competitive advantage [28][60] - Management noted that the disparity in corporate performance is leading to increased restructuring and liability management activity, alongside M&A [98][34] Other Important Information - The company returned $393 million to shareholders in 2025, including dividends and share repurchases [18] - The compensation ratio for the full year was 65.5%, a slight improvement from 65.9% in the prior year [17] Q&A Session Summary Question: Advisory trends and revenue mix - The revenue mix for the year was approximately 60% M&A and 40% non-M&A, with expectations for the non-M&A component to rise over time [32][31] Question: CFO transition - The transition to the new CFO was characterized as normal and smooth, with the outgoing CFO serving as a senior advisor [40][39] Question: M&A market observations - Management anticipates heightened private equity activity in 2026, driven by sponsors needing to return capital to LPs [48][47] Question: Asset management fee rates and unfunded mandates - The exit rate was modestly higher than the quarter run rate, with a healthy mix in the $13 billion of won but not yet funded mandates [52][54] Question: Geopolitical tensions impact - No significant impact on corporate discussions was noted due to geopolitical tensions, with a focus on broader variables in decision-making [60][59] Question: Restructuring cycle outlook - Continued activity in restructuring is expected due to the widening performance disparity among companies [98][34]

Lazard (NYSE:LAZ) Q4 2025 Earnings call January 29, 2026 08:00 AM ET Company ParticipantsAlexandra Deignan - Head of Investor Relations and TreasuryBrendan O’Brien - Senior VPChris Hogbin - CEO of Asset ManagementDaniel Cocchiara - Equity Research Associate of North American BanksDevin Ryan - Director of Financial Technology ResearchJames Yaro - Managing Director of Equity ResearchMary Ann Betsch - CFOPeter Orszag - CEO and ChairmanRyan Kenny - Executive Director of Equity ResearchConference Call Participan ...

Financial Data and Key Metrics Changes - Firm-wide revenue for 2025 was $3 billion, an increase of 5% from 2024, with fourth-quarter revenue at $892 million, up 10% year-over-year [11][4] - Financial advisory revenue reached $1.8 billion for the year, with fourth-quarter revenue at $542 million, up 7% from the previous year [11][6] - Asset management revenue was $1.2 billion for 2025, with fourth-quarter revenue at $339 million, up 18% year-over-year [12][8] - Average revenue per Managing Director (MD) increased to $8.9 million, up $2.5 million since 2023 [7][18] - The adjusted effective tax rate for 2025 was 22.7% [15] Business Line Data and Key Metrics Changes - In financial advisory, record revenue was reported in EMEA and the Private Capital Advisory group, with strong performance in restructuring and liability management [6][11] - Asset management AUM (Assets Under Management) was $254 billion as of December 31, 2025, a 12% increase year-over-year [13][8] - Gross inflows in asset management exceeded $50 billion, supported by a focus on sales and distribution [8][9] Market Data and Key Metrics Changes - The current level of won but not yet funded mandates is $13 billion, higher than the previous year, indicating strong client demand [6][9] - The firm anticipates positive net flows in 2026, driven by a diversified investment platform and strong client engagement [9][24] Company Strategy and Development Direction - The company is focused on executing its Lazard 2030 long-term growth strategy, with expectations for substantial growth in both financial advisory and asset management [4][5] - There is a strategic emphasis on enhancing advisory revenue from private capital, aiming to increase its share from approximately 40% to 50% over time [19][30] - The company plans to expand its presence in North America and continue investing in Europe and the Middle East, with new offices opened in Denmark and the UAE [20][24] Management's Comments on Operating Environment and Future Outlook - Management expects M&A activity to accelerate in 2026, despite ongoing geopolitical uncertainties [21][56] - The company sees a significant opportunity for restructuring and liability management due to the widening performance gap among companies [21][92] - The integration of AI into operations is viewed as a key driver for enhancing client outcomes and operational efficiency [24][25] Other Important Information - The company returned $393 million to shareholders in 2025, including dividends and share repurchases [16] - The compensation ratio for 2025 was 65.5%, a slight improvement from 65.9% in the previous year [15] Q&A Session Summary Question: Advisory trends and revenue mix - The revenue mix for the year was approximately 60% M&A and 40% non-M&A, with expectations for the non-M&A component to rise over time [30][31] Question: CFO transition - The transition to the new CFO is viewed as normal and smooth, with the outgoing CFO serving as a senior advisor during the transition [36][37] Question: Private equity activity and M&A outlook - Management anticipates heightened private equity activity in 2026, driven by LPs seeking returns and narrowing bid-ask spreads [45][46] Question: Asset management fee rates and unfunded mandates - The exit rate for the quarter was modestly higher than the average, with a healthy mix of asset classes in the $13 billion of won but not yet funded mandates [48][51] Question: Geopolitical tensions and corporate discussions - There has been no impact on corporate discussions from geopolitical tensions, and the regulatory environment is seen as accommodating for deals [55][56] Question: Incremental comp leverage and operating efficiency - Additional operating leverage is expected in 2026, with a focus on increasing productivity and creating efficiencies across corporate functions [61][62]