Q2 2021 PJT Partners Inc Earnings Call
[music].
Good day and welcome to the P. J T partners second quarter 2021earnings call.
Today's conference is being recorded at this time I'd like to turn the conference I've, just Sharon Pearson head of Investor Relations. Please go ahead.
Maam.
Thanks, very much Kathryn good morning, and welcome to the P. J T partners second quarter 2021 earnings conference call I'm, Sharon Pearson head of Investor Relations at P. J T partners and joining me today is Paul Taubman, our chairman and Chief Executive Officer.
And Helen mates Archie.
Chill officer before I turn the call over to Paul I want to point out that during the course of this conference call. We may make a number of forward looking statements.
Forward looking statements are subject to various risks and uncertainties and there are important factors that could cause actual outcomes to differ.
For materially from those indicated in these statements.
We believe that these factors are described in the risk factors section contained in P. J T partners 2020 form 10-K, which is available on our web site at P. J T partners Dot com and I want to remind you that the company assumes no duty to update.
Any forward looking statements.
Also the presentation, we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance for.
For detailed disclosures on these non-GAAP metrics and their GAAP reconciliations you should also refer to the financial data contained.
Within the press release, we issued this morning, which is also available on our website and with that I'll turn the call over to Paul. Thank you sure.
Everyone and thank you for joining us today.
Today's economic environment as total of 180 degrees from that of a year ago.
This time.
Last year, most M&A activity.
Was put on hold that advisory work centered around securing rescue capital.
And providing liability management and restructuring advice to companies.
Severely impacted by the pandemic.
Since then the combination of extraordinary.
Ordinary fiscal and monetary stimulus.
Vaccine Rollouts and reopening couple.
Coupled with highly receptive capital markets.
Have helped propel an extraordinary global economic recovery.
This has provided a dramatic catalyst for strategic activity while also.
Camping down restructuring activity.
Not surprisingly the financial performance of our businesses mirrors that turn.
As this robust recovery takes hold.
Our businesses away from restructuring have benefited.
We are seeing significantly elevated.
<unk> levels of activity across our strategic advisory cash.
Capital Advisory shareholder Advisory and fund placement businesses.
The GAAP created by the abrupt decline in restructuring activity is.
Is being filled by strong performance in our strategic advisory.
T J J Park Hill, and P. J T camera review businesses.
Against this macroeconomic backdrop, we are pleased to report record second quarter results.
As measured by revenues.
Adjusted pretax income and adjusted earnings per share.
Our year to date results are also at record levels.
Now turning to each of our businesses in more detail.
Beginning with restructuring.
We continue to believe that the fallout from COVID-19 will trigger an extended.
Period of elevated restructuring activity.
The pandemic has inflicted damage on many companies.
With business models disrupted and dislocated by changes in consumer behavior.
As well as accelerated technological innovation.
Nearly 1.5.
Years after the onset of this global health crisis.
We continue to believe this longer term restructuring outlook remains intact.
This year. However, we are seeing less restructuring activity than we had previously anticipated.
While we were.
<unk> a market leader in restructurings globally.
Given today's extraordinarily benign credit conditions.
Our 2021 restructuring results.
We are now unlikely to be much above 2019 levels.
Notwithstanding these near term.
Remains.
Our restructuring business was up sequentially in the second quarter.
Additionally, our restructuring business is poised for meaningfully stronger results.
In the second half of this year compared to the first half of the year.
With most of that increase appearing.
Wins in Q4.
Turning to <unk> Park Hill.
Many of the current economic conditions presenting challenges for restructuring our.
Providing opportunities for P. J Park Hill.
Strong demand for risk assets has stimulated fundraising.
<unk> activity.
In alternatives.
This heightened demand coupled with a roster of best in class Fund managers.
Has been an important catalyst in <unk> Park Hill's significant year over year revenue growth.
P J Park Hills 6 months performance.
<unk> stands at record levels.
And the business is well on track to deliver record results for.
For full year 2021.
Turning to strategic advisory.
In strategic Advisory, we had our second best quarter ever.
Slightly below Q2, 2000 Twenty's record results.
And up dramatically from Q2.2019.
The momentum in our strategic advisory business continues to build.
As our mandate count has grown meaningfully from a quarter ago and stands at record levels.
Yeah.
Accordingly, we expect our strategic advisory results to increase significantly in the second half of the year.
