Evercore Q4 2025 Evercore Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Evercore Inc Earnings Call
Speaker #2: Good morning and welcome to Evercore's fourth quarter 2025 and full year earnings conference call. Today's call is scheduled to last about one hour, including remarks by Evercore management and the question and answer session.
Operator: Good morning, and welcome to Evercore's Q4 2025 and full year earnings conference call. Today's call is scheduled to last about one 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 Katy Haber, Head of Investor Relations at Evercore. Please go ahead.
Operator: Good morning, and welcome to Evercore's Q4 2025 and full year earnings conference call. Today's call is scheduled to last about one 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 Katy Haber, Head of Investor Relations at Evercore. Please go ahead.
Speaker #2: 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.
Speaker #2: Head of Investor Relations at Evercore. Please go ahead.
Speaker #3: Thank you, operator. Good morning, and thank you for joining us today for Evercore's fourth quarter and full year 2025 financial results conference call. I'm Katy Haber, Evercore's Head of Investor Relations.
Katy Haber: Thank you, operator. Good morning, and thank you for joining us today for Evercore's Q4 and full year 2025 financial results conference call. I'm 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 call for questions. Earlier today, we issued a press release announcing Evercore's Q4 and full year 2025 financial results. Our discussion of our results today is complementary 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 1 hour after the conclusion of this call.
Katy Haber: Thank you, operator. Good morning, and thank you for joining us today for Evercore's Q4 and full year 2025 financial results conference call. I'm 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 call for questions. Earlier today, we issued a press release announcing Evercore's Q4 and full year 2025 financial results. Our discussion of our results today is complementary 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 1 hour after the conclusion of this call.
Speaker #3: Joining me on the call today is John Weinberg, our Chairman and CEO, and Timothy LaLonde, our CFO. After our prepared remarks, we'll open up the call for questions.
Speaker #3: Earlier today, we issued a press release announcing Evercore's fourth quarter and full year 2025 financial results. Our discussion of our results today is complimentary to the press release, which is available on our website at evercore.com.
Speaker #3: This conference call is being webcast live on our website, and an archive of it will be available for 30 days beginning approximately one hour after the conclusion of this call in the investor section.
Speaker #3: 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 various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements.
Katy Haber: 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 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 discussed in Evercore's filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 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.
Katy Haber: 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 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 discussed in Evercore's filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 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.
Speaker #3: These factors include, but are not limited to, those discussed in Evercore's filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.
Speaker #3: 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.
Speaker #3: For detailed disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is posted on our website.
Katy Haber: For detailed disclosures on these measures and the GAAP reconciliations, 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 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 closings. I will now turn the call over to John.
Katy Haber: For detailed disclosures on these measures and the GAAP reconciliations, 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 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 closings. I will now turn the call over to John.
Speaker #3: 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 closings.
Speaker #3: I will now turn the call over to
Speaker #3: John. Thank you,
John Weinberg: ... Thank you, Katy, and good morning, everyone. 2025 was a strong year for Evercore. We saw broad-based momentum across all of our businesses and ended the year with the strongest revenue performance in our history. Firm-wide adjusted net revenue reached approximately $3.9 billion, up 29% versus the prior year, and nearly 17% above our previous record in 2021. In fact, our fourth quarter represented the strongest revenue quarter in our history, with nearly $1.3 billion in adjusted net revenue. For the year, we generated approximately $14.56 in adjusted earnings per share, continued to return a meaningful amount of capital to shareholders, and improved our margin profile. Our quarterly and full-year record results reflect the improving market environment, the benefits of our diversified business model, and the execution of our long-term growth strategy.
John Weinberg: ... Thank you, Katy, and good morning, everyone. 2025 was a strong year for Evercore. We saw broad-based momentum across all of our businesses and ended the year with the strongest revenue performance in our history. Firm-wide adjusted net revenue reached approximately $3.9 billion, up 29% versus the prior year, and nearly 17% above our previous record in 2021. In fact, our fourth quarter represented the strongest revenue quarter in our history, with nearly $1.3 billion in adjusted net revenue. For the year, we generated approximately $14.56 in adjusted earnings per share, continued to return a meaningful amount of capital to shareholders, and improved our margin profile. Our quarterly and full-year record results reflect the improving market environment, the benefits of our diversified business model, and the execution of our long-term growth strategy.
Speaker #4: Katy. And good morning, everyone. 2025 was a strong year for Evercore. We saw broad-based momentum across all of our businesses and ended the year with a strongest revenue performance in our history.
Speaker #4: revenue reached approximately Firm-wide adjusted net $3.9 billion up 29% versus the prior year and nearly $17% above our previous record in 2021. In fact, our fourth quarter represented the strongest revenue quarter in our history, with nearly $1.3 billion in adjusted net revenue.
Speaker #4: For the year, we generated approximately $14.56 in adjusted earnings per share, continued to return a meaningful amount of capital to shareholders, and improved our margin profile.
Speaker #4: Our quarterly and full-year record results reflect the improving market environment, the benefits of our diversified business model, and the execution of our long-term growth strategy.
Speaker #4: We're pleased with how we delivered for our clients and our shareholders in 2025, and we enter 2026 with strong momentum. And getting into the details, I want to put optimism.
John Weinberg: We're pleased with how we delivered for our clients and our shareholders in 2025, and we enter 2026 with strong momentum and optimism. Before getting into the details, I want to put our results in the context of the market environment. Industry-wide, global M&A activity rebounded meaningfully last year. Announced transactions totaled approximately $4.5 trillion, up 49% from the prior year, and just 19% below record levels of 2021. Importantly, activity accelerated throughout the year. Deal volumes in the second half of 2025 were approximately 45% higher than in the first half, reflecting a clear shift in sentiment and decision-making. That improvement was particularly evident in the large cap segment of the market. Global M&A volumes for transactions greater than $5 billion were the highest ever, and approximately 13% above 2021 levels.
John Weinberg: We're pleased with how we delivered for our clients and our shareholders in 2025, and we enter 2026 with strong momentum and optimism. Before getting into the details, I want to put our results in the context of the market environment. Industry-wide, global M&A activity rebounded meaningfully last year. Announced transactions totaled approximately $4.5 trillion, up 49% from the prior year, and just 19% below record levels of 2021. Importantly, activity accelerated throughout the year. Deal volumes in the second half of 2025 were approximately 45% higher than in the first half, reflecting a clear shift in sentiment and decision-making. That improvement was particularly evident in the large cap segment of the market. Global M&A volumes for transactions greater than $5 billion were the highest ever, and approximately 13% above 2021 levels.
Speaker #4: Before our results in the context of the market environment. Industry-wide, global M&A activity rebounded meaningfully last year. Announced transactions trillion up 49% from the prior year and just 19% below record levels of 2021.
Speaker #4: Importantly, activity accelerated throughout the year. Deal volumes in the second half of 2025 were approximately 45% higher than in the first half, reflecting a clear shift in sentiment and decision-making.
Speaker #4: That improvement was particularly evident in the large-cap segment of the market. Global M&A volumes for transactions greater than $5 billion were the highest ever and approximately 13% above 2021 levels.
Speaker #4: Taken together, these metrics reflect improving confidence among boards and management teams, constructive financing conditions across public and private markets, and strong equity markets. Now, turning to Evercore, I want to highlight a few of our key accomplishments from the year across our market position, talent investment, and platform expansion.
John Weinberg: Taken together, these metrics reflect improving confidence among boards and management teams, constructive financing conditions across public and private markets, and strong equity markets. Now, turning to Evercore, I want to highlight a few of our key accomplishments from the year across our market position, talent investment, and platform expansion. We continued to serve clients on a number of the most complex and notable transactions, acting as financial advisor on 5 of the 15 largest global M&A deals for the year, and ranked third for sell-side transactions in the US based on dollar value. Relative to our largest global competitors, we continued to gain share. For the second year in a row, we ranked as the third-largest investment bank globally in 2025, based on advisory fees across all public firms.
John Weinberg: Taken together, these metrics reflect improving confidence among boards and management teams, constructive financing conditions across public and private markets, and strong equity markets. Now, turning to Evercore, I want to highlight a few of our key accomplishments from the year across our market position, talent investment, and platform expansion. We continued to serve clients on a number of the most complex and notable transactions, acting as financial advisor on 5 of the 15 largest global M&A deals for the year, and ranked third for sell-side transactions in the US based on dollar value. Relative to our largest global competitors, we continued to gain share. For the second year in a row, we ranked as the third-largest investment bank globally in 2025, based on advisory fees across all public firms.
Speaker #4: We continued to serve clients on a number of the most complex and notable transactions, acting as financial advisor on five of the 15 largest global M&A deals for the year and ranked third for sell-side transactions in the US based on dollar value.
Speaker #4: Relative to our largest global competitors, we continue to gain share. For the second year in a row, we ranked as the third largest investment bank globally in 2025, based on advisory fees across all public firms.
Speaker #4: Nearly all of our businesses posted record results, including our North America and EMEA advisory businesses, private capital advisory, Private Funds Group, our equities business, and Wealth Management.
John Weinberg: Nearly all of our businesses posted record results, including our North America and EMEA advisory businesses, private capital advisory, private funds group, our equities business, and wealth management. Importantly, the benefits of our diversification were increasingly evident. For the fourth quarter and full year, approximately 45% of revenues were generated from non-M&A businesses. Turning to talent, 2025 was a year of continued investment as we built out our senior advisory bench globally. We entered 2026 with 171 investment banking senior managing directors. We hired 19 SMDs across sectors, products, and geographies, representing our largest class of new lateral SMDs to date, and added 11 new promotes at the beginning of 2025.
John Weinberg: Nearly all of our businesses posted record results, including our North America and EMEA advisory businesses, private capital advisory, private funds group, our equities business, and wealth management. Importantly, the benefits of our diversification were increasingly evident. For the fourth quarter and full year, approximately 45% of revenues were generated from non-M&A businesses. Turning to talent, 2025 was a year of continued investment as we built out our senior advisory bench globally. We entered 2026 with 171 investment banking senior managing directors. We hired 19 SMDs across sectors, products, and geographies, representing our largest class of new lateral SMDs to date, and added 11 new promotes at the beginning of 2025.
Speaker #4: Importantly, the benefits of our diversification were increasingly evident. For the fourth quarter and full year, approximately 45% of revenues were generated from non-M&A businesses.
Speaker #4: Turning to talent investment, as we built out, 2025 was a year of continued senior advisory bench growth globally. We enter 2026 with 171 investment banking Senior Managing Directors.
Speaker #4: We hired 19 SMDs across sectors, products, and geographies, new lateral SMDs to date, and added 11 new promotes at the beginning of 2025. We are also excited to announce the recent promotion of eight investment banking SMDs globally, which is in addition to the 171 SMDs, underscoring our continued commitment to developing talent from within.
John Weinberg: We are also excited to announce the recent promotion of 8 investment banking SMDs globally, which is in addition to the 171 SMDs, underscoring our continued commitment to developing talent from within. In fact, 40% of our investment banking SMDs have been promoted internally, the highest percentage in our history. Our SMD base is 50% larger than it was at the end of 2021, and more than 40 SMDs are currently in a ramp mode, positioning us well for years ahead. Finally, expanding our platform across regions, sectors, and products was a key area of focus for us in 2025. We completed the acquisition of Robey Warshaw, a leading UK-based advisory firm. The acquisition represents a significant next step in our EMEA expansion strategy, and the integration is progressing well.
John Weinberg: We are also excited to announce the recent promotion of 8 investment banking SMDs globally, which is in addition to the 171 SMDs, underscoring our continued commitment to developing talent from within. In fact, 40% of our investment banking SMDs have been promoted internally, the highest percentage in our history. Our SMD base is 50% larger than it was at the end of 2021, and more than 40 SMDs are currently in a ramp mode, positioning us well for years ahead. Finally, expanding our platform across regions, sectors, and products was a key area of focus for us in 2025. We completed the acquisition of Robey Warshaw, a leading UK-based advisory firm. The acquisition represents a significant next step in our EMEA expansion strategy, and the integration is progressing well.
Speaker #4: In fact, 40% of our investment banking SMDs have been promoted internally, the highest percentage in our history. Our SMD base is 50% larger than it was at the end of 2021 and more than 40 SMDs are currently in a ramp mode positioning us well for years ahead.
Speaker #4: Finally, expanding our platform across regions and sectors and products with the key area of focus for us in 2025. We completed the acquisition of Robey Warshaw, a leading UK-based advisory firm.
Speaker #4: The acquisition represents a significant next step in our EMEA expansion strategy, and the integration is progressing well. We also continued to expand our footprint across key markets in EMEA, including significant investment in France, and first-time offices in Italy, the Nordics, and Saudi Arabia.
John Weinberg: We also continued to expand our footprint across key markets in EMEA, including significant investment in France and first-time offices in Italy, the Nordics, and Saudi Arabia, and we remain focused on building those out over time. We further strengthened our sector coverage globally, including healthcare, industrials, and transportation, while continuing to deepen our sponsor coverage efforts. We remained focused on broadening our product capabilities, including debt advisory, securitization, private capital advisory, ECM, and ratings advisory, to name a few. Before turning to the outlook, I'll briefly highlight a few key trends across our businesses from the quarter and the year. Our M&A advisory businesses finished the year with strong momentum. In North America, our team achieved a record year, and activity was broad-based across sectors, while financial sponsor engagement continued to increase and broaden....
