Core Insights - Moelis & Company reported record fourth-quarter revenues of $488 million, an 11% increase year-over-year, and full-year adjusted revenues rose 28% to $1.54 billion, driven by a 35% growth in M&A and a record-setting year for capital markets [2][5][4] Financial Performance - The adjusted compensation ratio improved to 61.1% in Q4 from 69% the previous year, contributing to an adjusted pre-tax margin of 28.6% in Q4, up from 16.4% in 2024 [12][14] - Adjusted EPS reached $2.99, reflecting a 64% increase from $1.82 in 2024, attributed to revenue growth and reduced expense ratios [15][4] - The firm ended the period with $849 million in cash and no debt, and declared a quarterly dividend of $0.65 while authorizing up to $300 million in share buybacks [18][17] M&A and Market Outlook - Management anticipates a constructive transaction environment in 2026, driven by strong equity market performance and active strategic pursuits for larger transformational deals [6][3] - The M&A market is expected to see continued mega-cap activity, with easing valuation disconnects and improved financing conditions potentially broadening momentum into the middle market [7][6] Capital Structure Advisory - The firm sees a long runway for liability management assignments due to leverage across many companies, with expectations for flat to up growth in capital structure advisory for 2026 [8][6] - Management noted that while geopolitical uncertainty remains a concern, boards may proceed with transactions unless significant shocks occur [9][10] Talent and Business Development - Moelis added 21 managing directors in 2025, indicating ongoing investment in talent and capabilities, with a focus on building its Private Capital Advisory business [19][22] - The PCA team is integrated with industry bankers, and while current revenue from PCA is limited, significant growth is expected as the firm moves into 2026 [23][22]

Moelis & Company (NYSE:MC) Q4 2025 Earnings call February 04, 2026 05:00 PM ET Company ParticipantsChristopher Callesano - CFOMatt Tsukroff - Head of Investor RelationsNavid Mahmoodzadegan - CEOConference Call ParticipantsAlexander Bond - AnalystBrendan O'Brien - AnalystBrennan Hawken - AnalystDaniel Cocchiara - AnalystDevin Patrick Ryan - AnalystJames Yaro - AnalystKenneth Worthington - AnalystNathan Stein - AnalystRyan Kenny - AnalystOperatorLadies and gentlemen, good afternoon and welcome to the Moelis & ...

Financial Data and Key Metrics Changes - The company reported record fourth quarter revenues of $488 million, an increase of 11% year-over-year [10] - For the full year, adjusted revenues grew 28% to $1.54 billion, driven by a 35% growth in M&A [4][10] - Adjusted compensation expense ratios improved to 61.1% for Q4 and 65.8% for the full year, down from 69% in the previous year [10][11] - Adjusted pre-tax margin was 28.6% for Q4 and 21.5% for the full year, representing a 510 basis point improvement from 16.4% in 2024 [11] Business Line Data and Key Metrics Changes - M&A accounted for approximately two-thirds of the business mix for both the fourth quarter and full year, with significant growth in capital markets [10] - Capital Structure Advisory (CSA) saw a decline, contrasting with the growth in M&A and Capital Markets [10][11] - The private capital advisory business is ramping up, with expectations for meaningful revenue growth in 2026 [71] Market Data and Key Metrics Changes - The company noted an increase in investor appetite across growth-oriented sectors, benefiting capital markets activities [7] - The financing markets are described as constructive, setting the stage for an active transaction environment in 2026 [5] - The company anticipates a broadening of M&A activity across transaction sizes as the year progresses [6] Company Strategy and Development Direction - The company aims to continue growing client capabilities and footprint, having added 21 managing directors in 2025 [8] - There is a focus on integrating the private capital advisory team with industry and financial sponsor bankers to enhance service offerings [8] - The company is committed to maintaining a strong balance sheet with no debt and substantial cash reserves [9][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive growth while generating operating leverage and delivering sustained value [9] - The outlook for 2026 is positive, with a near-record pipeline and expectations for increased sponsor activity [5][19] - Management acknowledged the potential impact of geopolitical factors on transaction activities but noted a general resilience among boards to proceed with necessary corporate transactions [32][33] Other Important Information - The board declared a regular quarterly dividend of $0.65 per share and authorized a new share repurchase program of up to $300 million [13][14] - The company returned $284 million of capital to shareholders through dividends and share repurchases in 2025 [14] Q&A Session Summary Question: Broader advisory outlook and sponsor engagement - Management noted an increasing velocity of sponsor deals and expects more activity in the middle market in 2026, driven by pressure from LPs to return capital [18][19] Question: Restructuring liability management activity - Management indicated a long runway of activity in liability management due to many companies still grappling with balance sheet issues [22][23] Question: M&A composition and outlook for 2026 - Management expects continued activity in larger cap transactions while anticipating a resurgence in middle market deals as financing conditions improve [28][31] Question: Impact of geopolitical factors on transactions - Management acknowledged that geopolitical uncertainty can affect transaction levels but noted that boards are becoming more accustomed to navigating these challenges [32][33] Question: Revenue recognition cadence for the coming year - Management indicated that while the first quarter may be lighter, the overall environment remains constructive, with high motivation for transactions [36][38] Question: Capital allocation and buyback timing - Management emphasized a commitment to maintaining dividends and mitigating share dilution through buybacks, while also keeping a strong balance sheet [74][75]

