PJT Partners Q4 2025 PJT Partners Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 PJT Partners Inc Earnings Call
Speaker #1: Please stand by. Your meeting is about to begin. Good day and welcome to the PJT Partners fourth quarter 2025 earnings call. Today's conference is being recorded.
Operator: Please stand by. Your meeting is about to begin. Good day, and welcome to the PJT Partners Q4 2025 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead, ma'am.
Operator: Please stand by. Your meeting is about to begin.
Good day, and welcome to the PJT Partners Q4 2025 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead, ma'am.
Speaker #1: At this time, I would like to turn the conference over to Sharon Pearson. Head of Investor Relations. Please go
Speaker #1: At this time, I would like to turn the conference over to Sharon Pearson. Head of Investor Relations. Please go ahead, ma'am. Thank you
Sharon Pearson: Thank you very much. Good morning, and welcome to the PJT Partners Full Year and Fourth Quarter 2025 Earnings Conference Call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners, and joining me today are Paul Taubman, our Chairman and Chief Executive Officer, and Helen Meates, our Chief Financial Officer. Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that these factors are described in the Risk Factors section contained in PJT Partners 2024 Form 10-K, which is available on our website at pjtpartners.com.
Sharon Pearson: Thank you very much. Good morning, and welcome to the PJT Partners Full Year and Fourth Quarter 2025 Earnings Conference Call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners, and joining me today are Paul Taubman, our Chairman and Chief Executive Officer, and Helen Meates, our Chief Financial Officer. Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that these factors are described in the Risk Factors section contained in PJT Partners 2024 Form 10-K, which is available on our website at pjtpartners.com.
Speaker #2: very much. Good morning and welcome to the PJT Partners full year and fourth quarter 2025 earnings conference call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners, and joining me today are Paul Taubman, our Chairman and Chief Executive Officer, and Helen Meates, our Chief Financial Officer.
Speaker #2: Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements.
Speaker #2: These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements.
Speaker #2: We believe that these factors are described in the risk factors section contained in PJT Partners' 2024 Form 10-K, which is available on our website at pjtpartners.com.
Speaker #2: I want to remind you that the company assumes no duty to update any forward-looking statements, and that the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance.
Sharon Pearson: I want to remind you that the company assumes no duty to update any forward-looking statements and that the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance. For detailed disclosures on these non-GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning, also available on our website. With that, I'll turn the call over to Paul.
I want to remind you that the company assumes no duty to update any forward-looking statements and that the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance. For detailed disclosures on these non-GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning, also available on our website. With that, I'll turn the call over to Paul.
Speaker #2: For detailed disclosures on these non-GAAP metrics, and their GAAP reconciliations, you should refer to the Financial Data contained within the press release we issued this morning also available on our website.
Speaker #2: And with that, I'll turn the
Speaker #2: call over to Paul. Thank you,
Paul Taubman: Thank you, Sharon. Good morning, everyone, and thank you for joining us to review our Q4 and full year results. Across the board, our 2025 results were record-setting as we reported record revenues, record Adjusted Pre-tax Income, and record Adjusted EPS. This strong performance reflects our sustained investment in building the best advisory-focused firm possible. A firm distinguished by its best-in-class talent and its unwavering commitment to a culture of collaboration and teamwork. This firm-wide investment continued in 2025 as we added senior talent across industries, capabilities, and geographies. For the year, firm-wide partner headcount increased 12%, while total headcount increased 7%. We ended the year with record cash balances of $586 million, after directing a record $384 million to share repurchases.
Paul Taubman: Thank you, Sharon. Good morning, everyone, and thank you for joining us to review our Q4 and full year results. Across the board, our 2025 results were record-setting as we reported record revenues, record Adjusted Pre-tax Income, and record Adjusted EPS. This strong performance reflects our sustained investment in building the best advisory-focused firm possible. A firm distinguished by its best-in-class talent and its unwavering commitment to a culture of collaboration and teamwork. This firm-wide investment continued in 2025 as we added senior talent across industries, capabilities, and geographies. For the year, firm-wide partner headcount increased 12%, while total headcount increased 7%. We ended the year with record cash balances of $586 million, after directing a record $384 million to share repurchases.
Speaker #3: Sharon: Good morning, everyone, and thank you for joining us to review our fourth quarter and full year results. Across the board, our 2025 results were record-setting.
Speaker #3: As we reported, record revenues, record-adjusted pre-tax income, and record-adjusted EPS. This strong performance reflects our sustained investment in building the best advisory-focused firm possible.
Speaker #3: A firm distinguished by its best-in-class talent, and its unwavering commitment to a culture of collaboration and teamwork. This firm-wide investment continued in 2025 as we added senior talent across industries, capabilities, and geographies.
Speaker #3: For the year, firm-wide partner headcount increased 12%, while total headcount increased 7%. We ended the year with record cash balances of $586 million, after directing a record $384 million to share repurchases.
Speaker #3: Our capital priority remains, first and foremost, to invest in our firm and our people, and second, to return capital to shareholders—and to do so principally through repurchases.
Paul Taubman: Our capital priority remains, first and foremost, to invest in our firm and our people, and second, to return capital to shareholders and to do so principally through repurchases. After Helen takes you through our financial results, I will review our business performance and outlook in greater detail. Helen?
Our capital priority remains, first and foremost, to invest in our firm and our people, and second, to return capital to shareholders and to do so principally through repurchases. After Helen takes you through our financial results, I will review our business performance and outlook in greater detail. Helen?
Speaker #3: After Helen takes you through our financial results, I will review our business performance and outlook in greater detail. Helen?
Speaker #2: Thank you, Paul. Good morning. Beginning with revenues—for the full year 2025, total revenues were $1.714 billion, up 15% year over year. As Paul mentioned, this was a record result for our firm.
Sharon Pearson: Thank you, Paul. Good morning. Beginning with revenues. For the full year 2025, total revenues were $1,714 million, up 15% year-over-year. As Paul mentioned, this was a record result for our firm. All of our businesses had record revenues, with Strategic Advisory, the primary driver of revenue growth for the year. For the fourth quarter, total revenues were $535 million, up 12% year-over-year, also reflecting a record revenue quarter for our firm. The growth in the fourth quarter was primarily driven by growth in Restructuring and PJT Park Hill. Turning to expenses. Consistent with prior quarters, we've presented the expenses with certain non-GAAP adjustments, which are more fully described in our Form 8-K.
Helen Meates: Thank you, Paul. Good morning. Beginning with revenues. For the full year 2025, total revenues were $1,714 million, up 15% year-over-year. As Paul mentioned, this was a record result for our firm. All of our businesses had record revenues, with Strategic Advisory, the primary driver of revenue growth for the year. For the fourth quarter, total revenues were $535 million, up 12% year-over-year, also reflecting a record revenue quarter for our firm. The growth in the fourth quarter was primarily driven by growth in Restructuring and PJT Park Hill. Turning to expenses. Consistent with prior quarters, we've presented the expenses with certain non-GAAP adjustments, which are more fully described in our Form 8-K.
Speaker #2: All of our businesses had record revenues, with strategic advisory the primary driver of revenue growth for the year. For the fourth quarter, total revenues were $535 million, up 12% year over year, also reflecting a record revenue quarter for our firm.
Speaker #2: The growth in the fourth quarter was primarily driven by growth in Restructuring and PJT Park Hill. Turning to expenses, consistent with prior quarters, we've presented the expenses with certain non-GAAP adjustments, which are more fully described in our 8-K.
Speaker #2: First, adjusted compensation expense. Full-year adjusted compensation expense was $1.15 billion, representing a compensation ratio of 67.1%, which compares to 69% for the full year 2024.
Sharon Pearson: First, Adjusted Compensation Expense. Full year adjusted compensation expense was $1.15 billion, representing a Compensation Ratio of 67.1%, which compares to 69% for the full year 2024. Given the higher compensation accrual for the first nine months of the year, the resulting rate for Q4 was 66.2%. We will provide guidance on our 2026 compensation estimate when we report our Q1 results. Turning to adjusted non-compensation expense. Total adjusted non-compensation expense was $207 million for the full year 2025, up 12% year-over-year. The main drivers of the year-over-year increase were higher occupancy costs, driven by additional space in New York and London, and higher travel and business-related expenses.
First, Adjusted Compensation Expense. Full year adjusted compensation expense was $1.15 billion, representing a Compensation Ratio of 67.1%, which compares to 69% for the full year 2024. Given the higher compensation accrual for the first nine months of the year, the resulting rate for Q4 was 66.2%. We will provide guidance on our 2026 compensation estimate when we report our Q1 results. Turning to adjusted non-compensation expense. Total adjusted non-compensation expense was $207 million for the full year 2025, up 12% year-over-year. The main drivers of the year-over-year increase were higher occupancy costs, driven by additional space in New York and London, and higher travel and business-related expenses.
Speaker #2: Given the higher compensation accrual for the first nine months of the year, the resulting rate for the fourth quarter was 66.2%. We will provide guidance on our 2026 compensation estimate when we report our first quarter results.
Speaker #2: Turning to adjusted non-compensation expense. Total adjusted non-compensation expense was $207 million for the full year 2025, up 12% year over year. The main drivers of the year-over-year increase were higher occupancy costs, driven by additional space in New York and London, and higher travel and business-related expenses.
Speaker #2: In the fourth quarter, total adjusted non-compensation expense was $54 million, up 16% year over year, with the same drivers of year-over-year growth—higher occupancy costs and higher travel and related business-related expenses.
Sharon Pearson: In Q4, total adjusted non-compensation expense was $54 million, up 16% year-over-year, with the same drivers of year-over-year growth, higher occupancy costs, and higher travel and related and business-related expenses. As a percentage of revenues, our adjusted non-compensation expense was 12.1% for the full year 2025, and 10.1% for Q4. We expect our total non-compensation expense in 2026 to grow at a similar rate to 2025, and we will provide more guidance on our outlook for the year when we report our Q1 results. We reported adjusted pre-tax income of $357 million for the full year 2025, and $127 million for Q4. Our adjusted pre-tax margin was 20.8% for the full year and 23.7% for Q4.
In Q4, total adjusted non-compensation expense was $54 million, up 16% year-over-year, with the same drivers of year-over-year growth, higher occupancy costs, and higher travel and related and business-related expenses. As a percentage of revenues, our adjusted non-compensation expense was 12.1% for the full year 2025, and 10.1% for Q4. We expect our total non-compensation expense in 2026 to grow at a similar rate to 2025, and we will provide more guidance on our outlook for the year when we report our Q1 results. We reported adjusted pre-tax income of $357 million for the full year 2025, and $127 million for Q4. Our adjusted pre-tax margin was 20.8% for the full year and 23.7% for Q4.
Speaker #2: As a percentage of revenues, our adjusted non-compensation expense was 12.1% for the full year 2025, and 10.1% for the fourth quarter. We expect our total non-compensation expense in 2026 to grow at a similar rate to 2025, and we will provide more guidance on our outlook for the year when we report our first quarter results.
Speaker #2: We reported adjusted pre-tax income of $357, for the full year 2025, and $127, for the fourth quarter, our adjusted pre-tax margin was 20.8% for the full year, and 23.7% for the fourth quarter.
Speaker #2: The provision for taxes: as with prior quarters, we've presented our results as if all partnership units had been converted to shares, and that all of our income was taxed at a corporate tax rate.