John Weinberg: We also continued to expand our footprint across key markets in EMEA, including significant investment in France and first-time offices in Italy, the Nordics, and Saudi Arabia, and we remain focused on building those out over time. We further strengthened our sector coverage globally, including healthcare, industrials, and transportation, while continuing to deepen our sponsor coverage efforts. We remained focused on broadening our product capabilities, including debt advisory, securitization, private capital advisory, ECM, and ratings advisory, to name a few. Before turning to the outlook, I'll briefly highlight a few key trends across our businesses from the quarter and the year. Our M&A advisory businesses finished the year with strong momentum. In North America, our team achieved a record year, and activity was broad-based across sectors, while financial sponsor engagement continued to increase and broaden....
Speaker #4: And we remain focused on building those out over time. We further strengthened our sector coverage globally, including healthcare, industrials, and transportation, while continuing to deepen our sponsor coverage efforts.
Speaker #4: We remained focused on broadening our product capabilities including debt advisory, securitization, private capital advisory, ECM, and ratings advisory, to name a few. Before turning to the outlook, I'll briefly highlight a few key trends across our businesses from the quarter and the year.
Speaker #4: Our M&A advisory businesses finished the year with strong momentum. In North America, our team achieved a record year and activity was broad-based across sectors while financial sponsor engagement continued to increase and broaden.
Speaker #4: Industry-wide, financial sponsor activity for 2025 was up 43% in dollar volume and 14% in number of transactions, excluding deals below $100 million, and we are expecting continued improved activity in 2026.
John Weinberg: Industry-wide financial sponsor activity for 2025 was up 43% in dollar volume and 14% in number of transactions, excluding deals below $100 million, and we are expecting continued improved activity in 2026. In EMEA, advisory activity accelerated meaningfully in the second half of the year. Our EMEA advisory business delivered record results in the fourth quarter and year, with strength across sectors and products. In the fourth quarter, we advised on a number of significant transactions around the globe, including Warner Bros. Discovery on its $83 billion sale of Warner Bros. to Netflix and the related spin-off, which was the largest announced transaction of the year. Axalta's $25 billion merger with AkzoNobel, Sedara Therapeutics on its $9.2 billion sale to Merck, and Sealed Air's $10.3 billion acquisition by CD&R.
John Weinberg: Industry-wide financial sponsor activity for 2025 was up 43% in dollar volume and 14% in number of transactions, excluding deals below $100 million, and we are expecting continued improved activity in 2026. In EMEA, advisory activity accelerated meaningfully in the second half of the year. Our EMEA advisory business delivered record results in the fourth quarter and year, with strength across sectors and products. In the fourth quarter, we advised on a number of significant transactions around the globe, including Warner Bros. Discovery on its $83 billion sale of Warner Bros. to Netflix and the related spin-off, which was the largest announced transaction of the year. Axalta's $25 billion merger with AkzoNobel, Sedara Therapeutics on its $9.2 billion sale to Merck, and Sealed Air's $10.3 billion acquisition by CD&R.
Speaker #4: In EMEA, advisory activity accelerated meaningfully in the second half of the year. Our EMEA advisory business delivered record results in the fourth quarter and year, with strength across sectors and products.
Speaker #4: In the fourth quarter, we advised on a number of significant transactions around the globe, including Warner Brothers Discovery on its $83 billion sale of Warner Brothers to Netflix and the related spin-off, which was the largest announced transaction of the year.
Speaker #4: Exaltas' $25 billion merger with $9.2 billion sale to ExxonMobil, Sidara Therapeutics on its Merck, and Sealed Air's $10.3 billion acquisition by CD&R. Our strategic defense and shareholder advisory group continued to be busy into year-end as activist campaigns remained at elevated levels.
John Weinberg: Our Strategic Defense and Shareholder Advisory group continued to be busy into year-end as activist campaigns remained at elevated levels. The Liability Management and Restructuring group had a strong close to the year, generating its second-best year for revenues, and notably well above last year's performance. Activity in the quarter and year reflected a more balanced mix of liability management and traditional restructuring activity. The private capital-related businesses remained a source of strength. PCA delivered another record year with strong performance across GP-led continuation funds, LP transactions, and structured capital solutions, and we advised on nearly half of industry-wide secondary volumes in 2025. The Private Funds Group also posted a record year, continuing to deepen relationships with our core client base while also expanding our reach. Equity Capital Markets activity continued to gain momentum into the year-end, benefiting from an improving market backdrop for IPOs.
John Weinberg: Our Strategic Defense and Shareholder Advisory group continued to be busy into year-end as activist campaigns remained at elevated levels. The Liability Management and Restructuring group had a strong close to the year, generating its second-best year for revenues, and notably well above last year's performance. Activity in the quarter and year reflected a more balanced mix of liability management and traditional restructuring activity. The private capital-related businesses remained a source of strength. PCA delivered another record year with strong performance across GP-led continuation funds, LP transactions, and structured capital solutions, and we advised on nearly half of industry-wide secondary volumes in 2025. The Private Funds Group also posted a record year, continuing to deepen relationships with our core client base while also expanding our reach. Equity Capital Markets activity continued to gain momentum into the year-end, benefiting from an improving market backdrop for IPOs.
Speaker #4: The liability management and restructuring group had a strong close to the year, generating its second best year for revenues and notably well above last year's performance.
Speaker #4: Activity in the quarter and year reflected a more balanced mix of liability management and traditional restructuring activity. The private capital-related businesses remained a source of strength.
Speaker #4: Year with strong performance, PCA delivered another record across GP-led continuation funds, LP transactions, and structured capital solutions, and we advised on nearly half of industry-wide secondary volumes in 2025.
Speaker #4: The private funds group also posted a record year continuing to deepen relationships with our core client base while also expanding our reach. gain momentum into the year-end, benefiting from an improving market backdrop for IPOs.
Speaker #4: We were a bookrunner in all of our equity capital markets activity, continued to execute equity transactions across products, and we continue to be diversified across sectors.
John Weinberg: We were a book runner in all of our equity transactions across products, and we continued to be diversified across sectors. Our equities business delivered a record quarter and year and had nine consecutive quarters of year-over-year revenue growth. Finally, our wealth management business had a record year and reached its highest quarter-end AUM of approximately $15.5 billion. As we look ahead, we believe 2025's steady build of activity will continue into 2026 and beyond. We expect many of the themes from 2025 to continue, including sustained engagement on large strategic transactions, alongside a further broadening of activity across deal sizes, sectors, products, and geographies. Given the investments we've made across our platform, we believe Evercore is well-positioned to serve clients across the full spectrum of the market. We start the year with strong momentum and backlogs at record levels.
John Weinberg: We were a book runner in all of our equity transactions across products, and we continued to be diversified across sectors. Our equities business delivered a record quarter and year and had nine consecutive quarters of year-over-year revenue growth. Finally, our wealth management business had a record year and reached its highest quarter-end AUM of approximately $15.5 billion. As we look ahead, we believe 2025's steady build of activity will continue into 2026 and beyond. We expect many of the themes from 2025 to continue, including sustained engagement on large strategic transactions, alongside a further broadening of activity across deal sizes, sectors, products, and geographies. Given the investments we've made across our platform, we believe Evercore is well-positioned to serve clients across the full spectrum of the market. We start the year with strong momentum and backlogs at record levels.
Speaker #4: Our equities business delivered a record quarter and year, and had nine consecutive quarters of year-over-year revenue growth. Finally, our wealth management business had a record year and reached its highest quarter-end AUM of approximately $15.5 billion.
Speaker #4: As we look ahead, we believe 2025's steady build of activity will continue We expect many of the themes from 2025 to continue, including sustained engagement on a large into 2026 and beyond.
Speaker #4: Strategic transactions alongside a further broadening of activity across deal sizes, sectors, products, and geographies. Given the investments we've made across our platform, we believe Evercore is well-positioned to serve clients across the full spectrum of the market.
Speaker #4: We start the year with strong momentum, and backlogs are at record levels. Overall, we are constructive on the environment. At the same time, we remain mindful of the geopolitical and macroeconomic risks, and note that transaction timing can be uneven.
John Weinberg: Overall, we are constructive on the environment. At the same time, we remain mindful of the geopolitical and macroeconomic risks and note that transaction timing can be uneven. Importantly, the strategy we've been executing over the last several years continues to deliver results. We remain focused on delivering outstanding client service and intend to continue investing thoughtfully as new opportunities arise. We're confident in our position as we start the new year. With that, let me turn it over to Tim.
John Weinberg: Overall, we are constructive on the environment. At the same time, we remain mindful of the geopolitical and macroeconomic risks and note that transaction timing can be uneven. Importantly, the strategy we've been executing over the last several years continues to deliver results. We remain focused on delivering outstanding client service and intend to continue investing thoughtfully as new opportunities arise. We're confident in our position as we start the new year. With that, let me turn it over to Tim.
Speaker #4: Importantly, the strategy we've been executing over the last several years continues to deliver results. We remain focused on delivering outstanding client service and intend to continue investing thoughtfully as new opportunities arise.
Speaker #4: We're confident in our position as we start the new year. With that, let me turn it over to
Speaker #2: Thank you, John. Evercore's fourth quarter and full-year results reflect strong performance across all our businesses. For the fourth quarter of 2025, net revenues operating income and EPS on a gap basis were $1.3 billion, $312 million, and $4.76 per share respectively.
Tim LaLonde: Thank you, John. Evercore's Q4 and full-year results reflect strong performance across all our businesses. For the Q4 of 2025, net revenues, operating income, and EPS on a GAAP basis were $1.3 billion, $312 million, and $4.76 per share, respectively. For the full year, net revenues, operating income, and EPS on a GAAP basis were $3.9 billion, $790 million, and $14.05 per share, respectively. For the full year, net revenues, operating income, and EPS on a GAAP basis were $3.9 billion, $790 million, and $14.05 per share, respectively. My comments from here will focus on non-GAAP metrics, which we believe are useful when evaluating our results.
Tim LaLonde: Thank you, John. Evercore's Q4 and full-year results reflect strong performance across all our businesses. For the Q4 of 2025, net revenues, operating income, and EPS on a GAAP basis were $1.3 billion, $312 million, and $4.76 per share, respectively. For the full year, net revenues, operating income, and EPS on a GAAP basis were $3.9 billion, $790 million, and $14.05 per share, respectively. For the full year, net revenues, operating income, and EPS on a GAAP basis were $3.9 billion, $790 million, and $14.05 per share, respectively. My comments from here will focus on non-GAAP metrics, which we believe are useful when evaluating our results.
Speaker #2: For the full year, net revenues operating income and EPS on a gap basis were $3.9 billion, $790 million, and $14.05 per share respectively. For the full year, net revenues operating income and EPS on a gap basis were $3.9 billion, $790 million, and $14.05 per share respectively.
Speaker #2: My comments from here will focus on non-GAAP metrics, which we believe are useful when evaluating standard GAAP reporting and our results. Our reconciliation of GAAP-to-adjusted results can be found in our press release, which is on our website.
Tim LaLonde: Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website. Our fourth quarter adjusted net revenues of $1.3 billion increased 32% versus the fourth quarter of 2024, our best quarter to date. On a full year basis, adjusted net revenues of $3.9 billion increased 29% compared to last year and represent our strongest year on record. Fourth quarter adjusted operating income of $337 million increased 55% versus the fourth quarter of 2024. Adjusted earnings per share of $5.13 increased 50% versus the prior year period. For the full year, adjusted operating income of $839 million increased 50%,...
Tim LaLonde: Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website. Our fourth quarter adjusted net revenues of $1.3 billion increased 32% versus the fourth quarter of 2024, our best quarter to date. On a full year basis, adjusted net revenues of $3.9 billion increased 29% compared to last year and represent our strongest year on record. Fourth quarter adjusted operating income of $337 million increased 55% versus the fourth quarter of 2024. Adjusted earnings per share of $5.13 increased 50% versus the prior year period. For the full year, adjusted operating income of $839 million increased 50%,...
Speaker #2: Our fourth quarter adjusted net revenues of $1.3 billion increased 32% versus the fourth quarter best quarter to date. of 2024. Our On a full-year basis, adjusted net revenues of $3.9 billion increased 29% compared to last year, and represent our strongest year on record.
Speaker #2: Fourth quarter adjusted operating income of $337 million increased 55% versus the fourth quarter of 2024. Adjusted earnings per share of $5.13 increased 50% versus the prior year period.
Speaker #2: For the full year, adjusted operating income of $839 million increased 50%, and adjusted earnings per share of $14.56 increased 55% versus the full year 2024.
Tim LaLonde: Adjusted earnings per share of $14.56 increased 55% versus the full year 2024. Our adjusted operating margin in the fourth quarter was 26%, an improvement of 380 basis points versus the prior year period. For the full year, our adjusted operating margin was 21.6%, up 300 basis points from the full year 2024. Turning to the businesses, fourth quarter adjusted advisory fees of over $1.1 billion increased 33% year-over-year and represents a record quarter. Adjusted advisory fees were $3.3 billion for the full year, up 34% compared to 2024, and 19% above our prior record in 2021. Our advisory results for the quarter and year reflect strong client activity levels and momentum that built throughout the year.
