Q2 2025 Evercore Inc Earnings Call

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Good morning and welcome to evercore second quarter 2025 earnings conference. Call today's call is scheduled to last about 1 hour, including remarks by evercore management, and the question and answer session in order to ask a question, please press the star key followed by the number 1 on your touchtone phone. At any time, I will now turn the call over to Katie heat relations at evercore. Please go ahead.

Thank you, operator. Good morning.

25, Financial Results Conference Call. I'm Katy Haber, Head of Investor Relations. Joining on the call today are John Weinberg, our Chairman and CEO, and Timothy LaLonde, our CFO.

After our prepared remarks, we will open up the line for questions.

Earlier today, we issued a press release announcing Evercore's second quarter 2025 financial results.

Our discussion of our results today is complimentary to the press release, which is available on our website at evercore.com.

This conference call is being webcast live in the Fort Investor section of our website, and the archive of it will be available for 30 days, beginning approximately 1 hour after the conclusion of this call.

During the course of this conference call, we may make a number of forward-looking statements. Any forward-looking statements that we make are subject to numerous risks and uncertainties. There are important factors that could cause actual outcomes to differ materially from those indicated in these statements.

These factors include but are not limited to those that discuss. An Ever course. Fine lines with the FCC, including our annual report on form. 10K quarterly reports on forms 10 q and current reports on form a k. I want to remind you that the company assumes no duty to update any forward-looking statements.

In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are not GAAP measures, that we believe are meaningful when evaluating the company's performance. For detailed disclosures on these measures and the GAAP reconciliation, you should refer to the financial data contained within our press release, which is posted on our website.

We continue to believe that it is important to evaluate ever, ever, ever course performance on an annual basis. As we have noted previously, our results for any particular quarter are influenced by the timing of transaction closings. I will now turn the call over to John.

Thank you, Katie.

Before we review our second quarter Financial results, I would like to spend a few minutes, discussing our announcements from earlier this morning.

We've entered into an agreement to acquire Roi, warshaw a leading uk-based advisory firm with an extraordinary client franchise and relationships with some of the most prominent multinational companies in Europe.

For 30 years. Ever core has been committed to delivering for clients by expanding our capabilities and talent each, and every year.

Building a firm ground in excellence and long-term high-quality growth. This acquisition continues, that approach enhancing our ability to create value for all of our stakeholders.

Roi Warshaw Partners have advised on some of the largest and most complex transactions globally, including 7 of the 10 largest in UK history.

This year. Roi warshaw, advised Banco.

In the UK Roi warshaw has been a trusted advisor to over a quarter of the 4100 and have significant reach in the continent and globally.

Row War shows business. It's highly complementary to every course broad and growing a Maya platform.

This acquisition is a significant step in our Global expansion strategy by combining Road War. Shaw's, long-standing trusted relationships with large cap clients and ever quartz relationships, broad product capabilities, each sector expertise and Global reach. We are

We are enhancing the value. We can deliver to clients around the world.

As you have seen, we've been accelerating our growth. In Omega in recent years, including key additions in France, Spain. And most recently Italy this acquisition will further. Strengthen our presence in the UK and the broader region.

It will also strengthen our global efforts. As we continue to serve large multinational companies on their most important transactions, we include additional ROI from Evercore. Core will have more than 400 bankers across 9 countries in the region. We believe this transaction will unlock synergies, creating value for our shareholders and enhancing our ability to serve clients.

Long-term client, integrity and Independence.

We are looking forward to welcoming the ROI Warsaw team evercore into what we will achieve together on behalf of our clients.

Now, let me discuss our business and second quarter results.

Despite the rapidly changing market conditions, experienced throughout the second quarter ever core delivered strong results.

Operator: All sites on hold. We do appreciate your patience and ask that you please continue to stand by.

The strength and resilience we have.

execution of our growth strategy and the versatility of our business model which enable us to,

Shareholders in various types of environments.

Since the market disruption in late March, and early April, business conditions have improved with an increase in CEO confidence levels.

Receptive, debt and Equity issuance markets and healthy engagement with both corporates and sponsors.

Year to date through the end of the second quarter.

Industry-wide Global m&a volumes were 30% higher than a year ago with clients increasing steadily each month.

Our backlogs continued to build throughout the quarter and our client dialogue activity remains robust.

well, uncertainties remain, we contain

Optimistic about the path forward.

as we move through the year, we expect

greater Clarity and stability in the markets which support continued Improvement in the Investment Bank environments.

Shifting to Talent, we continue to make progress on our recruiting goals.

Since our last earnings, call 4 senior managing directors have joined our investment banking practice. In private Capital advisory Healthcare Industrials, and in Italy.

And 3. Investment Banking, smds have committed to join our franchise to focus on Logistics and transportation and 1 focused on ratings advisory.

So far for the year, 9 Investment Banking smds, and 1 senior advisor have started at the firm or will be joining later in the year and we continue to have a solid pipeline of external candidates.

Tracking and developing the highest quality talent continues to be a core priority for us.

Speaker 2: Mm-hmm.

Operator: All lines on hold. We do appreciate your patience and ask that you please continue to stand by.

The senior level Talent, we've hired and promoted over the past several years, is contributing meaningfully to our results.

Now, let me briefly discuss the quarter.

As noted earlier, this year marks a period of growth across our diversified mix of businesses, in both the second quarter and the first half.

In fact, in the second quarter and over the last 12 months, approximately, 50% of our revenues were from non- m&a, sources reflecting the strength of our Diversified platform.

In m&a, we advise on a number of notable and complex transactions in the quarter including cost Communications merger with Charter Communications.

Valuing Cox Communications of 34.5 billion.

Warner Brothers Discovery on its separation, in two leading actions, is leveraging the expertise of multiple teams across the firm and the sale of Foot Locker to Dick's Sporting Goods for $2.5 billion.

We can continue to experience strong momentum in July, advising Beck and Dickinson on the combination of its biosciences and diagnostic solutions business with Waters in a $17.5 billion reverse mortgage trust transaction, and advising Huntington Bank shares on its acquisition of Veritex Holdings for $1.9 billion.

Year to date. We have advised on 4 of the 10 largest, global transactions, wide range of high-quality complex transactions, spending mid-cap, large cap and mega cap field sizes.

Our European business saw growth in the quarter with an increase in activity across most sectors and products.

And momentum for deal activity, in the region continues to build.

Pity among Financial sponsors continues to strengthen.

Sponsor dialogue.

Speaker 2: Mm-hmm.

