Q2 2025 PJT Partners Inc Earnings Call

To everyone and welcome to today's P. J T partners second quarter 2025 earnings call. Today's conference is being recorded at this time I would like to turn the conference over to MS. Sharon Pearson head of Investor Relations Ms. Pearson. Please go ahead ma'am.

Thank you very much good morning, and welcome to the P. J T partners.

Second quarter and six months 2025 earnings conference call.

I am Sharon Pearson head of Investor Relations at P. J T partners and.

Joining me today is Paul Taubman, our chairman and Chief Executive Officer, and tell them they are chief financial Officer.

Before I turn the call over to Paul I want to point out that during the course of this conference call. We may make a number of forward looking statements.

These forward looking statements 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.

We believe that these factors are described in the risk factors section contained in P. J T partners 2024, and 2020 for Form 10-K, which is available on our web site at P. J T partners Dot com.

I want to remind you that the company assumes no duty to update any forward looking statements and the presentation. We make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance.

The detailed disclosures on these non-GAAP metrics and their GAAP reconciliations you should refer to the financial data contained within the press release. We issued this morning also available on our website and with that I'll turn the call over to Paul Good morning.

Thank you for joining us today.

This is a day that puts things like earnings calls in perspective, so sad and challenging.

We mourn the loss of Lloyd from yesterday's senseless acts of violence in Midtown Manhattan.

Just steps from our office.

We agree.

The wives pray for healing for those injured.

And offer comfort to the families friends and colleagues of those impacted.

And we express gratitude to our first responders.

Who worked tirelessly to keep us all safe.

And now we will.

Turning to our earnings.

This morning, we reported record setting results.

It is adjusted pre tax income and adjusted EPS.

I'll set record highs for both the three.

Six months periods.

Second quarter revenues were 407 billion up 13%.

Adjusted pre tax income was $80 million up 22%.

And adjusted EPS was $1 54.

Up 29% from year ago levels.

For the six month revenues increased 6% <unk>.

Adjusted pre tax income increased 13%.

And adjusted EPS increased 19%.

From year ago levels.

Since our last earnings report the market backdrop has improved appreciably.

Equity valuations have come up market volatility has come down.

This confidence has rebounded capital is more readily available.

Last quarter's tariff uncertainties or concerns about the potential.

For such dislocations to chill investments.

Trigger an economic slowdown.

And fan inflationary pressures.

Today market concerns regarding these risks are.

Are much diminished.

Throughout all of this tumult, we continue to invest for the long term.

Our firm's commitment to investing.

As unshakable.

Through Bowl bear markets alike.

Our North Star remains building the best advisory firm period.

One built on excellence integrity, and an unwavering commitment to client service.

Nearly 10 years into this journey.

We are ever closer to that goal.

After Helen takes you through our financial results.

I will review, our business performance and outlook in greater detail.

Helen.

Thank you Paul good morning.

Beginning with revenues.

Total revenues for the second quarter were $407 million.

Thank you.

For the six months ended June 30, total revenues were 710.

You brought up.

Up 6% year over year.

Thank you.

The second quarter and was primarily driven by strategic advisory, which was meaningfully suffice period.

Restructuring revenues rose modestly in the second quarter and were up slightly from the first half.

<unk> revenues decreased year over year for both periods.

Turning to expenses consistent with prior quarters, we presented the expenses with certain non-GAAP adjustments, which are more fully described in our 8-K first adjusted compensation expense.

We accrued compensation expense at 67, 5% of revenues for the first half of the year compared to 69, 5% for the first half of 2024. This ratio represents our current best estimate for the full year 2025.

Turning to adjusted non compensation expense.

Total adjusted non compensation expense was $52 million in the second quarter up 18% year over year and 101 million for the first half.

13, 5% year on year as.

As a percentage of revenue was 12, 8% in the second quarter and 59% in the first half.

The main drivers of the expense increase for the first half of the year for higher occupancy costs and higher travel and related expenses.

Overall for the full year, we continue to expect that our non comp expense will grow at a rate similar to our 2024 growth rate of 12%.

We reported adjusted pre tax income of $80 million in the second quarter and $176 million consists of six months.

Adjusted pre tax margin for the second quarter was 19, 7% compared to 18, 2% for the same period last year and 18, 6% for the first six months compared to 17, 5% for the same period last year.

Provision for taxes as with prior quarters.

We have presented our results as if all partnership units had been converted to shares and in all of our income was taxed at a corporate tax rate.

<unk> tax rate for the first half of 2025 was 16, 5% and this is our current estimate for the full year.

Our adjusted if converted earnings were $1 54 per share for the second quarter up 29%.

And $2 59 per share for the first six months up 19% from the same period last year.

For the quarter, our weighted average share count was $43 4 million shares.

1% vis vis a year ago.

During the second quarter, we repurchased the equivalent of approximately 642000 shares primarily through open market repurchases.

Our repurchases in the first six months of the year totaled approximately $2 1 million shares.

On the balance sheet, we ended the quarter with $318 million in cash cash equivalents and short term investments.

And $461 million and net working capital and we had no funded debt outstanding.

The board has approved a quarterly dividend of <unk> 25 cents per share and that's impactful.

Hello.

Beginning with restructuring.

We continue to experience elevated levels of liability management activity.

We're expanding quantum of outstanding debt elevated interest rates.

An increasing economic and technological dislocations.

Have increased demand for best in class liability management.

And restructuring advisors.

In this period of heightened activity.

Our restructuring team continued its market leadership ranks.

Ranking number one in announced and completed.

And global restructurings for.

For the first half of 2025.

Our restructuring team also continued its track record.

Of the exceptional financial results.

With first half revenues bettering last year's record performance.

Our current expectation is for full year restructuring results too.

To at least match last years record levels.

Turning to <unk> Park Hill.

The primary fund raising environment remains challenged.

As historically low levels of capital return.

With a market increase in first time fund launches.

Have contributed to a significant supply demand imbalance.

In contrast, the environment for private capital solutions is far more favorable.

Increased demand for alternative liquidity vehicles from GPS and Lps.

Is better matched with investor appetite.

These asset classes.

P J J Park Hill, both second quarter and first half revenues.

Last year's results.

Principally due to the timing of closings.

However, we expect a strong pipeline in both primary and private capital solutions.

To result in stronger performance in the second half.

Turning to strategic advisory.

Our strategic advisory business delivered record performance in both the second quarter and first half.

As we benefited from increased transaction closings.

An increased fee realizations.

While there are indications that M&A activity is picking up.

The year to date data is mixed.

Although annualized global announced M&A volumes are up 40%.

The annualized number of transactions is down 15%.

Of greater consequence, global M&A activity remains near record lows.