With most of that increase coming in the fourth quarter.
For full year 2021.
We expect our strategic advisory results.
Levels to be up significantly as well.
We are reviewing our capital priorities.
Our approach to capital investment and capital return remains unchanged.
For the greatest return on investment continues to come from.
From the people we attract.
Track to our platform.
We continue to methodically add best in class talent as we build out our world class strategic advisory franchise.
To that end, we have grown the number of professionals and strategic advisory by nearly 20 per.
Salt and in the past year.
Much of that additional investment has been directed towards capital markets advisory sponsor coverage and ESG.
As well as further deepening a number of existing industry verticals.
We are also continue.
Per cent to invest in our other businesses.
As we position ourselves for continued growth and market share expansion.
P. J T remains the destination for best in class talent at all levels.
As our summer programs draw to a close.
I wanted.
Wanted to highlight the extraordinary success of our campus recruiting efforts.
This year, we received more than 8500 applications.
For just 81 summer positions.
Our summer class of analysts and associates.
We are able to join us.
<unk> person and we will be engaging in 2 weeks of community service after concluding the in office program.
We have received extremely positive feedback from our in turns.
And it is clear that our unique culture of collaboration.
Integrity and ethics.
Excellent is broadly recognized.
Our second highest capital priority continues to be our efforts.
To offset the share issuance.
From this substantial and sustained human capital investment.
Even after our significant recruitment of.
In <unk> individuals at all levels.
Our fully diluted share count today is essentially unchanged.
From where it was at the end of 2016, excluding the vesting of earn out units.
And the first 6 months of this year, we repurchased a record.
<unk> $2.3 million share equivalents.
Our full year 2021 share repurchases.
Whether measured in dollars or shares are tracking at record levels.
At current share prices, we continue to see compelling value.
In our.
Records.
Our success. These past 6 years has resulted.
In a significantly larger and more profitable firm.
As a result, we are now able to return additional capital to shareholders.
As well as continuing to aggressively invest in our business.
<unk>.
And continuing to offset the growth in share count.
As it pertains to additional capital returns.
Helen will discuss in greater detail the board's decision to approve a special dividend of $3 per share.
Now over to Helen.
Sure. Thank you Paul good morning.
Beginning with revenue.
Total revenue for the course of a $241 million up 3% year over year with advisory revenues of 198 million up 3% year over year.
Placement revenues of $14 million up 14%.
For.
For the 6 months ended June <unk> total revenue for $447 million up 3% year over year with advisory revenues of 350 million flat year.
Placement revenues of 91 million up 22%.
The increase in advisory revenues for both for 3 months on.
I'm curious was driven by increases in both strategic advisory and secondary advisory, which more than offset a decline in restructuring revenue.
The increase in placement revenue for both for 3 months from 6 month periods was driven by significantly higher from placement revenue partially.
Partially offset the current placement movements.
Turning to expenses consistent with prior quarters, we presented the expenses for certain non-GAAP adjustments. These adjustments are more fully described in our 8-K.
Adjusted compensation expense continues to be accrued at $62.5.
5% for.
This ratio represents our current best estimate for the compensation ratio for the full year.
Turning to adjusted non current concession expense.
Total adjusted non compensation expense was $32 million for the second quarter from $60 million for the first 6 months.
As we mentioned last quarter, we expect the growth in our full year non compensation expense to be driven by increased senior advisor experience as well as continued investment in communications from it.
And higher recruiting costs.
These factors were the primary driver of the higher non comp expense in both the second.
Quarter and the 6 months period.
While we saw some resumption of travel in the second quarter business related travel activity continues to track well below historical pre COVID-19 levels.
Looking ahead, we expect the full year 2021 non compensation expense to.
On the same level as our 2019 for non compensation expense.
Turning to adjusted pretax income we reported adjusted pre tax income of 58 million for the second quarter from $107 million for the first 6 months.
With an adjusted pre tax margin of 24.1.
To be around for the second quarter compared with 23, 7% for the same period last year and 24% for the first 6 months.
<unk> was 21, 9% for the same period last year.
Provision for taxes as with prior quarters, we have presented our results as if all partnership units had been.
1% to share.
And at all of our income was taxed at a corporate tax rate.
We also annualize the tax benefit relating to the delivery of Vista share during the first quarter.
Our effective tax rate for the first half of 2021 was 22, 8%.