Sharon Pearson: The provision for taxes, as with prior quarters, we presented our results as if all partnership units had been converted to shares and that all of our income was taxed at a corporate tax rate. Our effective tax rate for the full year was 14.1%, as we realized a significant tax benefit from the delivery of vested shares. The 14.1% rate was below our previous estimate of 15.5%, primarily due to the final income allocations across state, local, and foreign entities. For 2026, our current estimate for the tax rate is in the high teens%, which is between the 2024 rate and the 2025 rate. We'll provide an updated estimate when we report Q1 results.
The provision for taxes, as with prior quarters, we presented our results as if all partnership units had been converted to shares and that all of our income was taxed at a corporate tax rate. Our effective tax rate for the full year was 14.1%, as we realized a significant tax benefit from the delivery of vested shares. The 14.1% rate was below our previous estimate of 15.5%, primarily due to the final income allocations across state, local, and foreign entities. For 2026, our current estimate for the tax rate is in the high teens%, which is between the 2024 rate and the 2025 rate. We'll provide an updated estimate when we report Q1 results.
Speaker #2: Our effective tax rate for the full year was 14.1%, as we realized a significant tax benefit from the delivery of vested shares. The 14.1% rate was below our previous estimate of 15.5%, primarily due to the final income allocations across state, local, and foreign entities.
Speaker #2: For 2026, our current estimate for the tax rate is in the high teens percentage, which is between the 2024 rate and the 2025 rate.
Speaker #2: We'll provide an updated estimate when we report first quarter results. Our adjusted if converted earnings were $6.98 per share for the full year, compared with $5.02 in 2024, and $2.55 for the fourth quarter compared with $1.90 for the fourth quarter 2024.
Sharon Pearson: Our adjusted if converted earnings was $6.98 per share for the full year, compared with $5.02 in 2024, and $2.55 for Q4, compared with $1.90 for Q4 2024. On the share count for the year ended 2025, our weighted average share count was 43.9 million shares, slightly down year-over-year. During the year, we repurchased approximately 2.4 million shares and share equivalents, and as Paul mentioned, we spent a record $384 million on share repurchases. We are in receipt of exchange notices for an additional 850,000 partnership units, and subject to board approval, we intend to exchange these units for cash. We view the partnership exchanges as an effective way to repurchase shares without impacting the float.
Our adjusted if converted earnings was $6.98 per share for the full year, compared with $5.02 in 2024, and $2.55 for Q4, compared with $1.90 for Q4 2024. On the share count for the year ended 2025, our weighted average share count was 43.9 million shares, slightly down year-over-year. During the year, we repurchased approximately 2.4 million shares and share equivalents, and as Paul mentioned, we spent a record $384 million on share repurchases. We are in receipt of exchange notices for an additional 850,000 partnership units, and subject to board approval, we intend to exchange these units for cash. We view the partnership exchanges as an effective way to repurchase shares without impacting the float.
Speaker #2: On the share count for the year ended 2025, our weighted average share count was 43.9 million shares, slightly down year over year. During the year, we repurchased approximately 2.4 million shares in share equivalents and, as Paul mentioned, we spent a record $384 million on share repurchases.
Speaker #2: We are in receipt of exchange notices for an additional $850,000 partnership units, and subject to board approval, we intend to exchange these units for cash.
Speaker #2: We view the partnership exchanges as an effective way to repurchase shares without impacting the float. And consistent with our capital priorities, we will continue to invest in the business while using excess cash to, over time, reduce our share count.
Sharon Pearson: Consistent with our capital priorities, we will continue to invest in the business while using excess cash to, over time, reduce our share count. On the balance sheet, we ended the year with a record $586 million in cash, cash equivalents, and short-term investments, and $632 million in net working capital, and we have no funded debt outstanding. Additionally, the board has approved a quarterly dividend of $0.25 per share. Finally, a note on our revenue reporting. Going forward, we will report our revenue as a single line item and will no longer break out the advisory, placement, and other designations. In our earlier years as a public company, the placement fee line was a reasonable proxy for PJT Park Hill.
Consistent with our capital priorities, we will continue to invest in the business while using excess cash to, over time, reduce our share count. On the balance sheet, we ended the year with a record $586 million in cash, cash equivalents, and short-term investments, and $632 million in net working capital, and we have no funded debt outstanding. Additionally, the board has approved a quarterly dividend of $0.25 per share. Finally, a note on our revenue reporting. Going forward, we will report our revenue as a single line item and will no longer break out the advisory, placement, and other designations. In our earlier years as a public company, the placement fee line was a reasonable proxy for PJT Park Hill.
Speaker #2: On the balance sheet, we ended the year with a record $586 million in cash, cash equivalents, and short-term investments, and $632 million in networking capital.
Speaker #2: And we have no funded debt outstanding. Additionally, the board has approved a quarterly dividend of 25 cents per share. Finally, a note on our revenue reporting.
Speaker #2: Going forward, we will report our revenue as a single line item. And we'll no longer break out the advisory placement and other designations. In our earlier years as a public company, the placement fee line was a reasonable proxy for PJT Parkhill.
Speaker #2: Today, more than 10 years on, with the expansion of our private capital solutions business and the growth in our corporate placement capabilities, that is no longer the case.
Sharon Pearson: Today, more than 10 years on, with the expansion of our private capital solutions business and the growth in our corporate placement capabilities, that is no longer the case. Given our strategic priority of expanding and further integrating our broad advisory capabilities, these revenue designations do not reflect either how we manage our performance or how we measure our progress. As we have done in the past, we will continue to provide context around the key drivers of our performance. Back to Paul.
Today, more than 10 years on, with the expansion of our private capital solutions business and the growth in our corporate placement capabilities, that is no longer the case. Given our strategic priority of expanding and further integrating our broad advisory capabilities, these revenue designations do not reflect either how we manage our performance or how we measure our progress. As we have done in the past, we will continue to provide context around the key drivers of our performance. Back to Paul.
Speaker #2: Given our strategic priority of expanding and further integrating our broad advisory capabilities, these revenue designations do not reflect either how we manage our performance or how we measure our progress.
Speaker #2: As we have done in the past, we will continue to provide context around the key drivers of our performance. Back to Paul.
Speaker #1: Thank you, Helen. Beginning with restructuring, notwithstanding broadly favorable macroeconomic and capital market conditions, an increasing number of companies continue to grapple with over-leveraged balance sheets, challenged business models, technological disruption, changing consumer preferences, and governmental policies.
Paul Taubman: Thank you, Helen. Beginning with Restructuring. Notwithstanding broadly favorable macroeconomic and capital market conditions, an increasing number of companies continue to grapple with overleveraged balance sheets, challenged business models, technological disruption, and changing consumer preferences and governmental policies. In this environment, demand for our Liability Management and Restructuring advice remained elevated, and we delivered record Q4 and full-year results. Turning to PJT Park Hill. Relatively modest capital returns have further strained an already challenged Primary Fundraising environment, prompting GPs and LPs alike to pursue alternative liquidity options, while investor interest in secondary products continues to grow, driven by an increasingly appreciated return profile. Against this backdrop, global Primary Fundraising volumes declined for the fourth straight year, while client interest in Private Capital Solutions and other structured products continued to build....
Paul Taubman: Thank you, Helen. Beginning with Restructuring. Notwithstanding broadly favorable macroeconomic and capital market conditions, an increasing number of companies continue to grapple with overleveraged balance sheets, challenged business models, technological disruption, and changing consumer preferences and governmental policies. In this environment, demand for our Liability Management and Restructuring advice remained elevated, and we delivered record Q4 and full-year results. Turning to PJT Park Hill. Relatively modest capital returns have further strained an already challenged Primary Fundraising environment, prompting GPs and LPs alike to pursue alternative liquidity options, while investor interest in secondary products continues to grow, driven by an increasingly appreciated return profile. Against this backdrop, global Primary Fundraising volumes declined for the fourth straight year, while client interest in Private Capital Solutions and other structured products continued to build....
Speaker #1: In this environment, demand for our liability management and restructuring advice remained elevated, and we delivered record Q4 and full-year results. Turning to PJT Park Hill, relatively modest capital returns have further strained an already challenged primary fundraising environment, prompting GPs and LPs alike to pursue alternative liquidity options.
Speaker #1: While investor interest in secondary products continues to grow, driven by an increasingly appreciated return profile, against this backdrop, global primary fundraising volumes declined for the fourth straight year, while client interest in private capital solutions and other structured products continued to build.
Speaker #1: In this push-pull environment, our PJT Parkhill business delivered its strongest quarter ever, enabling full-year results to exceed 2024's record results. Turning to strategic advisory, M&A activity increased sharply in 2025, with global announced volumes up significantly as strength in debt and equity markets, greater confidence regarding regulatory outcomes, as well as improved CEO confidence, all served to make this the second best year ever for announced M&A activity.
Paul Taubman: In this push-pull environment, our PJT Park Hill business delivered its strongest quarter ever, enabling full-year results to exceed 2024's record results. Turning to Strategic Advisory. M&A activity increased sharply in 2025, with global announced volumes up significantly as strength in debt and equity markets, greater confidence regarding regulatory outcomes, as well as improved CEO confidence, all served to make this the second best year ever for announced M&A activity. Our 2025 Strategic Advisory results benefited from this favorable deal environment, as well as the continued investment in and maturation of our advisory platform. 2025 Strategic Advisory revenues significantly outpaced 2024's record levels, with revenues in our Strategic Advisory business reaching record highs for both the fourth quarter and the year. As we look ahead, the broader capital markets and M&A environment continue to be highly constructive for deal making.
In this push-pull environment, our PJT Park Hill business delivered its strongest quarter ever, enabling full-year results to exceed 2024's record results. Turning to Strategic Advisory. M&A activity increased sharply in 2025, with global announced volumes up significantly as strength in debt and equity markets, greater confidence regarding regulatory outcomes, as well as improved CEO confidence, all served to make this the second best year ever for announced M&A activity. Our 2025 Strategic Advisory results benefited from this favorable deal environment, as well as the continued investment in and maturation of our advisory platform. 2025 Strategic Advisory revenues significantly outpaced 2024's record levels, with revenues in our Strategic Advisory business reaching record highs for both the fourth quarter and the year. As we look ahead, the broader capital markets and M&A environment continue to be highly constructive for deal making.
Speaker #1: Our 2025 strategic advisory results benefited from this favorable deal environment, as well as the continued investment in and maturation of our advisory platform. 2025 strategic advisory revenues significantly outpaced 2024's record levels with revenues in our strategic advisory business reaching record highs for both the fourth quarter and the year.
Speaker #1: As we look ahead, the broader capital markets and M&A environment continue to be highly constructive for deal-making. The momentum in global M&A activity observed in the second half of 2025 is likely to carry over through 2026, with strength in debt and equity capital markets, greater confidence regarding regulatory outcomes, and increased CEO confidence, all providing ballast.
Paul Taubman: The momentum in global M&A activity observed in the second half of 2025 is likely to carry over through 2026, with strength in debt and equity capital markets, greater confidence regarding regulatory outcomes, and increased CEO confidence, all providing ballast. But as events of the last couple of weeks have shown, market sentiment can turn on a dime. Geopolitical risks, as well as debates surrounding the pace of AI development and capital deployment, and the economic returns associated with this investment continue to loom large. How these factors evolve will play a central role in shaping the year ahead. As it relates to our firm, in PJT Park Hill, the strength in our private capital solutions business should more than offset any declines in primary fundraising.