When measured relative to total equity market capitalization or GDP.

We have consistently maintained that in a world that is speeding up.

These need to respond more quickly to changes in their operating and competitive environment.

This in turn requires companies to be more active strategically.

Elevated economic and regulatory uncertainty has impeded much of this strategic interest.

From being acted upon.

As some of this uncertainty has dissipated and the business environment has become more favorable.

We now see a more constructive environment for companies to pursue their strategic ambitions.

And our pre announced strategic advisory pipeline now stands at record levels.

We continue to position ourselves for a return to more normalized levels of M&A activity.

This quarter four new strategic advisory partners will be joining.

As we look ahead.

We are reiterating our prior commentary strategic.

Strategic advisory will be up strongly from 2024 as record levels.

While restructuring and P. J J Park Hill are expected to deliver results in line with last year's record levels.

As before we remain confident in our near intermediate and long term growth prospects.

And with that we will now take your questions.

Thank you very much Mr. Taubman, ladies and gentlemen at this time the floor is open for your questions to ask a question. Please press star one on your telephone keypad and you get out of the queue Press Star two will go first this morning to James Euro of Goldman Sachs.

Hi, good morning, and thanks for taking the questions Paul.

Maybe I could just start with the sponsor M&A sponsors have remained slower in transacting, but obviously you do have a lot to sell or IPO.

In your analysis do many of these assets now have enough EBITDA that they can actually be sold for a gain and maybe you could just comment based on your dialogue when do you expect.

Parts or sell side too.

It starts to come back to the market more fully.

Well I think we're I think we're seeing an increase in sponsor activity across the board.

And it's been challenged for a variety of reasons.

And the release valves are starting evidenced themselves across the board so while the IPO market.

As far from robust.

It's been meaningfully more receptive to initial public offerings and.

In recent months, which has created an opportunity to create liquidity events on portfolio companies.

First point, that's a necessary condition to get the return of capital right and what we've always said is you got to get the return of capital right. So that there is a confidence to deploy increasing quantum's of capital.

Second as the credit markets have become more accommodative theres been more evidenced a dividend recap transactions, which have also.

Been a release valve.

I think the third is strategic interest in a number of portfolio companies, which have been expressed.

Then.

Sort of retreated around liberation day, because of all of the uncertainties create.

Created by the proposed tariffs.

As that uncertainty receipts, thanks, strategics or taking a fresher look.

Some of those portfolio companies and then continuation vehicles remained very active.

And.

Effective means of creating liquidity. So we're seeing more bids more interest from strategics, but we're also seeing that in the portfolio effect with lots of different levers to pull.

That sponsors are starting to be able to increase the pace of.

Return of capital, which I do believe is going to make them.

Buyers.

Of additional quantum's and when you think about selling portfolio companies of sponsors.

Sometimes the buyers are strategic sometimes there are other sponsors and being able to have robust.

Processes, where you have greater confidence that other sponsors will play and now that some of the clouds of liberation day have had lifted greater strategic interest it setting up better its still far from perfect, but I think that healing process has begun and at port <unk>.

<unk>.

February increasing levels of M&A, we believe but but slowly as we return to a more normalized cadence.

Thanks, a lot of sense, an adjacent question the secondary or the continuation on business I would imagine likely.

Slows in terms of growth with the return of regular way sponsor M&A and Ipos have you given any thought to.

What that particular dynamic means for the growth rate of continuation funds.

What what I guess, what portion of assets should be continuing.

Versus there being put in them right now because regular way exit strategies are not available yet.

I don't know if it's a substitution effect I think it I think every day that goes by there is greater acceptance of continuation funds as an appropriate means to manage liquidity. I also think that there are many instances where these are assets, where there is still <unk>.

Full upside and there is a desire to continue to operate and manage the asset but there is a desire on the part of some but by no means all of.

The Lps to create liquidity events, so I think of it as a tool in the toolkit.

That if you go back five years was barely understood and rarely used now its much better understood and used and the biggest governor on using that as a tool today.

It is simply that the dedicated pools of capital.

For continuation funds.

Is relatively modest in the context of the interest on the part of asset managers to deploy continuation funds. So right now the governor is theres, just not enough dedicated capital to the asset class and if you believe as we do that the.

Returns over time will prove to be attractive returns and.

This is a class a asset.

That should have appeal to a lot of investors one one obvious advantages you identify the asset and you're investing in it immediately as opposed to a blind pool concept. Another advantages you are making the investment commit.

And the drawdown of the funds is happening at the same time, which is not the case with the funding structure and I could go on but there are other there are other benefits. So we think that it's here to stay.

It has room to grow.

And probably what it does.

Is it substitutes for some of what historically would have been regular way IPO.

The problem with the regular way IPO is.

There is often times the IPO at considerable discounts.

Sudser almost inevitably used to realign the capital structure to pay down debt to make it a more normalized capital structure for a public company and you've got to wait for the expiry of Lockups.

And it starts to be a very long goodbye and this this may in fact be something that competes more directly with the IPO alternative.

That's very clear thanks, so much Paul.

Thank you. Thank you James.

Thank you. We'll go next now to Jim Mitchell of Seaport Global Securities.

Hey, good morning.

Good morning.

Hey, Paul just I know one area of focus has been leveraging kind of the park Hill franchise to build out coverage of financial sponsors on the M&A M&A side.

Can you just give us update on where you think you are in terms of moving along that spectrum and kind of getting more into the middle market deals with financial sponsors and leveraging that park Hill relationships.

Yes, we're still in the early early days of that but where there are many different ways in which those relationships.

Come together.

So.

With the best in class primary distribution and really being the fund placement agent of choice.

What we increasingly want to do is for clients to develop a holistic relationship with our firm where theres a recognition.

That if we're going to do the primary raised.

We're also going to be the advisor of choice on the continuation funds and the like and Thats, just an adjacency, where having a holistic conversation with the fund manager.

It makes all the sense in the world.

And then on top of that as we are increasingly sought after to do capital raises that oftentimes are difficult to raise the quantum of capital.

That might have been desired. So there is a recognition that we can we can deliver more capital than anyone else.

It's to have those more holistic conversations about ways in which our strategic advisory colleagues and jointly cover that client and then also have dialogues related to how they think about the GP itself stake sales liquidity.

<unk>.

Hawaii, So we're increasingly having those holistic conversations and I think it's begun to bear fruit, but when I think about where we are.

They're meaningfully advanced from where we started the firm we still have an awful lot of ground to cover before we fully mined that opportunity. So I still think we're early days.

Okay. That's helpful and maybe obviously seeing good growth on the strategic advisory side, where a lot of the hiring has been concentrated in the last few years. So does that give you a little more color I mean I know.