Our effective tax rate in the <unk>.
Second half of the year to also be 22, 8%.
Earnings per share our adjusted if converted earnings for $1.6 per share for the second quarter and $1.95 per share for the first 6 months.
From a share count for the quarter, our weighted average share count was $42.1 million.
<unk> quarter, we repurchased the equivalent of approximately 715000 shares primarily through open market repurchases.
Our repurchases in the first 6 months as Paul said total approximately $2.3 million, including the exchange of approximately 900000 partnership units for cash.
We're currently in receipt of exchange notices for an additional 394000 partnership units and as we've done in the past we will exchange these units for cash.
On the balance sheet, we ended the quarter with $212 million in cash cash equivalents and short term investments and 294 million.
And net working capital and we have no funded debt outstanding.
As we announced this morning. In addition to our quarterly dividend of <unk> <unk> per share. The board has approved the payment of a special dividend of $3 per share to all shareholders of class a common stock for.
For special dividend is payable on October 18th 2.
2021 to shareholders of record as of October Force.
Given our partnership structure, we make tax distributions to limited partners and to date. These distributions have consistently been equal to 50% of taxable income, which has a minimum required under our partnership.
Ship agreement.
The distributions paid to all limited partner unitholders, including the public company.
Which holds approximately 61% of the units.
As our taxable income has grown so too has the tax distributions, which in turn has resulted in an excess cash build.
Public company.
This cash flow again in the second half of last year and is continuing.
And in light of the excess cash built at the public company. The board has authorized for $3 special dividend to public shareholders.
And with that I'll turn it back to Paul.
Okay.
Thank.
Thank you Helen.
In terms of our outlook.
On a sequential basis, we expect the momentum in our businesses to.
To continue to build in the second half of the year.
With most of the incremental growth occurring in the fourth quarter.
Viewed on a year.
Year over year basis, our third quarter comparisons are the most difficult as.
As they reflect our highest restructuring quarter ever.
However.
We have considerable momentum and are positioned to finish the year quite strongly.
There is no doubt that we will begin to.
22, with a demonstrably stronger and more formidable firm than when we began this year.
Despite the 2021 headwinds and restructuring our other businesses are all on track for a record performance in 2021.
And all of our businesses, including restructuring are well positioned heading into 2022 and beyond.
We remain extremely confident in our future growth prospects.
And with that we will now take your questions.
Thank you.
Like to ask a question please signal by pressing star 1 on your telephone keypad.
If you're using a speaker phone. Please make sure your mute function is turned off toward other signal to reach our equipment again that is star 1 to ask a question, we'll pause just for a moment to allow everyone. The opportunity for signal for a question.
Thank.
We will now take the first question from Devin Ryan JMP Securities. Please go ahead.
Yes.
Hey, Thanks, good morning, everyone.
Good morning, Devin good morning.
Good morning.
Maybe just to start off.
Somewhat nuance, but.
To think about.
Some of the commentary today versus 3 months ago.
Clearly the restructuring is maybe a bit more muted.
Which makes sense just given what we're seeing in the environment, but love to just get kind of the the.
The bigger picture.
The.
Strategic advisory.
Has that environment gotten better relative to kind of what you guys were seeing a few months ago and then.
Also just kind of curious as we look out maybe a bit further on the strategic advisory side getting some questions around the executive order.
And the bond administration.
Any.
Just trying to get impact on business as a result for that as well.
Well.
There's a lot in that question, so let me try and unpack it.
With respect to restructuring we have been consistent which is business models have been.
If you did.
There is enormous shift in consumer behaviors. There are enormous number of new companies that have risen to.
To capitalize on these dislocations.
As there are winners they're going to be losers.
And that is.
Independent of the macroeconomic environment youre going to have more disruption.
More.
Changing of the pieces on the chess Board.
Going to have lots of new entrants.
We didn't hear a 5 or 10 years ago with extraordinary market capitalizations that debt.
Disrupt joy has to create paying somewhere in the system and there's a lot of idiosyncratic restructuring, which is all knit together through a common bond debt digital disruption changes a reset driven by Covid and EBIT, if the financing markets are incredibly vibrant and.
That us and companies can find rescue capital and they can kick that can down the road that doesn't stop.
The essential fact that many of these companies are vulnerable and their business models have been compromised and we are very much of.
And ROE vs that over time.