The momentum in global M&A activity observed in the second half of 2025 is likely to carry over through 2026, with strength in debt and equity capital markets, greater confidence regarding regulatory outcomes, and increased CEO confidence, all providing ballast. But as events of the last couple of weeks have shown, market sentiment can turn on a dime. Geopolitical risks, as well as debates surrounding the pace of AI development and capital deployment, and the economic returns associated with this investment continue to loom large. How these factors evolve will play a central role in shaping the year ahead. As it relates to our firm, in PJT Park Hill, the strength in our private capital solutions business should more than offset any declines in primary fundraising.
Speaker #1: But as events of the last couple of weeks have shown, market sentiment can turn on a dime. Geopolitical risks as well as debates surrounding the pace of AI development and capital deployment and the economic returns associated with this investment continue to loom large.
Speaker #1: How these factors evolve will play a central role in shaping the year ahead. As it relates to our firm, in PJT Parkhill, the strength in our private capital solutions business should more than offset any declines in primary fundraising.
Speaker #1: In restructuring and liability management, we continue to operate in a sustained period of elevated activity, and our best-in-class team remains well positioned to capture additional market share.
Paul Taubman: In restructuring and liability management, we continue to operate in a sustained period of elevated activity, and our best-in-class team remains well-positioned to capture additional market share. In strategic advisory, while we began 2026 with a pipeline of announced transactions comparable to year-ago levels, our pipeline of pre-announced transactions, measured both by number of mandates and revenue opportunity, is up meaningfully from a year ago and now stands near record levels. We are better positioned than ever before to capitalize on a favorable deal environment due to our expanded footprint, enhanced capabilities, and growing brand awareness. Given our differentiated mix of businesses and the growth opportunities before us in each of these businesses, our firm remains well-positioned to prosper in nearly any market environment. As before, we remain confident in our near, intermediate, and long-term growth prospects. And with that, we will now take your questions.
In restructuring and liability management, we continue to operate in a sustained period of elevated activity, and our best-in-class team remains well-positioned to capture additional market share. In strategic advisory, while we began 2026 with a pipeline of announced transactions comparable to year-ago levels, our pipeline of pre-announced transactions, measured both by number of mandates and revenue opportunity, is up meaningfully from a year ago and now stands near record levels. We are better positioned than ever before to capitalize on a favorable deal environment due to our expanded footprint, enhanced capabilities, and growing brand awareness. Given our differentiated mix of businesses and the growth opportunities before us in each of these businesses, our firm remains well-positioned to prosper in nearly any market environment. As before, we remain confident in our near, intermediate, and long-term growth prospects. And with that, we will now take your questions.
Speaker #1: In strategic advisory, while we began 2026 with a pipeline of announced transactions comparable to year-ago levels, our pipeline of pre-announced transactions measured both by number of mandates and revenue opportunity is up meaningfully from a year ago and now stands near record levels.
Speaker #1: We are better positioned than ever before to capitalize on a favorable deal environment due to our expanded footprint, enhanced capabilities, and growing brand awareness.
Speaker #1: Given our differentiated mix of businesses and the growth opportunities before us in each of these businesses, our firm remains well-positioned to prosper in nearly any market environment.
Speaker #1: As before, we remain confident in our near-, intermediate-, and long-term growth prospects. And with that, we will now take your questions.
Speaker #1: questions. Ladies
Operator: Ladies and gentlemen, at this time, the floor is open for your questions. To ask a question, please press star one on your telephone keypad. To get out of the queue, press star two. We'll take our first question from Devin Ryan with Citizens Bank. Your line is open.
Operator: Ladies and gentlemen, at this time, the floor is open for your questions. To ask a question, please press star one on your telephone keypad. To get out of the queue, press star two.
Speaker #2: And gentlemen, at this time, the floor is open for your questions. To ask a question, please press star 1 on your telephone keypad. To get out of the queue, press star 2.
Speaker #2: We'll take our first question from Devin Ryan with Citizens Bank. Your line is open.
We'll take our first question from Devin Ryan with Citizens Bank. Your line is open.
Speaker #2: open. Good morning, Paul.
[Analyst] (Citizens JMP Securities): Good morning, Paul. Good morning, Helen. How are you?
Devin Ryan: Good morning, Paul. Good morning, Helen. How are you?
Speaker #3: Good morning, Helen.
Speaker #3: How are you? We're well.
Paul Taubman: We're well. Good morning, Devin.
Paul Taubman: We're well. Good morning, Devin.
Speaker #4: Good morning, Devin.
[Analyst] (Citizens JMP Securities): I wanna start with restructuring. Obviously, I think a lot of interest in that business in the industry, just as new firms are saying kinda slightly different things on kind of the outlook there. And so I'm curious if you can just give a little bit more color around the type of activity that you're seeing. You know, is it kind of amend and extend or kinda comprehensive Liability Management? Is there more in court? And then just expectations there as we go out. I know you we don't have a crystal ball here, but in a world where your M&A activity is kind of normalizing and accelerating nicely, does restructuring maintain, can it still grow, or does the normal pattern of it kind of falling off a little bit kind of play out?
Speaker #3: I want to start with restructuring; obviously, I think a lot of interest in that business in the industry, just as new firms are saying, kind of slightly different things on kind of the outlook there.
Devin Ryan: I wanna start with restructuring. Obviously, I think a lot of interest in that business in the industry, just as new firms are saying kinda slightly different things on kind of the outlook there. And so I'm curious if you can just give a little bit more color around the type of activity that you're seeing. You know, is it kind of amend and extend or kinda comprehensive Liability Management? Is there more in court? And then just expectations there as we go out.
Speaker #3: And so I'm curious if you can just give a little bit more color around the type of activity that you're seeing. Is it kind of amend-and-extend, or kind of comprehensive liability management?
Speaker #3: Is there more in-court? And then just expectations there, as we go out—I know we don't have a crystal ball here—but in a world where M&A activity is kind of normalizing and accelerating nicely, does restructuring maintain?
I know you we don't have a crystal ball here, but in a world where your M&A activity is kind of normalizing and accelerating nicely, does restructuring maintain, can it still grow, or does the normal pattern of it kind of falling off a little bit kind of play out? I'm just curious how you're thinking about, not necessarily the next couple of months, but probably the next, you know, 12 to 18 months. Thanks.
Speaker #3: Can it still grow, or does the normal pattern of it kind of falling off a little bit kind of play out? I'm just curious how you think about not necessarily the next couple of months, but probably the next 12 to 18 months.
[Analyst] (Citizens JMP Securities): I'm just curious how you're thinking about, not necessarily the next couple of months, but probably the next, you know, 12 to 18 months. Thanks.
Speaker #3: Thanks.
Speaker #4: Sure. I think we've been remarkably consistent on this point, which is: we're in a multi-year period of elevated restructuring activity. And there are lots of reasons for that.
Paul Taubman: Sure. I think, I think we've been remarkably consistent on this point, which is we're in a multiyear period of elevated restructuring activity, and there are lots of reasons for that, some of which is the benchmarks and the mindset relate back to historically low interest rates that were aberrational, and we're dealing in a more normalized rate environment today than before. The second is, we're dealing in a world that is speeding up, not slowing down, and the technological innovation is fueling the global economy, but at the same time, it's creating winners, and those winners are redefining, you know, who the losers or left behind companies are, in what industries and which companies.
Paul Taubman: Sure. I think, I think we've been remarkably consistent on this point, which is we're in a multiyear period of elevated restructuring activity, and there are lots of reasons for that, some of which is the benchmarks and the mindset relate back to historically low interest rates that were aberrational, and we're dealing in a more normalized rate environment today than before. The second is, we're dealing in a world that is speeding up, not slowing down, and the technological innovation is fueling the global economy, but at the same time, it's creating winners, and those winners are redefining, you know, who the losers or left behind companies are, in what industries and which companies.
Speaker #4: Some of which is the benchmarks and the mindset relate back to historically low interest rates. That were aberrational and we're dealing in a more normalized rate environment today than before.
Speaker #4: The second is, we're dealing in a world that is speeding up, not slowing down. And the technological innovation is fueling our global economy, but at the same time, it's creating winners, and those winners are redefining who the losers are. Left behind companies are in what industries and which companies.
Speaker #4: And as a result, you can have a world where you have robust GDP growth, you have broad consensus that the macroeconomic environment is constructive, but at the same time, have very concentrated stress in certain industries and with certain companies.
Paul Taubman: As a result, you can have a world where you have robust GDP growth, you have broad consensus that the macroeconomic environment is constructive, but at the same time, have very concentrated stress in certain industries and with certain companies. I think that suggests to us that this has legs and is going to continue to play out for a period of time. The reality is we haven't really hit a recessionary environment for an extended period of time. If we were to, then all this commentary sort of gets taken off the board, and you're looking at a meaningful leg up. But if you just assume the current economic environment, we think you're going to continue to see robust liability management and restructuring.
As a result, you can have a world where you have robust GDP growth, you have broad consensus that the macroeconomic environment is constructive, but at the same time, have very concentrated stress in certain industries and with certain companies. I think that suggests to us that this has legs and is going to continue to play out for a period of time. The reality is we haven't really hit a recessionary environment for an extended period of time. If we were to, then all this commentary sort of gets taken off the board, and you're looking at a meaningful leg up. But if you just assume the current economic environment, we think you're going to continue to see robust liability management and restructuring.
Speaker #4: And I think that suggests to us that this has legs and is going to continue to play out for a period of time. And the reality is, we haven't really hit a recessionary environment for an extended period of time.
Speaker #4: If we were to, then all this commentary sort of gets taken off the board and you're looking at a meaningful leg up. But if you just assume the current economic environment, we think you're going to continue to see robust liability management and restructuring.
Speaker #4: We have not seen any diminution in that activity, and if anything, we think we're starting to see the very early signs of that growing.
Paul Taubman: We have not seen any diminution in that activity, and if anything, we think we're starting to see the very early signs of that growing. In addition, we have, every day, the goal of broadening our footprint, broadening our footprint with sponsors, broadening our footprint in industry groups, broadening our footprint geographically. And every day that we broaden that footprint gives us a greater addressable market in which to market those leading Liability Management and Restructuring capabilities. And as we're able to reach a broader group and become relevant to a broader group, that gives us, you know, the prospect of, of continuing to, to grow our business at rates that may be greater than what the, what the overall Liability Management or Restructuring data suggests.
We have not seen any diminution in that activity, and if anything, we think we're starting to see the very early signs of that growing. In addition, we have, every day, the goal of broadening our footprint, broadening our footprint with sponsors, broadening our footprint in industry groups, broadening our footprint geographically. And every day that we broaden that footprint gives us a greater addressable market in which to market those leading Liability Management and Restructuring capabilities. And as we're able to reach a broader group and become relevant to a broader group, that gives us, you know, the prospect of, of continuing to, to grow our business at rates that may be greater than what the, what the overall Liability Management or Restructuring data suggests.
Speaker #4: In addition, we have every day the goal of broadening our footprint—broadening our footprint with sponsors, broadening our footprint in industry groups, broadening our footprint geographically.
Speaker #4: And every day that we broaden that footprint gives us a greater addressable market in which to market those leading liability management and restructuring capabilities.
Speaker #4: And as we're able to reach a broader group and become relevant to a broader group, that gives us the prospect of continuing to grow our business at rates that may be greater than what the overall liability management or restructuring data suggests.
