Q2 2024 Perella Weinberg Partners Earnings Call

Operator: Good morning, and welcome to the Perella Weinberg second quarter 2024 earnings conference call. During today's discussion, all callers will be placed in listen-only mode, and following management's prepared remarks, the conference call will be open to questions from the research community. This conference call is being recorded. At this time, I'd like to turn the call over to Taylor Reinhardt, Head of Communications and Marketing.

Operator: Good morning, and welcome to the Porello Weinberg second quarter 2024 earnings conference call. During today's discussion, all callers will be placed in listen-only mode, and following management's prepared remarks, the conference call will be open for questions from the research community. This conference call is being recorded.

Good morning, and welcome to the Perella Weinberg second quarter 'twenty 'twenty four earnings conference call.

Yeah.

Speaker Change: During todays discussion all callers will be placed in listen only mode and following management's prepared remarks. The conference call will be opened for questions from the research community.

Speaker Change: This conference call is being recorded at this time I'd like to turn the conference over to you Taylor Reinhart head of communications and marketing.

Taylor Reinhardt: At this time, I'd like to turn the conference over to Taylor Reinhardt, Head of Communications and Marketing. Please go ahead.

Speaker Change: Please go ahead.

Taylor Reinhardt: Thank you, operator, and welcome all. Joining me today are Andrew Bednar, Chief Executive Officer, and Alex Gottschalk, Chief Financial Officer. Before we begin, I'd like to note that this call may contain forward-looking statements, including Porello Weinberg's expectations of future financial and business performance and conditions and industry outlook. Forward-looking statements are inherently subject to risks on certain fees and assumptions that could cause actual results to differ materially from those discussed in the forward-looking statements and are not guarantees of future events or performance. Please refer to Porello Weinberg's most recent SEC filings for discussion of certain of these risks and uncertainties.

Taylor Reinhardt: Thank you, Operator, and welcome all. Joining me today are Andrew Bednar, Chief Executive Officer, and Alex Gottschalk, Chief Financial Officer. Before we begin, I'd like to note that this call may contain forward-looking statements, including Perela Weinberg's expectations of future financial and business performance and Conditions and Industry Outlook. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those discussed in the forward-looking statements and are not guarantees of future events or performance.

Speaker Change: Thank you operator and welcome all joining me today are Andrew Burton, our Chief Executive Officer, and Alex Gottschalk, Chief Financial Officer before.

Taylor Reinhardt: Please refer to Perilla Weinberg's most recent SEC filings for discussion of certain of these risks and uncertainties. The forward-looking statements are based on our current beliefs and expectations, and the firm undertakes no obligation to update any forward-looking statement. During the call, there will also be a discussion of some metrics, which are non-GAAP financial measures, which management believes are relevant in assessing the financial performance of the business. Cruella Weinberg has reconciled these items to the most comparable GAAP measures in the press release files of today's Form EK, which can be found on the company's website. I will now turn the call over to Andrew Bednar to discuss our results.

Speaker Change: Before we begin I'd like to note that this call may contain forward looking statements, including prowler, Weinberg and expectations of future financial and business performance.

Speaker Change: Conditions and industry outlook.

Speaker Change: Forward looking statements are inherently subject to risks uncertainties and assumptions that could cause actual results to differ materially from those discussed in the forward looking statements and are not guarantees of future events or performance.

Speaker Change: Please refer acute perella Weinberg most recent SEC filings for a discussion of certain of these risks and uncertainties.

Taylor Reinhardt: The forward-looking statements are based on our current beliefs and expectations, and the firm undertakes no obligation to update any forward-looking statements. During the call, there will also be a discussion of some metrics, which are non-GAT financial measures, which management believes they're relevant in assessing the financial performance of the business.

Speaker Change: We're looking statements are based on our current beliefs and expectations on the firm undertakes no obligation to update any forward looking statements.

Speaker Change: During the call. There will also be a discussion of some metrics, which are non-GAAP financial measures, which management believes are relevant in assessing the financial performance of the business.

Taylor Reinhardt: Porello Weinberg has reconciled these items to the most comparable GAT measures in the press release files of today's Formique, which can be found on the company's website.

Speaker Change: Perella Weinberg has reconciled these items to the most comparable GAAP measures in the press release filed this city its form 8-K, which can be found on the company's website.

Andrew Bednar: I will now turn the call over to Andrew Bednar to discuss our results. Okay, thank you, Taylor, and good morning. Today we reported second-quarter revenues of $272 million of records for our firm, up 64% year over year, and more than doubling quarter over quarter. In our first half revenues of $374 million, we're up to 26% versus a year ago. In the quarter, we experienced a material increase in large transaction closing with relatively larger associated fees compared to the first quarter. Included in the quarter was more than $40 million in revenue, related to closing that occurred within the first few days of the third quarter, and which, in accordance with relevant accounting principles, we were required to record in the second quarter.

Speaker Change: I will now turn the call over to Andrew Bond Archie discuss our results.

Speaker Change: Okay.

Andrew Bednar: Okay, thank you, Taylor, and good morning. Today we reported second quarter revenues of $272 million, a record for our firm, up 64% year over year and more than doubling quarter over quarter. And our first half revenues of $374 million were up 26% versus a year ago. In the quarter, we experienced a material increase in large transaction closings with relatively larger associated fees compared to the first quarter. Included in the quarter was more than $40 million in revenue related to closings that occurred within the first few days of the third quarter and which, in accordance with relevant accounting principles, we were required to record in the second.

Speaker Change: Okay. Thank you Taylor and good morning.

Speaker Change: Today, we reported second quarter revenues of $272 million a record for our firm.

Up 64% year over year and more than doubling quarter over quarter.

Speaker Change: And our first half revenues of $374 million were up 26% versus a year ago.

Speaker Change: In the quarter, we experienced a material increase in large transaction closings with relatively larger associated fee compared to the first quarter.

Included in the quarter was more than $40 million in revenue related to closings that occurred within the first few days of the third quarter.

Speaker Change: Which in accordance with relevant accounting principles, we were required to record in the second quarter.

Andrew Bednar: We are very pleased with our results, but one quarter doesn't define our business. We are still very hard at work building a world-class franchise. We recognize that both the timing of certain transaction closing and the favorable positioning of our platform were factors in our outperformance of this quarter, and our forward progress continues now with the distinct market tailwind that we have not enjoyed in over two years. Contribution and collaboration across our business drove our results, with revenue from M&A, as well as restructuring and liability management up significantly year over year. The momentum we are seeing across our business is in part a reflection of putting the right partners in the right place over the past few years, both from a strategic energy graphic perspective.

Andrew Bednar: We are very pleased with our results, but one quarter doesn't define our business. We are still very hard at work building a world-class franchise. We recognize that both the timing of certain transaction closings and the favorable positioning of our platform were factors in our outperformance this quarter. And our forward progress continues now with a distinct market tailwind that we have not enjoyed in over two years. Contribution and collaboration across our business drove our results, with revenue from M&A as well as restructuring and liability management up significantly year over year.

Speaker Change: We were very pleased with our results, but one quarter doesn't define our business. We are still very hard at work building a world class franchise with.

Speaker Change: We recognize that both the timing of certain transaction closings and the favorable positioning of our platform were factors in our outperformance this quarter and our forward progress continues now with a distinct market tailwind that we have not enjoyed in over two years.

Speaker Change: Contribution in collaboration across our business drove our results with revenue from M&A as well as restructuring liability management up significantly year over year.

Andrew Bednar: The momentum we are seeing across our business is in part a reflection of putting the right partners in the right place over the past few years, both from a strategic and a geographic perspective. These teams continue to deliver for our clients, both for new clients and, increasingly, for repeat clients who view us not just as a fee-for-service provider but as a key partner as they tackle strategic and financial challenges. The game has changed in high-stakes, complex transactions. In that market today, the boutique firm is a go-to advisor, not simply a second opinion provider. To be the go-to advisor, you need talent.

Speaker Change: The momentum we are seeing across our business is in part a reflection of putting the right partners in the right place over the past few years, both from a strategic and a geographic perspective. These teams continue to deliver for our clients.

Andrew Bednar: These teams continue to deliver for our clients, both for new clients and more and more for repeat clients who view us not just as a fee-per-service provider, but as a key partner as they tackle strategic and financial challenges.

Speaker Change: Both for new clients and more and more for repeat clients, who view us not just as a fee per service provider, but as a key partner as they tackle strategic and financial challenges the.

Andrew Bednar: The game has changed in high-stakes complex transactions. In that market today, the boutique firm is a go-to advisor, not simply a second opinion provider. To be the go-to advisor, you need the talent. In year to date, we have added three advisory partners and have another two slated to join the firm later this year. We are confident that they will increase our client touch points and add revenue, both by introducing new clients to our firm as well as servicing our current client relationships with expanded expertise.