Tim LaLonde: Adjusted earnings per share of $14.56 increased 55% versus the full year 2024. Our adjusted operating margin in the fourth quarter was 26%, an improvement of 380 basis points versus the prior year period. For the full year, our adjusted operating margin was 21.6%, up 300 basis points from the full year 2024. Turning to the businesses, fourth quarter adjusted advisory fees of over $1.1 billion increased 33% year-over-year and represents a record quarter. Adjusted advisory fees were $3.3 billion for the full year, up 34% compared to 2024, and 19% above our prior record in 2021. Our advisory results for the quarter and year reflect strong client activity levels and momentum that built throughout the year.
Speaker #2: Our adjusted operating margin in the fourth quarter was 26%, an improvement of 380 basis points versus the prior year period. For the full year, our adjusted operating margin was 21.6%, up 300 basis points from the full year 2024.
Speaker #2: Turning to the businesses, fourth quarter adjusted advisory fees of over $1.1 billion increased 33% year over year and represent a record quarter. Adjusted advisory fees were $3.3 billion for the full year, up 34% compared to 2024 and 19% above our prior record in 2021.
Speaker #2: Our advisory results for the quarter and year reflect strong client activity levels and momentum that built throughout the year. Our fourth quarter adjusted underwriting fees were $49 million, up 87% from a year ago.
Tim LaLonde: Our fourth quarter adjusted underwriting fees were $49 million, up 87% from a year ago. For the full year, adjusted underwriting revenues were $180 million, up 14% versus last year, reflecting improved market conditions. Commissions and related revenue of $66 million in the fourth quarter was up 15% year over year. For the full year, commissions and related revenue of $243 million was up 13% compared to 2024. Both the quarter and the year represented record results. Fourth quarter adjusted asset management and administration fees were $24 million, up 10% versus the fourth quarter of last year. For the full year, adjusted asset management and administration were $91 million, up 8% versus 2024.
Tim LaLonde: Our fourth quarter adjusted underwriting fees were $49 million, up 87% from a year ago. For the full year, adjusted underwriting revenues were $180 million, up 14% versus last year, reflecting improved market conditions. Commissions and related revenue of $66 million in the fourth quarter was up 15% year over year. For the full year, commissions and related revenue of $243 million was up 13% compared to 2024. Both the quarter and the year represented record results. Fourth quarter adjusted asset management and administration fees were $24 million, up 10% versus the fourth quarter of last year. For the full year, adjusted asset management and administration were $91 million, up 8% versus 2024.
Speaker #2: For the full year, adjusted underwriting revenues were $180 million, up 14% versus last year, reflecting improved market conditions. Commissions and related revenue of $66 million in the fourth quarter was up 15% year over year.
Speaker #2: For the full year, commissions and related revenue of $243 million was up 13% compared to 2024. Both the quarter and the year represented record results.
Speaker #2: Fourth quarter adjusted asset management and administration fees were $24 million, up 10% versus the fourth quarter of last year. For the full year, adjusted asset management and administration were $91 million, up 8% versus 2024.
Speaker #2: Fourth quarter adjusted other revenue net was approximately $30 million, which compares to $24 million a year ago. For the full year, adjusted other revenue net was $103 million, compared to $105 million last year.
Tim LaLonde: Fourth quarter adjusted other revenue net was approximately $30 million, which compares to $24 million a year ago. For the full year, adjusted other revenue net was $103 million compared to $105 million last year. Approximately 25% of the other revenue in 2025 was a gain on our DCCP hedge, with the remainder predominantly from interest income. Turning to expenses, the adjusted compensation ratio for the fourth quarter was 62%, down 320 basis points from last year's fourth quarter. Our full year adjusted compensation ratio was 64.2%, down 150 basis points from 2024, and down 340 basis points over the past two years.
Tim LaLonde: Fourth quarter adjusted other revenue net was approximately $30 million, which compares to $24 million a year ago. For the full year, adjusted other revenue net was $103 million compared to $105 million last year. Approximately 25% of the other revenue in 2025 was a gain on our DCCP hedge, with the remainder predominantly from interest income. Turning to expenses, the adjusted compensation ratio for the fourth quarter was 62%, down 320 basis points from last year's fourth quarter. Our full year adjusted compensation ratio was 64.2%, down 150 basis points from 2024, and down 340 basis points over the past two years.
Speaker #2: Approximately $25% of the other revenue in 2025 was a gain on our DCCP hedge, with the remainder predominantly from interest income. Turning to expenses, the adjusted compensation ratio for the fourth quarter was 62%, down 320 basis points from last year's fourth quarter.
Speaker #2: Our full year adjusted compensation ratio was 64.2%, down 150 basis points from 2024, and down 340 basis points over the past two years. Our increased revenue and the reduction in our full year comp ratio reflect the benefits of a strengthening in the investment banking environment.
Tim LaLonde: Our increased revenue and the reduction in our full year comp ratio reflect the benefits of a strengthening in the investment banking environment, an increase in our market share, partially offset by our significant investment in talent, including our largest-ever addition of external SMDs. We are continuing to strive for additional gradual improvement in our comp ratio, balancing that with investment in our business and execution on our strategic growth plan. As I have said on past calls, our goals are to deliver excellence to our clients and to create value for our shareholders over the medium to longer term. The latter is accomplished by investing in and building our business and managing our expenses in a way that maximizes the present value of our future earnings and cash flows.
Tim LaLonde: Our increased revenue and the reduction in our full year comp ratio reflect the benefits of a strengthening in the investment banking environment, an increase in our market share, partially offset by our significant investment in talent, including our largest-ever addition of external SMDs. We are continuing to strive for additional gradual improvement in our comp ratio, balancing that with investment in our business and execution on our strategic growth plan. As I have said on past calls, our goals are to deliver excellence to our clients and to create value for our shareholders over the medium to longer term. The latter is accomplished by investing in and building our business and managing our expenses in a way that maximizes the present value of our future earnings and cash flows.
Speaker #2: An increase in our market share, partially offset by our significant investment in talent, including our largest-ever addition of external SMDs. We are continuing to strive for additional, gradual improvement in our comp ratio, balancing that with investment in our business and execution on our strategic growth plan.
Speaker #2: As I have said on past calls, our goals are to deliver excellence to our clients and to create value for our shareholders over the medium to longer term.
Speaker #2: The latter is accomplished by investing in and building our business, and managing our expenses in a way that maximizes the present value of our future earnings and cash flows.
Speaker #2: Adjusted non-comp expenses in the fourth quarter and full year were $156 million, and $552 million, up 26% and 17% respectively. The non-comp ratio for the full year was 14.2%, down 150 basis points from 2024, driven by stronger revenues.
Tim LaLonde: Adjusted non-comp expenses in the fourth quarter and full year were $156 million and $552 million, up 26% and 17%, respectively. The non-comp ratio for the full year was 14.2%, down 150 basis points from 2024, driven by stronger revenues. For the quarter, the non-comp ratio was 12%. The 17% increase in our full year non-comp expenses was in line with the increase we saw in 2024. The year-over-year increase reflects continued investment in the firm's technology infrastructure and increase in client-related expenses, particularly as deal activity accelerated throughout the year.
Tim LaLonde: Adjusted non-comp expenses in the fourth quarter and full year were $156 million and $552 million, up 26% and 17%, respectively. The non-comp ratio for the full year was 14.2%, down 150 basis points from 2024, driven by stronger revenues. For the quarter, the non-comp ratio was 12%. The 17% increase in our full year non-comp expenses was in line with the increase we saw in 2024. The year-over-year increase reflects continued investment in the firm's technology infrastructure and increase in client-related expenses, particularly as deal activity accelerated throughout the year.
Speaker #2: For the quarter, the non-comp ratio was 12%. The 17% increase in our full-year non-comp expenses was in line with the increase we saw in 2024.
Speaker #2: The year-over-year increase reflects continued investment in the firm's technology infrastructure, and increase in client-related expenses particularly as deal activity accelerated throughout the year. The increase also reflects higher rent and occupancy costs associated with office expansion, including additional floors in and renovation costs related to our New York offices, and additional occupancy costs related to our new leases in Paris, London, and Dubai.
Tim LaLonde: The increase also reflects higher rent and occupancy costs associated with office expansion, including additional floors in New York and renovation costs related to our New York offices, and additional occupancy costs related to our new leases in Paris, London, and Dubai. Client-related travel and entertainment spend also increased in the year as deal activity picked up. As we grow and continue to diversify our revenue streams, both geographically and with respect to lines of business, we must continue to invest in talent, technology, and infrastructure. We have discussed in some depth over the years our investment in talent. Some of our investment, such as in occupancy-related areas, is required to support our growth in the US and EMEA. At the time of investment, we must obtain enough capacity to provide for planned future growth.
Tim LaLonde: The increase also reflects higher rent and occupancy costs associated with office expansion, including additional floors in New York and renovation costs related to our New York offices, and additional occupancy costs related to our new leases in Paris, London, and Dubai. Client-related travel and entertainment spend also increased in the year as deal activity picked up. As we grow and continue to diversify our revenue streams, both geographically and with respect to lines of business, we must continue to invest in talent, technology, and infrastructure. We have discussed in some depth over the years our investment in talent. Some of our investment, such as in occupancy-related areas, is required to support our growth in the US and EMEA. At the time of investment, we must obtain enough capacity to provide for planned future growth.
Speaker #2: Client-related travel and entertainment spend also increased in the year, as deal activity picked up. As we grow and continue to diversify our revenue streams, both geographically and with respect to lines of business, we must continue to invest in talent, technology, and infrastructure.
Speaker #2: We have discussed in some depth over the years our investment in talent. Some of our investment, such as in occupancy-related areas, is required to support our growth in the US and EMEA.
Speaker #2: And at the time of investment, we must obtain enough capacity to provide for planned future growth. Part of our non-comp expense is for information services, for which the costs increase at a rate faster than the rate of inflation.
Tim LaLonde: Part of our non-comp expense is for information services, for which the costs increase at a rate faster than the rate of inflation. In addition, as is broadly known, there are significant improvements in the rapidly evolving technology landscape, and we must make investments and incur costs today that we believe will provide benefits in the medium term. In the past, we have discussed non-comp growth drivers such as headcount growth, inflation, and some upward pressure beyond that related to the items I have just discussed, and they will continue to influence non-comp costs in the near term. As a reminder, the non-comp expense line consists of a mix of fixed and variable expenses, of which a significant portion would be considered variable and will fluctuate with transaction activity and headcount, both in our businesses and in our corporate area, to execute on our increased transaction activity and growth initiatives.
Tim LaLonde: Part of our non-comp expense is for information services, for which the costs increase at a rate faster than the rate of inflation. In addition, as is broadly known, there are significant improvements in the rapidly evolving technology landscape, and we must make investments and incur costs today that we believe will provide benefits in the medium term. In the past, we have discussed non-comp growth drivers such as headcount growth, inflation, and some upward pressure beyond that related to the items I have just discussed, and they will continue to influence non-comp costs in the near term. As a reminder, the non-comp expense line consists of a mix of fixed and variable expenses, of which a significant portion would be considered variable and will fluctuate with transaction activity and headcount, both in our businesses and in our corporate area, to execute on our increased transaction activity and growth initiatives.
Speaker #2: In addition, as is broadly known, there are significant improvements in the rapidly evolving technology landscape and we must make investments and incur costs today that we believe will provide benefits in the medium term.
Speaker #2: In the past, we have discussed non-comp growth drivers such as headcount growth, inflation, and some upward pressure beyond that related to discussed. And they will continue to influence non-comp costs in the near term.
Speaker #2: As a reminder, the non-comp expense line consists of a mix of fixed and variable expenses, of which a significant portion would be considered variable and will fluctuate with transaction activity and headcount, both in our businesses and in our corporate area, to execute on our increased transaction activity and growth initiatives.
Speaker #2: Nonetheless, as you can see from the year comp and non-comp improvement in both our full ratios, we demonstrated leverage in 2025. We maintain a disciplined focus on our expenses, balancing that with investment in order to execute our strategic plan.
Tim LaLonde: Nonetheless, as you can see from the improvement in both our full-year comp and non-comp ratios, we demonstrated leverage in 2025. We maintain a disciplined focus on our expenses, balancing that with investment in order to execute our strategic plan. Our adjusted tax rate for the quarter was 29.4%, up from the Q4 of last year. Our full-year adjusted tax rate was 19.8%, down from 21.8% in 2024. The full-year adjusted tax rate was significantly impacted by, among other things, the appreciation of the firm's share price upon vesting of RSU grants above the original grant price, generating a benefit which was larger than the prior year's tax benefit. As a reminder, the majority of this impact typically occurs in the first quarter. Turning to our balance sheet.
Tim LaLonde: Nonetheless, as you can see from the improvement in both our full-year comp and non-comp ratios, we demonstrated leverage in 2025. We maintain a disciplined focus on our expenses, balancing that with investment in order to execute our strategic plan. Our adjusted tax rate for the quarter was 29.4%, up from the Q4 of last year. Our full-year adjusted tax rate was 19.8%, down from 21.8% in 2024. The full-year adjusted tax rate was significantly impacted by, among other things, the appreciation of the firm's share price upon vesting of RSU grants above the original grant price, generating a benefit which was larger than the prior year's tax benefit. As a reminder, the majority of this impact typically occurs in the first quarter. Turning to our balance sheet.
Speaker #2: Our adjusted tax rate for the quarter was 29.4%, up from the fourth quarter of last year. Our full year adjusted tax rate was 19.8%, down from 21.8% in 2024.
Speaker #2: The full year adjusted tax rate was significantly impacted by, among other things, the appreciation of the firm's share price upon vesting of RSU grants, above the original grant price, generating a benefit which was larger than the prior year's tax benefit.