Speaker #4: And as we're able to reach a broader group and become relevant to a broader group, that gives us the prospect of continuing to grow our business at rates that may be greater than what the overall liability management or restructuring data suggests.
[Analyst] (Citizens JMP Securities): That's great color, Paul. Thank you. And then just for my follow-up, I want to talk about the kind of platform maturation. You, you kind of mentioned that a couple of times. Obviously, just tremendous growth in Strategic Advisory, over the last year, or really the last decade. But, the last handful of years, really, the business has been maturing. And so, it, and again, I appreciate you don't break out a segment P&L. It's not how you run the firm, but can you help us get comfort around, you know, the ability to drive operating leverage off of those investments? You know, is there any proof points that you're seeing that? And then just kind of order of magnitude of operating leverage as the business backdrop transitions to a stronger M&A environment, to the extent it does.
Speaker #3: That's great color, Paul. Thank you. And then just for my follow-up, I want to talk about the kind of platform maturation. You kind of mentioned that a couple of times.
Devin Ryan: That's great color, Paul. Thank you. And then just for my follow-up, I want to talk about the kind of platform maturation. You, you kind of mentioned that a couple of times. Obviously, just tremendous growth in Strategic Advisory, over the last year, or really the last decade. But, the last handful of years, really, the business has been maturing. And so, it, and again, I appreciate you don't break out a segment P&L. It's not how you run the firm, but can you help us get comfort around, you know, the ability to drive operating leverage off of those investments?
Speaker #3: Obviously, just tremendous growth in strategic advisory over the last really last decade. But the last handful of years really the business has been maturing.
Speaker #3: And so, again, I appreciate you don't break out a segment P&L—it's not how you run the firm. But can you help us get comfort around the ability to drive operating leverage off of those investments?
Speaker #3: Is there any proof points that you're seeing that? And then just kind of order of magnitude of operating leverage as the business backdrop transitions to a stronger M&A environment to the extent it does?
You know, is there any proof points that you're seeing that? And then just kind of order of magnitude of operating leverage as the business backdrop transitions to a stronger M&A environment, to the extent it does. You know, I don't know if there's a way to think about an algorithm of revenue versus expense growth, or just how you would frame, just given the growth you've had and then the maturation of some of that growth as well.
Speaker #3: I don't know if there's a way to think about an algorithm of revenue versus expense growth, or just how you would frame it, just given the growth you've had and then the maturation of some of that growth as well.
[Analyst] (Citizens JMP Securities): You know, I don't know if there's a way to think about an algorithm of revenue versus expense growth, or just how you would frame, just given the growth you've had and then the maturation of some of that growth as well.
Speaker #4: Well, I don't think we've had a year to date where our strategic advisory partners, writ large, have been more productive than in 2025. So clearly, as you just look at the maturation and the progression of our firm, that continues to be up and to the right.
Paul Taubman: Well, I don't think we've had a year to date where our strategic advisory partners, writ large, have been more productive than in 2025. So clearly, as you just look at the maturation and the progression of our firm, you know, that, that continues to be up and to the right. At the same time, that, that may direct to up and to the right, but that doesn't mean that every quarter and every year is precisely up and to the right. As an example, one factor is just the pace of investment. We've made it very clear that when we find, you know, individuals who match, you know, our expectations for talent, relationships, and personal integrity and ability to operate in a culture of teamwork and collaboration, we're not going to be shy about onboarding those individuals.
Paul Taubman: Well, I don't think we've had a year to date where our strategic advisory partners, writ large, have been more productive than in 2025. So clearly, as you just look at the maturation and the progression of our firm, you know, that, that continues to be up and to the right. At the same time, that, that may direct to up and to the right, but that doesn't mean that every quarter and every year is precisely up and to the right. As an example, one factor is just the pace of investment. We've made it very clear that when we find, you know, individuals who match, you know, our expectations for talent, relationships, and personal integrity and ability to operate in a culture of teamwork and collaboration, we're not going to be shy about onboarding those individuals.
Speaker #4: At the same time, that may direct to up and to the right, but that doesn't mean that every quarter and every year is precisely up and to the right.
Speaker #4: And as an example, one factor is just the pace of investment. And we've made it very clear that when we find individuals who match our expectations for talent, relationships, and personal integrity, and ability to operate in a culture of teamwork and collaboration, we're not going to be shy about onboarding those individuals.
Speaker #4: So some of these productivity measures get masked from time to time based on what's the rate and pace of investment. So that's why it's never a straight line.
Paul Taubman: So some of these productivity measures get masked from time to time based on what's the rate and pace of investment. So that's why it's never a straight line. And also the Strategic Advisory business is a long sales cycle business. So many times you could be having real impact and effect, and from the KPIs one would look at, you're seeing increased productivity, even if the revenue lags. But I think we look back on 2025, and we're just a fundamentally different firm. And maybe the easiest way to see that is if you just look at our firm-wide revenue and compare it to 2021, which was the peak year for M&A activity of all time. On that basis, we're up nearly 75% in firm revenues from 2021 to 2025.
So some of these productivity measures get masked from time to time based on what's the rate and pace of investment. So that's why it's never a straight line. And also the Strategic Advisory business is a long sales cycle business. So many times you could be having real impact and effect, and from the KPIs one would look at, you're seeing increased productivity, even if the revenue lags. But I think we look back on 2025, and we're just a fundamentally different firm. And maybe the easiest way to see that is if you just look at our firm-wide revenue and compare it to 2021, which was the peak year for M&A activity of all time. On that basis, we're up nearly 75% in firm revenues from 2021 to 2025.
Speaker #4: And also, the strategic advisory business is a long sales cycle business. So, many times you could be having real impact and effect, and from the KPIs one would look at, you’re seeing increased productivity.
Speaker #4: Even if the revenue lags, I think we’ll look back on 2025 and see that we’re just a fundamentally different firm. And maybe the easiest way to see that is if you just look at our firm-wide revenue.
Speaker #4: And compare it to 2021, which was the peak year for M&A activity of all time. On that basis, we're up nearly 75% in firm revenues from 2021 to 2025.
Speaker #4: So just to give you some perspective as to how this continued investment is starting to gel, I think there's been real returns. But we're not satisfied with where we are because we have really high expectations and aspirations.
Paul Taubman: So just to give you some perspective as to how this continued investment is starting to gel, I think there's been real returns, but we're not satisfied with where we are because we have really high expectations and aspirations, but we're going to just continue to methodically get after all of the white space that we see across the board.
So just to give you some perspective as to how this continued investment is starting to gel, I think there's been real returns, but we're not satisfied with where we are because we have really high expectations and aspirations, but we're going to just continue to methodically get after all of the white space that we see across the board.
Speaker #4: But we're going to just continue to methodically get after all of the white space that we see across the—
Speaker #4: board. All right.
[Analyst] (Citizens JMP Securities): All right. Appreciate it, and I'll hop back in the queue. Thanks, guys.
Devin Ryan: All right. Appreciate it, and I'll hop back in the queue. Thanks, guys.
Speaker #3: Appreciate it. And I'll hop back into Q. Thanks,
Speaker #4: Thank you,
Paul Taubman: Thank you, Devin.
Paul Taubman: Thank you, Devin.
Speaker #4: Devin. We'll take our next
Operator: We'll take our next question from James Yaro with Goldman Sachs. Your line is open.
Operator: We'll take our next question from James Yaro with Goldman Sachs. Your line is open.
Speaker #1: Question from James Yarrow with Goldman Sachs. Your line is open.
Speaker #1: open. Hi, this is Sunshine
[Analyst] (Goldman Sachs): Hi, this is Song Shinjang, stepping for James. Paul, 2025 was a mega cap M&A-driven backdrop. So do you think, can this part of market continue at this pace or improve further in 2026?
Songqing Jiang: Hi, this is Song Shinjang, stepping for James. Paul, 2025 was a mega cap M&A-driven backdrop. So do you think, can this part of market continue at this pace or improve further in 2026?
Speaker #5: Zhao stepping in for James. I'm Paul. 2025 was a mega-cap, M&A-driven backdrop. So, do you think this part of the market can continue at this pace or improve further in '26?
Paul Taubman: ... I certainly think we're we haven't tasted the full extent of how robust the M&A market can be. But when you have a year like 2025, where depending upon how one counts, volumes are up 35, 40, even higher than 40%, and you're looking at the second highest revenue year, it becomes a difficult comparison. But I focus less on, you know, whether we're gonna ring the bell on top tick last year. I ask myself, are we in a multi-year period of elevated deal activity? And I think given the current macroeconomic backdrop, the regulatory posture, this administration, the desire, you know, in Europe to address certain issues in terms of industry consolidation and the like, which is perhaps been a negative for the continent.
Paul Taubman: ... I certainly think we're we haven't tasted the full extent of how robust the M&A market can be. But when you have a year like 2025, where depending upon how one counts, volumes are up 35, 40, even higher than 40%, and you're looking at the second highest revenue year, it becomes a difficult comparison. But I focus less on, you know, whether we're gonna ring the bell on top tick last year. I ask myself, are we in a multi-year period of elevated deal activity? And I think given the current macroeconomic backdrop, the regulatory posture, this administration, the desire, you know, in Europe to address certain issues in terms of industry consolidation and the like, which is perhaps been a negative for the continent.
Speaker #4: I certainly think we haven't tasted the full extent of how robust the M&A market can be. But when you have a year like 2025, where, depending upon how one counts, volumes are up 35, 40, even higher than 40%.
Speaker #4: And you're looking at the second highest revenue year, it becomes a difficult comparison. But I focus less on whether we're going to ring the bell and top tick last year; I ask myself, are we in a multi-year period of elevated deal activity?
Speaker #4: And I think given the current macroeconomic backdrop, the regulatory posture, this administration, the desire in Europe to address certain issues in terms of industry consolidation and the like, which is perhaps been a negative for the continent, when I think about the attractive capital markets backdrop and a world that is speeding up and not slowing down, which means you either need to press your competitive advantage and one of the ways to do that is with more scale, and to use your capabilities to continue to build moats, or you find yourself left behind and you need to think about the corporate structure that you have or your vulnerable to shareholder activism, or you need to pair the mission and focus on areas where you have clear core competencies and advantages.
Paul Taubman: When I think about the attractive capital markets backdrop and a world that is speeding up and not slowing down, which means you either need to press your competitive advantage, and one of the ways to do that is with more scale and to use your capabilities to continue to build moats, or you find yourself left behind and you need to think about, you know, the corporate structure that you have, or you're vulnerable to shareholder activism, or you need to pair the mission and focus on areas where you have clear core competencies and advantages. All of that suggests that we should be in a multi-year period of elevated deal activity.
When I think about the attractive capital markets backdrop and a world that is speeding up and not slowing down, which means you either need to press your competitive advantage, and one of the ways to do that is with more scale and to use your capabilities to continue to build moats, or you find yourself left behind and you need to think about, you know, the corporate structure that you have, or you're vulnerable to shareholder activism, or you need to pair the mission and focus on areas where you have clear core competencies and advantages. All of that suggests that we should be in a multi-year period of elevated deal activity.
Speaker #4: All of that suggests that we should be in a multi-year period of elevated deal activity; it's easy to talk about inflection points when things are going to get better or things are going to get worse.
Paul Taubman: It's easy to talk about inflection points when things are gonna get better or things are gonna get worse, but when you're dealing with quite attractive macro backdrop, the issue is just simply how long is it gonna continue? And we think it has legs, but whether we're continuously hitting new highs, that's much harder to call.