Speaker Change: The game has changed and high Stakes complex transactions in that market today. The boutique firm does it go to advisor not simply a second opinion provider.

Speaker Change: To be the go to advisor you need the talent and year to date, we have added three advisory partners and have another two slated to join the firm later this year.

Andrew Bednar: And year-to-date, we have added three advisory partners and have another two slated to join the firm later this year. We are confident that they will increase our client touch points and add revenue, both by introducing new clients to our firm as well as servicing our current client relationships with expanded expertise. As we look ahead, we see signs of better conditions on the ground, inflation receding, large pools of undeployed capital, and benchmark rates now declining in anticipation of the next Fed move.

Speaker Change: We are confident that they will increase our client touch points and AD revenue, both by introducing new clients to our firm as well as servicing our current client relationships with expanded expertise.

Andrew Bednar: As we look ahead, we see signs of better conditions on the ground. Inflation-receiving large pools of undeployed capital and benchmark rates now declining in anticipation of the next Fed move, though rips remain, especially around elections, global conflicts, and other geopolitical uncertainty. Our clients are navigating through the fog, taking advantage of the conditions as they are, and leaning in rather than tying away, especially in the larger deal market. We see these dynamics reflected in our announced and pending backlog, which, alongside a record revenue quarter, continues to build. The M&A rebound we are experiencing has been led more by corporates than funds, but we did see an increase in sponsor activity this quarter, representing a potential source of revenue growth in long-term.

Speaker Change: As we look ahead, we see signs of better conditions on the ground inflation.

Speaker Change: Inflation receding.

Speaker Change: Large pools of unemployed capital and benchmark rates now declining in anticipation of the next fed move.

Andrew Bednar: Though risks remain, especially around elections, global conflicts, and other geopolitical uncertainty, our clients are navigating through the fog, taking advantage of the conditions as they are, and leaning in rather than shying away, especially in the larger deal market. We see these dynamics reflected in our announced and pending backlog, which, alongside a record revenue quarter, continues to build. The M&A rebound we are experiencing has been led more by corporates than funds, but we did see an increase in sponsor activity this quarter, representing a potential source of revenue growth in the long-term. The return to a more normal level of sponsor activity is a matter of when, not if.

Speaker Change: No risk remain especially around elections global conflicts and other geopolitical uncertainty our clients are navigating through the fog taking advantage of the conditions as they are and leaning in rather than shying away, especially in the larger deal market we.

Speaker Change: We see these dynamics reflected in our announced and pending backlog, which alongside a record revenue quarter continues to build.

Speaker Change: The M&A rebound we are experiencing has been led more by corporates then funds, but we did see an increase in sponsor activity this quarter, representing a potential source of revenue growth long term.

Andrew Bednar: The return to a more normal level of sponsor activity is a matter of when, not if. Across our financing and capital solution business, we continue to see elevated activity and strong engagement with clients. While we don't see a watershed event in bankruptcies on the horizon, more and more we see opportunities to assist clients with complex and stressed financing situations, as well as with more proactive maturity management. And we are extremely proud of our restructuring team for their recent awards and distinctions highlighted in publication Reorg. Congratulations, our team.

Speaker Change: The return to a more normal level of sponsor activity as a matter of when not if.

Andrew Bednar: Across our financing and capital solutions business, we continue to see elevated activity and strong engagement with clients. While we don't see a watershed event in bankruptcies on the horizon, we are increasingly seeing opportunities to assist clients with complex and stressed financing situations, as well as with more proactive maturity management. And we are extremely proud of our restructuring team for their recent awards and distinctions highlighted in the publication RE-ORG. Congratulations, RxW. Before I turn the call over to Alex, let me reflect for a moment.

Speaker Change: Across our financing and capital solutions business, we continue to see elevated activity and strong engagement with clients.

Speaker Change: Well, we don't see a watershed event in bankruptcies on the horizon more and more we see opportunities to assist clients with complex and stressed financing situations as well as with more proactive maturity management.

Speaker Change: And we are extremely proud of our restructuring team for their recent awards and distinctions highlighted in publication reward Congratulations Rx team.

Andrew Bednar: Before I turn the call over to Alex, let me reflect for a moment. We recently marked three years since our public listing. And while this represents only a portion of the firm's rich history, we have accomplished quite a lot in that time. To date, our shares have risen over 80%. We have returned more than $400 million to equity holders, and we have managed our share count down while simultaneously increasing our publicly traded float, allowing new long-term investors to enter our shareholder roster. We have invested in growth by expanding our partnership, increased the visibility, recognition, and reputation of our brand, and diversified our advisory offering to support our clients whenever and wherever they need us.

Speaker Change: Before I turn the call over to Alex Let me reflect for a moment.

Andrew Bednar: We recently marked three years since our public listing, and while this represents only a portion of the firm's rich history, we have accomplished quite a lot in that time. To date, our shares have risen over 80%.

Speaker Change: We recently marks three years since our public listing and while this represents only a portion of the firm's rich history. We have accomplished quite a lot in that time to date powershares have risen over 80%.

Andrew Bednar: We have returned more than $400 million to equity holders, and we have managed our share count down while simultaneously increasing our publicly traded float, allowing new long-term investors to enter our shareholder roster. We have invested in growth by expanding our partnership, increasing the visibility, recognition, and reputation of our brand, and diversified our advisory offering to support our clients whenever and wherever they need it. Most importantly, we continue to add new clients.

Speaker Change: We have returned more than $400 million to equity holders.

Speaker Change: We have managed our share count down while simultaneously, increasing our publicly traded float.

Speaker Change: Bowing, new long term investors and to our shareholder roster.

Speaker Change: We are investing in growth by expanding our partnership.

Speaker Change: Increase the visibility recognition and reputation of our brand and diversified our advisory offerings to support our clients whenever and wherever they need us.

Andrew Bednar: Most importantly, we continue to add new clients. These are world-class companies and investors who we are proud and honored to work with through a second thin. We remain always on for our clients and for our teammates here at Pearl Weinberg, as we continue on our mission to scale our business. Thank you to all our loyal clients, and thank you to all our teammates for an excellent quarter. And importantly, for your exceptional business building, that positions our firms to deliver for our clients and our shareholders.

Speaker Change: Most importantly, we continued to add new clients.

Andrew Bednar: These are world-class companies and investors with whom we are proud and honored to work through thick and thin. We remain always available for our clients and for our teammates here at Perola Weinberg as we continue on our mission to scale our business. Thank you to all our loyal clients and thank you to all our teammates for an excellent quarter and, importantly, for your exceptional business building that positions our firm to deliver for our clients and our shareholders. Alex, I'll now turn the call over to you to review our financial results and capital management in more detail.

Speaker Change: These are world class companies and investors, who we are proud and honored to work with through thick and thin.

Speaker Change: We remain always on for our clients and for our teammates here at Perella Weinberg as we continue on our mission to scale our business.

Speaker Change: Thank you to all our loyal clients and thank you to all our teammates for an excellent quarter and importantly for your exceptional business building that positions our firm to deliver for our clients and our shareholders.

Alex Gottschalk: Alex, I'll now turn the call over to you to review our financial results and capital management in more detail. Thank you, Andrew. Our adjusted compensation ratio for the first half of the year was 68 percent and represents our current estimate for our full year of school. Our adjusted non-compensation expense was $41 million for the second quarter and $78 million for the first half. Adjusted non-compensation grew 10 percent in the first half compared to the same period last year.

Speaker Change: Alex I'll now turn the call over to you to review, our financial results and capital management in more detail.

Alexandra Gottschalk: Thank you, Andrew. Our adjusted compensation ratio for the first half of the year was 68% and represents our current estimate for our full-year accrual. Our adjusted non-compensation expense was $41 million for the second quarter and $78 million for the first half. Adjusted noncompensation grew 10% in the first half compared to the same period last year.

Alex Gottschalk: Thank you Andrew our adjusted compensation ratio for the first half of the year was 68% and represents our current estimate for a full year of cool our adjusted non compensation expense was $41 million for the second quarter and $78 million for the first half.

Speaker Change: Non compensation grew 10% in the first half compared to the same period last year.

Alex Gottschalk: We will continue to aggressively manage our expenses, consistent with prudently operating our business. Our adjusted tax rate for the second quarter was 32 percent and was 26 percent for the first half. We anticipate that our tax rate for the full year will be approximately 30 percent. At the end of the second quarter, we had 52.5 million shares of Class A common stock and 33.3 million partnership units outstanding. This includes the impact of a 5.75 million share offering in March, to proceed from which were used with cash on hand to retire 7.5 million units in May.