Speaker #2: As a reminder, the majority of this impact typically occurs in the first quarter. Turning to our balance sheet, as of December 31st, our cash and investment securities total $3 billion.
Tim LaLonde: As of December 31, our cash and investment securities totaled $3 billion. In 2025, we returned the second largest amount of capital in the firm's history, totaling $812 million. This included approximately $151 million through dividends and $661 million through the repurchase of 2.4 million shares at an average price of $275.42. Our Q4 adjusted diluted share count was approximately 45 million shares, modestly higher than the Q3. For the full year, our weighted average share count ended at 44.4 million shares, approximately 225,000 shares higher versus the year prior.
Tim LaLonde: As of December 31, our cash and investment securities totaled $3 billion. In 2025, we returned the second largest amount of capital in the firm's history, totaling $812 million. This included approximately $151 million through dividends and $661 million through the repurchase of 2.4 million shares at an average price of $275.42. Our Q4 adjusted diluted share count was approximately 45 million shares, modestly higher than the Q3. For the full year, our weighted average share count ended at 44.4 million shares, approximately 225,000 shares higher versus the year prior.
Speaker #2: In 2025, we returned the second largest amount of capital in the firm's history, totaling $812 million. This included approximately $151 million through dividends, and $661 million through the repurchase of 2.4 million shares at an average price of $275.42.
Speaker #2: Our fourth quarter adjusted diluted share count was approximately 45 million shares, modestly higher than the third quarter. For the full year, our weighted average share count ended at 44.4 million shares, approximately 225,000 shares higher versus the year prior.
Speaker #2: We remain committed to repurchasing shares to offset dilution from our year-end RSU bonus grants, and for the fifth year in a row, we have repurchased a number of shares greater than that, and we expect to do so again in 2026.
Tim LaLonde: We remain committed to repurchasing shares to offset dilution from our year-end RSU bonus grants, and for the fifth year in a row, we have repurchased a number of shares greater than that, and we expect to do so again in 2026. We also repurchase shares sufficient to cover the number expected to be issued in both 2025 and 2026 in relation to the Robey Warshaw acquisition. 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 are pleased with our performance in 2025, and as John mentioned, we begin the year with strong momentum in all of our businesses. We believe we are well positioned for 2026 and are approaching this year with optimism.
Tim LaLonde: We remain committed to repurchasing shares to offset dilution from our year-end RSU bonus grants, and for the fifth year in a row, we have repurchased a number of shares greater than that, and we expect to do so again in 2026. We also repurchase shares sufficient to cover the number expected to be issued in both 2025 and 2026 in relation to the Robey Warshaw acquisition. 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 are pleased with our performance in 2025, and as John mentioned, we begin the year with strong momentum in all of our businesses. We believe we are well positioned for 2026 and are approaching this year with optimism.
Speaker #2: We also repurchased shares sufficient to cover the number expected to be issued in both 2025 and to the Robey Warshaw 2026 in relation acquisition.
Speaker #2: 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.
Speaker #2: We are pleased with our performance in 2025, and as John mentioned, we begin the year with strong momentum in all of our businesses. We believe we are well-positioned for 2026 and are approaching this year with optimism.
Speaker #2: With that, we will now open the line for questions. Thank you. We will now conduct the question-and-answer portion of today's conference. Please limit yourself to one question only.
Tim LaLonde: With that, we will now open the line for questions.
Tim LaLonde: With that, we will now open the line for questions.
Operator: Thank you. We will now conduct the question-and-answer portion of today's conference. Please limit yourself to one question only. You are welcome to rejoin the queue for any additional questions, time permitting. Again, to ask a question, please press the star key followed by the one key on your touch-tone phone. Our first question will come from James Yaro with Goldman Sachs.
Operator: Thank you. We will now conduct the question-and-answer portion of today's conference. Please limit yourself to one question only. You are welcome to rejoin the queue for any additional questions, time permitting. Again, to ask a question, please press the star key followed by the one key on your touch-tone phone. Our first question will come from James Yaro with Goldman Sachs.
Speaker #2: You are welcome to rejoin the queue for any additional questions, time permitting. Again, to ask a question, please press the star key followed by the one key on your touch-tone phone.
Speaker #2: And our first question will come from James Yarrow with Goldman Sachs.
Sungshin Jeong: Hi, this is Sungshin Jeong, stepping in for James. John, 2025 was a heavily mega cap M&A-driven market. So could you help us think through the outlook for the large deals to continue or even accelerate from here? Thanks.
Speaker #3: Hi, this is Sunshine Jones, step-in for James. John, 2025 was a heavily mega-cap M&A-driven market. So could you help us think through the outlook for the large deals to continue or even accelerate from here?
Sungshin Jeong: Hi, this is Sungshin Jeong, stepping in for James. John, 2025 was a heavily mega cap M&A-driven market. So could you help us think through the outlook for the large deals to continue or even accelerate from here? Thanks.
Speaker #3: Thanks.
Speaker #4: Thank you very much for the
John Weinberg: Thank you very much for the question. We think that we will continue to have a healthy environment. All of the things that have really existed to fuel the merger recovery still exist, whether it's business prospects for many of the large companies, the strategy outreach from the companies, access to capital, and in many respects, a relatively benign environment with respect to the regulatory side. Our backlogs are very strong, but those backlogs really incorporate both large cap and mid cap and small cap, really at all sizes. We are very optimistic about this year.
John Weinberg: Thank you very much for the question. We think that we will continue to have a healthy environment. All of the things that have really existed to fuel the merger recovery still exist, whether it's business prospects for many of the large companies, the strategy outreach from the companies, access to capital, and in many respects, a relatively benign environment with respect to the regulatory side. Our backlogs are very strong, but those backlogs really incorporate both large cap and mid cap and small cap, really at all sizes. We are very optimistic about this year.
Speaker #4: question. We think that we will continue to have a healthy environment. All of the things that have really existed to fuel the merger recovery still exist, whether it's business, prospects for many of the large companies, the strategy outreach from the companies, access to capital, and in many respects, a relatively benign environment with respect to the regulatory side.
Speaker #4: We are in our backlogs are very strong. But those backlogs really incorporate both large-cap and mid-cap and small-cap really at all sizes. We are very optimistic about this year.
Speaker #4: We continue to believe that it's going to be a constant and steady build. And we think that the if our backlog is any indication, we are going to see a continuation of large-cap deals as well as deals really of all shapes and sizes.
John Weinberg: We continue to believe that it's gonna be a constant and steady build, and we think that, if our backlog is any indication, we are gonna see a continuation of large cap deals as well as deals really of all shapes and sizes.
John Weinberg: We continue to believe that it's gonna be a constant and steady build, and we think that, if our backlog is any indication, we are gonna see a continuation of large cap deals as well as deals really of all shapes and sizes.
Speaker #2: Okay, thank you. We'll take our next question from Mike Brown with UBS.
Operator: Okay, thank you. We'll take our next question from Mike Brown with UBS.
Operator: Okay, thank you. We'll take our next question from Mike Brown with UBS.
Speaker #5: Hey, good morning. So in 2025, we had the a bit of a Goldilocks environment with the strong performance from our structuring and also M&A.
Mike Brown: Hey, good morning.
Mike Brown: Hey, good morning.
John Weinberg: Good morning.
John Weinberg: Good morning.
Mike Brown: In 2025, we had a bit of a Goldilocks environment with the strong performance from restructuring and also M&A. As we look to 2026, can both continue to remain elevated here? Can restructuring revenue actually grow in 2026 versus 2025? And if the restructuring market itself stays somewhat flat, how much additional share do you think you can get in liability management and restructuring?
Mike Brown: In 2025, we had a bit of a Goldilocks environment with the strong performance from restructuring and also M&A. As we look to 2026, can both continue to remain elevated here? Can restructuring revenue actually grow in 2026 versus 2025? And if the restructuring market itself stays somewhat flat, how much additional share do you think you can get in liability management and restructuring?
Speaker #5: As we look to 2026, can both continue to remain elevated here? Can restructuring revenue actually grow in 2026 versus 2025? And if the restructuring market itself stays somewhat flat, how much additional share do you think you can get in liability management and restructuring?
John Weinberg: We think that the environment where restructuring and M&A coexist, both strong, is highly likely to persist. Our backlogs in each of those areas are high and really in most respects, record levels. We think that with respect to restructuring, our backlog is very diversified. So we're looking at, you know, liability management, we're looking at restructurings, we're looking at bankruptcies. All of those things are quite full in our backlogs, and we think that those will continue. And really, we feel very good about the restructuring environment for our business. On the M&A side, it's the same, and we have very strong backlogs. We have real activity. We are in very serious and strong dialogues with corporations and management teams, and also boards. And we think that this is gonna persist.
John Weinberg: We think that the environment where restructuring and M&A coexist, both strong, is highly likely to persist. Our backlogs in each of those areas are high and really in most respects, record levels. We think that with respect to restructuring, our backlog is very diversified. So we're looking at, you know, liability management, we're looking at restructurings, we're looking at bankruptcies. All of those things are quite full in our backlogs, and we think that those will continue. And really, we feel very good about the restructuring environment for our business. On the M&A side, it's the same, and we have very strong backlogs. We have real activity. We are in very serious and strong dialogues with corporations and management teams, and also boards. And we think that this is gonna persist.
Speaker #4: We think that the environment where restructuring and M&A coexist, both strong is highly likely to persist. Our backlogs in each of those areas are high.
Speaker #4: And really, in most respects, record levels. We think that with respect to restructuring, our backlog is very diversified. So we're looking at whether liability management, we're looking at restructurings, we're looking at bankruptcies.
Speaker #4: All of those things are quite full in our backlogs, and we think that those will continue. And really, we feel very good about the restructuring environment for our business.
Speaker #4: On the M&A side, it's the same. We have very strong backlogs. We have real activity. We are in very serious and strong dialogues with corporations and management teams.
Speaker #4: And also boards. And we think that this is going to persist. So the answer to your question is, we believe that both will coexist, and both really will be quite strong, if our backlogs and our activity levels are any indication.
John Weinberg: So the answer to your question is, we believe that both will coexist and both really will be quite strong if our backlogs and our activity levels are any indication. In terms of market share, I think that we, I think, are continuing to pick up market share in liability management and restructuring. We feel really good about how we're covering clients, and really, the new activity coming in is very diversified. So we feel really, really good about really where we stand.
John Weinberg: So the answer to your question is, we believe that both will coexist and both really will be quite strong if our backlogs and our activity levels are any indication. In terms of market share, I think that we, I think, are continuing to pick up market share in liability management and restructuring. We feel really good about how we're covering clients, and really, the new activity coming in is very diversified. So we feel really, really good about really where we stand.
Speaker #4: In terms of market share, I think that we I think are continuing to pick up market share. In liability management and restructuring, we feel really good about how we're covering clients.
Speaker #4: And really, is very diversified. So we feel really good about the new activity coming in really where we stand.
Speaker #2: you. Our next Thank question comes from Brennan Hawkin with BMO Capital
Operator: Thank you. Our next question comes from Brennan Hawken with BMO Capital Markets.
Operator: Thank you. Our next question comes from Brennan Hawken with BMO Capital Markets.
Speaker #6: Good
Brennan Hawken: Good morning. Thank you for taking my question.
Brennan Hawken: Good morning. Thank you for taking my question.
Speaker #6: morning. Thank you for taking my Markets. question. So Tim, you talked a little bit about investing sort of making hay when the sun is shining on the tech side, which makes a lot of sense.
John Weinberg: Mm-hmm.
John Weinberg: Mm-hmm.
Brennan Hawken: So Tim, you talked a little bit about investing, sort of, you know, making hay when the sun is shining on the tech side, which makes a lot of sense. Could you help us maybe understand, is that gonna be calibrated to revenue, right? So you almost start to think about the non-comp ratio, not obviously, it's not gonna be the same as the comp ratio, inherently. But maybe think about the growth rate with an eye to that, and then maybe help us think about, you know, guardrails, about how you manage it. And also, are there any particular businesses that are tech-heavy? I know, like, the PCA business is a very data-driven business, so any color on that would be great. Thank you very much.
Brennan Hawken: So Tim, you talked a little bit about investing, sort of, you know, making hay when the sun is shining on the tech side, which makes a lot of sense. Could you help us maybe understand, is that gonna be calibrated to revenue, right? So you almost start to think about the non-comp ratio, not obviously, it's not gonna be the same as the comp ratio, inherently. But maybe think about the growth rate with an eye to that, and then maybe help us think about, you know, guardrails, about how you manage it. And also, are there any particular businesses that are tech-heavy? I know, like, the PCA business is a very data-driven business, so any color on that would be great. Thank you very much.
Speaker #6: Could you help us maybe understand, is that going to be right? So you almost start to think about the non-comp ratio not obviously, it's not going to be the same as the comp ratio.
Speaker #6: Inherently, but maybe think about the growth rate with an eye to that and maybe help us think about guardrails about how you manage it.
Speaker #6: Are there any particular businesses that are very data-driven and also tech-heavy? I know the PCA business is a good example of that. So any color on that would be great.