It's easy to talk about inflection points when things are gonna get better or things are gonna get worse, but when you're dealing with quite attractive macro backdrop, the issue is just simply how long is it gonna continue? And we think it has legs, but whether we're continuously hitting new highs, that's much harder to call.
Speaker #4: But when you're dealing with a quite attractive macro backdrop, the issue is just simply how long is it going to continue? And we think it has legs.
Speaker #4: But whether we're continuously hitting new highs that's much harder to call.
Speaker #5: Thanks, very helpful. Just to follow up here, you delivered a meaningful step down in the Comprehension quarter. Can you please help us think through the outlook for the Comprehension from here?
[Analyst] (Goldman Sachs): Thanks, very helpful. Just to follow up here, you delivered a meaningful step down in the compensation ratio. Can you please help us think through the outlook for the comp ratio from here? Thanks.
Songqing Jiang: Thanks, very helpful. Just to follow up here, you delivered a meaningful step down in the compensation ratio. Can you please help us think through the outlook for the comp ratio from here? Thanks.
Speaker #5: Thanks.
Speaker #4: Well, I
Speaker #4: I think we've said a couple of years ago, when we were delivering our financial results, that we thought, based on everything we had seen, our compensation as a percentage of revenue had peaked. And it had peaked because we had maximal investment in a period of relatively low-velocity M&A activity.
Paul Taubman: Well, I think we've said a couple of years ago that when we, you know, were, you know, delivering our financial results, that we thought that based on everything we had seen, our compensation as a percentage of revenue had peaked, and it had peaked because we had maximal investment in a period of relatively low velocity M&A activity, and that confluence had caused that ratio to gap out in the short term, but we expected that to continue to work its way down. I don't think we're done working it down. The question is just simply the pace and rate of that, and that's in part gonna be a function of how the markets develop over the next couple of years and how strong they are and how much operating leverage we get by revenue growth.
Paul Taubman: Well, I think we've said a couple of years ago that when we, you know, were, you know, delivering our financial results, that we thought that based on everything we had seen, our compensation as a percentage of revenue had peaked, and it had peaked because we had maximal investment in a period of relatively low velocity M&A activity, and that confluence had caused that ratio to gap out in the short term, but we expected that to continue to work its way down. I don't think we're done working it down.
Speaker #4: And that confluence had caused that ratio to gap out in the short term, but we expected that to continue to work its way down.
Speaker #4: And I don't think we're done working it down. The question is just simply the pace and rate of that. And that's in part going to be a function of how the markets develop over the next couple of years, and how strong they are, and how much operating leverage we get by revenue growth.
The question is just simply the pace and rate of that, and that's in part gonna be a function of how the markets develop over the next couple of years and how strong they are and how much operating leverage we get by revenue growth. Some of it's also gonna be the pace of investment, which is still very much TBD. We'll report at the end of the first quarter when we deliver our Q1 results, our best estimate for what that ratio should be for 2026.
Speaker #4: But some of it's also going to be the pace of investment, which is still very much TBD. And we'll report at the end of the first quarter when we deliver our Q1 results our best estimate for what that ratio should be for 2026.
Paul Taubman: Some of it's also gonna be the pace of investment, which is still very much TBD. We'll report at the end of the first quarter when we deliver our Q1 results, our best estimate for what that ratio should be for 2026.
Speaker #1: We'll take our next question from Brennan Hawkin with BMO Capital Markets. Your line is open.
Operator: We'll take our next question from Brennan Hawkin with BMO Capital Markets. Your line is open.
Operator: We'll take our next question from Brennan Hawkin with BMO Capital Markets. Your line is open.
Speaker #6: Good morning. Thanks for taking my questions.
[Analyst] (BMO Capital Markets): Good morning. Thanks for taking my questions.
Brennan Hawken: Good morning. Thanks for taking my questions.
Speaker #4: Good morning.
Paul Taubman: Good morning.
Paul Taubman: Good morning.
Speaker #6: Hi, Paul. I'm hoping you can help me with something because I'm struggling a little bit here. So here you loud and clear that restructuring the outlook is pretty good.
[Analyst] (BMO Capital Markets): Hi, Paul. I'm hoping you can help me with something because I'm struggling a little bit here. So hear you loud and clear that Restructuring the outlook is pretty good. But, you know, when we look at the revenues here in Q4, I know you guys flagged in the press release that Restructuring was up, but like the multiple on the Dealogic revenue was one of the lowest that we've seen in years. So to me, that suggests that the actual quarter was a little bit lighter on the Restructuring side than what we've been seeing. So number one, I'd love to hear you maybe speak to those trends. I know Restructuring is chunky, right? So, like, that can happen quarter to quarter, but maybe help reconcile that a little bit.
Brennan Hawken: Hi, Paul. I'm hoping you can help me with something because I'm struggling a little bit here. So hear you loud and clear that Restructuring the outlook is pretty good. But, you know, when we look at the revenues here in Q4, I know you guys flagged in the press release that Restructuring was up, but like the multiple on the Dealogic revenue was one of the lowest that we've seen in years. So to me, that suggests that the actual quarter was a little bit lighter on the Restructuring side than what we've been seeing. So number one, I'd love to hear you maybe speak to those trends. I know Restructuring is chunky, right? So, like, that can happen quarter to quarter, but maybe help reconcile that a little bit.
Speaker #6: But when we look at the revenues here in the fourth quarter, I know you guys flagged in the press release that restructuring was up, but the multiple on the Dealogic revenue was one of the lowest that we've seen in years.
Speaker #6: So to me, that suggests that the actual quarter was a little bit lighter on the restructuring side than what we've been seeing. So number one, I'd love to hear you maybe speak to those trends.
Speaker #6: I know restructuring is chunky, right? So that can happen quarter to quarter. But maybe help reconcile that a little bit and then when you're thinking about restructuring, could you speak to maybe certain sectors and where you're seeing a lot of activity?
[Analyst] (BMO Capital Markets): And then, when you're thinking about restructuring, could you speak to maybe certain sectors and where you're seeing a lot of activity? There's a lot of agita out there around software, so curious about what you're seeing in your business there.
And then, when you're thinking about restructuring, could you speak to maybe certain sectors and where you're seeing a lot of activity? There's a lot of agita out there around software, so curious about what you're seeing in your business there.
Speaker #6: There's a lot of agita out there around software, so curious about what you're seeing in your business there.
Speaker #4: Okay. I don't spend a lot of time looking at deal logic data. I just focus on the business that we do. And we are pretty clear in how we communicate to our investors; we had our record quarter in restructuring, Q4 was the best restructuring quarter we've ever had.
Paul Taubman: Okay. I don't spend a lot of time looking at Dealogic data. I just, you know, focus on the business that we do, and we are pretty clear in how we communicate to our investors. We had our record quarter in Restructuring. Q4 was the best Restructuring quarter we've ever had. The year was the best Restructuring year we've ever had, and we continue to be constructive and optimistic about the future prospects for our franchise. I can't be any clearer than that. That's those are the facts.
Paul Taubman: Okay. I don't spend a lot of time looking at Dealogic data. I just, you know, focus on the business that we do, and we are pretty clear in how we communicate to our investors. We had our record quarter in Restructuring. Q4 was the best Restructuring quarter we've ever had. The year was the best Restructuring year we've ever had, and we continue to be constructive and optimistic about the future prospects for our franchise. I can't be any clearer than that. That's those are the facts.
Speaker #4: The year was the best restructuring year we've ever had, and we continue to be constructive and optimistic about the future prospects for our franchise.
Speaker #4: I can't be any clearer than that. That's the
Speaker #4: facts. Okay.
[Analyst] (BMO Capital Markets): Okay, and sectors where you're busy in restructuring?
Brennan Hawken: Okay, and sectors where you're busy in restructuring?
Speaker #6: And sectors where you're busy in
Speaker #6: And sectors where you're busy in restructuring? Sectors.
Paul Taubman: Sectors, look, we're really busy across the board, but, you know, I think there are areas, you know, I think you look at challenged industries, you know, parts of the healthcare, you know, complex; there's a lot of pain. Software is an area where there will be, you know, elevated focus just given, you know, events and pressures coming from AI. We've talked, you know, consistently about the fact that, you know, AI is going to be a disruptor. The whole digitization, you know, and the consumption of media has created significant opportunities in media. There are issues in retail, which also come from, you know, online versus offline shopping and changing consumer behaviors. I think it's broad-based.
Paul Taubman: Sectors, look, we're really busy across the board, but, you know, I think there are areas, you know, I think you look at challenged industries, you know, parts of the healthcare, you know, complex; there's a lot of pain. Software is an area where there will be, you know, elevated focus just given, you know, events and pressures coming from AI. We've talked, you know, consistently about the fact that, you know, AI is going to be a disruptor. The whole digitization, you know, and the consumption of media has created significant opportunities in media. There are issues in retail, which also come from, you know, online versus offline shopping and changing consumer behaviors. I think it's broad-based.
Speaker #4: Look, we're really busy across the board, but I think there are areas. I think you look at challenged industries—parts of the healthcare complex, there's a lot of pain. Software is an area where there will be elevated focus, just given events and pressures coming from AI.
Speaker #4: We've talked consistently about the fact that AI is going to be a disruptor. The whole digitization and the consumption of media has created significant opportunities in media.
Speaker #4: There are issues in retail, which also come from online versus offline shopping and changing a consumer behaviors. I think it's broad-based. It's not narrow.
Paul Taubman: It's not narrow, because in many industries, there are companies that are being left behind, and their business models took on, you know, or suggested they could support a quantum of debt that as the, as the world moves forward, it's clear that that was not the right capital structure. Companies are increasingly trying to get ahead of these issues, and they're looking at where their choke points might be in the future as far as covenants or significant maturities. They're using the creativity and, and deep capital markets and the ability to access public or private markets to come up with a, a better capital solution. So it's really quite, quite broad-based, and our focus is not, is not narrow. That's another reason why I, I have greater confidence that this, that this trend continues.
It's not narrow, because in many industries, there are companies that are being left behind, and their business models took on, you know, or suggested they could support a quantum of debt that as the, as the world moves forward, it's clear that that was not the right capital structure. Companies are increasingly trying to get ahead of these issues, and they're looking at where their choke points might be in the future as far as covenants or significant maturities. They're using the creativity and, and deep capital markets and the ability to access public or private markets to come up with a, a better capital solution. So it's really quite, quite broad-based, and our focus is not, is not narrow.
Speaker #4: Because in many industries, there are companies that are being left behind, and their business models took on—or suggested they could support—a quantum of debt that, as the world moves forward, it's clear that that was not the right capital structure.
Speaker #4: And companies are increasingly trying to get ahead of these issues, and they're looking at where their choke points might be in the future as far as covenants, or significant maturities.
Speaker #4: And they're using the creativity and deep capital markets, and the ability to access public or private markets, to come up with a better capital solution.
Speaker #4: So, it's really quite broad-based. And our focus is not narrow. And that's another reason why I have greater confidence that this trend continues. If it was just a couple of very narrow verticals, there's always the risk that that well runs dry.
That's another reason why I, I have greater confidence that this, that this trend continues. If it was just, you know, a couple of very narrow verticals, there's always the risk that that well runs dry, but that's not what we see.