Alexandra Gottschalk: We will continue to aggressively manage our expenses, consistent with prudently operating our business. Our adjusted tax rate for the second quarter was 32% and was 26% for the first half. We anticipate that our tax rate for the full year will be approximately 30%.

Speaker Change: We continue to aggressively manage our expenses consistent with prudently operating our business.

Speaker Change: Our adjusted tax rate for the second quarter was 32% and was 26% for the first half.

Speaker Change: We anticipate that our tax rate for the full year will be approximately 30%.

Alexandra Gottschalk: At the end of the second quarter, we had 52.5 million shares of Class A common stock and 33.3 million partnership units outstanding. This includes the impact of a 5.75 million share offering in March, the proceeds of which were used with cash on hand to retire 7.5 million units in May. We remain committed to actively managing our share count. Not only have we fully offset dilution from RSU vesting, but, as Andrew just mentioned, our share count is lower than when we first listed.

Speaker Change: At the end of the second quarter, we had 52 and a half million shares of class a common stock and $33 3 million partnership units outstanding. This includes the impact of the $5 75 million share offering in March the proceeds from which were used with cash on hand to retire seven 5 million units in may.

Alex Gottschalk: We remain committed to actively managing our share accounts. Not only have we fully offset delusion from our CVS thing, but as Andrew just mentioned, our share count is lower than when we first listed. Additionally, we have increased our publicly traded flow by more than 20 percent. We ended the quarter with $185 million in cash and no debt. In the first six months of this year, we returned $162 million to equity holders while still investing for future growth.

Speaker Change: <unk> committed to actively managing our share count not only have we fully offset dilution from our view that thing, but as Andrew just mentioned our share count is lower than when we first looked at Additionally, we have increased our publicly traded float by more than 20%.

Alexandra Gottschalk: Additionally, we have increased our publicly traded float by more than 20%. We ended the quarter with $185 million in cash and no debt. In the first six months of this year, we returned $162 million to equity holders while still investing for future growth. This morning, we declared a quarterly dividend of $0.07 per share. With that, Operator, please open the line for questions.

Speaker Change: We ended the quarter with $185 million in cash and no debt in the first six months of this year, we returned $162 million to equity holders, while still investing for future growth.

Alex Gottschalk: This morning, we declared a quarterly dividend of $0.70 per share.

Speaker Change: We declared a quarterly dividend seven cents per share with that operator. Please open the line for questions.

Operator: With that operator, please open the line for questions. Thank you. And at this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star. Into you, and we will pause for a moment to allow questions to queue.

Operator: Thank you. And at this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star and two. We will pause for a moment to allow questions to queue. And our first question comes from Devin Ryan with Citizens J&P.

Speaker Change: Thank you and at this time, if you would like to ask a question. Please press the star and one on your telephone keypad you may remove yourself from the queue at any time by pressing star N T O and we will pause for a moment to allow questions to queue.

Speaker Change: Okay.

Devon Ryan: And our first question comes from Devon Ryan with Citizens JMP. Hey, good morning, Andrew. Good morning, Alex. How are you? Good morning, Devon. Good morning.

Speaker Change: And our first question comes from Devin Ryan with citizens JMP.

Speaker Change: Okay.

Devin Ryan: Hey, good morning, Andrew. Good morning, Alex. How are you? Good morning, Devin.

Devin Ryan: Hey, good morning, Andrew Good morning, Alex how are you.

Speaker Change: Good morning, Kevin.

Andrew Bednar: I just want to start on the backlog.

Speaker Change: Morning.

Speaker Change: Just wanted to start on the.

Devin Ryan: Good morning; I want to start on the backlog. So obviously, it was a record quarter. I believe I heard the announced impending backlog is still at a record in building. So just a two part question on that. I'd love to just get a little bit of color around where you feel like you're gaining market share in the backdrop, because clearly, we're not in a record M&A market. We're far from that. So to the extent you're driving these types of results, where is the market share coming from? And then, as you look at the backlog, it also appears the speed to move deals through the process is accelerating. So I just want to get some color on what's driving that as well. Thank you.

Speaker Change: Our backlog, so obviously record quarter.

Andrew Bednar: So obviously, record quarter, I believe I heard the announcement pending backlog is still at a record and building. So just two part question on that. Love to just get a little bit of color around where you feel like you're gaining market share in the backdrop because clearly we're not in a record M&A market. We're far from that. So, to the extent you're driving, you start to result where the market share is coming from. And then, as you look at the backlog, it also appears the speed to meet deals through process is accelerating. So you just want to get some color on what's driving that as well.

Speaker Change: Believe I heard the announced and pending backlog is still at a record in building. So just two part question on that I'd love to just get.

Speaker Change: A little bit of color around where you feel like you're gaining market share in the backdrop is clearly we're not in a record M&A market. We're far from that so to the extent you're driving these types of results where the market share is coming from and then as you look at the backlog. It also appears the speed to meet deals through process is accelerating so I just want.

Speaker Change: To give some color on what's driving that as well. Thank you.

Andrew Bednar: Thank you.

Speaker Change: Yeah.

Andrew Bednar: Yeah, sure, Devon. Look, I don't want to get too excited about the period-over-period changes. There's a lot of nuance and idiosyncratic issues that come about in these transactions exactly when they close. So we were fortunate in the current period that we had in very large fee closings, and that's great. I think what we're seeing, as I said on the last call, is that we're very focused on our corporate clients. We've got a bit more waiting toward corporate clients versus our sponsor and fund clients. They're both important clients to us, but we're just a bit more indexed on the corporate side.

Andrew Bednar: Yeah, sure, Devin. Look, I don't want to get too excited about the period over period changes. There are a lot of nuanced and idiosyncratic issues that come about in these transactions, but that's exactly when they close. So we were fortunate in the current period that we had some very large fee closings, and that's great. I think what we're seeing, as I said on the last call, is that, you know, we're very focused on our corporate clients.

Speaker Change: Yeah sure Devin look I don't want to get too excited about the period over period changes, there's a lot of.

Speaker Change: Nuance and idiosyncratic issues that come about in these transactions that's exactly when they close so we were fortunate in the current period that we had some very large fee closings in and Thats, great I think what we're seeing as I said on the last call is that.

Speaker Change: We're very focused on our corporate clients, we've got a bit more weighting towards corporate clients versus our sponsor and fund clients. They're both important clients to us. So we're just a bit more indexed on the corporate side and I think everyone's been reporting and we've said the same that corporates are really leading us.

Andrew Bednar: We've got a bit more weighting toward corporate clients versus our sponsor and fund clients. They're both important clients to us, but we're just a bit more indexed on the corporate side. And I think everyone's been reporting, and we've said the same, that corporates are really leading us out of the trough in M&A and recovering quite nicely out of that trough. I do think we'll see sponsor activity coming back. As I said in my opening remarks, it's just a matter of when, not if.

Andrew Bednar: And I think everyone's been reporting, and we've said the same, that corporates are really leading us out of the trough in M&A and recovering quite nicely out of that trough. I do think we'll see sponsor activity coming back. As I said in my opening remarks, it's just a matter of when, not if, but we are beneficiary of the waiting toward corporate activity.

Speaker Change: Out of the trough in M&A and recovering quite.

Speaker Change: Nicely out of that trough I do think we will see sponsor activity coming back as I said in my opening remarks, it's just a matter of when not if but we are a beneficiary of the weighting toward corporate activity number one.

Andrew Bednar: But we are a beneficiary of the weighting toward corporate activity, number one. In terms of transactions and generally the timeline from engagement to announcement and then announcement to closing, we're not really seeing a material difference from what we've reported in the last few quarters. It's still taking more time to get engagement, taking more time to announce, and taking more time to close. And there are many factors that drive that, some of which are related to the regulatory regimes, both here in the United States as well as in Europe and around the world, for that matter, that are just taking longer and are putting some time constraints on these transactions between sign and close.

Andrew Bednar: Number one, in terms of transactions and generally the timeline from engagement to announcement and then announcement to closing, not really seeing a material difference to what we've reported in the last few quarters. It's still taking more time to get engagement and taking more time to announce and taking more time to close. And there are many factors that drive that, some of which is related to the regulatory regimes both here in the United States as well as in Europe and around the world for that matter that just taking longer and is putting some time constraints on these transactions between signing close, but also the period from engagement to signing.

Speaker Change: In terms of transactions and generally the timeline from engagement to announcement and then announcement to closing not really seeing a material difference to what we've reported in the last few quarters, it's still taking more time to get engagement and taking more time to announce and taking more time.

Speaker Change: To close and there are many factors that drive that.

Speaker Change: Some of which is related to the regulatory regimes. Both here in the United States as well as in Europe and around the world for that matter that just just taking longer and is putting some.