Operator: You all, lines on hold. We do appreciate your patience and ask that you please continue to stand by. Your program will begin momentarily. If you should require operator assistance, please press star zero. Please stand by. Your program is about to begin. If you need audio assistance during today's program, please press star zero. Good morning and welcome to Evercore Inc.'s second quarter 2025 earnings conference call. Today's call is scheduled to last about one hour, including remarks by Evercore Inc. management and the question and answer session. In order to ask a question, please press the star key followed by the number one on your touch-tone phone at any time. I will now turn the call over to Katy Haber, Head of Investor Relations at Evercore Inc. Please go ahead.

our Strategic Defense and shareholder Advisory Group remained, highly active, as the number of

reach new records in the first half of the year.

The liability management and restructuring group continues to see strong activity levels.

Private Equity legislation to remain a key driver.

And we expect the business to stay active in the near term as sponsors and corporate navigate upcoming maturity walls elevated, interest rates and broader Market uncertainty.

Our industry-leading, private Capital advisory business delivered. A record first, half and second quarter driven by unprecedented volume in gp-led. Continuation funds, LP, secondary and securitizations.

We advised on many of the most significant transactions across these products, including several high-profile secondary market funds.

Trend in our private funds group remain in line with the first quarter.

As fundraising conditions continue to be challenging. However, picked up inactivity towards the end of the year. Consistent with seasonal pattern.

After a Slowdown in activity, in April, the equity Capital markets have seen signs of recovery with dollar issuance volume in the second quarter, reaching the highest level, since the first quarter of 2021.

So, the number of transactions is still down year-over-year.

Katy Haber: Thank you, operator. Good morning, and thank you for joining us today for Evercore's second quarter 2025 financial results conference call. I am Katy Haber, Evercore's Head of Investor Relations. Joining me on the call today is John Weinberg, our Chairman and CEO, and Tim LaLonde, our CFO. After our prepared remarks, we will open up the line for questions. Earlier today, we issued a press release announcing Evercore's second quarter 2025 financial results. Our discussion of our results today is complimentary to the press release, which is available on our website at evercore.com. This conference call is being webcast live in the for investors section of our website, and an archive of it will be available for 30 days, beginning approximately one hour after the conclusion of this call. During the course of this conference call, we may make a number of forward-looking statements.

In business, experienced an uptick in activity, in May and June. And we expect these positive Trends to continue. As we enter the second half,

Our Equity franchise had its strongest second quarter ever, driven by increased market volatility, higher trading volumes, and strong client engagement.

Lastly wealth management, reached a record quarter. End AUM of approximately 14.5 billion driven by market appreciation and net inflows.

Before I turn it over to Tim, I’d like to make one final comment.

We remain committed.

To execute on our growth strategy and create value for both our clients and our shareholders, this is evidenced in our year-to-date financial results and in our acquisition of Roi Warshaw.

Katy Haber: Any forward-looking statements that we make are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. These factors include, but are not limited to, those that discussed in Evercore's filings with the SEC, including our annual report on Form 10-K, quarterly reports on Forms 10-Q, and current reports on Form 8-K. I want to remind you that the company assumes no duty to update any forward-looking statements. In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance. For detailed disclosures on these measures and the GAAP reconciliation, you should refer to the financial data contained within our press release, which is posted on our website.

With that, let me turn it over to Tim.

Thank you, John.

We are excited to have the Robey warshaw team joining and believe this will provide significant benefits to evercore.

Over the last three years, Robey Warshaw has produced average annual revenues of over £60 million or more than $80 million.

As you can see in the press release, the consideration we are paying is 146 million pounds for approximately 196 million payable in 2 tons. With the first payment, in evercore stock at closing and anniversary in stock or cash to be mutually. Agreed by evercore and Roi warshaw

Katy Haber: We continue to believe that it is important to evaluate Evercore's performance on an annual basis. As we have noted previously, our results for any particular quarter are influenced by the timing of transaction closing. I will now turn the call over to John.

There's also potential additional consideration.

Which is based on defined performance criteria over a multi-year period of time.

The transaction is expected to close around the beginning of the fourth quarter of this year.

John Weinberg: Thank you, Katy. Before we review our second quarter financial results, I would like to spend a few minutes discussing our announcement from earlier this morning. We have entered into an agreement to acquire Robey Warshaw, a leading U.K.-based advisory firm with an extraordinary client franchise and relationships with some of the most prominent multinational companies in Europe. For 30 years, Evercore has been committed to delivering for clients by expanding our capabilities and talent each and every year, building a firm grounded in excellence and long-term high-quality growth. This acquisition continues that approach, enhancing our ability to create value for all of our stakeholders. Robey Warshaw's partners have advised on some of the largest and most complex transactions globally, including seven of the 10 largest in U.K. history.

We expect it to be accretive to ever course adjusted and gaap EPS in our first full year together and thereafter.

We will continue to maintain strong liquidity and conservative debt levels and are committed to building value for our shareholders.

Now, I will discuss our financial results for the second quarter.

Evercore second quarter, reflected improving market conditions, and strong results across our Diversified mix of businesses.

The second quarter of 2025 the income and EPS on a gap basis. Were 834 million 150 million and $2.36 per share respectively.

John Weinberg: This year, Robey Warshaw advised Banco Santander on a $3.9 billion acquisition of TSB Direct Line Insurance Group on a $4.5 billion acquisition by Aviva, and Johnson Controls' sale of its ADT division to Honeywell International. In the U.K., Robey Warshaw has been a trusted advisor to over a quarter of the FTSE 100 and has significant reach in the continent and globally. Robey Warshaw's business is highly complimentary to Evercore's broad and growing M&A platform. This acquisition is a significant step in our global expansion strategy. By combining Robey Warshaw's longstanding trusted relationships with large-cap clients and Evercore's relationships, broad product capabilities, deep sector expertise, and global reach, we are enhancing the value we can deliver to clients around the world. As you have seen, we have been accelerating our growth in EMEA in recent years, including key additions in France, Spain, and most recently, Italy.

My comments from here, will focus on non-gaap metrics which we believe are useful when evaluating our results.

Our standard Gap reporting and a Reconciliation of gaap to adjusted results can be found in our press release which is on our website.

Our second quarter adjusted net revenues of 839 million increased 21% versus the second quarter.

Which was a record for the second quarter, and we also achieved record revenues for the first six months of the year.

Here.

Second quarter adjusted operating income of $157 million increased 37% versus the second quarter of 2024.