Your comp ratios.

Your best guess is now 67, and a half but does it give you more confidence with a record pipeline of strategic advisory revenue growth picking up that you're sort of lapping the growth and strategic head count with revenues and we can start to see some progress in the next year or two on the comp ratio.

I think based on the indicated ratio you're already seeing some progress.

That's good.

So.

Hi.

I know you would like more of it all dimensions that I got that just constantly just asked myself.

You know what's around the what's around the bend and what's around the band could be what's around the band in terms of additional hiring opportunities or what's around the vendors.

Competitive dynamics changing so we're just going to be thoughtful and cautious I've always said that as we get more productivity, we know where the direction of travel.

Okay.

Okay.

Great.

Okay.

And Mr. Taubman as it appears we have lost you on the main line if you could switch to the backup line.

Operator: Good day, everyone, and welcome to today's PJT Partners Second Quarter 2025 Earnings Call. Today's conference is being recorded.

Where we have made small investments and we've got an outsized returns.

Okay.

Yeah.

Sharon Pearson: At this time, I would like to turn the conference over to Ms. Sharon Pearson, Head of Investor Relations. Ms. Pearson, please go ahead, ma'am. Thank you very much.

Yeah.

And I would just highlight is one of those examples Japan.

Again, Mr. Taubman Mismate, we did lose your audio on the mainline.

Where we've made very modest commitment of resources, but we've received outsized returns in terms of our connectivity to some of the most consequential Japanese companies.

Sharon Pearson: Good morning and welcome to the PJT Partners second quarter in six months 2025 earnings conference call.

Sharon Pearson: I'm Sharon Pearson, Head of Investor Relations at PJT Partners, and joining me today is Paul Taubman, our Chairman and Chief Executive Officer, and Helen Meates, our Chief Financial Officer. Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements 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. We believe that these factors are described in the risk factor section contained in PJT Partners 2024 Form 10-K, which is available on our website at pjtpartners.com.

And still not hearing you.

And opportunities to really showcase the firm that up with additional resources.

<unk> made some Mr. Calvin.

Then we have other areas, where we are in the midst and we've seen real benefits, but there is still so much more to do and then even in our strongest areas. We're big believers that oftentimes investing and our strongest franchises can create the greatest results. So you might look at us from the <unk>.

Well.

Mr. Chairman I believe we have you back Sir.

Yes. Thank you. Thank you.

Is there another question we.

We do Mr. Taubman, we'll go next to Brendan O'brien with Wolfe Research.

Outside in and say they appear to be strategically complete in these areas. We look at it and say we can go from strong the stronger or from stronger strongest or from strongest by a little bit the strongest by a lot and that's why we're going to continue to invest because everywhere. We look we.

[noise] Brendan.

I'm sorry, I was on mute can you hear me.

Yes, yes.

I cut out on us.

Everybody issue, but.

Sharon Pearson: I want to remind you that the company assumes no duty to update any forward-looking statements, and the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance.

Thanks for taking my questions I guess to kick things off I just wanted to get an update on the regulatory front. There was obviously a lot of optimism around the outlook for large cap M&A do the expectation for a lighter regulatory touch under the current administration that it feels like that's warranted based on the recent decisions by the FCC.

See two things, we see proof of concept that all the things we believed in 10 years ago have proved out.

And we see proof of concept that no matter how much white space. We've filled in there is still white space as far as the eye can see and as a result, we feel really good about the track we're on but we still think we're early early days in building out the firm and the vision that we have for this firm.

Sharon Pearson: For detailed disclosures on these non-GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning, also available on our website.

Just based on our conversation thus far would you say that C. Suites are now more willing to push forward with large scale transactions than they were before or has some of the volatility and macro uncertainty has been too big of a stumbling block.

Paul Taubman: And with that, I'll turn the call over to Paul. Good morning. Thank you for joining us today. This is a day that puts things like earnings calls in perspective.

Great. Thanks, Paul and then can you just touch on the restructuring opportunity outside the U S and just kind of initiatives to scale footprint in.

I don't know.

Paul Taubman: It's a sad and challenging day as we mourn the loss of life from yesterday's senseless act of violence in midtown Manhattan. just steps from our office. We grieve for those who lost their lives, pray for healing for those injured. and offer comfort to the families, friends, and colleagues of those impacted. And we express gratitude to our first responders. who work tirelessly to keep us all safe.

Available answer is all of the above because it might be all of the above.

Yes.

So, let's let's parse out a little bit.

Probably.

A lot of headcount or just kind.

There is no doubt that in totality there.

Where that might go over the next couple of years.

Well.

Regulatory approach of this administration.

A lot of that if you just we couldnt agree more and if you just look at you know the increased investment that we've made in various European countries the opportunity to do more in France to do more in Germany to do more across Europe as our footprint grows as our strategic connectivity inquiry.

Is more conducive to M&A consolidation combinations.

And then the prior administration.

That's good news.

Number two I think there is more willingness on the part of this administration to negotiate.

Paul Taubman: And now, we'll turn to our. This morning, we reported record-setting results as revenues, adjusted pre-tax income, and adjusted EPS all set record highs for both the three- and six-month period. Second quarter revenues were $407 million, up 13%. The adjusted pre-tax income was $80 million, up 22%. And adjusted EPS was $1.54, up 29% from year-ago level. For the sixth month, revenues increased 6%. Adjusted pre-tax income increased 13%. and Adjusted EPS increased 19%. from year-ago levels.

<unk> the opportunity to do more on the liability management side in Europe increases, we have significant commitment to the Gulf region the opportunity in the Gulf to do more is considerable we have.

To negotiate remedies.

As opposed to having an up or down approach to some combination. So there is the SaaS set for the right package of.

Negotiated points.

A small but highly successful commitment to non Japan Asia.

The right behavioral remedies.

Can secure approval that's a good thing.

And those opportunities have already produced.

On the other hand, there are industries I believe.

Great results Theres, an opportunity to do more and there is so everywhere we have had.

Sure.

They are consumer facing where they may well affect the price consumers pay where there continues to be a very heightened sensitivity.

Footprint and connectivity and success.

Outside of liability management, we're now spending time trying to make sure that those opportunities.

<unk> like certain retail consolidation and the like I think media continues to be.

Its own <unk>.

We're in front of and that we are bringing our.

Area of inquiry from the SEC from the FCC and the like so it is not clear that all industries are demonstrably easier to have line of sight to consolidation transactions than before but the direction of travel is definitely better.

Our teams to those opportunities and as a result, I think there is opportunities for us to take that.