Andrew Bednar: But also, the period from engagement to signing, I think people are just more careful and taking their time; there's less sense of urgency. I actually think that's quite healthy and, I think, leads to a bit less remorse as people sometimes rush to transactions and have second thoughts. So, I think actually the engagement to announcement timelines, even though they're elongated, I think it leads to healthier transactions.

Speaker Change: No time constraints on these transactions between sign and close but also the period from engagement to signing I think people are just more careful and.

Andrew Bednar: I think people are just more careful in taking their time. There's less sense of urgency, but I actually think that's quite healthy and I think leads to a bit less remorse, as people sometimes rush to transactions and have second thoughts. So I think actually the engagement to announcement timelines, even though they’re elongated, I think it leads to healthier transactions.

Speaker Change: They're taking their time, there's less sense of urgency, but I actually think that's quite healthy and I think leads to a bit.

Speaker Change: You know a bit less for more says people, sometimes you know, Russia transactions and have second thoughts. So I think actually the engagement two announcements timelines, even though theyre elongated I think it leads to healthier transactions.

Andrew Bednar: Thank you.

Andrew Bednar: That's a great color, Andrew. Thank you.

Devon Ryan: That's great color, Andrew. Thank you.

Speaker Change: That's great color Andrew. Thank you and then a follow up probably for let's just on the comp ratio. So 68% for the first half it's still above the normal target in the mid sixties.

Devon Ryan: And then the follow-up probably for lectures on the cop ratio. So, you know, 68% to the first half is still above the normal target in the mid-60s. So, just trying to think through kind of how to read that for what that implies for the rest of the year, you know, how much is conservatism versus, you know, giving what the backlogs are. You know, is there anything else that's keeping it elevated?

Devin Ryan: And then a follow-up probably for Alex just on the comp ratio. So, you know, 68% for the first half is still above the normal target in the mid-60s. So, just trying to think through kind of what that implies for the rest of the year. You know, how much is conservatism versus, you know, given where the backlogs are, you know, is there anything else that's keeping it elevated? And then just within that kind of what you're targeting for new hires in kind of the back half of the year, that would be helpful. Thank you.

Speaker Change: I'm just trying to think through kind of how to read that for what that implies for the rest of the year. You know how much is conservatism versus you know given where the backlogs are is there anything else that's keeping it elevated and then just within that kind of what you're targeting for for new hires.

Devon Ryan: And then just within that kind of what you're targeting for, for new hires and kind of the back half of the year, that would be helpful. Thank you.

Speaker Change: And kind of the back half of the year that'd be helpful. Thank you.

Andrew Bednar: Yeah, Devin. So, as you know, that's a bit of a multi-variable equation for all of us because we're thinking about not only what we need to compensate our team so that they're firmly in their seat and are being fairly and properly rewarded for their efforts. Number one, number two, we do have investment. We continue to be very deliberate and steady about. We will continue to grow our firm with the addition of talent. So, we have to factor that in. And lastly, we have to look at where the competitive set is and what's happening in the marketplace.

Andrew Bednar: Yeah, Devin, so as you know, that's a bit of a multivariable equation for all of us because we're thinking about not only what we need to compensate our team so that they're firmly in their seats and are being fairly and properly rewarded for their efforts, number one. But, number two, we do have an investment that we continue to be very deliberate and steady about. We will continue to grow our firm with the addition of talent, so we have to factor that in. And lastly, we have to look at where the competitive set is and what's happening in the marketplace. So those three variables will come together as we head toward the third and fourth quarters.

Speaker Change: Yeah, Devin so as you know that's a bit of a multi variable equation for for all of us because we're thinking about not only what we need to compensate our teams. So that they are firmly in their seat and are being fairly and properly rewarded for their efforts number one number two we do have investments that we continue to be very deliberate.

Speaker Change: Study about we will continue to grow our firm with the addition of talent. So we have to factor that in.

Speaker Change: And lastly, we have to look at where the competitive set is and what's happening in the marketplace. So those three variables will come together as we head toward third and fourth quarter, we'll make adjustments as we see it as needed right now what we've accrued for the first half is our best estimate and that's what we've put out those are.

Andrew Bednar: So, those three variables will come together as we head toward third and fourth quarter. We'll make adjustments as we see as needed. Right now, what we've accrued for the first half is our best estimate. And that's what we put out as our cop margin today. But that is subject to some change. We do like to stay within our target range. We indicated in our public listing, which was mid-sixties. We've been at the outer bounds of that. More recently, I think, for good reason.

Andrew Bednar: We'll make adjustments as we see them as needed. Right now, what we've accrued for the first half is our best estimate, and that's what we put out as our top margin today, but that is subject to some change. We do like to stay within our target range. We indicated in our public listing, which was the mid-60s, and we've been at the outer bounds of that. More recently, I think for good reason, as you know, I've said this many times, a lot of our comp is, in effect, CapEx, and I lose the battle with accountants all the time on that, but we have to look at some of that comp ratio as really investing for the future and driving revenue going forward.

Speaker Change: Comp margin today, but that is subject to some change we do like to stay within our target range. We indicated in our public listing which was mid sixties, who had been at the outer bounds of that more recently I think for good reason.

Andrew Bednar: As you know, I've said this many times; a lot of comp is in effect, CapEx. And I lose the battle with the count and solve time on that. But we have to look at some of that comp ratio as really investing for the future and driving revenue going forward.

Speaker Change: I've said this many times a lot of our call.

Speaker Change: Comp is in effect Capex I lose the battle with accounts all the time on that but we.

Speaker Change: We have to look at some of that comp ratio is really investing for the future and driving revenue going forward.

Andrew Bednar: That's great, and then I guess just the other part of that is, is there any flavor you can give around what that CapEx is in terms of just bringing in folks who commander the year like how the recruiting pipeline looks? Because I would assume that it is one of the variables that you just suggested, Andrew.

Devon Ryan: That's great. And then I guess just the other part of that is, is there any flavor you can give around what that CapEx in terms of just bringing in focus, whose remainder of the suggested address? Yeah, we're seeing good opportunities in the pipeline.

Speaker Change: Yes.

Speaker Change: Great and then I guess just the other part of that is is there any flame.

Speaker Change: Flavor, you can give around what that capex in terms of just bringing in folks.

Andrew Burton: The remainder of the year or like how the recruiting pipeline looks because I would assume that that's one of the variables that you just suggested Andrew.

Andrew Bednar: Yeah, we're seeing good opportunities in the pipeline. I would say that, much like the transaction timelines, the recruiting timelines are a bit more elongated. I think that's a function of people being busy, a little bit at this time of year. But generally, we still have more people interested in our firm than we will probably admit to our firm, which is a good dynamic. And I also think, much like I said earlier about transactions, I think the more deliberative people are, the more thoughtful before they rush into a job change, the better off both parties are.

Andrew Burton: Yeah, we're seeing good opportunities in the pipeline I would say that much like the transaction timelines. The recruiting timelines are a bit more elongated I think that's a function of people being dizzy a little bit now time of year.

Andrew Bednar: I would say that much like the transaction timelines, the recruiting timelines are a bit more elongated. I think that's a function of people being busy a little bit now, time of year. But generally, we have still more people interested in our firm than we will probably admit to our firm, which is a good dynamic. And I also think, much like I said earlier about transactions, I think the more deliberative people are, the more thoughtful, before they rush into a job change, the better off both parties are. So, again, I think that's a pretty healthy dynamic.

Andrew Burton: But generally we have still more people interested in our firm then we will probably.

Andrew Burton: Admit to our firm, which is a good dynamic and I also think much like I said earlier about transactions I think the more deliberate as people are the more thoughtful before they rush into a job change the better off both parties are so again I think that's a pretty healthy dynamics, we're still on track with what we said on average we'd probably add.

Andrew Bednar: So again, I think that's a pretty healthy dynamic. We're still on track with what we said on average, we probably add five or six partners a year. And we probably have one or two retirements every year or two. I don't see much aberration from that this year. So we're still on that pace. And every once in a while, we may have a one-off opportunity where we have a little bit more investing

Andrew Bednar: We're still on track with what we set on average. We probably had five or six partners a year. And we probably have one or two retirements every year or two. I don't see much aberration from that this year, so we're still on that pace. And every once in a while, we may have one-off opportunity where we have a little bit more investing, but I think generally we're still on pace with what we've indicated early on in our public listing that we'll grow the partnership, five or six people, and then probably have one or two retirements between a year-over-year appearance.

Andrew Burton: Five or six partners a year.

Andrew Burton: And we probably have one or two retirements are every year or two.

Andrew Burton: Don't see much aberration from that.

Andrew Burton: This year, so we're still on that pace in every once in a while we may have one off.