Investor Presentation Q4 2025 This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect our current views with respect to, among other things, Evercore's operations and financial performance. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "backlog," "believes," "expects," "potential," "probable," "continues," "may," "will," ...

Financial Data and Key Metrics Changes - The company reported revenues of $365 million in Q2 2025, a 38% increase compared to the prior year period, marking the highest second quarter revenues on record [5] - First half revenues reached $672 million, up 39% from the prior year period [5] - The compensation expense ratio for Q2 was 69%, consistent with the previous quarter, while non-compensation expense ratio was 14.4% [6][7] - The corporate tax rate was accrued at 29.5%, consistent with Q1 [7] - The company maintained a strong balance sheet with cash and liquid investments of $475 million and no debt [7] Business Line Data and Key Metrics Changes - The year-over-year revenue increase was primarily driven by growth in M&A and capital markets [6] - The company achieved record revenues in the first half of the year, reflecting successful investments in capital markets [9] Market Data and Key Metrics Changes - The company noted a significantly improved transaction environment entering the second half of the year, recovering from the disruptions caused by the "Liberation Day" market chaos [8] - The pipeline for new business origination is near record levels, indicating strong market activity [8] Company Strategy and Development Direction - The company aims to build a premier platform in secondary and primary capital solutions for sponsors, with plans to aggressively scale this franchise [9] - The focus remains on investing in high total addressable markets (TAMs) and attracting elite talent to drive revenue growth [31][32] - The company is committed to maintaining a strong culture and internal talent development, with 40% of MDs being internally promoted [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the improving market conditions and the company's ability to execute for clients [9] - The company anticipates continued growth in the private capital advisory business, viewing it as a significant revenue opportunity [26][28] - Management acknowledged the potential for returning excess capital to shareholders, including stock repurchases [77][78] Other Important Information - A CEO transition is underway, with Navid Mahmoodzadegan stepping into the role, while Kenneth Moelis will serve as Executive Chairman [11][13] - The company is actively hiring in various sectors, focusing on building pipelines and covering more areas [65] Q&A Session Summary Question: Progression of sponsor reengagement across sectors - Management noted a broad recovery across sectors, with some areas still affected by trade uncertainty [20][22] Question: Addressable market for private capital advisory - Management sees the addressable market for private capital advisory as potentially exceeding a couple of hundred million dollars, with aggressive hiring planned [25][26] Question: Focus areas for the next phase of growth - The strategy will continue to focus on high TAMs, attracting elite talent, and maintaining a strong culture [31][32] Question: Outlook for M&A and IPO activity post Labor Day - Management indicated a steady improvement in market activity, with increasing enthusiasm for transactions [40][41] Question: Trends in restructuring activity - Restructuring activity has trended slightly down, as companies prefer financing options in a strong market [52] Question: Flexibility of compensation ratio - Management stated that the compensation ratio is top-line driven and will be evaluated based on revenue growth [56][60] Question: Hiring focus outside of PCA - Management is in active discussions for talent across various sectors, aiming to build franchises in untapped areas [65][66] Question: Cash and liquid investments return to shareholders - Management acknowledged excess capital and is considering various ways to return it to shareholders, including stock repurchases [77][78]