Paul Taubman: Since our last earnings report, the market backdrop has improved appreciably. Equity valuations have come up. Market volatility has come down. Business confidence has rebounded. Capital is more readily available. Last quarter's tariff uncertainties sparked concerns about the potential for such dislocations to chill investments. trigger an economic slowdown. and Fan Inflationary Pressure. Today, market concerns regarding these risks are much diminished.

Liability management practice, that's outside the U S and make it multiples the size of what it is today.

The other.

Sort of sort of.

That's great. Thanks for taking my questions I appreciate it absolutely Devin.

Overlay here is.

Until there really is a sense that the timelines.

Thank you and ladies and gentlemen that does conclude our question and answer period I would now like to turn the call back over to Mr. <unk> for any closing comments.

From <unk>.

Signing to closing are demonstrably shorter and it's difficult for this administration to really deal with that directly because in many of these situations youre dealing with many regulatory bodies around the world who have their ability to put their.

Alright, well hopefully you all can hear us and we appreciate your support and your interest in our company and we look forward to Reconvening in three months when we will report our third quarter results. So again. Thank you for your support and your interest and we wish you a good day.

Paul Taubman: Throughout all this tumult, we continue to invest for the long term. Our firm's commitment to investing is unshakable through bull and bear markets alike. Our North Star remains building the best advisory firm, period. want to build on excellence, integrity, and an unwavering commitment to client service. Nearly 10 years into this journey, we are ever closer to that goal.

There their voice.

Out there.

You're seeing still what are by historic lenses long closing periods.

Okay.

Hum.

[music].

And in a world that moves around quite a bit that is volatile.

Having the commitment to acquire businesses, where even if you have high degree of confidence.

Ultimately be able to complete the acquisition if you have elongated processes.

Paul Taubman: After Helen takes you through our financial results.

Elong delays.

Paul Taubman: I will review our business performance and outlook in greater detail. Thank you for good morning.

The type of business momentum that you start out with that closing may be very different than what you anticipated and I think that that has suddenly made on some of these big deals.

Paul Taubman: Beginning with revenue. Total revenues for the second quarter were $400 million, up 13% year-over-year. For the sixth month ended June 30, total revenues were $731 million, up 6% year-over-year.

Just getting the right price.

Where there is enough.

Risk.

Reduction reflected in the price because of the fact that even if the acquisition makes sense.

You may end up with 12 to 18 months, where you're in no man's land that that does harm the health of the business Thats received I think that thats complicated things in a subtle way.

Paul Taubman: Revenue growth for the second quarter and third half was primarily driven by strategic advisory, which was up meaningfully for both periods. Restructuring revenues rose modestly in the second quarter and were up slightly for the first half, while PJT partner revenues decreased year-over-year for both periods.

Bottom line, we're in a better place.

Then where we were in the prior administration, we have clarity, there's a greater sense of a willingness to negotiate remedies more industries more situations are likely to go through on an expedited basis, but it's still.

Paul Taubman: Financial expenses consistent with prior quarters, we've presented the expenses with certain non-GAAP adjustments, which are more fully described in our 8K, so it's just the compensation expenses. We accrued compensation extent at 67.5% of revenues for the first half of the year, compared to 69.5% for the first half of 2024. This ratio represents our current best estimate for the full year 2025.

In certain industries or in certain politically sensitive areas that may also invite regulatory scrutiny.

From other areas of the globe. It still makes large transactions are quite complicated to effect.

Paul Taubman: Attempting to adjust a non-compensation expense. Total adjusted non-compensation expense was $52 million in the second quarter, up 18% year-over-year, and $101 million for the first half, up 13.5% year-over-year. As a percentage of revenues, 12.8% in the second quarter, and 13.9% in the first half. The main drivers of the expense increase for the first half of the year were higher occupancy costs and higher travel and related expenses. Overall for the full year we continue to expect that our non-cop expense will grow at a rate similar to our 2024 growth rate of 12 percent. We reported adjusted pre-tax income of $80 million in the second quarter and $136 million for the first six months.

No that's helpful color and I guess for my follow up there's been a lot of optimism on the potential for a meaningful ramp in M&A in the back half now that we seem to be heading towards a resolution on tariffs and getting greater clarity on the macro outlook, but just wanted to get your views on what the trajectory of that recovery could look like given.

It feels like there is significant pent up demands for transaction, specifically on the sponsor side, but it does feel like Theres still a few big question marks out there.

On both training as well as interest rates and alike.

Okay, I'm going to try and rephrase. The question because you came across a little.

Glitchy.

And I think it was really just saying look there seems to be a general sense that the direction of travel for M&A is up into the right, but can you sort of draw it out a little bit as to what that trajectory is likely to be.

Paul Taubman: Our adjusted pre-tax margin for the second quarter was 19.7%, compared to 18.2% for the same period last year, and 18.6% for the first six months, compared to 17.5% for the same period last year.

I think it's going to be a gradual plush and gradual in the sense that I think all of these clouds are lifting.

Slowly, but surely and that would suggest that it's going to be.

Paul Taubman: Provision for Texas, as with prior quarters. We have presented our results as if all partnership units had been converted to shares and that all of our income was taxed at a corporate tax rate. Our effective tax rate for the first half of 2025 was 16.5%, and this is our current estimate for the full year. Our adjusted average earnings were $1.54 per share for the second quarter, up 29%, and $2.59 per share for the first six months, up 19% from the same period last year. For the quarter, our weighted average share count was 43.4 million shares, up 1% versus a year ago.

Yeah.

A prolonged period of just slow gradual improvement plus as I've always said that where it makes M&A different as many things not least of which is the competitive responses.

And in situations, where your competitor makes a bold strategic move.

The likelihood that there is a competitive response and a follow on transaction and an industry is high so I kind of think that this is a a gradual build as it relates to some of these storm clouds, continuing to lift and everyday it seems.

Paul Taubman: During the second quarter, we repurchased the equivalent of approximately 642,000 shares, primarily through open market repurchase. Our repurchases in the first six months of the year totalled approximately 2.1 million shares.

Recently, there's just a little bit more clarity a little less volatility.

And a little bit more comfort.

But I think that pluses I expect that in certain industries, where like youre not going to see one transaction thats been on the drawing board youre going to see the second and maybe even.

Paul Taubman: On the balance sheet, we ended the quarter with $318 million in cash, cash equivalents and short-term investments, and $461 million in net working capital, and we had no funded debt outstanding.

Third as our competitors.

More comfortable with the status quo when no one was moving but if theres a competitive response.

Paul Taubman: Finally, the board has approved a quarterly dividend of $0.25 per share.

The.

But they need to.

Paul Taubman: I'll now turn back to Paul. Thank you, Helen.

To respond in kind is probably greater.