Those companies will have their day of reckoning and there is going to be.
Active restructuring environment and when that happens the quantum of debt that is outstanding it.
It makes anything.
Previous cycles, it will look look quite modest.
For the bullet so there's that.
With respect to the here and now when you have near zero interest rates and <unk>.
Have vulnerable companies that are able to refinance for.
For mid single digit rates. It has taken companies that might otherwise have needed to restructure and given them another lease.
<unk> online, which is why our 2021.
<unk> has become less constructive.
From our perspective, we think we as a firm are taking that pain in 2021, and therefore, we don't see a carryover or a hangover.
Modest for into 2022.
That's sort of my my best effort to address your restructuring questions.
With respect to M&A.
We were early in saying there is a secular change.
And youre going to see more M&A.
In this cycle and in most any cycle than we would have seen previously because that is the companion to this digital disruption and innovation, which is as the world speeds up companies need to react.
<unk>.
That is all of this talk about ROE and sustainable M&A.
Volumes can we keep this up et cetera, and I could go on with lots of different facts.
I'm just going to give you 1.1 snapshot here, which I think.
Sure.
<unk> when we report.
Or when others report as compared to a year ago, which were anything but ordinary times and depending upon whether you were on top or on bottom a year ago. Your growth rates are going to look very different but if we look at the M&A market and look at the first half of 'twenty.
Puts a 'twenty, 1 and just simply annualize it.
And if we compare it to 2018.
The M&A volumes are up 43% for annualized 21 versus 18 is up 43% and if you back out specs is up 25%.
During that period of time the S&P.
<unk> is up 58%.
And the number of deals depending on whether you include or exclude faxes up anywhere from 3% to 5%.
So all of this.
Tracking of year ago, when you're comparing it to a market that was just flat on its back doesn't really.
Resonate with me.
So when you look at this in a longer perspective.
I continue to believe that.
There is a secular shift and I don't think that the volumes today.
Reflective of anything aberrational.
The real issue, which no 1 is talking about is the fact.
For the values are up 60% since 2018, so if you believe that debt.
That's where the vulnerability is but of course, we're going to have we're going to have issues and as it relates to the Biden administration.
Every administration is different.
Policies and the like.
Maintain and I've talked about this for a while that the mega deals.
Which are the deals which are most likely to receive heightened regulatory scrutiny.
We have seen a meaningful reduction in true Mega deals for the last few years.
Because of all of the difficulties in navigating the regulatory regimes around the globe.
For the Covid and some additional nationalism and rise of National Champions, We think thats going to be more difficult, but to some extent Devin you've seen itself editing there.
<unk>.
Number of Super large transactions that get brought to the market has declined the last few years. So it's not clear to me whether.
Executives have already factored this in which case for buying the administration really is just codifying or attempting.
To enforce.
For us what's already common wisdom or whether it will have some effect, but if it has effect I don't think it will have a significant effect because it does relate to a relatively small number of situations.
Okay.
Okay, great. Thanks for all the color there Paul.
Maybe just a follow up on.
The potential for margin expansion from here so clearly.
As you guys were embarking on the journey that view wise.
Could get to where peers are on margin as the business scales.
And some of that growth investment moderates on a relative basis over time and potentially even given your structured debt to a level that is above some other peers are on the higher end demand.
We're you're operating now in kind of the mid twenties on that.
Justin.
Margin basis, which I think was kind.
Many viewed as good in the market.
And what we're seeing is some of the peers are now moving to 30% or even a little bit about that so I'm curious.
In a very good backdrop and I'm curious how you guys are thinking about the potential to continue to move margins higher from call. It the mid 20% level and uneven.
And a better environment get to something thats closer to 30% or above.
Well first of all.
First of all I'm not sure that margin calculations off of 2 quarters of operating performance.
In a world that is anything but normal.
Normal.
Any sense of what is the new normal for margins just to start there right.
I'm not convinced that 2 quarters.
The results.
What are clearly a typical cost environment because for the lack of travel.
And a lack of in office is really reflective so let's see what.
What it becomes over time that would be number 1 so I just don't know, but I'm not convinced that that there is a new normal.
Number 2 we've always said that we are going to make sure.
Or is that investment comes first as opposed to a flattering margins.
And if you go through Helen's commentary.
You will see that we have spent a lot of money on it systems because in a world that is going to be more hybrid.
