Financial Data and Key Metrics Changes - For the first nine months of 2025, total firm-wide revenue was $2.1 billion, with record Financial Advisory revenue of $1.3 billion [4] - Third-quarter firm-wide revenue reached $725 million, up 12% year-over-year, driven by both business segments [7] - Financial Advisory revenue for the third quarter totaled $422 million, up 14% from the previous year [7] Business Line Data and Key Metrics Changes - In Financial Advisory, the company saw strong activity in M&A across healthcare, industrials, and consumer sectors, contributing to the revenue growth [4] - Asset Management revenue for the first nine months was $827 million, with third-quarter revenue up 8% year-over-year [5] - Management fees in Asset Management increased by 6% year-over-year, while incentive fees rose to $9 million from $3 million in the previous year [9][10] Market Data and Key Metrics Changes - The company reported net positive flows of $1.6 billion year-to-date in Asset Management, with total AUM up 17% [5] - As of September 30, total AUM was $265 billion, a 7% increase compared to both September 2023 and June 2023 [10] - The company experienced significant inflows from various geographic regions, particularly in quantitative and emerging market strategies [10] Company Strategy and Development Direction - The company is focused on expanding its team of Financial Advisory Managing Directors and enhancing productivity, aiming for an average revenue per MD of $10 million by 2028 [14][15] - The strategic emphasis is on active management in areas where it can add value, such as quantitative strategies and customized solutions [16] - The company is also expanding its ETF business, launching six strategies in 2025, with plans for further global expansion [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in an increasingly constructive environment for advisory activity, despite potential short-term impacts from the U.S. government shutdown [13] - The company anticipates continued growth in both M&A and restructuring activities, driven by evolving market conditions and increased private equity engagement [13][56] - Management highlighted the importance of geopolitical trends and AI advancements in shaping future business opportunities [19] Other Important Information - The effective tax rate for the third quarter was 21.4%, down from 32.5% in the previous year, with a full-year 2025 expectation of around 20% [12] - The company returned $60 million to shareholders in the third quarter, including a quarterly dividend of $47 million [12] - The appointment of Chris Hogan as CEO of Lazard Asset Management is expected to further accelerate growth and adapt to client needs [18] Q&A Session Summary Question: Hiring environment and talent retention - Management noted strong success in attracting high-quality talent and reported very few regrettable departures, indicating a healthy Managing Director pool [25][26] Question: Recent success in Asset Management inflows - Management confirmed significant gross inflows in promising areas, with ongoing outflows from sub-advised accounts, but overall positive net flows [29][30] Question: Trends in gross outflows - Gross outflows have decreased compared to last year, primarily from sub-advised accounts, with a more promising trajectory outside that category [36] Question: Operating leverage in Asset Management - Management expressed confidence in achieving operating leverage in 2026, driven by improved productivity and strategic focus [39] Question: Impact of U.S. government shutdown on advisory - Management indicated that deals requiring government approvals could be delayed but expected a quick catch-up once the government reopens [59][60]