Speaker Change: <unk>, where we have a little bit more investing but I think generally we're still on pace with what we've indicated early on in our public listing that will grow the partnership you know.

Andrew Bednar: But I think, generally, we're still on pace with what we indicated early on in our public listing that we'll grow the partnership by five or six people and then probably have one or two retirements between the year-over-year periods.

Andrew Burton: Five or six people and then probably have one or two retirements.

Andrew Burton: Between.

Andrew Burton: Year over year periods.

Devin Ryan: Okay, that's great, Connor. Thanks, Andrew. I'll leave it there.

Devon Ryan: Okay, that's great color.

Andrew Burton: Okay, that's great color, Thanks, Andrew I'll leave it there.

Devon Ryan: Thanks, Andrew; I'll leave it there. Thanks, David. Thanks.

Andrew Burton: Excellent.

Operator: Thank you.

Operator: Thank you. And we will take our next question from Brendan O'Brien with Wolf Research.

Andrew Burton: Thank you.

Brendan O'brien: And we will take our next question from Brendan O'Brien with Wolf Research. Good morning. Thank you for taking my questions. I guess the start, I just wanted to touch on Europe.

Andrew Burton: And we will take our next question from Brendan O'brien with Wolfe Research.

Brendan O'brien: Good morning. Thank you for taking my questions. I guess to start, I just wanted to touch on Europe, and I just wanted to get a sense as to how you would compare activity in Europe relative to the U.S. We've heard some of your peers indicate that trends there have lagged. And specifically with sponsors, I wanted to see if you've seen any pickup in activity following the recent moves by the ECB.

Brendan O'brien: Good morning, and thank you for taking my questions I guess to start I just wanted to touch on Europe.

Andrew Bednar: Yeah, I think Europe is lagging behind on announcements. You don't need me to tell you that.

Andrew Bednar: And I just wanted to get a sense of how you would compare activity in Europe relative to the US. We've heard some of your peers indicate that trends there have lagged. And I specifically with sponsors, I want to see if you've seen any pickup in activity following the recent moves by the ECB. Yeah, I think Europe is lagging on announcements. You don't need me to tell you that. You can see that from the publicly available data. Our mix shifted a little bit down between Europe and the US, the US leading more in terms of our announced revenue today.

Brendan O'brien: Just wanted to get a sense as to how you would compare activity in Europe relative to the U S. We've heard some of your peers indicate that trends there have flags and specifically with sponsors I wanted to see if you've seen any pickup in activity. Following the recent moves by the ECB.

Speaker Change: Yeah, I think Europe is lagging on announcements you don't need me to tell you that you can see that from the publicly available data.

Andrew Bednar: You can see that from the publicly available data. You know, our mix shifted a little bit down between Europe and the U.S., with the U.S. leading more in terms of our announced revenue today. I think in terms of the other metrics we look at in our dashboard, you would think that they are much more aligned in terms of activities. So when we look at things like new business reviews, engagement letters, and generally, you know, our activities with clients on both sides of the Atlantic are quite robust. And I think for different reasons.

Speaker Change: You know our mix shifted a little bit down between Europe, and the U S. The U S leading more in terms of our.

Andrew Burton: Announced revenue today.

Andrew Bednar: I think in terms of the other metrics we look at in our dashboard, you would think that they are much more aligned in terms of activity. So when we look at things like new business reviews, engagement letters, generally, you know, our activities with clients, both sides of the Atlantic are quite robust.

Andrew Burton: In terms of the other metrics, we look at our dashboard.

Andrew Burton: You would think that they are much more aligned in terms of activities. So when we look at things like new business reviews engagement letters generally.

Andrew Burton: Our.

Speaker Change: Activities with clients both sides of the Atlantic are quite robust and I think for different reasons I think there are different pressure points in Europe different areas.

Andrew Bednar: And I think for different reasons, I think there are different pressure points in Europe, different areas of growth, opportunity, and differences, Iris. For example, for a lot of European companies to rethink their global footprint, particularly their exposure to the US, which many, many European companies are looking to increase their exposure to the United States, which I think does play well into where we have boots on the ground. You know, we are largely a US and European business in terms of the M&A markets. It's 75% of announced activity; probably a greater percentage of the fee pool.

Andrew Bednar: I think there are different pressure points in Europe, different areas of growth opportunity, and different desires, for example, for a lot of European companies to rethink their global footprint, particularly their exposure to the U.S. Many, many European companies are looking to increase their exposure to the United States, which I think does play well into where we have boots on the ground. You know, we are largely a U.S. and European business in terms of the M&A markets. It's 75% of announced activity, probably a greater percentage of the fee pool. So we feel very well positioned for that type of activity.

Andrew Burton: Our growth opportunity in different desires for example for a lot of European comedies too to rethink their global footprint and particularly their exposure to the U S, which many many.

Andrew Burton: Many many European companies are looking to increase their exposure to the United States with our I think does play well into where we have boots on the ground. We are largely a U S and European.

Speaker Change: Business in terms of the M&A markets, it's a 75% of announced activity probably a greater percentage of the fee pool. So we feel very well positioned for that type of activity, but there are different drivers of of transactions and I think youre seeing that play out in the types of transactions that you.

Andrew Bednar: So we feel very well positioned for that type of activity. But there are different drivers of transactions. And I think you're seeing that play out in the types of transactions that you see from Europe versus the United States. I think in terms of, so I think the revenue over time does start to catch up. Usually, you have that lag effect that you're referencing, which I think you're absolutely right about. But with activity where it is, I do expect that European revenue for our business as well as the sector will likely improve as we head over into the back half of 24 and it's a 25.

Andrew Bednar: But there are different drivers of transactions, and I think you're seeing that play out in the types of transactions that you see from Europe versus the United States. I think in terms of revenue, I think the revenue over time does start to catch up. Usually, you have that lag effect that you're referencing, which I think you're absolutely right about.

Andrew Burton: See from Europe versus the United States.

Andrew Burton: I think in terms of.

Andrew Burton: So I think the revenue over time it does start to catch up he usually you have that lag effect that you're referencing which I think you're absolutely right about but with activity where it is I do expect that European revenue for our business as well as the sector will likely improve as we head over into the back half of 'twenty four and it's 25.

Andrew Bednar: But with activity where it is, I do expect that European revenue for our business as well as the sector will likely improve as we head over into the back half of 24 and into 25. I think in terms of sponsor activity, not a material change because of ECB moves, and I don't expect a material change because of a likely Fed move now in September. I think, generally, we see a very significant backlog of assets that sponsors will need to monetize in some way, either through continuation vehicles or through sales or through IPOs.

Andrew Bednar: I think in terms of sponsor activity, not a material change because of ECB moves, and I don't expect a material change because of a likely Fed move now in September. I think generally we see a very significant backlog of assets that sponsors will need to monetize in some way, either through continuation vehicles or through sales or through IPOs. And that supply chain and the sponsor community just needs to get flowing a little bit more, and that will naturally lead to more deployment of capital. But we're in the early days here; I think of a sponsor recovery.

Speaker Change: I think in terms of sponsor activity.

Andrew Burton: Not a material change because of ECB moves and I don't expect a material change because of the likely fed moves now in September I think generally we see a very significant backlog of of assets that sponsors will need to monetize in some way either through.

Andrew Burton: Continuation of vehicles or through sales or through Ipos and that supply chain and the sponsor community just needs to get flowing a little bit more and that will naturally lead to more deployment of capital.

Andrew Bednar: And that supply chain and the sponsor community just needs to get flowing a little bit more, and that'll naturally lead to more deployment of capital. But we're in the early days here, I think, of a sponsor recovery. I think they're abnormally low as a proportion of overall activity. And, you know, again, I'll say it three times now: I do think it's a matter of when, not if, sponsors come back. And they're very sophisticated pools of capital.

Speaker Change: We're in the early days here I think of a sponsor.

Andrew Bednar: I think they're abnormally low as a proportion of overall activity. And again, I'll say three times now I do think it's a matter of when, not if sponsors come back. And they're very sophisticated pools of capital there, very sophisticated investors. I've mentioned three or four trillion dollars' worth of dry powder between private equity credit, and if you had an infrastructure, it's even more than that. And so I do see a lot of activity coming from that community over time.

Speaker Change: Recovery I think theyre abnormally low as a proportion of overall activity and you know again I'll say it three times now I do think it's a matter of of when not if sponsors come back and they're very sophisticated pools of capital, they're very sophisticated investors I've mentioned.

Andrew Bednar: They're very sophisticated investors. I've mentioned $3 or $4 trillion worth of dry powder between private equity credit and, you know, if you add in infrastructure, it's even more than that. And so I do see a lot of activity coming from that community over time.