Paul Taubman: If it was just, you know, a couple of very narrow verticals, there's always the risk that that well runs dry, but that's not what we see.
Speaker #4: But that's not what we
Speaker #4: see. Got it.
[Analyst] (BMO Capital Markets): Got it. Got it. Yeah, and look, the - thanks for that color. The, the strength of the restructuring franchise that you've built is, is, clearly quite good. Maybe, maybe I'm going to try my question a different direction. I know you don't pay attention to Dealogic, but, you know, we're, we're stuck here using the data that we've got. So, could you speak to Park Hill? I know you spoke to the challenges in the fundraising environment, but there's also the, you know, the GP-led secondaries business, which has been better. What, what did trends in Park Hill, revenue trends in Park Hill look like? And was, was that maybe a little bit weaker just because the fundraising remains so challenging?
Brennan Hawken: Got it. Got it. Yeah, and look, the - thanks for that color. The, the strength of the restructuring franchise that you've built is, is, clearly quite good. Maybe, maybe I'm going to try my question a different direction. I know you don't pay attention to Dealogic, but, you know, we're, we're stuck here using the data that we've got. So, could you speak to Park Hill? I know you spoke to the challenges in the fundraising environment, but there's also the, you know, the GP-led secondaries business, which has been better. What, what did trends in Park Hill, revenue trends in Park Hill look like? And was, was that maybe a little bit weaker just because the fundraising remains so challenging?
Speaker #6: Got it. Yeah. And look, thanks for that color, the strength of the restructuring franchise that you've built is clearly quite good. Maybe I'm going to try my question a different direction.
Speaker #6: I know you don't pay attention to deal logic, but we're stuck here using the data that we've got. So could you speak to Park Hill?
Speaker #6: I know you spoke to challenges in the fundraising environment, but there's also the GPU-led secondaries business, which has been better. What have trends in Park Hill, revenue trends in Park Hill look like?
Speaker #6: And was that maybe a little bit weaker just because the fundraising remains so challenging?
Paul Taubman: I think most of my commentary throughout the year was that we expected the year to, you know, come close to or be proximate to the prior, the prior year's record performance. 2024 was a record for the Park Hill business. We ended up with a record Q4, and as a result of a record Q4, we created a new full-year record. Our 2025 results eclipsed 2024. I mean, if we just step back for a moment, we generated over $500 million of revenues in the quarter. We've never done that before as a firm. We had a record quarter. We pierced $500 million by a significant amount. We had the best quarter ever in Restructuring. We had the best quarter ever in Strategic Advisory. We had the best quarter ever in PJT Park Hill.
Speaker #4: I think most of my commentary throughout the year was that we expected the year to come close to or be proximate to the prior year's record performance.
Paul Taubman: I think most of my commentary throughout the year was that we expected the year to, you know, come close to or be proximate to the prior, the prior year's record performance. 2024 was a record for the Park Hill business. We ended up with a record Q4, and as a result of a record Q4, we created a new full-year record. Our 2025 results eclipsed 2024. I mean, if we just step back for a moment, we generated over $500 million of revenues in the quarter. We've never done that before as a firm. We had a record quarter. We pierced $500 million by a significant amount. We had the best quarter ever in Restructuring. We had the best quarter ever in Strategic Advisory. We had the best quarter ever in PJT Park Hill.
Speaker #4: 2024 was a record for the Park Hill business. We ended up with a record fourth quarter. And as a result of a record fourth quarter, we created a new full-year record.
Speaker #4: Our 2025 results eclipsed 2024. I mean, if we just step back for a moment, we generated over $500 million of revenues in the quarter.
Speaker #4: We've never done that before as a firm. We had a record quarter—we pierced $500 million by a significant amount. We had the best quarter ever in Restructuring, we had the best quarter ever in Strategic Advisory, we had the best quarter ever in PJT Park Hill, and the reality is we're dealing with a fourth quarter a year ago where we also had records.
Paul Taubman: The reality is, we're dealing with, you know, a Q4 a year ago where we also had records. So we had, you know, very tough hurdles there, and we cleared them across the board. So all of the businesses are very well-positioned going forward. I think as you look at the Park Hill business going forward, you're going to see private capital solutions, structured products, and the like, increasingly represent, you know, the bulk of the revenue opportunity. And that market, as I said in the outlook, is growing meaningfully faster for us than any potential, you know, diminution or flatness in the primary fundraising line, which makes us optimistic about the Park Hill business in aggregate. So we're feeling pretty good about where we stand at the end of 2025, moving into 2026.
The reality is, we're dealing with, you know, a Q4 a year ago where we also had records. So we had, you know, very tough hurdles there, and we cleared them across the board. So all of the businesses are very well-positioned going forward. I think as you look at the Park Hill business going forward, you're going to see private capital solutions, structured products, and the like, increasingly represent, you know, the bulk of the revenue opportunity. And that market, as I said in the outlook, is growing meaningfully faster for us than any potential, you know, diminution or flatness in the primary fundraising line, which makes us optimistic about the Park Hill business in aggregate. So we're feeling pretty good about where we stand at the end of 2025, moving into 2026.
Speaker #4: So we had very tough hurdles there, and we cleared them across the board. So all of the businesses are very well-positioned going forward. I think as you look at the Park Hill business going forward, you're going to see private capital solutions, structured products, and the like.
Speaker #4: Increasingly, represent the bulk of the revenue opportunity. And that market, as I said in the outlook, is growing meaningfully faster for us than any potential diminution or flatness in the primary fundraising line, which makes us optimistic about the Park Hill business in aggregate.
Speaker #4: So, we're feeling pretty good about where we stand at the end of 2025, moving into 2026.
Speaker #6: Right. Thanks for those
Speaker #6: Right. Thanks for those comments, Paul. Appreciate it. Sure.
[Analyst] (BMO Capital Markets): Great. Thanks for those comments, Paul. Appreciate it.
Brennan Hawken: Great. Thanks for those comments, Paul. Appreciate it.
Paul Taubman: Sure. Absolutely.
Paul Taubman: Sure. Absolutely.
Speaker #4: Absolutely. We'll move
Operator: We'll move next to Jim Mitchell with Seaport Global Securities. Your line is open.
Operator: We'll move next to Jim Mitchell with Seaport Global Securities. Your line is open.
Speaker #1: next to Jim Mitchell with Seaport Global Securities. Your line is
Speaker #1: open. Hey, good
Jim Mitchell: Hey, good morning. Paul, last, you mentioned that M&A volumes are the second best year ever, but when we look at sort of the number of deals, down for the fourth year in a row last year, so very much a mega cap kind of environment. So I guess, number one, are you seeing activity starting to broaden out to more the middle market, and down? And then secondly, for you specifically, for PJT, I know you've been looking to build out your touch points with financial sponsors, so just any kind of update on how you're positioned for that maybe middle market recovery among financial sponsors? Thanks.
Jim Mitchell: Hey, good morning. Paul, last, you mentioned that M&A volumes are the second best year ever, but when we look at sort of the number of deals, down for the fourth year in a row last year, so very much a mega cap kind of environment. So I guess, number one, are you seeing activity starting to broaden out to more the middle market, and down? And then secondly, for you specifically, for PJT, I know you've been looking to build out your touch points with financial sponsors, so just any kind of update on how you're positioned for that maybe middle market recovery among financial sponsors? Thanks.
Speaker #6: Morning. Paul, last you mentioned that M&A volumes are the second-best year ever, but when we look at the number of deals, they're down for the fourth year in a row last year, so very much a mega-cap kind of environment.
Speaker #6: So I guess, number one, are you seeing activity starting to broaden out to more of the middle market? And down. And then secondly, for you specifically, for PJT, I know you've been looking to build out your touchpoints with financial sponsors.
Speaker #6: So just any kind of update on how you’re positioned for that, maybe, middle market recovery among financial?
Speaker #6: Thanks. Sure.
Paul Taubman: Sure. So, volumes are up meaningfully, deal count down, although if you really double-click on that, a lot of the reduction in deal count is in the sub-billion dollar transactions, and that's not a place that we play as much in.
Paul Taubman: Sure. So, volumes are up meaningfully, deal count down, although if you really double-click on that, a lot of the reduction in deal count is in the sub-billion dollar transactions, and that's not a place that we play as much in.
Speaker #4: So, volumes are up meaningfully. Deal count is down. Although, if you really double-click on that, a lot of the reduction in deal count is in the sub-$1 billion transactions.
Speaker #4: And that's not a place that we play as much in. So, in some respects, that's not as broad-based as people might think, because a lot of that reduction in deal count is at the much, much smaller level than it is in chunky $3, $5, $10 billion transactions.
Jim Mitchell: Right.
Jim Mitchell: Right.
Paul Taubman: So in some respects, that's not. It's not as broad-based as people might think, because a lot of that reduction in deal count is at a much, much smaller level than it is in chunky $3 billion, $5 billion, $10 billion transactions. That would be the first point. I think the second point is, if you look at the buying binge in private equity in 2021, and then the painful, you know, comeuppance in 2023, when there were somewhere like 9 rate hikes in 2023, you got a very low velocity private equity environment. And I think what we're doing is we're getting back to equilibrium between capital expended and DPI. And we've talked about this. It's not always the easiest way to shift ... from a fundamental imbalance, where all this capital has been called and relatively little of it is monetized.
Paul Taubman: So in some respects, that's not. It's not as broad-based as people might think, because a lot of that reduction in deal count is at a much, much smaller level than it is in chunky $3 billion, $5 billion, $10 billion transactions. That would be the first point. I think the second point is, if you look at the buying binge in private equity in 2021, and then the painful, you know, comeuppance in 2023, when there were somewhere like 9 rate hikes in 2023, you got a very low velocity private equity environment. And I think what we're doing is we're getting back to equilibrium between capital expended and DPI. And we've talked about this. It's not always the easiest way to shift ... from a fundamental imbalance, where all this capital has been called and relatively little of it is monetized.
Speaker #4: That would be the first point. I think the second point is if you look at the buying binge in private equity in 2021, and then the painful comeuppance in 2023 when there were somewhere like nine rate hikes in 2023.
Speaker #4: You've got a very low-velocity private equity environment. And I think what we're doing is we're getting back to equilibrium between capital expended and DPI, and we've talked about this.
Speaker #4: It's not always the easiest way to shift from a fundamental imbalance, where all this capital has been called and relatively little of it is monetized.
Speaker #4: If you do that for a period of time, you create stresses and strains in the system. I think the industry has worked through a lot of it.
Paul Taubman: If you do that for a period of time, you create stresses and strains in the system. I think the industry has worked through a lot of it. They haven't worked through all of it, but I would expect that we will, you know, continue to see some increasing activity amongst private equity firms as they become more comfortable in monetizing investments at these valuations. And the more that they can monetize, I think that will make it easier for them to be more forward-leaning and commit more capital, and we'll get this ecosystem better, better linked between sort of capital deployed and capital return. I don't think that it's gonna be perfectly in balance, which is why we're so constructive on the private capital solutions business. I think that's an arrow in one's quiver that's going to continue for a considerable period of time.
If you do that for a period of time, you create stresses and strains in the system. I think the industry has worked through a lot of it. They haven't worked through all of it, but I would expect that we will, you know, continue to see some increasing activity amongst private equity firms as they become more comfortable in monetizing investments at these valuations. And the more that they can monetize, I think that will make it easier for them to be more forward-leaning and commit more capital, and we'll get this ecosystem better, better linked between sort of capital deployed and capital return. I don't think that it's gonna be perfectly in balance, which is why we're so constructive on the private capital solutions business. I think that's an arrow in one's quiver that's going to continue for a considerable period of time.