Adjusted earnings per share of $2.42 increased 34% versus the second quarter of last year.

Our adjusted operating margin was 18.7% for the second quarter.

Up from 16.4% in the prior year period, an improvement of 230 basis points.

Turning to the businesses.

John Weinberg: This acquisition will further strengthen our presence in the U.K. and the broader region. It will also strengthen our global efforts as we continue to serve large multinational companies on their most important transactions. In addition to Robey Warshaw, Evercore will have more than 400 bankers across nine countries in the region. We believe this transaction will unlock synergies, creating value for our shareholders and enhancing our ability to serve clients. Importantly, their values are an excellent match with ours of commitment to partnership and collaboration and to long-term integrity and independence. We are looking forward to welcoming the Robey Warshaw team to Evercore and to what we will achieve together on behalf of our clients. Now, let me discuss our business and second quarter results.

Second quarter, adjusted advisory fees of 698 million increased 23% year-over-year, which is a record for the second quarter.

First, half results. Also represented a record for the advisory business.

Our second quarter underwriting revenues were 32 million of 4% from a year ago.

Commissions and related revenue of 58 million in the quarter, increased 10% year-over-year.

Increase levels of volatility.

Second quarter adjusted asset management and administration fees of 21 million rows, 3%, year-over-year driven by market appreciation and net inflows.

John Weinberg: Despite the rapidly changing market conditions experienced throughout the second quarter, Evercore delivered strong results, generating adjusted net revenues of $839 million, up nearly 21% year over year. In the first half of 2025, Evercore generated over $1.5 billion in adjusted net revenue, a 20% increase compared to the same period a year ago. These results represent record revenues for the past. The strength and resilience we execution of our growth strategy and the versatility of our business model, which enable us to serve shareholders in various types of environments. Since the market disruption in late March and in early April, business conditions have improved with increasing CEO confidence levels, receptive debt and equity issuance markets, and healthy engagement with both corporates and sponsors.

Second quarter adjusted other Revenue, net was approximately 29 million which compares to 22 million a year ago.

Slightly more than half of that is related to gains in our DCP hedge portfolio, which is correlated to the performance of the broader Equity market and the balance of the other revenue is primarily related to interest income.

Turning to expenses.

The adjusted compensation ratio for the second quarter is 65.4% down 60 basis points from the prior year period and down 30 basis points from last quarter.

Our compensation ratio for the quarter reflects a gradual improvement in the investment banking environment and an improvement in our revenue.

As you've seen from the recent announcements, we are...

acute on our strategic growth plan, which may create a timeline for making meaningful improvement in our comp ratio in the near term.

John Weinberg: Year to date, through the end of the second quarter, industry-wide global M&A volumes were 30% higher than a year ago, with volumes increasing steadily each month. Our backlogs continue to build throughout the quarter, and our client dialogue activity remains robust. While uncertainties remain, we continue to be optimistic about the path forward. As we move through the year, we expect greater clarity and stability in the markets, which should support continued improvement in the investment banking environment. Shifting to talent, we continue to make progress on our recruiting goal. Since our last earnings call, four Senior Managing Directors have joined our investment banking practice in private capital advisory, healthcare, industrial, and in Italy. Three investment banking SMBs have committed to join our franchise, two focused on logistics and transportation, and one focused on ratings advisory.

Adjusted non-compensation, expenses in the quarter, were 133 million up 9% from a year ago.

The increase year-over-year is primarily driven by two things.

The first is technology and Information Services expense, which Rose due to higher, renewal costs for Market data, and Licensing fees.

And those costs tend to rise faster than the rate of inflation.

And the other is the implementation and development of new software applications which are intended to create efficiencies and facilitate our client coverage and service efforts.

The second is occupancy and Equipment expense, which increased due to higher rents and costs associated. With the addition of new floors in our New York headquarters and new offices related to our expansions in Chicago Paris Dubai and London.

John Weinberg: So far for the year, nine investment banking SMBs and one Senior Advisor have started the firm or will be joining later in the year, and we continue to have a solid pipeline of external candidates. Attracting and developing the highest quality talent continues to be a core priority for us. The senior-level talent we've hired and promoted over the past several years is contributing meaningfully to our results. Now, let me briefly discuss the quarter. As noted earlier, a year of growth across our diversified mix of businesses in both the second quarter and the first half. In fact, in the second quarter and over the last 12 months, approximately 50% of our revenues were from non-M&A sources, reflecting the strength of our diversified platform.

our adjusted non-compete ratio for the quarter is at 15170 basis, points below the ratio for the prior year period and 180 basis points below last quarter's ratio

Benefit.

Sitting from our Revenue increase.

Over a significant period of time, there’s a correlation between headcount and non-comp expenses, with some additional increases related to inflation.

If we look at our non-comp expense on a per-head basis year-over-year, our second quarter adjusted non-comp expense would be up 2.4% per employee.

As I mentioned in the past, we are maintaining a disciplined focus on managing our non-compensation expenses while investing in areas that are necessary to support our growth.

John Weinberg: In M&A, we advised on a number of notable and complex transactions in the quarter, including Comcast Communications' merger with Charter Communications, valuing Comcast Communications at $34.5 billion, Warner Bros. Discovery on its separation into two leading actions that leverage the expertise of multiple teams across the firm, and the sale of Foot Locker to Dick's Sporting Goods for $2.5 billion. We have continued to experience strong momentum in July, advising Becton Dickinson on the combination of its biosciences and diagnostic solutions business with Waters in a $17.5 billion reverse mortgage trust transaction, and advising Huntington Bank shares on its acquisition of Veritech Holdings for $1.9 billion. Year to date, we have advised on four of the 10 largest global transactions, a range of high-quality, complex transactions in mid-cap, large cap, and mega cap deal sizes.

Our adjusted tax rate for the quarter was 30%, compared to 26.9% in the second quarter of last year.

The year-over-year increase in the tax rate is primarily related to an increase in non-deductible expenses and an increase in taxes related to State and local abortion.

Turning to our balance sheet.

As of June 30th our cash and investment Securities totaled over 1.7 billion dollars and we continue to be cash flow positive.

in the first 6 months of the year, we returned 532 million of capital to shareholders through the repurchase of shares and the payments of dividends

During the second quarter, we repurchased just under 200,000 shares at an average price of 2365 per share.