Andrew Burton: Three or four trillion dollars worth of dry powder.

Speaker Change: Between private equity credit.

Speaker Change: If you had an infrastructure, it's even more than that and so I do see a lot of activity coming from that community over time.

Speaker Change: Yeah.

Brendan O'brien: That's great, Culler. And I guess for my follow-up, kind of touching on a few of the themes there, just on the election, you know, on the one hand, and specifically the puts and takes of a potential change in regime in the U.S., you know, on the one hand, you might have a more accommodative FTC, which should be somewhat of a benefit, but on the other hand, you know, potentially higher tariffs, maybe an headwind or tailwind activity.

Andrew Bednar: I just want to follow up, kind of touching on a few of the themes there, just on the election, on the one hand, and specifically the puts and takes of a potential change in the U.S. On the one hand, you might have a more accommodative FTC, which should be somewhat of a benefit, but on the other hand, potentially higher tariffs, maybe a headwind or tailwind activity. I would just like to get a sense of how you see the potential puts and takes of the, well, it's not the FDC, but I guess on the tariff side and the potential tailwind from a more accommodative FTC.

Speaker Change: That's great color and I guess for my follow up kind of touching on a few of the themes. There just on the election you know.

Speaker Change: On the one hand, and specifically the puts and takes of a potential change in regime in the U S. On.

Speaker Change: On the one hand, you might have a more accommodative FTC, which should be somewhat of a benefit but on the other hand potentially higher tariffs.

Speaker Change: Maybe.

Speaker Change: Headwind or tailwind activity I would just like to get a sense of say, how you see the potential puts and takes.

Brendan O'brien: I would just like to get a sense of, say, how you see the potential puts and takes of the, well, I guess not the FTC, but I guess on the tariff side and the potential tailwind from a more accommodative FTC.

Speaker Change: My it's not the FTC, but I guess on the tariff side and the potential tailwind from a more accommodative M D C.

Andrew Bednar: I'll just start with the public service announcement that I am not a politician, and I'm not a macro economist; I'm just a banker, so I'll give you my view for what it's worth. You know, I've now in my career have witnessed seven elections in my 30-year career. I, like many people, have probably really overthought what the implications of elections will mean for markets and other parts of our lives. I think they're really important, and they do have consequences. I think that probably the effects have been overstated, at least in my lifetime. And I think that for M&A specifically, it seems now, given the commentary that both party leaders are interested in having some change to anti-trust review and anti-trust regulation.

Andrew Bednar: I'll just start with a public service announcement that I am not a politician and I'm not a macro economist. I'm just a banker, so I'll give you my view for what it's worth. You know, I've now witnessed seven elections in my 30-year career.

Speaker Change: Yeah, I'll just start with the public service announcements that I'm not a politician and I'm not a macro economist some just a banker so give me my my view.

Andrew Burton: For what it's worth.

Andrew Burton: Now in my career have witnessed seven elections in my 30 year career.

Andrew Bednar: Like many people, I probably have probably really overthought what the implications of elections will mean for markets and other parts of our lives. I think they're really important, and they do have consequences. I think that probably the effects have been overstated, at least in my lifetime. And I think that for M&A specifically, now, given the commentary, that both party leaders are interested in having some change to antitrust review and antitrust regulation.

Andrew Burton: I like many people publicly really over thought what the implications of elections will mean for markets in other parts of our lives I think they're really important and they do have consequences I think that.

Speaker Change: Probably the effects have been overstated.

Speaker Change: At least in my lifetime.

Andrew Burton: And I think that for M&A, specifically it seems now given the commentary that both.

Andrew Burton: Both party leaders are interested in having some change to antitrust review and antitrust regulations. So on balance I think that'll be a positive.

Andrew Bednar: So, on balance, I think that'll be positive. I think that you have a Fed in motion now to begin at least looking at lowering rates. I think that is an important pivot and signal, and I do think that helps markets broadly. But we also have two candidates that seem to be less focused and have less of a priority on our national debt and probably place a high emphasis on spending.

Andrew Bednar: So, on balance, I think that'll be a positive. I think that you have a set in motion now to begin at least looking at lowering rates. I think that is an important pivot and signal. And I do think that helps markets broadly, but we also have two candidates that seem to be less focused and have less of a priority on our national debt and probably place high emphasis on spending. So I do think we'll probably be in a higher rate than we've normally had over long-term periods. I don't see rates going down to zero the way they did during COVID or the financial crisis.

Andrew Burton: I think that you have a fed in motion now to begin at least looking at lowering rates. So I think that is an important pivot and signal and I do think that helps markets broadly.

Speaker Change: But we also have two candidates.

Andrew Burton: It seemed to be less focused and have less of a priority on our national debt 10, probably place a high emphasis on spending so I do think we'll probably be in a hurry.

Andrew Bednar: So I do think we'll probably be in a higher interest rate than we normally have over long-term periods. I don't see rates going down to zero the way they did during COVID or the financial crisis. So I think we're going to live with just higher rates for a really long time, but not painfully high, but just above the crisis levels that you probably wouldn't want to be in anyway because it signals a troubled economy.

Andrew Burton: The higher rate than we have normally had over a long term periods I don't see rates going down to zero the way they did during COVID-19 or the financial crisis. So I think we're going to live with just higher rates for.

Andrew Bednar: So I think we're going to live with just higher rates for a really long time, but not painfully high, but just above the crisis levels that he probably wouldn't want to be in any way because it signals a troubled economy. So I think we're not hearing from any clients that they're stopping processes because of the election. We're not hearing from clients that they're accelerating anything because of the election. But I do think once that is settled, it does remove an uncertainty out of people's thinking in their models. And generally, post-election periods are good times for, you know, then planning out your next horizon and taking appropriate action.

Andrew Burton: There are really a long time, but not not painfully high but just above the price levels that you probably wouldn't want to be in any way because it signals a troubled economy. So.

Andrew Bednar: So I think we're not hearing from any clients that they're stopping processes because of the election. We're not hearing from clients that they're accelerating anything because of the election. But I do think once that is settled, it does remove uncertainty from people's thinking and their models. And generally, post-election periods are a good time for planning out your next horizon and taking appropriate action. So that's generally a good time for people in our business.

Speaker Change: We're not hearing from any clients that theyre stopping processes because of the election, we're not hearing from clients that they're accelerating anything because of the election.

Andrew Burton: But I do think once that is settled it does remove an uncertainty out of people's thinking and their models and generally post election periods are you know a good time for planning out here next horizon and taking appropriate actions. So that's generally a good time for people in our business.

Andrew Bednar: So that's generally a good time for people in our business.

Brendan O'brien: Great.

Brendan O'brien: Great Thank you for taking my questions.

Brendan O'brien: Thank you for taking my questions.

Speaker Change: Great. Thank you for taking my questions.

Operator: Thank you.

Operator: Thank you. And we will take our next question from James Yaro of Goldman Sachs.

Speaker Change: Thank you and we will take our next question from James <unk> with Goldman Sachs.

James Yarrow: And we will take our next question from James Yarrow with Goldman Sachs. Good morning, and thanks for taking my questions. Now that we're more than halfway into the year and results came in somewhat stronger this quarter, how are you thinking about the go-forge revenue here? Just trying to anchor between the goalposts of the past two quarters.

James Yaro: Good morning, and thanks for taking my questions. Now that we're more than halfway into the year and results came in so much stronger this quarter, how are you thinking about the go-forward for revenue here, just trying to anchor between the goalposts over the past two quarters? Is it conceivable for revenue to continue to rise off this level in the back half, or should we expect revenue to be likely higher between 1Q and 2Q? And then, relatedly, how should we think about the impacts of the typical summer slowdown we sometimes see for dealmaking?

James <unk>: Hi, good morning, and thanks for taking my questions.

James Yaro: And I'll stop there.

James <unk>: We're more than halfway into the year and results came in somewhat stronger this quarter. How are you thinking about the go forward for revenue here just trying to anchor between the goalposts over the past two quarters is it conceivable for revenue to continued rise off this level in the back half or should we expect revenue to be likely more between.

James Yarrow: Is it conceivable for revenue to continue to rise off this level in the back half, or should we expect revenue to be likely more between the average or between one queue and two queue?

Speaker Change: The average or between <unk> and <unk> and then Relatedly, how should we think about the impacts of the typical summer slowdown, we sometimes see for dealmaking and just.

James Yarrow: And then we'll just stop.

Speaker Change: I'll stop there.

Andrew Bednar: Yeah. Hi, James. Good morning.

Andrew Bednar: Yeah. Hi James. Good morning.

Speaker Change: Yes.