You need to be cutting edge, we have.
A lot of money, we will continue to spend a lot of money.
You'll also see in our margins that we have made greater use of senior advisors around the globe, who have been extraordinarily additive to our franchise.
And there is that cost and the recruiting.
Recruiting costs, which reflect the fact that we've grown our strategic advisory head count.
20% in the last 12 months, which I think is second to none.
So a lot of that will ultimately work its way through the system and then we'll see what what the margins are but.
I maintain.
That if anything because of the way we've architected our firm we have a long term cost advantage.
A lot of the margin too is just reflective of where you are in the revenue cycle and as we continue to grow our revenues, which we undoubtedly will youll see more operating.
Operating leverage in the business.
And then not to not to turn this into a treatise, but you did Africa.
The open ended question. The other thing you need to look at too is you know what.
Whenever you're doing a study you need to look at what other companies have similar revenues what are their margins.
There's no doubt if we had 2 billion revenues, we'd have higher margins. So question is.
At these levels, who has the most effective cost structures and I stand by what I've said from day, 1 I think we were building a better mousetrap.
Yes.
I appreciate.
Paul Andy I'm, just looking for some of the relative color there.
We are necessarily setting a new bar here permanently, but do appreciate it and I'll hop back into the queue.
Absolutely. Thank you Devin.
Thank you we'll now take the next question from Richard Ramsden Goldman Sachs. Please go ahead.
Because good morning, guys. So maybe I can kick off with a couple of questions. So the first is can you expand a little bit on what youre seeing in the advisory business and I guess based on the public data. What we've seen is the financial sponsor activity has picked up a lot.
In the last 3 or 4 months.
So I'm curious does that reconcile.
I consulted with what Youre seeing within your business in terms of pipelines and then more broadly.
<unk>, obviously been dominated by a pickup in activity in the U S.
Based on your dialogue, so you're seeing green shoots in terms of activity in the rest of the world or is that still quite muted. Thanks a lot.
Hi.
We are seeing green shoots everywhere.
I do think that the U S.
<unk> is clearly leading in so many ways I think it's.
Led.
In.
Vaccination Rollouts it's led.
And economic recovery its lead in fiscal and monetary stimulus and not surprisingly it's.
Led in M&A activity, and I suspect that that Europe, and the rest of the world will will.
If not catch up they'll get more into gear.
There is.
And no doubt that Theres a lot of activity that is beginning to percolate everywhere and it's not just contained.
2.
To the U S.
With respect to.
To sponsors.
Again.
How you.
How you look at this.
There is not.
Sponsors as buyers.
Look at the data sponsors as buyers are pretty much up the same amount as corporates are up as buyers.
So this whole notion of.
Dry powder and all of that the fact is you actually dig into the numbers debt.
Debt to buying is coming across the board, it's not corporate stroke strategic it's not sponsors it's everyone.
And the buying is up almost across the board now at the same time.
You have a lot of capital put out by sponsors.
They are.
Becoming an ever increasing component of the sell side as they monetize their investments. So I would say that undoubtedly we're seeing and as they raise larger and larger funds.
And as the M&A market grows and as they're growing along with that it just.
Because they are.
Going to be on both sides of the trade, both buying and selling and Theres no doubt that they are.
A bigger piece of this but I see a lot of that coming.
From the fact that they have enormous amount of capital that's been committed.
It's.
It means being harvested as you've seen this.
Explosion in values and there is an opportunity and I think that also for.
Relates to the whole issue of.
Whether youre going to continue to see sponsor to sponsor monetization or whether youre going to see Inc.
Creasing continuation funds, you're going to see.
Special purpose vehicles to take assets that are true jewels.
Give individual lps opportunities to create liquidity, while keeping those.
Youll assets as a core holding for the sponsors. So this market continues to evolve.
We are better.
Fitting from that because a lot of that dialogue is at the intersection of our strategic Advisory and Park Hill businesses.
Okay. That's helpful. And then the second question I wanted to ask is around the decision to pay for $3 special dividend.
And I guess, a couple of things I mean, the first is.
By definition special dividends I guess, it's supposed to be 1 off but at.
A number of your peers that become recurring nonrecurring items.
How should we think about your appetite in terms of using special dividends as a capital return.
The tool over a multiyear period.
No.
Well.
I think I think we like to think and do things our own way. So I'm not sure we're going to be particularly.