John Weinberg: Our European business saw growth in the quarter with an increase in activity across most sectors and products, and momentum for deal activity in the region continues to build. Activity among financial sponsors continues to strengthen sponsor dialogue. Our strategic defense and shareholder advisory group remains highly active as the number reached new records in the first half of the year. The liability management and restructurings group continues to see strong activity levels. Private equity-led situations remain a key driver, and we expect the business to stay active in the near term as sponsors and corporates navigate upcoming maturity walls, elevated interest rates, and broader market uncertainty. Our industry-leading private capital advisory business delivered a record first half and second quarter, driven by unprecedented volumes in GP-led continuation funds, LP secondaries, and securitizations.

Year to date. We've repurchased, approximately 1.7 million shares at an average price of 258 and 50 cents per share.

We fully offset the dilution associated.

2024 bonus cycle and returned more capital to.

Than in any other conseil.

2 quarter period in our history.

Our second quarter adjusted diluted share count was 43.5.

Million million shares relatively in line with the prior year and down approximately 850,000 shares from the first quarter.

To undrafted rsus as our weighted. Average share price declined. In the second quarter.

Given the increase in our share price, third quarter to date, we would expect to see our share.

Account modestly increased in the third quarter due to the same accounting impact on RSUs from our share.

Share price that caused our share count to decrease this quarter.

John Weinberg: We advised on many of the most significant transactions across these products, including several high-profile secondary margin funds. Trends in our private funds group remain in line with the first quarter as fundraising conditions continue to be challenging. However, a pickup in activity towards the end of the year is consistent with seasonal patterns. After a slowdown in activity in April, the equity capital markets have seen signs of recovery, with dollar issuance volumes in Q2 reaching the highest level since Q1 2021. Though the number of transactions is still down year over year, our underwriting business experienced an uptick in activity in May and June, and we expect these positive trends to continue as we enter the second half. Our equities franchise had a stronger Q2 ever, driven by market volatility, increased trading volumes, and strong client engagement.

Additionally in July, we issued 2. Conchas of senior notes in the form of a private placement for a total of 250 million.

We issued 125 million of 5.17%. Series, K notes, due in 2030 and 125 million of 5.47% series L notes, due in 2032.

The use of proceeds is to repay 2, tranches of notes that are maturing 1 in August of 2025, and 1 in March of 2026, totaling about 86 million. And the remainder is for General Corporate purposes.

We continue to maintain a strong cash position, taking into consideration our regulatory requirements and the current economic and business environment.

Cash needs for the implementation of our strategic initiatives, including hiring plans.

And preserving a solid Financial footing.

John Weinberg: Lastly, wealth management reached a record quarter-end AUM of approximately $14.5 billion, driven by market appreciation and net influence. Before I turn it over to Tim, I would like to make one final comment. We remain committed to executing on our growth strategy and on creating value for both our clients and our shareholders. This is evident in our year-to-date financial results and in our acquisition of Robey Warshaw. With that, let me turn it over to Tim.

As we enter the second half of the year, we remain confident in our ability to deliver solid results, as we have continued to demonstrate that our diversified business model performs well in all types of environments.

With that, we will now open the line for questions.

Tim Lalonde: Thank you, John. We are excited to have the Robey Warshaw team joining and believe this will provide significant benefits to Evercore Inc. Over the last three years, Robey Warshaw has produced average annual revenues of over 60 million pounds, or more than $80 million. As you can see in the press release, the consideration we are paying is 146 million pounds, or approximately $196 million payable in two tranches, with the first payment in Evercore Inc. stock at closing anniversary in stock or cash to be mutually agreed by Evercore Inc. and Robey Warshaw. There is also potential additional consideration, which is based on defined performance criteria over a multi-year period of time. The transaction is expected to close around the beginning of the fourth quarter of this year.

Thank you. We will now conduct the question and answer portion of the conference. Please limit yourself to one question only. You are welcome to rejoin the queue for additional questions, time permitting. Again, in order to ask a question, please press the star key followed by 1 on your touchtone phone. Our first question is from James Yarrow with Goldman Sachs. Please go ahead.

Good morning. And thank you for taking the question regarding the Robey Warshaw transaction. Would you be able to provide any additional color on Robey Warshaw? Specifically, what, aside from M&A advisory,

Thanks James.

They are primarily.

A top level advisor, spend a great and with boards.

they are very strategic and they have based their

Business on giving strategic advice. They are knowledgeable about a full line of products, but they really haven't been able to um, translate their knowledge. And really the advisory

Tim Lalonde: We expect it to be accretive to Evercore Inc.'s adjusted and GAAP EPS in our first full year together and thereafter. We will continue to maintain strong liquidity and conservative debt levels and are committed to building value for our shareholders. Now, I will discuss our financial results for the second quarter. Evercore Inc.'s second quarter reflected improving market conditions and strong results across our diversified mix of businesses. In the second quarter of 2025, the income and EPS on a GAAP basis were $834 million, $150 million, and $2.36 per share, respectively. My comments from here will focus on non-GAAP metrics, which we believe are useful when evaluating our results. Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website.

To the position that they have into revenues and 1 of the great. Um, synergies of this transaction we believe is that we have this very full product. Set a very extensive industry sector, uh uh, group and Analysis, and and analyze. And and what we are going to be able to do is really marry their extraordinary relationships with our capabilities and we think that's going to be a real source of of of of Revenue and growth. So I think that that they it's it's really what they really have which is absolutely extraordinary is that some amazing client franchise.

Trusted relationships with so many very, and I think that marrying that with our capabilities will will actually be quite powerful.

That's great. Thank you for

for clarifying that, um, for my side question just, uh,

Tim Lalonde: Our second quarter adjusted net revenues of $839 million increased 21% versus the second quarter, which was a record for the second quarter. We also achieved record revenues for the first six months of the year. Second quarter adjusted operating income of $157 million increased 37% versus the second quarter of 2024. Adjusted earnings per share of $2.42 increased 34% versus the second quarter of last year. Our adjusted operating margin was 18.7% for the second quarter, up from 16.4% in the prior year period, an improvement of 230 basis points. Turning to the businesses, second quarter adjusted advisory fees of $698 million increased 23% year over year, which is a record for the second quarter. First half results also represented a record for the advisory business. Our second quarter underwriting revenues were $32 million, up 4% from a year ago.

Around, um, M&A. Uh, the backdrop, you sound constructive. But perhaps you could talk about whether, uh, in the boardroom, you're still seeing, uh, impacts from, uh, tariffs, uh, weighing on, uh, potential transactions.

Well there's no question that there is not the full on merger, you know, um, activity that you have seen that, you might have seen at the beginning of the year or that we anticipated. But having said that, I think that boards and management teams are getting more comfortable.