Andrew Bednar: Next for the question. We don't give any kind of revenue guidance, as you know, so I'll just really stay far away from that. I think that, you know, what we've reported here in the first two quarters, you know, we weren't overly excited on the downside in the first quarter, and we're not getting overly excited about the upside in the second quarter. There's, you know, given our scale, there's going to be a bit more of volatility in some mean reversions, so we've got to expect that.

Andrew Burton: Hi, James Good morning, Thanks for the question.

James: We don't give any kind of revenue guidance as you know so I'll, just really stay far away from that.

Andrew Bednar: Thanks for the question. We don't give any kind of revenue guidance, as you know, so I'll just really stay far away from that. I think that, you know, what we've reported here in the first two quarters, you know, we weren't overly excited about the downside in the first quarter, and we're not getting overly excited about the upside in the second quarter. There's, you know, given our scale, there's going to be a bit more volatility and some mean reversions, so we'd have to expect that. What I look at more is not trying to predict what the... what revenue is going to be quarter over quarter. It's just an impossible task.

Speaker Change: I think that you.

Speaker Change: What we've reported here in the first two quarters, we werent overly excited on the downside in the first quarter and we're in.

Speaker Change: Not getting overly excited about the upside in the second quarter. There's you know given our scale, there's going to be a bit more volatility in some mean reversion. So we'd have to expect that what would I look at more is not trying to predict what's.

Andrew Bednar: What would I look at more as not trying to predict what, you know, what revenue is going to be quarter over quarter, it's just an impossible task, but just looking at all those important indicia of a really successful and strong franchise, you know, how many clients are calling us, how many clients are engaging us, the fact that we're not seeing a lot of fee pressure, for example, in particularly larger complex transactions, that we see people paying for the value we bring, and I think that's the sign of a really healthy market and a healthy franchise.

Andrew Burton: What revenue is going to be a quarter over quarter, it's an impossible task, but just looking at all those important condition of a really successful and strong franchise. You know how many clients are calling us how many clients are engaging us.

Andrew Bednar: But just looking at all those important indicators of a really successful and strong franchise, you know, how many clients are calling us? How many clients are engaging us? The fact that we're not seeing a lot of fee pressure, for example, in particularly larger, complex transactions where we see people paying for the value we bring. And I think that's a sign of a really healthy market and a healthy franchise. So we're, it'll be an unsatisfactory answer to you and your job, James, but we're just not in the business of trying to think quarter to quarter.

Andrew Burton: The fact that we're not seeing a lot of fee pressure for example is particularly larger complex transactions that.

Andrew Burton: We see people paying for the value, we bring and I think that's the sign of a really healthy market and.

Andrew Burton: And a healthy franchise.

Andrew Bednar: So we're, it'll be an unsatisfying answer to you and your job, James, but we're just not in the business of trying to think quarter to quarter. We're just trying to build this world-class franchise, and we think we're on a great trajectory to do that, but we will have volatility, and I think most people don't simply take a quarter and, you know, multiply it by four.

Andrew Burton: So we're it'll be an unsatisfying answer to you in your job James but we're just not in the business of trying to think quarter to quarter. We're just trying to build this world class franchise, and we think we're on a great trajectory to do that but we will have volatility.

Andrew Bednar: We're just trying to build this world-class franchise. And we've grown a great trajectory to do that, but we will have volatility. And I think most people don't simply take a quarter and, you know, multiply it by four.

Speaker Change: And I think most people don't simply take a quarter and multiply it by four.

Alex Gottschalk: Just trying to understand that, because that's super clear, maybe just on the non-comp dollars, I think they did rise a little bit more than the full year, seven percent year-on-year growth number that you'd previously given. Maybe you could just help us think about the non-comp trajectory as we look ahead, and I think especially in light of the inflationary pressures that have been cited by many of your peers. Sure, Alex, do you want to take that one? Yeah, sure, thanks, James. Look, our non-comp for the first half does reflect some what I would characterize as a regular item, in a bit episodic to this year.

James Yaro: Just trying to understand that because that's super clear. Maybe just on the non-comp dollars, I think they rose a little bit more than the full year 7% year-on-year growth number that you'd previously given. Maybe you could just help us think about the non-comp trajectory as we look ahead, especially in light of the inflationary pressures that have been cited by many of your peers.

James <unk>: Yeah, I'm, just trying to understand that because.

Speaker Change: That's super clear and maybe just on the non comp.

Speaker Change: I think they did rise a little bit more than the full year, 7% year on year growth.

Speaker Change: Number that you'd previously given maybe you could just help us think about the the non comp trajectory as we look ahead and I think especially in light of the inflationary pressures that have been cited by many of your peers.

Andrew Bednar: Sure. Alex, do you want to take that one?

Speaker Change: Sure Alex do you want to take that one.

Alex Gottschalk: Sure. Thanks James.

Alex Gottschalk: Our non comp for that for the first half does reflect some what I would characterize as irregular items and a bit episodic to this year in particular, we had a very unfortunate bad debt item and and also have ongoing litigation costs, which which are substantially higher relative to the prior period and yeah I do.

Alexandra Gottschalk: Some of what I would characterize as irregular items and a bit episodic in this year. In particular, we had a very unfortunate bad debt item and also had ongoing litigation costs which are substantially higher relative to the prior period. I do think that those results are generally in line with what we expect to see for the year, but I wouldn't think of them on a long-term basis. You know, we're doing very well with our controllable costs, and over time, with scale, we should see more leverage and improvement on that margin.

Alex Gottschalk: In particular, we had a very, you know, unfortunate bad debt item, and also has ongoing litigation costs, which are substantially higher relative to the prior period. You know, I do think that those results are generally in line with what we expect to see for the year, but I would think of those on a long-term basis. You know, we're doing very well with our controllable costs, and over time, with scale, we should see more leverage and improvement on that margin. So, just because when you're talking about the dollars of non-comp or the comp ratio in terms of the near-term...

Alex Gottschalk: Think that those results are generally in generally in line with what we expect to see for the year, but I would I wouldn't think of those.

Speaker Change: On a long term basis, you know, we're doing very well with our controllable cost and over time with scale, we should we should see more leverage and improvement on that margin.

Alexandra Gottschalk: So just to be clear, are you talking about the dollars of non-cops or the cop ratio in terms of the near term?

Speaker Change: So just to be clear when you're talking about the dollars of non cover at the comp ratio.

Speaker Change: Terms of the near term.

James Yarrow: The dollars of non-comp in terms of the near-term. Yep.

James Yaro: The dollars of non-com in terms of the near term.

Speaker Change: The the dollars of non comp in terms of the near term.

James Yaro: Thank you. On that last one, I think the share count was notably high, which I think was reflective of a difference in how you calculated this versus historically. I guess, is this the right way to think about the share count going forward? And then any update on any near-term potential share unlocks and triggers we need to be thinking about over the next few quarters?

James Yarrow: Okay, great, thank you.

James Yarrow: The last one, you know, I think the share count was notably higher, which I think that was reflective of the difference in how you calculated this versus historically. I guess, is this the right way to think about the share count going forward? And then any update on any near-term potential share unlocked, excuse me, unlocks and triggers who need to be thinking about over the next few quarters.

Speaker Change: Okay, great. Thank you.

Speaker Change: Last one I think that the share count was notably higher which I think that was.

Speaker Change: Reflective of a difference in how you calculated this versus.

Speaker Change: Historically I guess is this the right way to think about the share count going forward and then any update on any near term potential share unlocked.

Speaker Change: This me unlocks and triggers we need to be thinking about over the next few quarters.

Alex Gottschalk: Yep. Alex, why don't you take us through the current share count, but then I forecast a little bit of what we're expecting. Thanks.

Alexandra Gottschalk: Yep. Alex, why don't you take us through the current share count, and then I'll forecast a little bit of what we're expecting. Thanks. Yes, yes, yes.

Alex Gottschalk: Yeah, Alex why did it take us through the current share count, but don't have a forecast a little bit of what we're expecting.

Alex Gottschalk: Yeah, sure. So look, I think the number to focus on is the outstanding count as of June 30th, which is just under 86 million. Obviously, that 100 million that you're seeing is really a function of the timing of when we affected the offering in Q1 relative to our very aggressive buybacks in Q2.

Alexandra Gottschalk: Yep, yep, sure. So, look, I think the number to focus on is the outstanding balance as of June 30th, which is just under $86 million. Obviously, that $100 million that you're seeing is really a function of the timing of when we affected the offering in Q1 relative to our very aggressive buybacks in Q2. So, from a forward-looking perspective, obviously, we do issue share-based comp. All of that is reflected in our public filings.

Speaker Change: Yep Yep sure.

Speaker Change: So look I think the number to focus on is the outstanding count as of June 30th which is just under 86 million, obviously that that 100 million that youre seeing is really a function of the timing of when we affected the offering in Q1 relative to our very aggressive buybacks and in Q2.