Influenced by other is the fact is.
We have been laser focused on 2 priorities.
Investing in the business and then to the extent there was.
Capital leftover to offset the dilution created by the investment.
And thats been at but as we become more and more profitable we've opened up a third leg. It's just.
It's the fact that we are a demonstrably different firm today Richard than we were.
6 years ago, there is all of this excess.
Excess cash that sits up there. This is an effort to sort of wipe the slate clean and then at some point in the future sometime I imagine in 2022.
We'll probably take a first look at <unk>.
What our ongoing dividend.
Policy should be and having not touched it for 6 years will I'm sure look at it sometime in 2022, but 1 thing about us where were remarkably consistent and we're not going to let that in any way comparable.
Provides objective number 1 which is to invest in the business.
And then to.
Follow that by offsetting dilution, but if we ended up generating additional monies then we will open up a third leg.
Okay got it. Thanks, that's very helpful. Thanks, a lot.
Thank you Richard.
We will now take the next question from Stephen Ju Buck at Wolfe Research. Please go ahead.
Good morning, guys. This is Brendan O'brien filling in for Steven.
Good morning, Great a great day.
Good morning.
Yeah.
First.
On.
Stocks you have a lot of success winning business. So far this year, while other deals you've been on have clearly been of higher quality. If there has been some concern around the ability of stocks defined targets given the significant amount of capital chasing deals.
Paul I was hoping you could provide your thoughts on the sustainability of the spine market overall.
For our.
The ability their ability to find targets and do you expect sites will continue to be a meaningful contributor to <unk> business into 2022.
Sure.
I've maintained that.
Without trying too.
Send anyone the bar to get us back.
<unk> raised has been reasonably low.
The bar to convince a targeted to engage with you reasonably high.
So the easy part this already extended to go raise this back in the harder part is to actually prevail.
So it doesn't surprise me at all that there is a mismatch between.
The number of specs.
That have been raised and the number of specs that at the end of the day are going to be able to constructively put that capital to work.
You made the point and we would agree that we have been extraordinarily diligent and high grading.
Those parties that we deal with and.
And when you're dealing with.
<unk>.
Clear leaders in finance and in industry.
Youre going to find it easier to raise the pipe capital and Youre going to have a value added proposition to the target.
And your batting average is going to be a lot higher so that has been our objective and.
We're highly selective in.
Who we work with I don't really see that as being a challenge.
In the.
But in the near to intermediate term and I think that.
The spec market very much plays to our strength because companies are coming to us because they want our imprimatur.
They want our strategic deal flow they want our advice.
And.
We have a leading capital markets advisory practice and when it all gets knit together.
It's a compelling value proposition and this is an important part of our practice.
And I expect it to remain an important part of our practice, but I've also said Brendan.
That right now there are many.
Advantages that <unk> has 1 of which is regulatory arbitrage and 1 or 2 things is going to happen.
Which is some of the benefits to us back are going to be tightened up.
Or.
There is going to be more of a leveling of the playing field and some of the rules maybe relax for a regular.
And we May ipos, but this is not sustainable permanently to have this difference.
And over time I suspect that the <unk>.
<unk> from a regulatory perspective will be arbitrage away.
But it will continue to be a different tool, which.
Regular have clear utility in certain circumstances, but it's never going to be the clear dominant way for companies to go public but it will be for many companies a better way, but I doubt it will ever be or if it will be not for very long the only way were the principal way.
Way that companies go public.
Thanks for the color and very insightful.
On recruiting.
There's been a lot of discussion about the hot labor market.
Competition for both junior and senior talent.
While elevated levels of activity likely make it even more difficult to attract.
Attracts.
<unk> talent.
How have your conversations with potential recruits evolve throughout the year.
How would you compare your current recruiting pipeline.
The startup.
Started the year.
I think yes.
Directionally it's unchanged.
Clearly as we as the Covid fog lifts a bit.
It makes.
More of these discussions actionable as I mentioned on previous calls.
When.
When you are really in the midst of a crisis most people want to sell close to shore and they ended up staying at their incumbent firm and.
I think.
Individuals are starting to say, okay. Let me return to these important career.
Decisions, but I would highlight the fact that we've grown.
Our strategic advisory head count.
Nearly 20% in the last 12 months.
If you look at the composition of that debt.