Paul Taubman: Beginning with restructuring. We continue to experience elevated levels of liability management activity. As an expanding quantum of outstanding debt, elevated interest rates, and increasing economic and technological dislocations have increased demand for best-in-class liability management and restructuring advice. In this period of heightened activity, our restructuring team continued its market leadership ranking number one in announced and completed U.S. and global restructuring. for the first half of 2025. A restructuring team also continued its track record of exceptional financial results. with first half revenues bettering last year's record performance. Our current expectation is for full year restructuring results. to at least match last year's record levels.

Alright, Thank you for taking my questions.

Thank you. The next now to you Alex bond of K B W.

Hey, good morning, everyone. Thanks for thanks for taking my questions, maybe just moving back to Park Hill fundraising business. So your placement fees were up quarter over quarter, but you did call out that the.

Fundraising backdrop remains challenging.

I'm just curious to what extent that you may have seen an improvement here in the recent weeks as the macro backdrop has improved there.

And then you also mentioned that you expect you know about the primary end private capital contribution to improve for Park Hill in the second half, but just trying to get a sense of if you think that contribution might be more weighted towards.

The private capital side, given the challenging.

Backdrop. Thanks.

Right I think it's both I think we are.

We're just.

Feeling with the fact that there is lumpiness.

And these capital raises and if things get pushed out a little bit they don't show up in Q2, they're showing up in Q3 and Q4. So we look much more at all of the transactions whether they're private.

Paul Taubman: turning to PJT Park Hill. The primary fundraising environment remains challenged. As historically low levels of capital return coupled with a market increase in first-time fund launches have contributed to a significant supply-demand imbalance. In contrast, the environment for private capital solutions is far more favorable, where increased demand for alternative liquidity vehicles from GPs and LPs is better matched with investor appetite for these asset classes.

Tcs transactions or fund placement on the primary side as to how many.

Fundraisers are in flight.

And that number continues to build on both sides notwithstanding the challenging conditions on the primary side. So we think that.

Because of just the cadence of transactions and transaction closings is.

Likely to be more in the back half of the year than in the first half of the year, but I also think that structurally.

The secondary business is just in a better place because there is a better matching of supply demand and what you're seeing on the primary side continues to be.

Paul Taubman: For PJT Park Hill, both second quarter and first half revenues were below last year's results. principally due to timing of closing. However, we expect our strong pipeline in both primary and private capital solutions to result in stronger performance in the second half.

Everyone wants to fund raise and in fact, they're even more managers out trying to fundraise, but allocated capital to the asset class is diminished and as a result, it's made fundraisings more challenging it's taken longer to get deals done.

Paul Taubman: Turning to strategic advisory. Our strategic advisory business delivered record performance in both the second quarter and first half. as we benefited from increased transaction closings. and Increased Fee Realization. While there are indications that M&A activity is picking up. The year-to-date data is next. Although annualized global announced M&A volumes are up 20%, The annualized number of transactions is down 15%. Of greater consequence, global M&A activity remains near record lows when measured relative to total equity market capitalization, or GDP. We've consistently maintained that in a world that is speeding up, companies need to respond more quickly to changes in their operating and competitive environment.

And it's less likely to have an oversubscription than it would have been before so the opportunity for positive surprises has reduced the flip side is in a world where it's more difficult to raise primary capital in primary capital is the lifeblood.

The alternative asset managers.

Then the flight to quality is greater and Thats been a benefit for our P. J P Park Hilton.

Got it. Thanks, that's helpful color I will jump back in the queue. Thanks, Paul Thank.

Thank you.

Thank you, we've actually now to Devin Ryan of citizens.

Hi, Thanks, good morning, everyone.

Good morning Devin.

I'm doing great.

Kind of bigger picture question, Paul just around.

P J T franchise today.

Obviously the firm looks different.

2021 of the prior kind of peak cycle.

Paul Taubman: This in turn requires companies to be more active strategically. Elevated economic and regulatory uncertainty has impeded much of this strategic interest. from being active on. As some of this uncertainty has dissipated, and the business environment has become more favorable, We now see a more constructive environment for companies to pursue their strategic ambitions. And our pre-announced strategic advisory pipeline now stands at record levels. We continue to position ourselves for return to more normalized levels of M&A activity.

A number of groups that you have to pay are much bigger.

Industry perspective.

Alright fair enough just to maybe get a little bit of sense.

We're really getting some network effects on that scaling.

Whether its industries or.

Yes, good sectors or geographies, where you feel like you are you seeing evidence of network effects and then maybe areas where you feel like there's been a lot of investments made the momentum maybe hasn't come through yet to the public.

You're really optimistic about thanks sure.

Sure.

The reality is every day there is evidence of the network attack literally every day. So I just I go through my emails every single day there.

Paul Taubman: This quarter, four new strategic advisory partners will be joining. As we look ahead. Reiterating our prior commentary. Strategic Advisory will be up strongly from 2024's record levels. While restructuring and PJT Park Hill are expected to deliver results in line with last year's record levels.

There is a connecting of dots.

Call comes into one area, there's expertise there's a relationship they'd like to be introduced to the partners that another part of our business. We identify situations, we're trying to connect dots.

And we're in the earlier days, we might have had a relationship with the C suite now.

Now we have a relationship with the C suite and the board and it's more likely than we've presented to one of the.

Paul Taubman: As before, we remain confident in our near, intermediate, and long-term growth prospects.

Companies.

Our board members has recently experienced our advice and capabilities. So that network effect is in evidence every day, but like everything else. It takes time for it to.

Operator: And with that, we will now take your questions. Thank you very much, Mr. Taubman.

Operator: Ladies and gentlemen, at this time, the floor is open for your questions. To ask a question, please press star one on your telephone keypad, and to get out of the queue, press star two.

Fully.

Fully developed so we see it every day.

Our ability to collaborate across geographies across industries across different touch points and companies, we're seeing more conflict.

James Yaro: We'll go first this morning to James Yaro of Golden Sack. Good morning, and thanks for taking the questions, Paul. Maybe I could just start with the sponsor M&A sponsors have remained slower in transacting, but obviously do have a lot to sell or IPO. In your analysis, do many of these assets now have enough EBITDA that they can actually be sold for a gain? And maybe you could just comment based on your dialogues, when you expect agent sponsor sell sides to start to come back to the market more fully. Well, I think we're I think we're seeing an increase in sponsor activity across the board.

Adjudication because.

We may have opportunities to represent a.

Uh huh.

Group of creditors at the St.

We have a strong relationship with the debtor, where we're getting all of that benefit but I still think we're really early days compared to what our vision.

For this franchise can be and when you think about it by geography or industry. There are places, where we really haven't made any effort at all so that's just complete and white space.