And the momentum could continue over the balance of this year. So the answer to your question really is that we see that people are becoming more comfortable; there's more certainty, there is more clarity. Having said that, we don't think we have a full-on absolute, uh, roaring recovery at this moment.

Thanks a lot. I'm sorry. I didn't. I am sorry for asking two questions. Thanks.

That's okay, that's okay. Thanks.

Tim Lalonde: Commissions and related revenue of $58 million in the quarter increased 10% year over year. The strength in the quarter was primarily driven by heightened trading volumes in April, resulting from increased levels of volatility. Second quarter adjusted asset management and administration fees of $21 million rose 3% year over year, driven by market appreciation and net inflows. Second quarter adjusted other revenue net was approximately $29 million, which compares to $22 million a year ago. Slightly more than half of that is related to gains in our DCCP hedge portfolio, which is correlated to the performance of the broader equity market. The balance of the other revenue is primarily related to interest income. Turning to expenses, the adjusted compensation ratio for the second quarter is 65.4%, down 60 bps from the prior year period and down 30 bps from last quarter.

Our next question will come from Ryan. Can you with Morgan Stanley? Please go ahead.

Hi, good morning. On the ROI, Warshaw deal, there's a very clear overview on how it aligns with your global expansion strategy and your culture. My strategy for gaining global.

Global markets. Start going forward. Do you see yourself doing more acquisitions in the

Future to fuel growth and is there any change in how you think about the mix of organic growth hiring m&a and supporting growth? Thanks.

Our our most important means of growth are is going to continue to be hiring high quality Talent 1 by 1. It's really the way we think, it's the best way to do it and we're going to continue that. So if you think about how we're going to grow, we're going to continue. Its the way we have, which is on the basis of finding high quality people and recruiting them.

Tim Lalonde: Our compensation ratio for the quarter reflects a gradual improvement in the investment banking environment and an improvement in our revenue. As you have seen from the recent announcements, we are on our strategic growth plan, which may create a timeline for making meaningful improvement in our comp ratio in the near term. Adjusted non-compensation expenses in the quarter were $133 million, up 9% from a year ago. The increase year over year is primarily driven by two things. The first is technology and information services expense, which rose due to higher renewal costs for market data and licensing fees, and those costs tend to rise faster than the rate of inflation. The other is the implementation and development of new software applications, which are intended to create efficiencies and facilitate our product coverage and service efforts.

The reason we did the Workshop is that we found an extraordinarily high-quality organization, which really had such a good match with us, culturally, and had some really interesting synergies from a business perspective.

We we would not be doing an acquisition if it hadn't been for Roi warshaw. Having said that, um, we're not we not take anything off the table, if something comes up, we'll evaluate it. But I think if we're going to aggressively grow 1 by 1, we're going to continue to drive our Pipeline. And I say that, you know this year is you probably know we have we really have 10 senior Bank sin, 10 senior people in and we have a really healthy Pipeline and we're going to continue to grow. That grow that Pipeline. And, and, uh, execute on that pipeline. I hope that helps

thank you, that helps

Our next question comes from Devin Ryan with citizens, please go ahead.

Tim Lalonde: The second is occupancy and equipment expense, which increased due to higher rents and costs associated with the addition of new floors in our New York headquarters and new offices related to our expansions in Chicago, Paris, Dubai, and London. Our adjusted non-comp ratio for the quarter is at 170 bps below the ratio for the prior year period and 180 bps below last quarter's ratio, benefiting from our revenue increase. Over a significant period of time, there is a correlation between headcount and non-comp expenses with some additional increase related to inflation. If we look at our non-comp expense on a per head basis, year over year, our second quarter adjusted non-comp expense would be up 2.4% per employee. As I've mentioned in the past, we are maintaining a disciplined focus on managing our non-compensation expenses while investing in areas that are necessary to support our growth.

Good morning, and congrats on the deal. Um, the question just on kind of the, the diversification of the business. So obviously you highlighted again the second quarter and then actually the last 12 months approximately, 50% of revenues were from non m&a sources. So obviously terrific job, just kind of diversifying the business and and seeing growth in some of those

Just curious if we should think about this as kind of a new baseline or or kind of where you want to be from a mixed perspective or is is that simply you know as m&a kind of react here, these other businesses maybe don't keep up until the mix goes back down to to 40% or something less than that. Thanks.

Hard to know exactly what the percentages are going to fall out too. But I would say that mergers is building and our merger that we are very leveraged on our merger business. And as our merger business builds, we believe that it will over time build and, and, and really continue to be the, the lion, not the Lion Share, but a significant piece of of, really, what we're able to do with clients.

Tim Lalonde: Our adjusted tax rate for the quarter was 30% compared to 26.9% in the second quarter of last year. The year-over-year increase in the tax rate is primarily related to an increase in non-deductible expenses and an increase in taxes related to state and local apportionment. Turning to our balance sheet, as of June 30th, our cash and investment securities totaled over $1.7 billion, and we continue to be cash flow positive. In the first six months of the year, we returned $532 million of capital to shareholders through the repurchase of shares and the payment of dividends. During the second quarter, we repurchased just under 200,000 shares at an average price of $236.05 per share. Year to date, we have repurchased approximately 1.7 million shares at an average price of $258.50 per share.

PCA restructuring activism defense. Those are very, very good businesses. I don't see them really slowing right now. I think that they all have, you know, really healthy um activity levels and we really don't see that they're going to be weakness there, but we do think the merger business will strengthen and so then by definition, the merger business will probably pick up and do a higher percentage, but we intend to continue to invest in our non- merger businesses. So hopefully over time, you'll see something that does approximate 40 or 50%. I don't know where it'll fall in the middle, you know of that. But but clearly we think that, uh, that all of those businesses will grow in the merger business will probably grow faster. As

The market really does recover.

That's great, caller. Thank you.

Our next question comes from Alex.

Bond with KBW, please go ahead.

Tim Lalonde: We fully offset the dilution associated with the 2024 bonus cycle and returned more capital than in any other consecutive two-quarter period in our history. Our second quarter adjusted diluted share count was 43.5 million shares, relatively in line with the prior year, and down approximately 850,000 shares from the first quarter. The decline in the share count reflects a full first quarter and the accounting impact with respect to unvested RSUs as our weighted average share price declined in the second quarter. Given the increase in our share price third quarter to date, we would expect to see our share count modestly increase in the third quarter due to the same accounting impact on RSUs from our share price that caused our share count to decrease this quarter.