Speaker #6: Thank you very
Speaker #3: Yeah, sure, Brennan. Thanks for the
Tim LaLonde: Yeah, sure, Brennan, thanks for the question. Look, I think the way to think about it is, we feel like we've made significant strides, you know, with respect to growing the business and diversifying the business, both with respect to lines of business and geographically. And in order to kind of build a first-rate corporation and then, and then a foundation upon which to continue that kind of growth, we do need to invest in our infrastructure, and part of that is technology. We, you know, I mentioned in my comments about how there's a kind of a rapidly evolving landscape, and I don't need to go into that because it's well covered in the news.
Tim LaLonde: Yeah, sure, Brennan, thanks for the question. Look, I think the way to think about it is, we feel like we've made significant strides, you know, with respect to growing the business and diversifying the business, both with respect to lines of business and geographically. And in order to kind of build a first-rate corporation and then, and then a foundation upon which to continue that kind of growth, we do need to invest in our infrastructure, and part of that is technology. We, you know, I mentioned in my comments about how there's a kind of a rapidly evolving landscape, and I don't need to go into that because it's well covered in the news.
Speaker #3: question. Look, I it is we feel like we've much. think the way to think about
Speaker #1: made significant growing strides respect the , with . We've business You to business with respect to lines of business and , both geographically order and , and diversifying the both respect to business lines with of and geographically to kind diversifying the in first rate corporation and then and then found a order foundation upon kind of growth , we do need to invest in our infrastructure .
Speaker #1: made significant growing strides respect the , with . We've business You to business with respect to lines of business and , both geographically order and , and diversifying the both respect to business lines with of and geographically to kind diversifying the in first rate corporation and then and then found a order foundation upon kind of growth , we do need to invest in business And part of that is technology .
Speaker #1: made significant growing strides respect the , with . We've business You to business with respect to lines of business and , both geographically order and , and diversifying the both respect to business lines with of and geographically to kind diversifying the in first rate corporation and then and then found a order foundation upon kind of growth , we do need to invest in business in comments my there's a kind of you landscape I don't and need to go into that a it's , because well But news .
Tim LaLonde: But I think that, you know, you've seen a pickup probably in the investment in our non-comps over the last couple of years. And so the increase in 2024 was 16%, increase in 2025 was 17%. And, you know, I think in order to support the growth and the diversity and the technology initiatives, and so on, it-- I wouldn't be surprised to see something somewhat similar, as we head into 2026. I would note, though, I think that, you know, the good news is, the growth in the non-comps is less than the growth in our revenues.
Tim LaLonde: But I think that, you know, you've seen a pickup probably in the investment in our non-comps over the last couple of years. And so the increase in 2024 was 16%, increase in 2025 was 17%. And, you know, I think in order to support the growth and the diversity and the technology initiatives, and so on, it-- I wouldn't be surprised to see something somewhat similar, as we head into 2026. I would note, though, I think that, you know, the good news is, the growth in the non-comps is less than the growth in our revenues.
Speaker #1: in I think that , covered know , you've seen a probably in the evolving our Non-comp over the couple of last so the increase in 24 was 16% increase the in 17% .
Speaker #1: in order And , you know , to growth years . in the diversity and the And technology I was support the and on .
Speaker #1: so I wouldn't be surprised to see something somewhat similar head into as would note , though , I think that , you I know , the good is the is non-comp growth in the less revenues .
Speaker #1: so I wouldn't be surprised to see something somewhat similar head into as would note , though , I think that , you I know , the good is the is non-comp growth in the less revenues . our growth in so , this you know , corresponding revenue growth rates over those last two years And were 23% , 29% .
Tim LaLonde: So, you know, those corresponding revenue growth rates over those last two years were 23%, 29%, and hence we have made pretty significant progress on the non-comp ratio, bringing it down from 16.6% two years ago to 15.7% last year and 14.2% this year. So, you know, I think we're going to continue to invest in our infrastructure, but, you know, we're pleased with the fact that we're able to make some progress on the non-comp ratio.
Tim LaLonde: So, you know, those corresponding revenue growth rates over those last two years were 23%, 29%, and hence we have made pretty significant progress on the non-comp ratio, bringing it down from 16.6% two years ago to 15.7% last year and 14.2% this year. So, you know, I think we're going to continue to invest in our infrastructure, but, you know, we're pleased with the fact that we're able to make some progress on the non-comp ratio.
Speaker #1: And we have made pretty hence significant progress Non-comp on the ratio down , bringing it from 16.6% two years ago to 15.7 last year .
Speaker #1: And year . so , you And I 14.2% this know , continue to invest in our infrastructure going to but , you know , we're pleased with the we're and progress on fact that the Non-comp able to ratio .
John Weinberg: Sure. But the businesses that drive the non-comp, any color on that? Sorry.
Brennan Hawken: Sure. But the businesses that drive the non-comp, any color on that? Sorry.
Tim LaLonde: Pardon?
Tim LaLonde: Pardon?
John Weinberg: Any color on which business drive the non-comp? Yeah.
Brennan Hawken: Any color on which business drive the non-comp? Yeah.
Speaker #2: Sure . But and the businesses
Tim LaLonde: Yeah. It's why I would say that it's Yes, PCA is certainly one, but we're also, you know, for our kind of standard and traditional M&A and restructuring businesses, we're using it in equities. It's really. And frankly, in corporate as well, as we seek to drive efficiencies in the corporate side of our business. And so it's really, I would say, comprehensive. And then, you know, aside from the technology, as we expand, and I you know pleased with the progress we've made in our geographic expansion, particularly in Europe, and that, of course, leads to both in Europe and in the US, increased occupancy costs as well, which are, you know, part of the underlying growth you're seeing in the non-comp expense.
Tim LaLonde: Yeah. It's why I would say that it's Yes, PCA is certainly one, but we're also, you know, for our kind of standard and traditional M&A and restructuring businesses, we're using it in equities. It's really. And frankly, in corporate as well, as we seek to drive efficiencies in the corporate side of our business. And so it's really, I would say, comprehensive. And then, you know, aside from the technology, as we expand, and I you know pleased with the progress we've made in our geographic expansion, particularly in Europe, and that, of course, leads to both in Europe and in the US, increased occupancy costs as well, which are, you know, part of the underlying growth you're seeing in the non-comp expense.
Speaker #2: Any color on that? Sorry about that.
Speaker #1: Pardon ?
Speaker #2: Any drive the make some Non-comp ? Yeah . businesses
Speaker #1: Yeah . pKa is certainly one . But also , you know for our , our kind of yes . standard M&A traditional and businesses .
Speaker #1: I would It's say that it's
Speaker #1: We're using it It's in color on really equities . and frankly in seek drive
Speaker #1: efficiencies side of corporate business . to I would say really it's . And aside from the and technology , as we expand and I , know , you I'm pleased with the progress we've made in our , particularly in Europe .
Speaker #1: And and that of leads to expansion both in Europe course , and in the US , increased occupancy geographic which , which are , you know , part which of the underlying growth you're the seeing in Non-comp expense .
John Weinberg: Great. Thanks, Tim, and, well, well done on the comp ratio, by the way.
Brennan Hawken: Great. Thanks, Tim, and, well, well done on the comp ratio, by the way.
Tim LaLonde: Thank you.
Tim LaLonde: Thank you.
Operator: Thank you. Our next question comes from Devin Ryan with Citizens Bank.
Operator: Thank you. Our next question comes from Devin Ryan with Citizens Bank.
Speaker #1: great .
Speaker #2: And
Speaker #2: well done Thanks , Tim . . On the Okay , by the comp ratio , way .
Speaker #1: you Thank .
Devin Ryan: Hi, great. Good morning, John. Good morning, Tim. Question just on kind of the broader outlook. Obviously, a lot of, I think, enthusiasm in there, just around kind of the momentum into 2026, and I think we can see a lot of that even from the outside in terms of, you know, M&A backlogs and just kind of where the types of deals that Evercore is currently involved in. So, great to see that. And then you hit on, you know, some of the momentum you're still seeing in restructuring. It'd be great if you could just hit on some of the other non-M&A businesses, whether that's private capital or capital markets advisory, and just kind of where all these stack together. So I think people are trying to kind of put it all together.
Devin Ryan: Hi, great. Good morning, John. Good morning, Tim. Question just on kind of the broader outlook. Obviously, a lot of, I think, enthusiasm in there, just around kind of the momentum into 2026, and I think we can see a lot of that even from the outside in terms of, you know, M&A backlogs and just kind of where the types of deals that Evercore is currently involved in. So, great to see that. And then you hit on, you know, some of the momentum you're still seeing in restructuring. It'd be great if you could just hit on some of the other non-M&A businesses, whether that's private capital or capital markets advisory, and just kind of where all these stack together. So I think people are trying to kind of put it all together.
Speaker #3: Thank question comes next Devin Ryan with citizens you . Bank Our
Speaker #3: .
Speaker #4: Hi . Good morning Tim Great . just from . Question morning John . on kind broader a outlook . Obviously of I think in there just kind of the momentum into around 2026 .
Speaker #4: And I think we see a lot of that outside in the even from terms of , know , you M&A backlogs and just kind types of deals that Evercore is of involved great to see that .
Speaker #4: And then you hit So on some momentum you're still seeing of the restructuring in great if you in . could just hit on some of the .
Speaker #4: other non M&A It'd be that's private capital or capital markets advisory , and just kind where all of these stacked together . So I think people are trying of put all together to kind businesses , businesses clearly grown and are bigger have contribution .
Devin Ryan: The non-M&A businesses have clearly grown and are bigger contribution. You've got this, you know, M&A business that's on fire right now. Where are these other businesses kind of in that mix in terms of, like, growth expectations over the next 12 to 18 months? Can they keep up at a similar pace, or are they kind of a ballast in the market? Maybe M&A grows faster, but these other businesses can provide a little bit more stability. Just good to get some kind of directional color there. Thank you.
Devin Ryan: The non-M&A businesses have clearly grown and are bigger contribution. You've got this, you know, M&A business that's on fire right now. Where are these other businesses kind of in that mix in terms of, like, growth expectations over the next 12 to 18 months? Can they keep up at a similar pace, or are they kind of a ballast in the market? Maybe M&A grows faster, but these other businesses can provide a little bit more stability. Just good to get some kind of directional color there. Thank you.
Speaker #4: You've got this M&A that's on fire business now. Where are these other businesses kind of in that mix in terms of growth expectations over the next 12 to 18 months?
Speaker #4: Can they keep up at a similar pace, or are they kind of ballast in the—maybe the market grows faster, but these other businesses a little bit can bring stability.
John Weinberg: Sure. Sure, Devin. We really continue to see strength throughout our system. I think, as we said, virtually all of our businesses are at or very close to record levels. In terms of the businesses which you specifically highlighted, private capital advisory, let me start with that. PCA had a record year this year. PFG, which is our, as you know, is our fundraising business, they had a record year. Our debt advisory slash private capital markets businesses, which really were new two years ago or three years ago, have actually performed at a very high level and are setting records also. Our real estate advisory businesses have really picked up dramatically. So across the board, we're seeing momentum to our businesses.
John Weinberg: Sure. Sure, Devin. We really continue to see strength throughout our system. I think, as we said, virtually all of our businesses are at or very close to record levels. In terms of the businesses which you specifically highlighted, private capital advisory, let me start with that. PCA had a record year this year. PFG, which is our, as you know, is our fundraising business, they had a record year. Our debt advisory slash private capital markets businesses, which really were new two years ago or three years ago, have actually performed at a very high level and are setting records also. Our real estate advisory businesses have really picked up dramatically. So across the board, we're seeing momentum to our businesses.
Speaker #4: Just good kind of there . color Thank to get some directional
Speaker #1: in terms of the businesses which you specifically highlighted , private capital me start advisory . Let with that . pKa had a record year this year .
Speaker #1: which is our PFG , , as you know , is our fundraising business . They had year . Our debt advisory slash private capital markets businesses , really were which a record ago or ago new actually , have performed at a two years very high are three years setting records also , our real estate advisory businesses level and really picked up dramatically .
John Weinberg: So in terms of the breakout between M&A and other businesses, it's actually still continuing to be very high. Even when M&A running as hot as it is, we still have 45% of our businesses are non-M&A, and I think that's going to persist no matter really how strong M&A gets. Now, obviously, if M&A really hits the tsunami, that may be hard to keep on top of that, because, you know, the M&A business, as you know, has great leverage in our system. But I think really what you're seeing is a real diversification. We've worked really hard to diversify. We've built out these very, very strong businesses, and we continue to see that.
John Weinberg: So in terms of the breakout between M&A and other businesses, it's actually still continuing to be very high. Even when M&A running as hot as it is, we still have 45% of our businesses are non-M&A, and I think that's going to persist no matter really how strong M&A gets. Now, obviously, if M&A really hits the tsunami, that may be hard to keep on top of that, because, you know, the M&A business, as you know, has great leverage in our system. But I think really what you're seeing is a real diversification. We've worked really hard to diversify. We've built out these very, very strong businesses, and we continue to see that.
Speaker #1: So across the board , we're momentum to our So in businesses . seeing terms of in terms of the the breakout between M&A and businesses , it's it's actually high , very even when M&A hot as it running as , we we is still have 45% of our businesses are non .
Speaker #1: So across the board , we're momentum to our So in businesses . seeing terms of in terms of the the breakout between M&A and businesses , it's it's actually high , very even when M&A hot as it running as , we we is still have 45% of our businesses are non M&A persist no matter really strong how M&A gets .
Speaker #1: Now, obviously, if it really hits the tsunami, that may be hard to pick up. M&A track to keep on top of that because, you know, keep M&A business, as you know, has great— in our leverage system.