Is skewed towards senior professionals, meaning vice presidents all the way up through partners. So its officers plus is up meaningfully more than 20%.
And we're doing that in large part because all of the partners, who we hired as they are on the platform for longer periods of time become increasingly productive and they then create.
Their own.
Additional opportunities and workloads so we.
We've been super focused on that.
I mentioned, our campus recruiting I still I'm stunned every time I see that that there are more than 8500 campus applicants who want to.
Work here.
We were 1 of the extraordinarily few programs.
Eyewear to conduct in office. This summer I'm confident that that gives us a huge leg up.
All of our competitors because the experience and the engagement is just light year is different and there is no doubt that everyone has figured out.
Debt.
And they need to engage and they need to focus on their individuals'.
But we've been doing that for 6 years, we built an extraordinarily differentiated culture.
And you can re create that with a peloton bike.
So I feel like we're in a really good credit or.
A really good.
And we're going to we're going to continue to.
Make sure.
Is that all of our employees.
Get all of the career development all of the mentoring and that if we can continue to do that and we can continue to Polish.
A world class culture that debt at the end of the day, it's going to be the single biggest recruiting advantage that we have and it's hard for someone to to replicate that over overnight. So we're very focused on that but theres no doubt.
That activity levels are high people are working extraordinarily.
Good clearly hard and everyone wants.
To add to their to their head count.
Thank you for taking my questions.
Of course.
We will now take our final question today from.
From Michael Brown at Kay.
Pwc current securities.
Please go ahead.
Okay, Great Hey, Paul.
Ron Paul Helen from Sharon sorry, guys.
Great. Good morning, Thanks, good morning.
So I.
I just wanted to follow up on the capital and capital return.
Question here I guess for 1 lever I didn't really hear about as acquisitions for for P. J T. Chomp review was a nice acquisition.
When that was completed and you guys, obviously added a really attractive capability.
On to the platform given your size and growth now.
And a little less.
There's a few less opportunities out there relative to a couple of years ago, but is M&A still an option for P. J T is that something you would consider.
Yes, we would consider it.
I guess would fall under the first which is investing in our business. So.
Maybe if there is an opportunity to strengthen our firm by investing in the business, whether it's organically or inorganically.
That is our first priority.
Having said that.
I've always maintained that you need to have an extraordinarily tight filter to find.
On inorganic opportunities, where there's a cultural fit.
It meshes.
From a strategy perspective.
And the light camera view was 1 of those to the extent that there are others that are out there we're certainly open to it.
I'm of the view that those are.
True diamonds in the roster and they come along extraordinarily infrequently.
Okay. Just a quick follow up there Paul is there anything that you identified today.
An area that as something that would be that could be filled through through an acquisition. Obviously much of your white space can be probably.
Best addressed or through hiring but is there anything out there.
You can identify or point to that you would say this would be maybe.
Maybe best matched with an acquisition.
I think the I think anything.
Well, let me start this way we have an extraordinary amount of white space, we're going to continue to organically grow.
The franchise and there are just so many opportunities whether you're looking at in terms of industry verticals capabilities Jean.
<unk> fees extraordinary opportunities for us too.
To continue to grow.
Absolutely confident.
We can do all of that organically.
But if it turns out debt.
Or are there further review there, there's an inorganic way to get there in a better way, we're open to it but theres nothing.
That I can see that we cannot get at.
Organically.
Yes that makes sense and then maybe just 1 more for me just a clarification kind of modeling related we saw that there was price.
Sizeable completions really early in the third quarter and for for third quarter is off to a nice nice start, but I just wanted to check due to the revenue recognition.
Counting rules was any.
Of that recognized in <unk> that we should be aware.
Yes. So we did have a number of deals that closed on July 1.
From a personal approximately $20 million and they did meet the accounting criteria such that we were required to book during Q2, and then just for context in Q1.
We had a number of deals that closed on April 1.
Total about $9 million. So just to give you the other side of the room.
Okay, Great. That's very helpful. Thank you.
That concludes today's question and answer session. Mr. Tillman at this time.
I'd like to turn the conference back to you for any additional or closing remarks.
Well. Thank you very much I just wanted to thank everyone for.
Dialing in this morning and for their interest.
And our story and for their support of our company and we look forward to speaking to you again on our next earnings call.
In the fall thank you.
That concludes.
Today's call. Thank you for your participation you may now disconnect.