Paul Taubman: And it's been challenged for a variety of reasons. And the release valves are starting to evidence themselves across the board. So while the IPO market is far from robust, It's been meaningfully more receptive to initial public offerings in recent months, which has created an opportunity to create liquidity events on portfolio companies. That's the first point. That's a necessary condition to get the return of capital right. And what we've always said is you got to get the return of capital right, so that there's confidence to deploy increasing quantums of capital. The second is, as the credit markets have become more accommodative, there's been more evidence of dividend recap transactions, which have also been a release valve.

There are areas, where we have made small investments.

And we've got an outsized returns.

And I would just highlight is one of those examples Japan.

Where we've made very modest commitment of resources, but we've received outsized returns in terms of our connectivity to some of the most consequential Japanese companies.

And opportunities to really showcase the firm.

We're now going to follow that up with additional resources. Then we have other areas, where we're in the midst and we've seen real benefits, but there is still so much more to do and then even in our strongest areas, we're big believers that oftentimes investing and our strongest franchise.

Paul Taubman: I think the third is strategic interest in a number of portfolio companies which have been expressed But then. sort of retreated around Liberation Day because of all of the uncertainties. created by the proposed tariffs. As that uncertainty recedes, I think strategics are taking a fresher look at some of those portfolio companies. And then continuation vehicles remain very active and effective means of creating liquidity. So we're seeing more bids, more interest from strategics, but we're also seeing that in the portfolio effect with lots of different levers to pull that sponsors are starting to be able to increase the pace of return of capital, which I do believe is going to make them buyers of additional quantums. And when you think about selling portfolio companies of sponsors, sometimes the buyers are strategic, sometimes there are other sponsors.

This can create the greatest results. So you might look at us from the outside in and say they appear to be strategically complete in these areas. We look at it and say we can go from strong the stronger or from stronger strongest or from strongest by a little bit the strongest by a lot.

And that's why we're going to continue to invest because everywhere. We look we see two things we see proof of concept that all the things. We believed in 10 years ago have proved out.

And we see proof of concept that no matter how much white space. We've filled in there is still white space as far as the eye can see and as a result, we feel really good about the track we're on but we still think we're early early days in building out the firm and the vision that we have for this firm.

Great. Thanks, Paul and then can you just touch on the restructuring opportunity outside the U S and just kind of initiatives to scale footprint in.

Yes.

Probably.

A lot of head count adjust.

Where that might go over the next couple of years.

Well.

Paul Taubman: And being able to have robust processes where you have greater confidence that other sponsors will play. And now that some of the clouds of Liberation Day have lifted greater strategic interest, it's setting up better. It's still far from perfect, but I think that healing process has begun and it portends ever-increasing levels of M&A, we believe, but slowly as we return to a more normalized cadence.

A lot of that if you just we couldnt agree more and if you just look at you know the increased.

Investment that we've made in various European countries, the opportunity to do more in France to do more in Germany to do more across Europe as our footprint grows as our strategic connectivity increases the opportunity to do more on the liability management side in Europe increases we have.

Significant commitment to the Gulf region, the opportunity in the Gulf to do more is considerable we have.

James Yaro: Makes a lot of sense.

James Yaro: An adjacent question, the secondary or the continuation fund business, I would imagine likely slows in terms of growth with the return of regular way sponsor M&A and IPOs. Have you given any thought to, you know, what that particular dynamic means for the growth rate of continuation funds? What, I guess, what portion of assets should be in continuation fund vehicles versus they're being put in them right now because regular way exit strategies are not available? Yeah, I don't know if it's a substitution effect. I think every day that goes by, there's greater acceptance of continuation funds as an appropriate means to manage liquidity.

<unk>, a small but highly successful commitment to.

Two non Japan Asia, and those opportunities have already produced.

Great results there is an opportunity to do more and there is an opportunity to do more in Japan.

So everywhere we have had.

Footprint and connectivity and success outside of liability management, we're now spending time trying to make sure that those opportunities.

We're in front of and that we're bringing our.

Our teams to those opportunities and as a result, I think there is opportunities for us to take that.

Paul Taubman: I also think that there are many instances where these are assets where there's still meaningful upside and there's a desire to continue to operate and manage the asset, but there is a desire on the part of some, but by no means all of the LPs to create liquidity events. So I think of it as a tool in the toolkit that if you go back five years was barely understood and rarely used. Now it's much better understood and used. And the biggest governor on using that as a tool today is simply that the dedicated pools of capital.

Liability management practice, that's outside the U S and make it multiples the size of what it is today.

That's great. Thanks for taking my question I appreciate it.

Absolutely Devin.

Thank you and ladies and gentlemen that does conclude our question and answer period I would now like to turn the call back over to Mr. Taubman for any closing comments.

Alright, well hopefully you all can hear us and we appreciate your support and your interest in our company and we look forward to Reconvening in three months when we will report.

Our third quarter results. So again, thank you for your support and your interest and we wish you a good day.

Paul Taubman: for continuation funds. is relatively modest in the context of the interest on the part of asset managers to deploy continuation funds. So right now, the governor is there's just not enough dedicated capital to the asset class. And if you believe, as we do, that the returns over time will prove to be attractive returns, and that this is a class of asset that should have appeal to a lot of investors. One, one obvious advantage is, you identify the asset, and you're investing in it immediately, as opposed to a blind pool concept. Another advantage is, you're making the investment commit.

Hum.

[music].

Okay.

Paul Taubman: And the drawdown of the funds is happening at the same time, which is not the case with the fund structure. And I could go on, but there are other, there are other benefits. So we think that it's it's here to stay. It has room to grow. And probably what it does is it substitutes for some of what historically would have been regular way IPO. And the problem with the regular way IPO is. There's oftentimes the IPO at considerable discounts, the funds are almost inevitably used to realign the capital structure to pay down debt to make it a more normalized capital structure for a public company.

Paul Taubman: Then you've got to wait for the expiry of lockups and it starts to be a very long goodbye and this may in fact be something that competes more directly with the IPO alternative.

James Yaro: That's very clear.

James Yaro: Thanks so much, Paul.

Paul Taubman: Thank you.

Operator: Thank you, James.

Operator: Thank you.

Jim Mitchell: We go next now to Jim Mitchell of Seaport Global Security. Hey, good morning. Good morning. Hey, Paul, just I know one area of focus has been leveraging kind of the Park Hill franchise to build out coverage of financial sponsors on the M&A side. Can you just give us an update on where you think you are in terms of moving along that spectrum and kind of getting more into the middle market deals with financial sponsors and leveraging that Park Hill relationship? Yeah, we're still in the early, early days of that. But we're, there are many different ways in which those relationships come together.