Speaker #1: Now obviously if really hits the tsunami that may be hard to pick up . M&A track to keep on top of that because know , keep M&A business as you know , has great in our you I think really But what you're seeing real diversification .
John Weinberg: On the PCA side, which, as I said, had a record year, they had a very high market share this year. I think it was over 45%. They continued to be looking at a very diversified product set, whether that is LP-based or the GP-based businesses. As you know, the GP is a continuation fund business, which has actually really been on fire, but we have significant new products in that business also. So I think really what we've, what we're really building and working hard to do is to keep our, you know, very strong businesses and performing at the highest level, but also making sure that we are investing in the diversification, which we have promised shareholders that we will do.
John Weinberg: On the PCA side, which, as I said, had a record year, they had a very high market share this year. I think it was over 45%. They continued to be looking at a very diversified product set, whether that is LP-based or the GP-based businesses. As you know, the GP is a continuation fund business, which has actually really been on fire, but we have significant new products in that business also. So I think really what we've, what we're really building and working hard to do is to keep our, you know, very strong businesses and performing at the highest level, but also making sure that we are investing in the diversification, which we have promised shareholders that we will do.
Speaker #1: We've is a worked really hard to diversify . We've built out these strong very , very businesses and we continue to see that on the PCA side , had , which as I said , had a record year .
Speaker #1: They had a high market share this year . I think it was over 45% . They continue to looking at be a very set diversified product that is LP based or the the GP based businesses , as you know , that , whether the is GP the is the business , continuation fund which , which has actually really been on fire .
Speaker #1: But we have new products in business also. So, a significant thing really is what we've really — what we're building and working hard to do to keep our, you know, businesses very strong and performing at the highest level, but also making sure that we are investing in that diversification, which we have promised shareholders we will do.
John Weinberg: And I think so far we're, you know, we're working hard, and it's going quite well.
John Weinberg: And I think so far we're, you know, we're working hard, and it's going quite well.
Speaker #1: And I think that we so far we're , you know , we're working hard it's and and and it's going quite well .
Operator: Our next question will come from Daniel Kacharov with Bank of America.
Operator: Our next question will come from Daniel Kacharov with Bank of America.
Speaker #4: Thank you. Excellent. Thank you.
Tim LaLonde: Good morning, and thank you for taking my question. Given the sell-off in software yesterday and as well as your stock's reaction, there seems to be some fears just about the potential impact AI may have on advisory businesses in 2026. I was wondering if you could talk to us about the potential disruption risks AI may pose to your pipelines, and if you can provide any color on sector exposures in your backlogs, both on the public and private sides, that would be very helpful. Thank you very much.
Daniel Cocchiara: Good morning, and thank you for taking my question. Given the sell-off in software yesterday and as well as your stock's reaction, there seems to be some fears just about the potential impact AI may have on advisory businesses in 2026. I was wondering if you could talk to us about the potential disruption risks AI may pose to your pipelines, and if you can provide any color on sector exposures in your backlogs, both on the public and private sides, that would be very helpful. Thank you very much.
Speaker #3: Our next question will come from Daniel Kucera with Bank of America .
Speaker #5: Good morning and thank you for taking my question . given Just the sell off in software yesterday and as well as your stocks seems to be some reaction , there about the potential fears just impact AI may have on advisory businesses in 2026 .
Speaker #5: wondering if you I could talk to us was about the potential disruption risks AI may pose to your and if you pipelines , can provide any color on sector backlogs , exposures in your public both on the and private sides , I'll be very Thank you helpful .
John Weinberg: ... Sure. Obviously, we've taken a strong look at that, certainly, especially over the last 24 hours. And honestly, we have, in our backlogs and really our business activities, we are very diversified. There's no question that AI is influencing the world. As we look at our business in the near and medium term, we really don't see disruption. Now, obviously, the markets could be significantly seeing further disruption, and I think it would be unrealistic to say if the markets got very disruptive, that it wouldn't impact our business. Certainly, it can. But right now, we look at what we're working on, our backlogs, really what we're seeing, as I said, near term and medium term, and given our diversification, really along products, geographies, and sectors, we actually feel quite good about where we stand and really the stability of our business.
John Weinberg: ... Sure. Obviously, we've taken a strong look at that, certainly, especially over the last 24 hours. And honestly, we have, in our backlogs and really our business activities, we are very diversified. There's no question that AI is influencing the world. As we look at our business in the near and medium term, we really don't see disruption. Now, obviously, the markets could be significantly seeing further disruption, and I think it would be unrealistic to say if the markets got very disruptive, that it wouldn't impact our business. Certainly, it can. But right now, we look at what we're working on, our backlogs, really what we're seeing, as I said, near term and medium term, and given our diversification, really along products, geographies, and sectors, we actually feel quite good about where we stand and really the stability of our business.
Speaker #5: very much .
Speaker #1: Sure . Obviously we've taken a strong look at that . especially over the last 24 hours . And honestly , we have in our in our backlogs and really our business very diversified .
Speaker #1: There is no question that AI is influencing the world. As we look at our business in the near and longer term, we really don't see disruption.
Speaker #1: Now , obviously , the markets could significantly be disruption and it would be I think unrealistic to say if the markets got very it wouldn't our disruptive , that impact business .
Speaker #1: Certainly it can , but right now we look at what we're working our on , backlogs , really what we're seeing , as I said , near term and medium term and given our diversification along products really , geographies and sectors , we actually feel quite good about where we stand .
Operator: Thank you. As a reminder, that is star one to ask a question. And our next question will come from Alex Bond with KBW.
Operator: Thank you. As a reminder, that is star one to ask a question. And our next question will come from Alex Bond with KBW.
Speaker #1: And really the of our business stability .
Speaker #3: Thank . As a that reminder , is star one to ask a question you and next our question will come from Alex Bond with KB .
Alex Bond: Hey, good morning, everyone. I have a question on the expectations for ECM in 2026. So the IPO sentiment continues to improve, and it seems like there could be a strong lineup of large deals coming to market sometime in the near future. Can you just give us an update on your backlog here and maybe high-level outlook for the year? And then also on the equities front, if this environment that we're in now, in terms of heightened volatility, becomes more entrenched or persists, can you just help us think about maybe what the right or what the revenue potential is for that area of the business? Thank you.
Alex Bond: Hey, good morning, everyone. I have a question on the expectations for ECM in 2026. So the IPO sentiment continues to improve, and it seems like there could be a strong lineup of large deals coming to market sometime in the near future. Can you just give us an update on your backlog here and maybe high-level outlook for the year? And then also on the equities front, if this environment that we're in now, in terms of heightened volatility, becomes more entrenched or persists, can you just help us think about maybe what the right or what the revenue potential is for that area of the business? Thank you.
Speaker #6: Hey , good morning I have everyone . a question on the expectations for for ECM in 2026 . So IPO sentiment continues to the improve and seems like there could be a lineup of strong deals coming to market sometime in the future .
Speaker #6: near give Can you just give us an update on your backlog here and maybe , maybe high level outlook for the year and then also on the equities front , if this environment that we're in now in terms of heightened volatility becomes more entrenched or persists , can you think about maybe just help us or what the right what the potential that revenue area of business ?
John Weinberg: Sure. In terms of our backlog, our backlogs are good, and they're building. We really saw a really healthy build through the fourth quarter, and I think that has just continued. We will absolutely be involved in what I think is a very healthy IPO business going forward here, and I think we're feeling quite good about really our activity levels. As you know, we've really diversified. We are—we're not just in healthcare, but we're looking... You know, we are very involved in many different sectors now, and we've really spent a lot of time and effort building out our capabilities in those areas. And I think also, really with respect to our activity levels, having strong research with ISI really has helped us to stay involved in thinking about a lot of different sectors.
John Weinberg: Sure. In terms of our backlog, our backlogs are good, and they're building. We really saw a really healthy build through the fourth quarter, and I think that has just continued. We will absolutely be involved in what I think is a very healthy IPO business going forward here, and I think we're feeling quite good about really our activity levels. As you know, we've really diversified. We are—we're not just in healthcare, but we're looking... You know, we are very involved in many different sectors now, and we've really spent a lot of time and effort building out our capabilities in those areas. And I think also, really with respect to our activity levels, having strong research with ISI really has helped us to stay involved in thinking about a lot of different sectors.
Speaker #6: Thank is for .
Speaker #1: Sure . In terms terms of our backlog , our backlogs are we we good building really saw a a really healthy build through the fourth quarter .
Speaker #1: And I just think that is continued. We will absolutely be involved in what I think is a very healthy IPO business going here.
Speaker #1: And I think feeling quite we're really about forward our activity . As you know , we've really levels diversified . We are we're not just in healthcare , but we're looking you know , we are very many involved in different sectors now .
Speaker #1: And we've really spent a lot of time and effort building out our capabilities in those areas . And I think with respect to our activity also really levels , having strong research with ISI really has helped us to stay involved in thinking about a lot of different sectors .
John Weinberg: The bottom line is that I think the equity capital markets business is actually healthy and growing. We expect that it's gonna continue along the lines of where it was in the fourth quarter and strengthening from there. So we're feeling quite good about that.
John Weinberg: The bottom line is that I think the equity capital markets business is actually healthy and growing. We expect that it's gonna continue along the lines of where it was in the fourth quarter and strengthening from there. So we're feeling quite good about that.
Speaker #1: The bottom line is that that I think the equity capital markets business is , is actually healthy and growing . expect that it's We going to continue along the lines of where it was in the fourth quarter and and from strengthening there .
Alex Bond: Great. Thank you. That's helpful.
Alex Bond: Great. Thank you. That's helpful.
Operator: Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities.
Operator: Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities.
Speaker #1: So we're feeling quite good about that .
Speaker #6: you . That's helpful Great . Thank .
Jim Mitchell: Hey, good morning. Tim, I guess I'll ask the question that you probably don't want to answer, but you highlighted, I think over the last two years, comp ratio improvement of 340 basis points. Is that sort of your definition of gradual, and a decent way to think about the next couple of years, assuming the environment continues to improve as we expect? Just any help on how you're thinking about the evolution of the comp ratio from here.
Jim Mitchell: Hey, good morning. Tim, I guess I'll ask the question that you probably don't want to answer, but you highlighted, I think over the last two years, comp ratio improvement of 340 basis points. Is that sort of your definition of gradual, and a decent way to think about the next couple of years, assuming the environment continues to improve as we expect? Just any help on how you're thinking about the evolution of the comp ratio from here.
Speaker #3: Thank you . Our next question comes Mitchell from Jim with Seaport Global Securities .
Speaker #1: Hey good Tim . I guess I'll ask the . probably don't want to answer , but you highlighted , I think , over the last two years , comp ratio of improvement 340 basis points .
Speaker #1: Is that sort of your definition of of gradual decent and a way to think about the next couple of assuming the years , environment continues to improve , as we expect just any , any help on how you're thinking about the evolution of the comp ratio from here ?
Tim LaLonde: Yeah. Hi, Jim, and sure, happy to share some thoughts. And yeah, as you mentioned, we have made some progress these last couple of years, 340 basis points over the last two years, as we came down from 67.6 to 65.7, and now 64.2 this year. And look, as you know, and I don't wanna make this answer sound too much like a disclaimer, but there are really a lot of things that go into determining the comp ratio, and it has to do with absolute revenues, revenue growth, you know, market comp, and, you know, competitive environment, number of SMD and non-SMDs hiring. So there's an awful lot of things that go into that.
Tim LaLonde: Yeah. Hi, Jim, and sure, happy to share some thoughts. And yeah, as you mentioned, we have made some progress these last couple of years, 340 basis points over the last two years, as we came down from 67.6 to 65.7, and now 64.2 this year. And look, as you know, and I don't wanna make this answer sound too much like a disclaimer, but there are really a lot of things that go into determining the comp ratio, and it has to do with absolute revenues, revenue growth, you know, market comp, and, you know, competitive environment, number of SMD and non-SMDs hiring. So there's an awful lot of things that go into that.
Speaker #7: Yeah . Hi , Jim . And sure happy to share some thoughts . as you you know , And mentioned , we have made some progress these last couple of years .
Speaker #7: 340 basis points over the last two years . As we came down from 67 6 to 65 seven . And now two this year 64 .
Speaker #7: And , as look you know and don't don't want to make this sound too answer much like a but disclaimer , there really a lot of things that go into comp determining the ratio .
Speaker #7: it And with has to do absolute revenue growth , you know , market comp revenues , you know , competitive environment , number SMEs and non SMEs .
Speaker #7: of there's a there's an awful lot of things that go into that . And what I'd say is you know we're to striving make continued progress .
Tim LaLonde: And what I'd say is, you know, we're striving to make continued progress. Now, you know, you know, whether we could continue to decrease it every year at the same kind of pace and magnitude that you've seen over the last couple of years, might be a bit challenging, but we're striving to make continued improvement, you know, as we head into 2026.
Tim LaLonde: And what I'd say is, you know, we're striving to make continued progress. Now, you know, you know, whether we could continue to decrease it every year at the same kind of pace and magnitude that you've seen over the last couple of years, might be a bit challenging, but we're striving to make continued improvement, you know, as we head into 2026.
Speaker #7: Now you know know whether we you could continue to decrease it every year at the same kind of pace . And magnitude seen over last that you've the couple of years might be a bit challenging we're , but striving to to make continued improvement , you know , as we head into 26 .