Um, so just wondering if you can go into a bit more detail on the outlook for industry volumes in this area, um, in the back half of the year. Um, and then also maybe how you think about the, you know, how the competitive Dynamics in in the secondary space. Um, on the advisory side May evolve um as broader momentum in this area continues. Thanks.

Sure. Competitively, there's no question that there are many people who are talking about really ramping up their, their activity level here. And so, I do believe the competition will will heat up even more. Uh, we are very well positioned. We have an outstanding team, we have a lot of experience. We have a real estate track record of success. So we we think we're going to compete very well in that.

in terms of the second half, um, it was very good first half as we said,

Tim Lalonde: Additionally, in July, we issued two tranches of senior notes in the form of a private placement for a total of $250 million. We issued $125 million of 5.17% Series K notes due in 2030 and $125 million of 5.47% Series L notes due in 2032. The use of proceeds is to repay two tranches of notes that are maturing, one in August of 2025 and one in March of 2026, totaling about $86 million, and the remainder is for general corporate purposes. We continue to maintain a strong cash position and take into consideration our regulatory requirements, the current economic and business environment, cash needs for the implementation of our strategic initiatives, including hiring plans, and preserving a solid financial footing.

We can we continue to see a very strong activity level um really all fronts, both on the GP level, this continuity, and the lp level, where we've been involved in some of the most uh high-profile a secondary sales. Uh, we think those that we're going to continue and I think that um, from our standpoint I don't see a Slowdown. I do believe that if we may not, we may not ramp as fast in the in the second half as we did, but we feel very comfortable with the levels. We're at right now.

Understood, that's helpful. Thank you.

Thank you. And as a reminder, ladies and gentlemen, if you'd like to ask a question, please press star 1 on your telephone, keypads we'll go next to Brandon with O'Brien, with wolf research. Please go ahead.

Good morning and thanks for taking my questions uh, just a 2-party here on expenses. You know, I appreciate the potential Topline synergies, you mentioned earlier but I was hoping you can help us think through the call side of the equation and your ability to drive synergies by, you know, consolidating all this space and Tech infrastructure and the like. And then, as we think about margins for the combined entity, you know, Tim I heard your comments on the comp ratio Improvement, um, but just want to get a sense of your confidence and your ability to get your comp ratio back down to the sub, 60% level once the Cadence of hiring goes back to a more normal level.

Tim Lalonde: As we enter the second half of the year, we remain confident in our ability to deliver solid results as we have continued to demonstrate that our diversified business model performs well in all types of environments. With that, we will now open the line for questions.

Speaker 6: Thank you. We will now conduct the question and answer portion of the conference. Please limit to one question only. You are welcome to rejoin the queue for additional questions, time permitting. Again, in order to ask a question, please press the star key followed by one on your touch-tone phone. Our first question is from James Yaro with Goldman Sachs. Please go ahead.

Yeah, sure. Thank, thanks for the question, Brandon. Uh, look, we, we, uh, as I said on previous calls, uh, co uh, both compensation and non-compensation. Expenses are a significant focus of the farm on the compensation side. Um, and and I think I, I mentioned this in my prepared remarks. Uh, we're very focused on, uh, achieving optimal value for the shareholders, by balancing our investing, uh, in in, uh, in people, uh, which is how we grow our firm, uh, along with, with managing our expenses. Um, and

James Yaro: Good morning and thanks for taking the question. With the Robey Warshaw transaction, would you be able to provide any additional color for Robey Warshaw? Specifically, what aside from M&A advisory?

You mentioned, you know we did make some progress on the comp ratio of this quarter. Uh we made uh have made you know what I would say quite meaningful progress from where we were 2 years ago.

John Weinberg: Thanks, James. They are primarily a top-level advisor and a great suite and report. They are very strategic and they have based their business on giving strategic advice. They are knowledgeable about a full line of products, but they really haven't been able to translate their knowledge and the advisory position that they have into revenues. One of the great synergies of this transaction, we believe, is that we have this very full product set, a very extensive industry sector group and analyze. What we are going to be able to do is really marry their extraordinary relationships with our capabilities, and we think that's going to be a real source of revenue and growth. I think that what they really have, which is absolutely extraordinary, is an amazing client franchise, trusted relationships with so many very. I think that marrying that with our capabilities will actually be quite powerful.

Uh, you know, and I'm not satisfied with where we are. I think, uh, I think I'd like, I'd like to take it lower. I think, uh, you know, the cooperation you saw for this quarter is reflective of our best to judgement in relation to an AC cruel, that takes into consideration, uh, what happened during the quarter and also, our outlook for the remainder of the year,

Uh, so I I, you know, as I sit here today, not seeing that, you know, in the next, the near term, which I would Define as the next quarter or 2, uh, you know, uh, quite significant changes because our, our acral reflects what we currently see today. Um, but we certainly are going to strive to make improvements, uh, looking looking beyond that. So that's that's on the compensation side on the non-compensation side. Um, you know, as a percentage of revenues, uh, you, you'll note that we, um, make quite significant progress in this quarter. Uh, is is the first point? Second is what I would say there is, you know, we do have some Investments, we're making we uh, you know, uh, up about 11 million dollars a year over year and that's really attributable to

Primary areas and 1 is the occupancy.

which is up in that, simply a reflection of our growth and our

James Yaro: That's great. Thank you for clarifying that. My second question is just around M&A, the backdrop. You sound constructive, but perhaps you could talk about whether in the boardroom you're still seeing impacts from tariffs and weighing on potential transactions.

John Weinberg: There is no question that there is not the full-on merger activity that you might have seen at the beginning of the year or that we anticipated. But having said that, I think that board and management teams are getting more comfortable and they believe they have more certainty. So there is absolutely some building of activity in our backlogs that build throughout our firm. I think that we really believe that the activity level could continue to grow and the momentum could continue over the balance of this year. So the answer to your question really is that we see that people are becoming more comfortable. There is more certainty. There is more clarity. Having said that, we do not think we have a full-on absolute roaring recovery at this moment.

Technology and and we all know that, you know, we're at a I would say, historical inflection point in technology and we're investing to make sure uh we take advantage of the improvements we're seeing and then hope hoping to realize productivity gains from that. Now 1 of the way,

On a per-head basis because as I've said historically, uh, the um, uh, you know, there's a correlation between headcount growth and not compacting a little bit for inflation. Uh, and if you look back to the preco year,

Uh, on a forehead basis. Our non comps would be up about 13%. That's over 6 years.