Paul Taubman: So. With the best-in-class primary distribution and really being the fund placement agent of choice, What we increasingly want to do is for clients to develop a holistic relationship with our firm where there's a recognition that if we're going to do the primary raise. We're also going to be the advisor of choice on the continuation funds and the like. And that's just an adjacency where having a holistic conversation with the fund manager makes all the sense in the world. And then on top of that, as we are increasingly sought after to do capital raises that oftentimes are difficult to raise the quantum of capital that might have been desired, but there's a recognition that we can deliver more capital than anyone else.

Paul Taubman: It's to have those more holistic conversations about ways in which our strategic advisory colleagues can jointly cover that client and then also have dialogues related to how they think about the GP itself, stake sales, liquidity events, and the like. So we're increasingly having those holistic conversations. And I think it's begun to bear fruit. But when I think about where we are, we're meaningfully advanced from when we started the firm. We still have an awful lot of ground to cover before we fully buy that opportunity.

Paul Taubman: So I still think we're early days.

Jim Mitchell: Okay, that's that's helpful. And maybe, you know, obviously seeing good growth on the strategic advisory side, where a lot of the hiring has been concentrated the last few years. So does that give you a little more? I mean, I know you're, you know, your comp ratios set, you know, your best guess is now 67 and a half. But does it give you more confidence with the record pipeline of strategic advisory revenue growth, picking up that you're sort of lapping the growth and strategic headcount with revenues, and we can start to see some progress in the next year or two on the comp ratio?

Jim Mitchell: Oh, I think based on the indicated ratio, you're already seeing some progress. Yes. So we want more. I know you'd like more at all dimensions. And I got that just constantly just ask myself, you know, what's around the what's around the bend? And you know, what's around the bend could be what's around the bend in terms of additional hiring opportunities, or what's around the bend is, you know, competitive dynamic changing. So we're just going to be thoughtful and cautious. I've always said that, as we get more productivity, we know where the direction of Thank you.

Operator: Bye.

Operator: Taubman, it appears we have lost you on the main line. If you could switch to the back.

Operator: Aidan Hall, PJT Partners Inc. Again, Mr. Taubman, Ms. Meates, we did lose your audio on the main line. Still not hearing you, Ms. Meates, Mr. Taubman.

Operator: Welcome. Mr. Taubman, I believe we have you back, sir. Yes, thank you. Thank you. Is there another question?

Operator: We do, Mr. Taubman.

Brennan O'Brien: We'll go next now to Brennan O'Brien with Wolf Research. Thank you.

Brennan O'Brien: I'm sorry, I was on mute. Hey, can you hear me? Yes, yes. Sorry about that, I cut out. I don't know if that was everybody's issue, but um... Thanks for taking my questions, Paul.

Brennan O'Brien: I guess to kick things off, I just wanted to get an update on the regulatory front. You know, there's obviously a lot of optimism around the outlook for large-cap M&A due to the expectation for a lighter regulatory touch under the current administration, and it feels like that's warranted based on the recent decisions by the FCC. However, just based on the conversations thus far, would you say that C-suites are now more willing to push forward with large-scale transactions than they were before or, you know, has some of the volatility and macro uncertainty been too big of a stumbling block?

Paul Taubman: I don't know if the available answer is all of the above, because it might be all of the above, so let's parse that a little bit. There is no doubt that, in totality, the regulatory approach of this administration is more conducive to M&A consolidation combination. then the prior administration.

Paul Taubman: That's good news. Number two, I think there is more willingness on the part of this administration to negotiate to negotiate remedies. as opposed to having an up or down approach to some combination. So there is the sense that for the right package of negotiated points, the right behavioral remedies, you can secure approval. That's a good. On the other hand, there are industries, I believe, We're They are consumer-facing, where they may well affect the price consumers pay, where there continues to be a very heightened sensitivity. Things like certain retail consolidation and the like. I think media continues to be its own area of inquiry from the FCC and the like.

Paul Taubman: So it's not clear that all industries are demonstrably easier to have line of sight to consolidation transactions than before, but the direction of travel is definitely better. the other.

Paul Taubman: Sort of, sort of, uh... Overlay here is until there really is a sense that the timelines Um Signing to closing are demonstrably shorter, and it's difficult for this administration to really deal with that directly because in many of these situations, you're dealing with many regulatory bodies around the world who have their ability to put their their voice out there. You're seeing still what are, by historic lenses, long closing periods. And in a world that moves around quite a bit, that is volatile, having the commitment to acquire businesses where even if you have high degree of confidence, you'll ultimately be able to complete the acquisition if you have elongated processes and prolonged delays.

Paul Taubman: The type of business momentum that you start out with at closing may be very different than what you anticipated. And I think that that has subtly made, on some of these big deals, just getting the right price, where there's enough... risk. Reduction reflected in the price because of the fact that even if the acquisition makes sense. You may end up with 12 to 18 months where you're in no man's land that that that does harm the health of the business that's received.

Paul Taubman: I think that that's complicated things in a subtle way.

Paul Taubman: So bottom line, we're in a better place. than where we were in the prior administration. We have clarity. There's a greater sense of willingness to negotiate remedies. More industries, more situations are likely to go through on an expedited basis, but it's still in certain industries or in certain politically sensitive areas that may also invite regulatory scrutiny from other areas of the globe. It still makes large transactions quite complicated to effect.

Brennan O'Brien: That's helpful, Culler. And I guess for my follow-up, you know, there's been a lot of optimism on the potential for a meaningful ramp in M&A in the back half now that we seem to be heading towards a resolution on tariffs and, you know, getting greater clarity on the macro outlook. But just wanted to get your views on what the trajectory of that recovery could look like, given it feels like there's significant pent-up demands for transactions, specifically on the sponsor side. But it does feel like there's still a few big question marks out there on both trade as well as interest rates and the like.

Paul Taubman: Okay, I'm going to try and rephrase the question because you came across a little glitchy. And I think it was really just saying, look, there seems to be a general sense that the direction of travel for M&A is up and to the right. But can you sort of draw it out a little bit as to what that trajectory is likely to be? I think it's going to be a gradual plus, and gradual in the sense that I think all of these clouds are lifting, you know, Slowly but surely, and that would suggest that it's going to be a prolonged period of just slow, gradual improvement.

Paul Taubman: The plus is, I've always said that what makes M&A different is many things, not least of which is the competitive responses, and in situations where your competitor makes a bold strategic move. The likelihood that there's a competitive response and a follow-on transaction in an industry is high. So I kind of think that this is a gradual build as it relates to some of these storm clouds continuing to lift. And every day, it seems recently there's just a little bit more clarity, a little less volatility, and a little bit more comfort. But I think that plus is I expect that in certain industries and the like, you're not going to see one transaction that's been on the drawing board.