Jim Mitchell: Okay, thanks.
Jim Mitchell: Okay, thanks.
Operator: Thank you. Our next question comes from Brendan O'Brien with Wolfe Research.
Operator: Thank you. Our next question comes from Brendan O'Brien with Wolfe Research.
Speaker #1: Okay . Thanks .
Brendan O'Brien: Good morning, and thank you for taking my question. I just wanted to ask on the sponsor backdrop, and specifically, just how you characterize the conversations that you're having with your sponsor clients at the moment, and whether there's been any notable shifts in the tenor of those discussions, and how we should be thinking about the trajectory of, you know, sponsor activity throughout the remainder of this year.
Brendan O'Brien: Good morning, and thank you for taking my question. I just wanted to ask on the sponsor backdrop, and specifically, just how you characterize the conversations that you're having with your sponsor clients at the moment, and whether there's been any notable shifts in the tenor of those discussions, and how we should be thinking about the trajectory of, you know, sponsor activity throughout the remainder of this year.
Speaker #3: Thank you next question . comes Our from Brendan O'Brien with Research .
Speaker #8: Good morning , and thank you for my question . I guess I just wanted to ask on the taking backdrop and specifically just how you'd characterize the conversations that you're having with your sponsor clients at the whether moment and there's been any notable tenor of those shifts in the how we should be thinking about the trajectory of sponsor activity the remainder of this throughout year .
John Weinberg: Thanks for the question. As you have seen, we've had a very interesting set of circumstances with sponsors. We have a lot of dry powder, we have LPs that really want liquidity, and we have markets that seem to be recovering. And in many respects, the sponsor business has really started to gain momentum in terms of that activity level, on the M&A side, with size being a dictator, the bigger, the more active you're seeing in the market. I think what we're seeing on the M&A side, the market is starting to really start to diversify some, and some of the middle market assets or even the B assets are becoming more liquid.
John Weinberg: Thanks for the question. As you have seen, we've had a very interesting set of circumstances with sponsors. We have a lot of dry powder, we have LPs that really want liquidity, and we have markets that seem to be recovering. And in many respects, the sponsor business has really started to gain momentum in terms of that activity level, on the M&A side, with size being a dictator, the bigger, the more active you're seeing in the market. I think what we're seeing on the M&A side, the market is starting to really start to diversify some, and some of the middle market assets or even the B assets are becoming more liquid.
Speaker #1: Thanks for the question . As you have seen , we've had a very interesting set of circumstances with sponsors . We have a lot of dry powder .
Speaker #1: We have LPs that really want liquidity, and we have markets that seem to be recovering. And in many respects, the sponsor business has really started to gain momentum in terms of that activity level.
Speaker #1: On the M&A side , with size being a dictator , the bigger , the more active you're seeing in the I think market .
Speaker #1: we're seeing what on the M&A side that the market is starting to really start to diversify some and that some of the middle market assets or even the assets are becoming more , more seeing in .
John Weinberg: We're seeing, in some respects, a capitulation where sponsors are trying to really look carefully at their portfolios and start to move things out because they really want to create more movement. And so I think there will be a growing momentum in the sponsor business. Obviously, the big, highest quality assets will continue, and then I think you're gonna see assets throughout, really, the spectrum. Now, one of the very important things in terms of sponsor activity for us is, as we've said, we have a very strong set of businesses which service sponsors, whether it's PCA, PFG, or LP stake sales, and those businesses are very healthy. The dialogues are very strong. We're seeing that activity level continue. And so from that perspective, the sponsor business for us continues to build.
John Weinberg: We're seeing, in some respects, a capitulation where sponsors are trying to really look carefully at their portfolios and start to move things out because they really want to create more movement. And so I think there will be a growing momentum in the sponsor business. Obviously, the big, highest quality assets will continue, and then I think you're gonna see assets throughout, really, the spectrum. Now, one of the very important things in terms of sponsor activity for us is, as we've said, we have a very strong set of businesses which service sponsors, whether it's PCA, PFG, or LP stake sales, and those businesses are very healthy. The dialogues are very strong. We're seeing that activity level continue. And so from that perspective, the sponsor business for us continues to build.
Speaker #1: Some capitulation where, in respects, sponsors are trying to really look carefully at their portfolios and start to move things out because they really want to create more movement.
Speaker #1: And so I think there will be a growing momentum in the sponsor business . Obviously , the big highest quality will assets continue and I think then you're going to see assets throughout , really the spectrum .
Speaker #1: Now , one of the very important things in terms of sponsor activity for us is , as we've said , a we have very set of strong businesses which service sponsors , whether it's PCA or or PFG LP stake sales those , and very healthy .
Speaker #1: The dialogues are businesses are very strong . We're seeing that activity level continue . And so from that perspective , the sponsor business for us continues to build as we've as we've articulated in many calls before , this , one of the things that we're spending a lot of time focusing on how do we is bring together all of the strengths of our businesses , the M&A , the M&A side and the coverage side of the sponsors themselves .
John Weinberg: As we've articulated in many calls before this, one of the things that we're spending a lot of time focusing on is, how do we bring together all of the strengths of our businesses? The M&A, the M&A side and the coverage side of the sponsors themselves, the PCA business, and how we really interact with GPs on that business, the fundraising business with PFG, and really, how we think about advising the senior people in these businesses about liquidity. And I think we're making a lot of progress on that, and we're feeling momentum there. So I'm hoping that that will lead to even more dialogue, activity, and opportunities for us to serve this very important investor client base.
John Weinberg: As we've articulated in many calls before this, one of the things that we're spending a lot of time focusing on is, how do we bring together all of the strengths of our businesses? The M&A, the M&A side and the coverage side of the sponsors themselves, the PCA business, and how we really interact with GPs on that business, the fundraising business with PFG, and really, how we think about advising the senior people in these businesses about liquidity. And I think we're making a lot of progress on that, and we're feeling momentum there. So I'm hoping that that will lead to even more dialogue, activity, and opportunities for us to serve this very important investor client base.
Speaker #1: PCA The business and how we really interact with with GPS on that business . The fundraising business with PFG , and really how we think about advising the senior people in these in these businesses about liquidity .
Speaker #1: think a lot of we're making And I momentum , a lot of on that . progress And we're feeling momentum there . So I'm hoping that that will lead to even more dialogue , activity and opportunities for us to serve this very important investment client base .
Daniel Kacharov: Great. Thank you for taking my question.
Brendan O'Brien: Great. Thank you for taking my question.
Operator: Next, we have a question from Nathan Stein with Deutsche Bank.
Operator: Next, we have a question from Nathan Stein with Deutsche Bank.
Speaker #8: Great. Thank you for taking my question.
Nathan Stein: Hey, good morning, everyone. So large and mega deals really fueled the deal-making recovery in 2025, and we're all monitoring the industry data to see when this could really start to widen out down market. Can you talk about the - are you seeing an uptick in the core upper middle market transactions within your business lines?
Nathan Stein: Hey, good morning, everyone. So large and mega deals really fueled the deal-making recovery in 2025, and we're all monitoring the industry data to see when this could really start to widen out down market. Can you talk about the - are you seeing an uptick in the core upper middle market transactions within your business lines?
Speaker #3: Next, we have a question from Stein with Nathan at Deutsche Bank.
Speaker #9: Hey , good morning everyone . So large mega deals really fueled the deal making recovery in 2025 . And we're all monitoring the industry data to this could see when really start to widen out down market .
Speaker #9: Can you talk about whether you are seeing an uptick in the core upper middle market transactions within your business lines?
John Weinberg: We are definitely seeing more activity. We are definitely seeing more in our backlog. We do have diversification in our backlog, so we are seeing. We have a significant number of what you would classify as middle market. And frankly, if you think about our investment as a firm, we are investing in coverage of the middle market, and so we're seeing more of those types of assignments coming into our backlog as the people who we've hired over the last two or three years begin to mature and to hit their stride. So we're seeing it building out. In terms of the market itself, which I think is what your question is, is there really continued or increasing activity in the middle market? We think there is.
John Weinberg: We are definitely seeing more activity. We are definitely seeing more in our backlog. We do have diversification in our backlog, so we are seeing. We have a significant number of what you would classify as middle market. And frankly, if you think about our investment as a firm, we are investing in coverage of the middle market, and so we're seeing more of those types of assignments coming into our backlog as the people who we've hired over the last two or three years begin to mature and to hit their stride. So we're seeing it building out. In terms of the market itself, which I think is what your question is, is there really continued or increasing activity in the middle market? We think there is.
Speaker #1: We are definitely seeing more activity . We are definitely seeing more in our backlog . We do have diversification in our backlog . So we are seeing we have a significant number of what you would classify as middle market .
Speaker #1: And frankly, if you think about our investment as a firm, we are investing in coverage of the middle market. And so we're seeing more of those types of assignments coming into our backlog as the people who we've hired over the last two or three years begin to mature and to hit their stride.
Speaker #1: So we're it we're seeing building out in terms of the market itself , which I think is what your question is , there is really continued or increasing activity in the middle market ?
John Weinberg: We think that there is a very healthy build in that side, and you know, we're seeing a lot of that. Our pitches, our numbers of pitches, both sponsors and middle market companies as well as non-sponsor, is up significantly. So we're seeing a very strong level of pitch activity and dialogue activity in that middle market sector.
John Weinberg: We think that there is a very healthy build in that side, and you know, we're seeing a lot of that. Our pitches, our numbers of pitches, both sponsors and middle market companies as well as non-sponsor, is up significantly. So we're seeing a very strong level of pitch activity and dialogue activity in that middle market sector.
Speaker #1: We think there is . We think that there is a very healthy build in that side . And , you know , we're seeing a lot of that .
Speaker #1: Where our , our , our numbers of pitches , both sponsors in the middle market , companies as well as Non-sponsor is up significantly .
Speaker #1: And so we're seeing a very strong level of pitch activity and dialogue activity in that , in that middle market sector .
Operator: Thank you. Our next question will come from Ryan Kenney with Morgan Stanley.
Operator: Thank you. Our next question will come from Ryan Kenney with Morgan Stanley.
Ryan Kenny: Hi, good morning. Thanks for taking my question. So on the Private Capital Advisory side, you are a market leader in secondaries, and we've seen some peers lean in recently. We've seen some of the money center banks doing more. So what's your sense of competition ramping up? Are you feeling that, and how do you protect your share?
Ryan Kenny: Hi, good morning. Thanks for taking my question. So on the Private Capital Advisory side, you are a market leader in secondaries, and we've seen some peers lean in recently. We've seen some of the money center banks doing more. So what's your sense of competition ramping up? Are you feeling that, and how do you protect your share?
Speaker #3: Thank you . Our next question will come from Ryan Kenny with Morgan Stanley .
Speaker #10: Hi . Good morning . Thanks for taking my question . So on the private capital advisory side , you are market leader in secondaries .
Speaker #10: And we've seen some peers lean in recently . We've seen some of the money center banks doing more . So what's of your sense competition ramping up .
John Weinberg: There is definitely a lot of activity in people trying to build these businesses. And, I'm certain that there's gonna be very worthy competition, and it's gonna grow. We have a very good business, and we have a really, really well-established base. We have a group of clients who are very happy with the service that we've been providing them. And I think there's a level of advantage for having been in this business for a long time and done it well, whether it's data that we've been able to capture, and it's very strong data, an experience level that people recognize, and I think in many respects, clients appreciate, a track record of success, and the relationships themselves. And so I think that we're gonna be able to compete very adequately as new people, as new entrants come into the market.
John Weinberg: There is definitely a lot of activity in people trying to build these businesses. And, I'm certain that there's gonna be very worthy competition, and it's gonna grow. We have a very good business, and we have a really, really well-established base. We have a group of clients who are very happy with the service that we've been providing them. And I think there's a level of advantage for having been in this business for a long time and done it well, whether it's data that we've been able to capture, and it's very strong data, an experience level that people recognize, and I think in many respects, clients appreciate, a track record of success, and the relationships themselves. And so I think that we're gonna be able to compete very adequately as new people, as new entrants come into the market.
Speaker #10: Are you at that, and how are you feeling? Do you protect your share?
Speaker #1: There is definitely a lot of activity in people trying to build these businesses. And I'm certain that there's going to be very worthy competition, and it's going to grow.
Speaker #1: We have a very good business and we have a really , really well established base . We have a group of clients who are very happy with the service that we've been providing them , and I think there's a level of of advantage for having been in this business for a long time and done it well .
Speaker #1: Whether it's data that we've been able to capture and it's very strong data and experience level that that people recognize . And I think in many respects , clients appreciate a track record of success .
Speaker #1: And the relationships themselves . And so I think that we're going be to able to compete very adequately as people , new new entrants come into the market .
John Weinberg: But as you know, on Wall Street, you know, competition can be intense. The competitors are always very worthy and good, so we're gonna, you know, we're gonna have our hands full, but I think we're ready for it. And I think we're, you know, we're actually competing extremely well right now.
John Weinberg: But as you know, on Wall Street, you know, competition can be intense. The competitors are always very worthy and good, so we're gonna, you know, we're gonna have our hands full, but I think we're ready for it. And I think we're, you know, we're actually competing extremely well right now.
Speaker #1: But as you know , on Wall Street , you know , competition can be intense . The competitors are always very worthy and good .
Speaker #1: So we're going to we're going to have our hands full . But I think we're ready for it . And I think we're , you know , we're actually competing extremely well right now .