Alex Gottschalk: So, from a forward-looking perspective, obviously, we do issue share-based comp; all of that's reflected in our public filing. For this year, we're anticipating an additional two million shares that's on a net-settled basis consistent with our past practice, the intent to net-settle those shares that would enter our count by the end of the year. And again, this is before any retirement of units or open market repurchases if we choose to do that over the course of Q3 and Q4.

Speaker Change: From a forward looking perspective, you know obviously, we do issue share based comp all of that is reflected in our public filings and for this year. We're anticipating an additional 2 million shares that's on a net settle basis and consistent with with our past practice to intend to settle those shares.

Alexandra Gottschalk: For this year, we're anticipating an additional 2 million shares. That's on a net settled basis, consistent with our past practice. We intend to net settle those shares that would enter our account by the end of the year. And again, this is before any retirement of units or open market repurchases if we choose to do that over the course of Q3 and Q4.

Speaker Change: It would enter our account, but by the end of the year and again. This is before any retirement of units or open market repurchases. If if we choose to do that over over the course of Q3 and Q4.

James Yarrow: Okay, that's very helpful.

James Yaro: Okay, that's very helpful. Thank you.

Speaker Change: Okay. That's very helpful. Thank you.

James Yarrow: Thank you.

Speaker Change: Sure.

Operator: Thank you. And our next question comes from Aidan Hall with KBW.

Alex Gottschalk: Thank you and our next question comes from Aden Hall, with K B W.

Aidan Hall: And our next question comes from Aidan Hall with KBW. Great. Thanks for taking my question.

Aidan Hall: Great. Thanks for taking my question. Good morning, everyone. Good morning.

Aden Hall: Great. Thanks for taking my question good morning, everyone.

Aidan Hall: Good morning, everyone. M&A has historically been a part of PWP's growth acquisition of TPH. Although it's really foregoing public three years ago, so Andrew, I'd be curious to get your thoughts on kind of inorganic growth opportunities. And if there's any complimentary businesses, whether it's primary fundraising, secondary advisory, or any other strategies where you think it would make more sense to buy versus build for PWP.

Operator: M&A has historically been a part of PwP's growth. Andrew Bednar, James Yaro, Steven Chubak, Aidan Hall, Alexandra Gottschalk, Taylor Reinhardt, inorganic growth opportunities. And if there are any complementary businesses, whether it's primary fundraising, secondary advisory, or any other strategies where you think it would make more sense to buy versus build for PWP.

Aden Hall: Good morning, M&A has historically been a part of Pwc's growth acquisition of G. P. H, although it's really for going public three years ago. So Andrew I'd be curious to get your thoughts on kind of just.

Speaker Change: Inorganic growth opportunities and if theres any complementary businesses whether it's.

Speaker Change: Primary fund raising secondary advisory or any other strategies, where you think it would make more sense to buy versus build for P. W. P.

Andrew Bednar: Yeah, good question. Look, we’re in the M&A business, so we constantly think about ways to materially change the nature of our business rather than doing the job brick by brick, which is what we’ve been doing other than TPH, as you correctly point out. We haven't found something that would be strategically, financially, and culturally compelling. We've looked at some things over time. There are some adjacencies that are interesting. We have been a core M&A and restructuring and liability franchise. We've added now a terrific shareholder advisory and activist team. We've added a terrific debt advisory team. We have not had to go to the acquisition market for that.

Aidan Hall: Yeah, good question. Look, we're in the M&A business. So we constantly think about ways to materially change the nature of our business rather than doing the job brick by brick, which is what we've been doing other than TPH, as you correctly point out. We haven't found anything that would be strategically and financially and culturally compelling. We've looked at some things over time. There are some adjacencies that are interesting.

Andrew Burton: Yeah. Good question look we're in the M&A business. So we constantly think about ways to.

Speaker Change: Materially change the nature of our business rather than doing the job brick by brick which is what we're what we've been doing other than T. P. H as you correctly pointed out we haven't found something that would be strategically and financially and culturally compelling.

Speaker Change: We've looked at some things over time there are some adjacencies that are interesting we have been a core M&A and restructuring liability franchise. We've added now a terrific shareholder.

Andrew Bednar: We have been a core M&A and restructuring and liability franchise. We've added now a terrific shareholder advisory and activist team. We've added a terrific debt advisory team.

Alex Gottschalk: Advisory and Actavis team, we've added a terrific debt advisory team, we have not had to go to the.

Andrew Bednar: We have not had to go to the acquisition market for that. We've acquired talent, but not companies. That's always a little more challenging on full-on company deals or large team deals. We're open-minded to that. We just haven't seen anything that makes sense for us.

Alex Gottschalk: The acquisition markets, where that we've acquired talent, but not companies.

Andrew Bednar: We've acquired talent, but not companies. That's always a little more challenging on, you know, full-on company deals or large team deals. We're up in mind that we just haven't seen anything that makes sense for us, and so we will continue to build by brick, as I mentioned, which has worked very well for us.

Aden Hall:

Aden Hall: That's always a little more challenging.

Alex Gottschalk: Full on company deals or a large team deals. We're open minded to that we just haven't seen anything that makes sense for us.

Andrew Bednar: And so we will continue to build by brick, as I mentioned, which has worked very well for us. And I think by extending our, excuse me, product line, we're not going to stray off course from being an advisory-only firm. That's not something that we're actively looking at. But there are some additional capabilities, you know, outside of the core that are lucrative and attractive adjacencies. And we just, you know, have to keep looking for the right people and capabilities. And that is something that we have a team that actively reviews.

Aden Hall: And so we will continue to build.

Bret: Bye bye, Bret because I, because I mentioned, which you know.

Alex Gottschalk: Has worked very well for us.

Andrew Bednar: I think on extending our product line; we're not going to stray off course from being an advisory-only firm. That's not something that we're actively looking at, but there are some additional capabilities, you know, outside of the core that are lucrative and attractive adjacencies, and we just, you know, have to, you know, keep looking for the right people and capabilities, and that is something that we have a team that actively reviews that. Got it. It's very helpful. Appreciate the color.

Aden Hall: And I think on extending our.

Alex Gottschalk: Excuse me product line.

Alex Gottschalk: We're not going to stray off course from being an advisory only firm.

Alex Gottschalk: That's not something that we're actively looking at but there are some additional capabilities outside of the core that are lucrative in attractive adjacencies and we just have to.

Aden Hall: Keep looking for the right people and capabilities and that is something that we have a team that actively.

Aden Hall: Actively reviews.

Aidan Hall: Got it. It's very helpful. I appreciate the caller.

Speaker Change: Got it that's very helpful. I appreciate the color.

Speaker Change: Thank you.

Operator: Thank you. And it appears that we have no further questions at this time. I will now turn the program back to our presenters for any additional or closing remarks.

Speaker Change: Thank you and it appears that we have no further questions. At this time I will now turn the program back to our presenters for any additional or closing remarks.

Operator: And it appears that we have no further questions at this time.

Andrew Bednar: I will now turn the program back to our presenters for additional or closing remarks. Okay, thank you, Madison, and thank you, everyone, for joining the call today. I really hope you have a relaxing and a reflective end of summer. We really appreciate your continued support, especially those of you who have believed in our firm since day one, and who continue to believe that we all do inside the firm and the unique potential of the Parallel Weinberg franchise. So thank you again for joining.

Andrew Bednar: Okay. Thank you, Madison, and thank you, everyone, for joining the call today. I really hope you have a relaxing and reflective end to the summer. We really appreciate your continued support, especially those of you who have believed in our firm since day one and who continue to believe, as we all do inside the firm, in the unique potential of the Perella Weinberg franchise. So, thank you again for joining us. Have a nice summer. Bye-bye.

Speaker Change: Okay. Thank you Madison and thank you everyone for joining the call today I really hope you have a relaxing and are reflective in the summer.

Speaker Change: We really appreciate your continued support especially those of you who have believed in our firm since day, one and who continue to believe that we all do inside the firm and the unique potential of the perella Weinberg franchise. So thank you again for joining and.

Andrew Bednar: Have a nice summer, bye bye.

Alex Gottschalk: Have a nice summer bye bye.

Aden Hall: Yeah.

Operator: Thank you.

Operator: Thank you. This does conclude today's Perella Weinberg second quarter 2024 earnings conference call. Thank you for your participation. You may disconnect at any time.

Speaker Change: Thank you. This does conclude today's perella Weinberg second quarter 2024 earnings conference call. Thank you for your participation you may disconnect at any time.

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Operator: This does conclude today's Parallel Weinberg second quarter 2024 earnings conference call. Thank you for your participation. You may disconnect at any time.

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