Paul Taubman: You're going to see the second and maybe even the third as competitors who are more comfortable with the status quo when no one was moving. But if there's a competitive response, the The need to respond in kind is probably. Great.

Brennan O'Brien: Thank you for taking my questions. Thank you.

Alex Bond: We go next now to Alex Bond of KVW. Hey, good morning, everyone. Thanks for thanks for taking my questions. Maybe just moving back to Park Hill and the fundraising business. So your placement fees were up quarter over quarter, but you did call out that the you know, the broader fundraising backdrop remains challenging. So just curious, you know, to what extent that you may have seen an improvement here in the recent weeks as the macro backdrop has improved there. And then you also mentioned that you expect, you know, both the primary and private capital contribution to improve for Park Hill in the second half, but just trying to get a sense of if you think that contribution might be more weighted towards the private capital side, given, you know, the challenging fundraising backdrop.

Paul Taubman: Thanks. Right. I think it's both. I think we're... We're just dealing with the fact that there is lumpiness. in these capital raises. And if things get pushed out a little bit, they don't show up in Q2, they're showing up in Q3 and Q4. So we look much more at all the transactions, whether they're private PCS transactions or fund placement on the primary side as to how many, you know, fundraisers are in flight. And that number continues to build on both sides, notwithstanding the challenging conditions on the primary side. So we think that... Because of just the cadence of transactions and transaction closings, it's likely to be more in the back half of the year than in the first half of the year.

Paul Taubman: But I also think that structurally The secondary business is just in a better place because there is a better matching of supply-demand. And what you're seeing on the primary side continues to be that everyone wants to fundraise. And in fact, there are even more managers out trying to fundraise. But allocated capital to the asset class is diminished. And as a result, it's made fundraisings more challenging. It's taken longer to get deals done. And it's less likely to have an oversubscription than it would have been before. So the opportunity for positive surprises is reduced. The flip side is, in a world where it's more difficult to raise primary capital, and primary capital is the lifeblood of the alternative asset managers, then the fight to quality is greater.

Alex Bond: And that's been a benefit for our PJT Park Hill team. Got it. No, thanks. That's helpful, Collar.

Alex Bond: I will jump back in the queue. Thanks, Paul. Thank you.

Devin Ryan: We go next now to Devin Ryan of All right, thanks.

Devin Ryan: Good morning, everyone. Good morning, Devin. How are you? I'm doing great.

Devin Ryan: Just kind of a bigger picture question, Paul, just around kind of the PJT franchise today and what you guys have built over the past handful of years. Obviously, the firm looks different than 2021, kind of the prior kind of peak cycle, and the number of groups that you have today are much bigger from an industry perspective than they were kind of during that time.

Paul Taubman: Let's just maybe get a little flexed on that scaling, you know, whether it's industries or sectors or geographies, kind of where you feel like you're seeing evidence of network effects, and then maybe areas where you feel like there's been a lot of investments made, the momentum maybe hasn't come through yet to the public, but you're really optimistic about things. Sure. Well. The reality is, every day, there's evidence of the network effect, literally every day. So, I just, if I go through my emails every single day, there is a connecting of dots. The call comes in to one area, there's expertise, there's a relationship, they'd like to be introduced to partners at another part of our business.

Paul Taubman: We identify situations, we're trying to connect dots. And where in earlier days, we might have had a relationship with the C-suite, now we have a relationship with the C-suite and the board, and it's more likely than we've presented to one of the. companies where one of the board members has recently experienced our advice and capabilities. So that network effect is in evidence every day. But like everything else, it takes time for it to fully fully be developed. So we see it every day in our ability to collaborate across geographies, across industries, across different touch points.

Paul Taubman: At companies, we're seeing more conflict adjudication because We may have opportunities to represent a group of creditors at the same time. We have a strong relationship with the debtor. We're getting all of that benefit, but I still think we're really early days compared to what our vision for this franchise can be.

Paul Taubman: And when you think about it, by geography or industry, there are places where we really haven't made any effort at all. So that's just complete white space. There are areas where we have made small investments and we've gotten outsized returns. And I would just highlight as one of those examples Japan. where we've made very modest commitment of resources, but we've received outsized returns in terms of our connectivity to some of the most consequential Japanese companies. and opportunities to really showcase the firm, and we're now going to follow that up with additional resources.

Paul Taubman: Then we have other areas where we're in the midst and we've seen real benefits, but there's still so much more to do. And then even in our strongest areas, we're big believers that oftentimes investing in our strongest franchises can create the results. So you might look at us from the outside in and say they appear to be strategically complete in these areas. We look at it and say we can go from strong to stronger, or from stronger to strongest, or from strongest by a little bit to strongest by a lot. And that's why we're going to continue to invest because everywhere we look, we see two things.

Paul Taubman: We see proof of concept that all the things we believed in 10 years ago have proved out. And we see proof of concept that no matter how much white space we've filled in, there's still white space as far as the eye can see. And as a result, we feel really good about the track we're on, but we still think we're early, early days in building out the firm and the vision that we have for this firm.

Devin Ryan: Great. Thanks, Paul.

Devin Ryan: And then can you just touch on the restructuring opportunity outside the U.S. and just kind of initiatives to scale the footprint? And yeah, I appreciate probably we'll need a lot of headcount, but just kind of where that may go over the next couple of years.

Paul Taubman: Well. A lot of that, if you just, we couldn't agree more. And if you just look at, you know, the increased investment that we've made in various European countries, the opportunity to do more in France, to do more in Germany, to do more across Europe, as our footprint grows, as our strategic connectivity increases, the opportunity to do more on the liability management side in Europe increases. We have significant commitment to the Gulf region. The opportunity in the Gulf to do more is considerable. We have a small but highly successful commitment to non-Japan Asia, and those opportunities have already produced, you know, great results.

Devin Ryan: There's an opportunity to do more, and there's an opportunity to do more in Japan. So everywhere we have had footprint and connectivity and success outside of liability management, we're now spending time trying to make sure that those opportunities. liability management practice that's outside the U.S. and make it multiples the size of what it is. That's great. Thanks for taking my questions. Appreciate it, Paul. Absolutely, Devin.

Operator: Thank you, and ladies and gentlemen, that does conclude our question and answer period.

Paul Taubman: I would now like to turn the call back over to Mr. Taubman for any closing comments. All right, well, hopefully you all could hear us and we appreciate your support and your interest in our company. And we look forward to reconvening in three months when we'll report our third quarter results. So, again, thank you for your support and your interest, and we wish you a good day.