Uh, and so that's that's just a little over 2%, uh, per year, uh, which I, I would attribute to inflationary pressures. And so, that's, that's kind of how we think.

We think we're headed.

That's a great color. Thank you for taking my questions.

Thank you and we'll go next again to James jar, with Goldman Sachs. Please go ahead.

James Yaro: Thanks a lot. Sorry for asking two questions. Thanks.

John Weinberg: That's okay. That's okay, James.

Speaker 6: Our next question will come from Ryan Kenny with Morgan Stanley. Please go ahead.

James Yaro: Hi, good morning. On the Robey Warshaw deal, a very clear overview on how it aligns with your global expansion strategy and your culture, like strategy for gaining global market share going forward. Do you see yourself doing more acquisitions in the future to fuel growth? Is there any change in how you think about the mix of organic growth, hiring, M&A, and supporting growth? Thanks.

Follow up. I just wanted to ask a little bit about the, uh, the Robey warshaw of financing if there is any, um, you know, would you, uh, consider issuing stock for, uh, either of the, the first 2 Tes? Could you talk a little bit about the consideration between for the second tro?

Dash and then perhaps you could talk a little bit about the performance incentives to the extent. You can associate with, you know, potentially uh, you know, increasing the the the uh, consider

Consideration.

Sure, sure James happy to um, now during my prepared remarks, uh, 1 thing, I just want to make sure didn't go unnoticed is we did.

John Weinberg: Our most important means of growth is going to continue to be hiring high-quality talent one by one. It is really the way we think is the best way to do it, and we are going to continue that. If you think about how we are going to grow, we are going to continue it the way we have, which is on the basis of finding high-quality people and recruiting them. The reason we did Robey Warshaw is that we found an extraordinarily high-quality organization, which really had such a good match with us culturally and had some really interesting synergies from a business perspective. We would not be doing an acquisition if it had not been for Robey Warshaw. Having said that, we are not taking anything off the table. If something comes up, we will evaluate it.

Where we raised 250.

Million dollars in the form of 2 notes. Uh, want to find your note at 5.17% in the second is a 7-year. Note at 5.47%. And so just wanted to uh make sure we noted that on the ROI warshaw transaction. Uh, you saw that, our our uh, told what we call up front consideration. Uh, was in dollars about 196 million and uh, is payable in 2 trauma. Uh, and so, uh, think about it as about 49% in the, uh, want to get close to get about 51%, uh, at the time of the 1-year anniversary. The first tranche was payable in or will be payable in stock.

John Weinberg: I think we are going to aggressively grow one by one. We are going to continue to drive our pipeline. I say that this year, as you probably know, we really have 10 senior people in, and we have a really healthy pipeline, and we are going to continue to grow that pipeline and execute on that pipeline. I hope that helps.

Um, and we've been very disciplined about trying to manage our share count.

And, um, uh, and and so, you know, uh, no guarantees because we take a lot of factors into consideration, but we certainly are giving strong consideration to repurchasing. Um, you know,

James Yaro: Thank you, if that helps.

Speaker 6: Our next question comes from Devin Ryan with Citizens JMP. Please go ahead.

who shares that would be similar, uh, to the number issued in The Upfront payment on this. And so, in a, in a way you might think about it as net cash. We, we love the idea of issuing shares.

James Yaro: Good morning and congrats on the deal. The question just on kind of the diversification of the business. You highlighted again the second quarter and actually the last 12 months, approximately 50% of revenues were from non-M&A sources. Obviously, terrific job just kind of diversifying the business and seeing growth in some of those non-M&A businesses like private capital raising and restructurings and strategic shareholder advisory. It has also been a tougher M&A market. I am just curious if we should think about this as kind of a new baseline or kind of where you want to be from a mix perspective, or is that simply as M&A kind of reaccelerates here, these other businesses maybe do not keep up until the mix goes back down to 40% or something less than that. Thanks.

John Weinberg: Hard to know exactly what the percentages are going to fall out to, but I would say this: mergers and building. Our merger, we are very leveraged on our merger business. As our merger business builds, we believe it will, over time, build and really continue to be not the lion's share, but a significant piece of really what we are able to do with clients. PCA restructuring, activism defense, those are very, very good businesses. I do not see them really slowing right now. I think that they all have really healthy activity levels, and we really do not see that there is going to be weakness there. We do think the merger business will strengthen. Then, by definition, the merger business will probably pick up and do a higher percentage. But we intend to continue to invest in our non-merger businesses.

Um, and uh, and and you know, making sure our new colleagues are invested in the future as as we all are. Um, um, but I think from a shareholder standpoint you could think about it as maybe netting out, uh, as we proceed in time and and, uh, you know, are giving strong consideration to to repurchasing those shares and then if you look at the, um, uh, balance of payments due, uh, you should think about it as is it, it could be some combination of stocks and or cash, but to the extent of stock we again at that point would consider giving, you know, get strong consideration to repurchasing shares. So from, uh, a shareholder standpoint, you know, uh, over time, this should be thought of as a largely net cash.

Um uh a transaction that's that's the first point. Second is you asked about any additional consideration. So of course we noted in our press release, that there is you know, the potential for future consideration.

Received.

John Weinberg: Hopefully, over time, you will see something that does approximate 40% or 50%. I do not know where it will fall in the middle of that. Clearly, we think that all of those businesses will grow. The merger business will probably grow faster as the market really does recover.

And, uh, if that happens, um, and they earn additional potential consideration, uh, that is a win-win because it also is, um, very, uh, value accretive, uh, for our shareholders, the way it's structured.

James Yaro: That's great color. Thank you.

Speaker 6: Our next question comes from Alex Bond with KBW. Please go ahead.

The only thing I would like to add is that there? There are 2, there are 2 actual aspects that that I think are important. In addition 1 is that the add-on value that they can

James Yaro: Hey, good morning, everyone. Thanks for taking the question. It looks like industry secondary volumes reached a new high in the first half of the year. You also mentioned that PCA revenues reached new highs in both Q2 and the first half. Just wondering if you can go into a bit more detail on the outlook for industry volumes in this area in the back half of the year, and then also maybe how you think about how the competitive dynamics in the secondary space on the advisory side may evolve as broader momentum in this area continues. Thanks.

Can be able to generate is really something that will bind them to the firm. And so the good news is we think we're going to get them for a good long time. And that's, I think from our standpoint very valuable. And the second is that obviously, by having something which is kind of somewhat of an earnout, IT aligns their interests and the firm's interests.

The.