Speaker #4: They haven't worked through all of it. But I would expect that we will continue to see some increasing activity amongst private equity firms as they become more comfortable in monetizing investments at these valuations.
Speaker #4: And the more that they can monetize, I think that will make it easier for them to be more forward-leaning and commit more capital, and we'll get this ecosystem better linked between sort of capital deployed and capital returned.
Speaker #4: I don't think that it's going to be perfectly imbalanced, which is why we're so constructive on the private capital solutions business. I think that's an arrow in one's quiver that's going to continue.
Speaker #4: For considerable period of time. And as far as the private equity ecosystem and how we touch it and how we cover it, one way we touch it and cover it is through all the liability management exercises we do.
Paul Taubman: As far as the private equity ecosystem and how we touch it and how we cover it, one way we touch it and cover it is through all the Liability Management exercises we do. As we continue to broaden our sponsor coverage, it shouldn't be a surprise that, that some of that benefits our Restructuring special situations Liability Management effort. I think the next is we have a leading Private Capital Solutions business. The more developed that business is, the more opportunities we have to use those distinctive capabilities and also our distribution and our ability to raise new capital, to further penetrate the middle market or, or sub-mega fund complexes. That's an area where PJT Park Hill is particularly strong and has real deep relationships.
As far as the private equity ecosystem and how we touch it and how we cover it, one way we touch it and cover it is through all the Liability Management exercises we do. As we continue to broaden our sponsor coverage, it shouldn't be a surprise that, that some of that benefits our Restructuring special situations Liability Management effort. I think the next is we have a leading Private Capital Solutions business. The more developed that business is, the more opportunities we have to use those distinctive capabilities and also our distribution and our ability to raise new capital, to further penetrate the middle market or, or sub-mega fund complexes. That's an area where PJT Park Hill is particularly strong and has real deep relationships.
Speaker #4: And as we continue to broaden our sponsor coverage, it shouldn't be a surprise that some of that benefits our restructuring special situations liability management effort.
Speaker #4: I think the next is, we have a leading private capital solutions business. The more developed that business is, the more opportunities we have to use those distinctive capabilities, and also our distribution and our ability to raise new capital, to further penetrate the middle market or sub-mega fund complexes.
Speaker #4: And that's an area where PJT Park Hill is particularly strong and has real deep relationships. And as we continue to build out our industry groups and strategic advisory we become more relevant to more sponsor firms because of our industry expertise and our industry verticals better matching where there might be investor focus.
Paul Taubman: As we continue to build out our industry groups and Strategic Advisory, we become more relevant to more sponsor firms because of our industry expertise and our industry verticals better matching where there might be investor focus. So, you know, we're continuing that journey to, to further grow that business, but I've always believed it needs to start with best-in-class advice. It needs to start with best-in-class corporate access, and then from there, you have things of real relevance that resonate with your sponsor clients.
As we continue to build out our industry groups and Strategic Advisory, we become more relevant to more sponsor firms because of our industry expertise and our industry verticals better matching where there might be investor focus. So, you know, we're continuing that journey to, to further grow that business, but I've always believed it needs to start with best-in-class advice. It needs to start with best-in-class corporate access, and then from there, you have things of real relevance that resonate with your sponsor clients.
Speaker #4: So we're continuing that journey to further grow that business. But I've always believed it needs to start with best-in-class advice, it needs to start with best-in-class corporate access, and then from there you have things of real relevance that resonate with your sponsor.
Speaker #4: funds.
Speaker #6: Oh, that's really
Jim Mitchell: Oh, that's, that's really helpful. Maybe a quick one for Helen. I appreciate not giving the full year tax rate yet, but can you give us any help on the first quarter, given the likely quite positive benefit in the first quarter? Any way to think about what the tax rate could be in the first quarter?
Jim Mitchell: Oh, that's, that's really helpful. Maybe a quick one for Helen. I appreciate not giving the full year tax rate yet, but can you give us any help on the first quarter, given the likely quite positive benefit in the first quarter? Any way to think about what the tax rate could be in the first quarter?
Speaker #6: Helpful. Maybe a quick one for Helen. I appreciate not giving the full-year tax rate yet, but can you give us any help on the first quarter? Given the likely quite positive benefit in the first quarter, is there any way to think about what the tax rate could be in the first quarter?
Speaker #3: Sure. When we estimate the taxes, Jim, we look at it over the full year and smooth it over the full year when we do the adjusted effective tax rate.
Sharon Pearson: Sure. When we, when we estimate the taxes, Jim, we look at it over the full year and smooth it over the full year when we do the adjusted effective tax rate. So, when we do that... When I gave you the high teens, that anticipated that benefit from the-
Helen Meates: Sure. When we, when we estimate the taxes, Jim, we look at it over the full year and smooth it over the full year when we do the adjusted effective tax rate. So, when we do that... When I gave you the high teens, that anticipated that benefit from the-
Speaker #3: So when we do that, when I gave you the high teens, that anticipated that benefit from the tax rate, which will be early March.
Jim Mitchell: All right.
Jim Mitchell: All right.
Sharon Pearson: will be early March, so.
Helen Meates: will be early March, so.
Speaker #3: So. It takes it into
Speaker #6: That's right. You smooth it out.
Jim Mitchell: That's right. You smooth it out.
Jim Mitchell: That's right. You smooth it out.
Sharon Pearson: It takes it into account. Yeah.
Helen Meates: It takes it into account. Yeah.
Speaker #3: Yeah.
Speaker #3: Yeah.
Speaker #6: Okay. Thank account.
Jim Mitchell: Okay. Thank you.
Jim Mitchell: Okay. Thank you.
Speaker #4: Thanks, you.
Paul Taubman: Thanks, Jim.
Paul Taubman: Thanks, Jim.
Speaker #4: Jim.
Speaker #1: We'll
Speaker #1: take our next question from Mike Browne with UBS. Your line is
Speaker #1: take our next question from Mike Browne with UBS. Your line is open. Great.
Operator: We'll take our next question from Mike Brown with Wells Fargo Securities. Your line is open.
Operator: We'll take our next question from Mike Brown with Wells Fargo Securities. Your line is open.
[Analyst] (Wells Fargo Securities): Great. Good morning, Paul and Helen.
Mike Brown: Great. Good morning, Paul and Helen.
Speaker #7: Good morning,
Speaker #7: Paul and Helen. Good
Paul Taubman: Good morning.
Paul Taubman: Good morning.
Speaker #7: So Paul, I wanted to just morning. double-click on the private client solutions opportunity here. You've touched on it a number of times on the call.
Sharon Pearson: Good morning.
Helen Meates: Good morning.
[Analyst] (Wells Fargo Securities): So Paul, I wanted to just double-click on the Private Capital Solutions opportunity here. You've touched on it a number of times on the call. Maybe just start on the secondary side of the market. You know, what are you expecting from kind of the GP and LP side in terms of the mix in 2026 compared to 2025? And then your positive views there, it sounds like it's kind of a secular growth, but maybe can you unpack a little bit about PJT's opportunity from a market share opportunity? And then just on the primary side, if you could spend a minute there, we are seeing realizations picking up for the industry. So when could that return of capital start to translate to stronger fundraising on the primary side for Park Hill?
Mike Brown: So Paul, I wanted to just double-click on the Private Capital Solutions opportunity here. You've touched on it a number of times on the call. Maybe just start on the secondary side of the market. You know, what are you expecting from kind of the GP and LP side in terms of the mix in 2026 compared to 2025? And then your positive views there, it sounds like it's kind of a secular growth, but maybe can you unpack a little bit about PJT's opportunity from a market share opportunity? And then just on the primary side, if you could spend a minute there, we are seeing realizations picking up for the industry. So when could that return of capital start to translate to stronger fundraising on the primary side for Park Hill?
Speaker #7: Maybe just start on the secondary side of the market. What are you expecting from the GP and LP side in terms of the mix in '26 compared to '25?
Speaker #7: And then your positive views there, it sounds like it's kind of a secular growth, but maybe can you unpack a little bit about PJT's opportunity from a market share opportunity?
Speaker #7: And then just on the primary side, if you could spend a minute there, we are seeing realizations picking up for the industry. So when could that return of capital start to translate to stronger fundraising on the primary side for Park
Speaker #7: Hill? Okay.
Paul Taubman: Okay, why don't we start there? I think the primary industry across the board is challenged for a variety of reasons, right? One of which is, increasingly, asset allocators are allocating larger and larger percentages of their allocations to the largest fund complexes. And as a result, many of those have their capabilities in-house. So you're really dealing with the next level. That trend towards consolidating relationships and the like, I don't expect to change. I think that's the first thing. I think the second is, the performance across the industry has been a bit uneven, and I think the 2021 vintage, you know, may turn out to be, you know, a less than flattering vintage when history is written.
Paul Taubman: Okay, why don't we start there? I think the primary industry across the board is challenged for a variety of reasons, right? One of which is, increasingly, asset allocators are allocating larger and larger percentages of their allocations to the largest fund complexes. And as a result, many of those have their capabilities in-house. So you're really dealing with the next level. That trend towards consolidating relationships and the like, I don't expect to change. I think that's the first thing. I think the second is, the performance across the industry has been a bit uneven, and I think the 2021 vintage, you know, may turn out to be, you know, a less than flattering vintage when history is written.
Speaker #4: Why don't we start there? I think the primary industry across the board is challenged for a variety of reasons, right? One of which is, increasingly, asset allocators are allocating larger and larger percentages of their allocations to the largest fund complexes.
Speaker #4: And as a result, many of those have their capabilities in-house. So you're really dealing with the next level. That trend towards consolidating relationships and the like—I don't expect to change.
Speaker #4: I think that's the first thing. I think the second is the performance across the industry has been a bit uneven, and I think the 2021 vintage may turn out to be a less than flattering vintage when history is written.
Speaker #4: And as a result, there's also the risk that just the absolute allocations to the asset class sort of move away. At the same time, there's immense interest and opportunity in credit, and credit products, and structured credit.
Paul Taubman: And as a result, there's also the risk that just the absolute allocations to the asset class sort of, you know, move away. At the same time, there's immense interest and opportunity in credit, and credit products, and structured credit, and I think we're very well positioned there. There's also real opportunities in real estate, and I think that the dynamics today are more favorable than they've been for a considerable period of time. So it's not like one monolithic industry, it's the fact that, you know, there are gonna be pockets of opportunity, always. And in a world where it's more difficult to raise capital, clients are gonna be more discerning about whether or not to employ a placement agent. If they use a placement agent, who to use. And I think all of those trends work to our benefit.
And as a result, there's also the risk that just the absolute allocations to the asset class sort of, you know, move away. At the same time, there's immense interest and opportunity in credit, and credit products, and structured credit, and I think we're very well positioned there. There's also real opportunities in real estate, and I think that the dynamics today are more favorable than they've been for a considerable period of time. So it's not like one monolithic industry, it's the fact that, you know, there are gonna be pockets of opportunity, always. And in a world where it's more difficult to raise capital, clients are gonna be more discerning about whether or not to employ a placement agent. If they use a placement agent, who to use. And I think all of those trends work to our benefit.
Speaker #4: And I think we're very well positioned there. There's also real opportunities in real estate, and I think that the dynamics today are more favorable than they've been for a considerable period of time.