Ryan Kenny: Thank you.
Ryan Kenny: Thank you.
Operator: Thank you. Great, and we do have a follow-up question from Daniel Kacharov with Bank of America.
Operator: Thank you. Great, and we do have a follow-up question from Daniel Kacharov with Bank of America.
Speaker #10: Thank
Speaker #10: you . Thank
Speaker #3: you . And we do have a follow up question from Daniel Cachero with Bank of America .
Daniel Kacharov: Thank you for sneaking me in. Just when thinking about privates, we've seen alts struggle in terms of price action. Do you think LPs are recalibrating how they allocate to private markets? And on the non-M&A revenues, is there a high correlation between M&A activity, or should we think of these two as entirely uncorrelated? Thank you.
Daniel Cocchiara: Thank you for sneaking me in. Just when thinking about privates, we've seen alts struggle in terms of price action. Do you think LPs are recalibrating how they allocate to private markets? And on the non-M&A revenues, is there a high correlation between M&A activity, or should we think of these two as entirely uncorrelated? Thank you.
Speaker #5: Thank you for sneaking me in. When thinking about just privates, we've seen alts struggle in terms of price action. Do you think LPs are recalibrating how they allocate to private markets?
Speaker #5: And on the non-M&A revenues, is there a high correlation with M&A activity, or should we think of these two as entirely uncorrelated?
John Weinberg: Well, I don't think you can ever have something be entirely uncorrelated with the flow of funds going back and forth through asset classes. I don't think that we're gonna see that, you know, what I would call as kind of a rethinking or maybe as a somewhat of a discussion on alts to be changing what's happening on the M&A side. So I think that what you'll see is you'll see flows of funds going back and forth. There always is. We don't see any major impact right now in our business, but obviously, we're watching it just like you are, and but we don't anticipate it's gonna have a big impact.
John Weinberg: Well, I don't think you can ever have something be entirely uncorrelated with the flow of funds going back and forth through asset classes. I don't think that we're gonna see that, you know, what I would call as kind of a rethinking or maybe as a somewhat of a discussion on alts to be changing what's happening on the M&A side. So I think that what you'll see is you'll see flows of funds going back and forth. There always is. We don't see any major impact right now in our business, but obviously, we're watching it just like you are, and but we don't anticipate it's gonna have a big impact.
Speaker #5: Thank you .
Speaker #1: Well I don't think you can ever have something be entirely uncorrelated with the flow of funds going back and forth through asset . classes don't think that we're going to that , you see know , what I would call as kind of a rethinking or maybe a somewhat of a discussion on on all to be changing what's happening on the M&A side .
Speaker #1: So I think that what you'll see is you'll see flows of funds going back and forth. There always is. We don't see any major impact right now in our business.
Speaker #1: But obviously we're watching it just like you are, and we don't anticipate it's going to have a big impact.
Operator: Thank you. We do have another follow-up question from Nathan Stein with Deutsche Bank.
Operator: Thank you. We do have another follow-up question from Nathan Stein with Deutsche Bank.
Speaker #3: Thank you. We do have another follow-up question from Nathan Stein with Deutsche Bank.
Nathan Stein: Hey, thanks for taking the follow-up. Was hoping you'd provide some additional color on the capital allocation strategy in 2026. You called out doing buybacks again this year, net of the employee comp program. Is the Q4 repurchase level a good run rate for buybacks for the rest of the year? And just how are you thinking about capital allocation this year?
Nathan Stein: Hey, thanks for taking the follow-up. Was hoping you'd provide some additional color on the capital allocation strategy in 2026. You called out doing buybacks again this year, net of the employee comp program. Is the Q4 repurchase level a good run rate for buybacks for the rest of the year? And just how are you thinking about capital allocation this year?
Speaker #9: Hey , thanks for taking the follow up . Was hoping you would provide some additional color capital on the allocation strategy in 2026 .
Speaker #9: You called out doing buybacks again this year, net of the employee comp program. Is the core repurchase level of buybacks for the year a good run rate?
Tim LaLonde: Yeah. Yeah, sure, Nate, and thanks for the question. I would not take any particular quarter of buybacks that you see from us and apply an annualization to it. I think just to give you some color on it, first, what I would note is that the $812 million that we returned last year was our second highest return of capital ever, trailing only 2021 and trailing that number by not much. And so that'd be the first point. Second is, each year we've indicated to the market that we strive to acquire at least a number of shares equivalent to the number of RSUs we grant as part of our bonus cycle. So that's probably the second point I would make.
Tim LaLonde: Yeah. Yeah, sure, Nate, and thanks for the question. I would not take any particular quarter of buybacks that you see from us and apply an annualization to it. I think just to give you some color on it, first, what I would note is that the $812 million that we returned last year was our second highest return of capital ever, trailing only 2021 and trailing that number by not much. And so that'd be the first point. Second is, each year we've indicated to the market that we strive to acquire at least a number of shares equivalent to the number of RSUs we grant as part of our bonus cycle. So that's probably the second point I would make.
Speaker #9: And just how rest of the are you thinking about capital allocation this year ?
Speaker #7: Yeah , yeah , sure . Nate , and thanks for the question . We I would not take any particular quarter of buybacks that you see from us .
Speaker #7: And and applied annualization to it . I think just to to give you some color on it . First . What I would note is that the 812 million that we returned last year was our second highest return of capital ever , trailing only 2021 .
Speaker #7: And trailing that number by not that much, so that'd be the first point. Second is, each year we've indicated to the market that we strive to acquire at least a number of shares equivalent to the number of RSUs we grant as part of our bonus cycle.
Tim LaLonde: And then, thirdly, you know, we, we're sitting right now on a, as of year-end, about $3 billion of cash. Some of that, of course, is required for regulatory purposes and for underwriting capital and for operating capital. But there's still some excess there. And, you know, we intend to be repurchasing shares. Not only in the last five years have we repurchased a number equivalent to the RSUs issued as part of our comp cycle, but we've acquired a number in excess of that. And I think we'd certainly strive to do that this year as well.
Tim LaLonde: And then, thirdly, you know, we, we're sitting right now on a, as of year-end, about $3 billion of cash. Some of that, of course, is required for regulatory purposes and for underwriting capital and for operating capital. But there's still some excess there. And, you know, we intend to be repurchasing shares. Not only in the last five years have we repurchased a number equivalent to the RSUs issued as part of our comp cycle, but we've acquired a number in excess of that. And I think we'd certainly strive to do that this year as well.
Speaker #7: So that's that's probably the would make . And second point I then thirdly , you know , we we've we're sitting right now on a as of year end , about $3 billion of cash and some of that of course , is required for regulatory purposes and for underwriting capital and for operating capital .
Speaker #7: But there's still some some excess there . And , you we intend know , to be repurchasing shares not only for the last five years , not only have we repurchased a equivalent to the RSUs issued number as part of our comp cycle , but we've acquired a number in excess of that .
Operator: Thank you. We do have one more question in the queue, this one from Jim Mitchell with Seaport Global Securities.
Operator: Thank you. We do have one more question in the queue, this one from Jim Mitchell with Seaport Global Securities.
Speaker #7: And I think we'd certainly strive to do that this year as well .
Speaker #3: Thank you. We do have one more question in the queue, this one from Jim Mitchell with Seaport Global Securities.
Jim Mitchell: Yeah, hey, sorry, apologies for keeping you. But maybe just, John, can you speak about the recruiting environment, whether or not it's getting tougher to get people to leave their seats in this environment, and, you know, is it getting more expensive? And just overall, what's your take on your recruiting pipeline?
Jim Mitchell: Yeah, hey, sorry, apologies for keeping you. But maybe just, John, can you speak about the recruiting environment, whether or not it's getting tougher to get people to leave their seats in this environment, and, you know, is it getting more expensive? And just overall, what's your take on your recruiting pipeline?
Speaker #11: Yeah . Hey , sorry . Apologies for keeping you . But maybe just John , can you speak about the recruiting environment . Whether or not it's get getting tougher to people to their leave this ?
Speaker #11: And , you know , is it getting more expensive and just overall , what's your take on your recruiting pipeline ?
John Weinberg: Thanks, Jim. The recruiting environment is heated up a lot, and it's very intense, and it's very competitive. We feel good about the pipeline of people that we're talking to. There's no question that getting people to move is harder than it was two or three years ago. But I think what's happening is, you know, there's a lot of momentum at Evercore, and we have a pretty compelling story for people. But I do think the premise of your question, which is it's harder, and it's gonna take more work, and it may even be more expensive, that premise is correct. There is definitely gonna be more competition. It's probably gonna be more expensive. We're gonna be having to work harder to get people to make the move, especially if they're very busy in a recovering environment.
John Weinberg: Thanks, Jim. The recruiting environment is heated up a lot, and it's very intense, and it's very competitive. We feel good about the pipeline of people that we're talking to. There's no question that getting people to move is harder than it was two or three years ago. But I think what's happening is, you know, there's a lot of momentum at Evercore, and we have a pretty compelling story for people. But I do think the premise of your question, which is it's harder, and it's gonna take more work, and it may even be more expensive, that premise is correct. There is definitely gonna be more competition. It's probably gonna be more expensive. We're gonna be having to work harder to get people to make the move, especially if they're very busy in a recovering environment.
Speaker #1: Thanks , Jim recruiting . The environment is heated up a lot and it's very intense . And it's very competitive . We feel good about the pipeline of people that we're talking to .
Speaker #1: There is no question that getting people to is move harder than it was 2 or 3 years ago , but I think what's happening is , you know , of there's a lot momentum at Evercore , and we have a pretty compelling story for people .
Speaker #1: I do think But you're your the premise of your question , which is it's harder and it's going to take more work and it may even be more expensive .
Speaker #1: that Those premise is , is correct . There is definitely going to be more competition . It's probably going to be more expensive .
Speaker #1: We're going to be we're having to going to be harder to get people to work move , especially if they're very busy in a environment .
John Weinberg: So I do think it's gonna be hard. You know, we've we spent a lot of effort and time finding the right people and going after A-plus candidates. I think one of the things that we're really happy about is that a lot of the people that we really have worked hard to get over the last three or four years, many of them have ramped, hit their stride, and they're starting to really kick in, and some of the results that we're showing now is that group. So our incentive to continue to go, even if the environment is harder, maybe more expensive, will still be there. We're gonna continue our aggressive recruiting efforts throughout the cycle here.
John Weinberg: So I do think it's gonna be hard. You know, we've we spent a lot of effort and time finding the right people and going after A-plus candidates. I think one of the things that we're really happy about is that a lot of the people that we really have worked hard to get over the last three or four years, many of them have ramped, hit their stride, and they're starting to really kick in, and some of the results that we're showing now is that group. So our incentive to continue to go, even if the environment is harder, maybe more expensive, will still be there. We're gonna continue our aggressive recruiting efforts throughout the cycle here.
Speaker #1: So I do think it's going to be hard . You know , we've we've we spent a lot of effort and time finding the right people and going after A-plus candidates .
Speaker #1: I think one of the things that we're really happy about is that a lot of the people that we really have worked hard to get over the last 3 or 4 years , many of them have ramped hit their stride , and they're starting to really kick in .
Speaker #1: And some of the results that we're showing now is that group . So our incentive to continue to go , even if the environment is harder , may be more expensive , will will still be there .
Tim LaLonde: Right. One thing I might add to that, Jim, is, you know, the good news is that we've made a lot of progress in these past 3 years. We've added 41 through external means and promoted 25 internally. We've got 40 that are in ramp mode. And so while, as John said, we're always out there working hard, trying to implement, you know, our strategic plan and talking to a lot of people, though we never know in any given year exactly how many, you know, will cross the finish line, the good news is, I think we're really well-positioned based on the success we have had over the past 3 years.
Tim LaLonde: Right. One thing I might add to that, Jim, is, you know, the good news is that we've made a lot of progress in these past 3 years. We've added 41 through external means and promoted 25 internally. We've got 40 that are in ramp mode. And so while, as John said, we're always out there working hard, trying to implement, you know, our strategic plan and talking to a lot of people, though we never know in any given year exactly how many, you know, will cross the finish line, the good news is, I think we're really well-positioned based on the success we have had over the past 3 years.
Speaker #1: We're going to continue our real aggressive recruiting efforts throughout the cycle here.
Speaker #7: One thing I Right . might add that , to Jim , is , is , you know , the good news is that we've made a lot of progress in these past three years .
Speaker #7: We've added 41 through external means and promoted 25 internally . We've got 40 that are on mode , ramp so while as and John said , we're always out there hard , working trying to implement , you know , our strategic plan and talking to a lot of people , though we never know in any given year exactly how many , you know , will will cross the finish line .
Speaker #7: I think we're in really good news, really well positioned based on the success we have had over the past three years.
Jim Mitchell: Okay, that's really great color. Thanks for taking the follow-up.
Jim Mitchell: Okay, that's really great color. Thanks for taking the follow-up.
Operator: There are no further questions in the queue at this time. With that said, this does conclude Evercore's Q4 2025 and Full Year Earnings Conference Call. You may now disconnect.
Operator: There are no further questions in the queue at this time. With that said, this does conclude Evercore's Q4 2025 and Full Year Earnings Conference Call. You may now disconnect.
Speaker #11: Okay, that's really great color. Thanks for taking the follow-up.
Speaker #3: And there are no further questions in the queue at this time . With that said , this conclude does Evercore fourth quarter 2025 and full year earnings conference call .