John Weinberg: Sure. Competitively, there's no question that there are many people who are talking about really ramping up their activity level here. So I do believe the competition will heat up even more. We are very well positioned. We have an outstanding team. We have a lot of experience. We have a real track record of success. So we think we're going to compete very well in that. In terms of the second half, it was a very good first half, as we said. We continue to see a very strong activity level on really all fronts, both on the GP level with continuity and the LP level, where we've been involved in some of the most high-profile secondary sales. We think that we're going to continue. I think that from our standpoint, I don't see a slowdown.

The fit between them culturally and us, uh, is extraordinary. But this kind of an arrangement will continue to carry forward. The incentives that are very much aligned and I think that's an important point.

Extremely helpful. Thank you.

Thank you. And this concludes today's evercore second quarter 2025 earnings conference call. You may now disconnect

John Weinberg: I do believe that we may not ramp as fast in the second half as we did, but we feel very comfortable with the levels we're at right now.

James Yaro: Understood. That's helpful. Thank you.

Speaker 6: Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypads. We will go next to Brendan O'Brien with Wolfe Research. Please go ahead.

Brendan O'brien: Good morning and thanks for taking my questions. Just a two-part here on expenses. I appreciate the potential top-line synergies you mentioned earlier, but I was hoping you could help us think through the cost side of the equation and your ability to drive synergies by consolidating office space and tech infrastructure and the like. As we think about margins for the combined entity, Tim, I heard your comments on the comp ratio improvement, but just want to get a sense of your confidence and your ability to get your comp ratio back down to the sub-60% level once the cadence of hiring goes back to a more normal level.

Tim Lalonde: Yeah, sure. Thanks for the question, Brendan O'Brien. Look, we, as I've said on previous calls, both compensation and non-compensation expenses are a significant focus of the firm. On the compensation side, and I think I mentioned this in my prepared remarks, we are very focused on achieving optimal value for the shareholders by balancing our investing in people, which is how we grow our firm, along with managing our expenses. As you mentioned, we did make some progress on the comp ratio this quarter. We have made, what I would say is quite meaningful progress from where we were two years ago. I am not satisfied with where we are. I think I would like to take it lower.

Tim Lalonde: I think the comp ratio you saw for this quarter is reflective of our best judgment in relation to an accrual that takes into consideration what happened during the quarter and also our outlook for the remainder of the year. I, as I sit here today, am not seeing that in the next near term, which I would define as the next quarter or two, quite significant changes because our accrual reflects what we currently see today. But we certainly are going to strive to make improvements looking beyond that. So that is on the compensation side. On the non-compensation side, as a percentage of revenues, you will note that we made quite significant progress in this quarter, is the first point. Second is what I would say there is, we do have some investments we are making.

Tim Lalonde: We are up about $11 million year over year, and that is really attributable to two primary areas. One is the occupancy, which is up, and that is simply a reflection of our growth. Our office space in London, we have added office space in Paris and Dubai and Italy and in Chicago as well as consolidating some of our corporate people into one location in Manhattan. So that is what would explain that. I think that is just a natural part of the growth. Then the other is investment in technology. We all know that we are at a, I would not say historical inflection point in technology, and we are investing to make sure we take advantage of the improvements we are seeing and then hoping to realize productivity gains from that.

Tim Lalonde: Now, one of the ways on a per head basis, because as I have said historically, there is a correlation between headcount growth and non-comp factoring a little bit for inflation. If you look back to the pre-COVID year, on a per head basis, our non-comps would be up about 13%. That is over six years. So that is just a little over 2% per year, which I would attribute to inflationary pressures. So that is kind of how we think we are headed.

James Yaro: That's great color. Thank you for taking my questions.

Speaker 6: Thank you. We'll go next again to James Yaro with Goldman Sachs. Please go ahead.

James Yaro: Follow-up. I just wanted to ask a little bit about the Robey Warshaw financing, if there is any. Would you consider issuing stock for either of the first two tranches? Could you talk a little bit about the consideration for the second tranche? Then perhaps you could talk a little bit about the performance incentives to the extent you can associated with potentially increasing the consideration.

Tim Lalonde: Sure, sure, James. Happy to. During my prepared remark, one thing I just want to make sure didn't go unnoticed is we did where we raised $250 million in the form of two notes. One a five-year note at 5.17% and the second is a seven-year note at 5.47%. I just wanted to make sure we noted that. On the Robey Warshaw transaction, you saw that our total, what we call upfront consideration, was in dollars about $196 million. It is payable in two tranches, one at closing, one a year from now. Think about it as about 49% and the one at closing about 51% at the time of the one-year anniversary. The first tranche was payable in or will be payable in stock. We have been very disciplined about trying to manage our share count.

Tim Lalonde: No guarantees because we take a lot of factors into consideration, but we certainly are giving strong consideration to repurchasing shares that would be similar to the number issued in the upfront payment on this. In a way, you might think about it as net cash. We love the idea of issuing shares and making sure our new colleagues are invested in the future as we all are. But I think from a shareholder standpoint, you could think about it as maybe netting out as we proceed in time and are giving strong consideration to repurchasing those shares. If you look at the balance of payments due, you should think about it as it could be some combination of stock and/or cash. To the extent in stock, we again at that point would consider giving strong consideration to repurchasing shares.

Tim Lalonde: So from a shareholder standpoint, over time, this should be thought of as a largely net cash transaction. That is the first point. Second is you asked about any additional considerations. Of course, we noted in our press release that there is the potential for future consideration. I am very pleased with the structure of the transaction because that potential future consideration is only earned to the extent of two things. Number one, that the Robey Warshaw outperforms our base assumptions in the projections that we use. Number two, in the event that significant synergies and aligned goals are achieved. If that happens and they earn additional potential consideration, that is a win-win because it also is very value accretive for our shareholders the way it is structured.

John Weinberg: The only thing I would like to add is that there are two actual aspects that I think are important in addition. One is that the add-on value that they can be able to generate is really something that will bind them to the firm. So the good news is we think we are going to get them for a good long time, and that is, I think, from our standpoint, very valuable. The second is that obviously, by having something which is kind of somewhat of an earnout, it aligns their interests and the firm's interests. The fit between them culturally and us is extraordinary. But this kind of an arrangement will continue to carry forward the incentives that are very much aligned, and I think that is an important point.

James Yaro: Extremely helpful. Thank you.

Speaker 6: Thank you. This concludes today's Evercore Inc. second quarter 2025 earnings conference call. You may now disconnect.