Speaker #4: So, it's not like one monolithic industry. It's the fact that there are going to be pockets of opportunity—always. And in a world where it's more difficult to raise capital, clients are going to be more discerning about whether or not to employ a place manager, and if they use a place manager, who to use.
Speaker #4: And I think all of those trends work to our benefit. And the more we solidify those relationships, that puts us in the pole position for more of the opportunities and looks.
Paul Taubman: And the more we solidify those relationships, that puts us in a pole position for more of the opportunities and looks as it relates to Private Capital Solutions. So I think those businesses are highly synergistic as they work together. And I do think that as an asset class, if you just look at how many new funds are being raised in secondaries, I think as I said in my prepared remarks, there is an increasing realization of the attractiveness of the secondary opportunity from an investment perspective. You know, the absence of a J-Curve, the ability to invest alongside sponsors where there's continuity of management, specific identification of the assets, a real track record of performance, and increasingly, those assets that are being presented to the marketplace are the highest quality assets.
And the more we solidify those relationships, that puts us in a pole position for more of the opportunities and looks as it relates to Private Capital Solutions. So I think those businesses are highly synergistic as they work together. And I do think that as an asset class, if you just look at how many new funds are being raised in secondaries, I think as I said in my prepared remarks, there is an increasing realization of the attractiveness of the secondary opportunity from an investment perspective. You know, the absence of a J-Curve, the ability to invest alongside sponsors where there's continuity of management, specific identification of the assets, a real track record of performance, and increasingly, those assets that are being presented to the marketplace are the highest quality assets.
Speaker #4: As it relates to private capital solutions, I think those businesses are highly synergistic as they work together. And I do think that, as an asset class, if you just look at how many new funds are being raised in secondaries, I think, as I said in my prepared remarks, there is an increasing realization of the attractiveness of the secondary opportunity from an investment perspective.
Speaker #4: The absence of a J curve, the ability to invest alongside sponsors where there's continuity of management, specific identification of the assets, real track record of performance, and increasingly those assets that are being presented to the marketplace are the highest quality assets.
Speaker #4: So I think that that's going to have a reinforcing effect. And that's going to invite more capital. The more capital there is, the ability to run a more competitive process with better price discovery where you have a multitude of providers of capital to choose from.
Paul Taubman: So I think that that's going to have a reinforcing effect, and that's going to invite more capital. The more capital there is, the ability to run a more competitive process with better price discovery, where you have a multitude of providers of capital to choose from. So all of that, I think, is a positive for the industry, and we're very comfortable with our market position in the sense that we have unique capabilities, particularly the secondaries, joined with our unique primary distribution capabilities, and we expect to gain share in that business as we look out going forward.
So I think that that's going to have a reinforcing effect, and that's going to invite more capital. The more capital there is, the ability to run a more competitive process with better price discovery, where you have a multitude of providers of capital to choose from. So all of that, I think, is a positive for the industry, and we're very comfortable with our market position in the sense that we have unique capabilities, particularly the secondaries, joined with our unique primary distribution capabilities, and we expect to gain share in that business as we look out going forward.
Speaker #4: So all of that, I think, is a positive for the industry. And we're very comfortable with our market position, in the sense that we have unique capabilities, particularly the secondaries joined with our unique primary distribution capabilities.
Speaker #4: And we expect to gain share in that business as we look at going
Speaker #4: forward. Great.
Speaker #7: Thanks, Paul, for all of that color there. Just wanted to follow up on the restructuring side. So very positive outlook here for restructuring. That was clear.
[Analyst] (Wells Fargo Securities): Great. Thanks, Paul, for all of that color there. Just wanted to follow up on the restructuring side. So very positive outlook here for restructuring. That was, that was clear. Just wanted to ask, are you seeing any competition for talent in the restructuring business? You've obviously got a premier franchise and leading share, but, we did observe that a partner looks like they spun out and creating their own restructuring business. And just curious how you're thinking about, you know, the war for talent in that restructuring side of the business. Thank you.
Mike Brown: Great. Thanks, Paul, for all of that color there. Just wanted to follow up on the restructuring side. So very positive outlook here for restructuring. That was, that was clear. Just wanted to ask, are you seeing any competition for talent in the restructuring business? You've obviously got a premier franchise and leading share, but, we did observe that a partner looks like they spun out and creating their own restructuring business. And just curious how you're thinking about, you know, the war for talent in that restructuring side of the business. Thank you.
Speaker #7: Just wanted to ask, are you seeing any competition for talent in the restructuring business? You've obviously got a premier franchise and leading share, but we did observe that out, and are creating their own—a partner looks like they spun a restructuring business—and just curious how you're thinking about the war for talent on that restructuring side of the business.
Speaker #7: Thank you.
Speaker #4: Look, we're a talent-focused firm, so we're always focused on making sure that we have the best talent. And we believe we have the best talent.
Paul Taubman: Look, we're a talent-focused firm, so we're always focused on making sure that we have the best talent, and we believe we have the best talent, we believe we have the best culture, and we believe we have tremendous opportunities ahead of us as we start to get at the white space that we have. And I think our franchise enjoys more white space than most anyone else. So we're very comfortable that it is a highly attractive destination, and we'd love nothing more than to continue to invest in our franchise and to add more talent if those opportunities arise.
Paul Taubman: Look, we're a talent-focused firm, so we're always focused on making sure that we have the best talent, and we believe we have the best talent, we believe we have the best culture, and we believe we have tremendous opportunities ahead of us as we start to get at the white space that we have. And I think our franchise enjoys more white space than most anyone else. So we're very comfortable that it is a highly attractive destination, and we'd love nothing more than to continue to invest in our franchise and to add more talent if those opportunities arise.
Speaker #4: We believe we have the best culture, and we believe we have tremendous opportunities ahead of us as we start to get at the white space that we have.
Speaker #4: And I think our franchise enjoys more white space than most anyone else. So we're very comfortable that it is a highly attractive destination. And we'd love nothing more than to continue to invest in our franchise and to add more talent if those opportunities arise.
Speaker #7: Thanks,
[Analyst] (Wells Fargo Securities): Thanks, Paul.
Mike Brown: Thanks, Paul.
Speaker #7: Paul. We'll move
Operator: We'll move next to Brendan O'Brien with Wolfe Research. Your line is open.
Operator: We'll move next to Brendan O'Brien with Wolfe Research. Your line is open.
Speaker #1: next to Brendan O'Brien with Wolf Research. Your line is
Speaker #1: open. Good morning.
Brendan O'Brien: Good morning. Thank you for taking my questions. I guess to start, just a bigger picture question, Paul. You know, there's obviously been a lot of optimism on the capital markets outlook this earnings season, but just based on what we can see in the data, it looks like announced volumes for January were down around 10% year-over-year. You know, I know that one month does not make a trend, but as you flagged in your prepared remarks, that we have seen a notable uptick in geopolitical tension and political uncertainty in the US, which is only likely to intensify into the midterms.
Brendan O'Brien: Good morning. Thank you for taking my questions. I guess to start, just a bigger picture question, Paul. You know, there's obviously been a lot of optimism on the capital markets outlook this earnings season, but just based on what we can see in the data, it looks like announced volumes for January were down around 10% year-over-year. You know, I know that one month does not make a trend, but as you flagged in your prepared remarks, that we have seen a notable uptick in geopolitical tension and political uncertainty in the US, which is only likely to intensify into the midterms.
Speaker #8: Thank you for taking my questions. I guess to start, just a bigger picture question, Paul. There's obviously been a lot of optimism on the capital markets outlook this earnings season, but just based on what we can see in the data, it looks like announced volumes for January were down around 10% year on year.
Speaker #8: I know that one month does not make a trend, but as you flagged in your prepared remarks, we have seen a notable uptick in geopolitical tension and political uncertainty.
Speaker #8: In the US, which is only likely to intensify into the midterms, so I just wanted to see if you had any views as to what is driving that delta between the optimism and the data thus far, and whether you've seen the rhetoric and resulting market volatility have any impact on—
Brendan O'Brien: So just wanted to see if you had any views around as to what is driving that delta between, you know, the optimism and the data thus far, and whether you've seen the rhetoric and resulting market volatility have any impact on dialogues at this point?
Brendan O'Brien: So just wanted to see if you had any views around as to what is driving that delta between, you know, the optimism and the data thus far, and whether you've seen the rhetoric and resulting market volatility have any impact on dialogues at this point?
Speaker #8: Dialogues at this point. Well, I
Speaker #4: think bankers love to be optimistic in January. I think that's a tried and true tradition, and that doesn't seem to vacillate regardless of the macro environment.
Paul Taubman: Well, I think bankers love to be optimistic in January. I think that's a tried and true tradition, and that doesn't seem to vacillate regardless of the macro environment. I think maybe because I've been around so long, I have a more sober view of the world, which is, I think we have a highly constructive macro backdrop. But, you know, the deal environment and capital markets environments are, you know, inherently fragile, and they react, you know, in a punishing way to news flow.
Paul Taubman: Well, I think bankers love to be optimistic in January. I think that's a tried and true tradition, and that doesn't seem to vacillate regardless of the macro environment. I think maybe because I've been around so long, I have a more sober view of the world, which is, I think we have a highly constructive macro backdrop. But, you know, the deal environment and capital markets environments are, you know, inherently fragile, and they react, you know, in a punishing way to news flow.
Speaker #4: I think maybe because I've been around so long, I have a more sober view of the world, which is, I think we have a highly constructive macro backdrop, but the deal environment and the capital markets environments are inherently fragile.
Speaker #4: And they react in a punishing way to news flow. And the news flow can be positive, or it can be negative. And we're dealing with some large geopolitical risks, and we're dealing with some very large debates about the capital being deployed to AI, the pace of that capital deployment, what the returns are, the implications for industries, and changing market winners and resultant market losers.
Paul Taubman: And the news flow can be positive or it can be negative, but we're dealing with some, you know, large geopolitical risks, and we're dealing with some very large debates about the capital being deployed to AI, the pace of that capital deployment, what the returns are, and the implications for industries and for changing, you know, market winners and resultant market losers. So I think we have a very constructive backdrop, but I'm not prepared to kind of just wave the flag and bring out the pom-poms and talk about how this is going to be the best year ever and the like. I think it's a highly constructive environment. I've taken note of the first month.
And the news flow can be positive or it can be negative, but we're dealing with some, you know, large geopolitical risks, and we're dealing with some very large debates about the capital being deployed to AI, the pace of that capital deployment, what the returns are, and the implications for industries and for changing, you know, market winners and resultant market losers. So I think we have a very constructive backdrop, but I'm not prepared to kind of just wave the flag and bring out the pom-poms and talk about how this is going to be the best year ever and the like. I think it's a highly constructive environment. I've taken note of the first month.
Speaker #4: So, I think we have a very constructive backdrop, but I'm not prepared to kind of just wave the flag and bring out the pom-poms and talk about how this is going to be the best year ever and the like.
Speaker #4: I think it's a highly constructive environment. I've taken note of the first month. I think it is just a month, but maybe when we have our conversation, at the end of the first quarter, we'll have more clarity.
Paul Taubman: I, I think it is just a month, but maybe when we have our conversation, you know, at the end of Q1, we'll have more clarity. But the reality is, 2025 was a pretty darn good year, with volumes up, however you count it, 35, 40, 40+ percent, the second best year. It does create, you know, a high bar. So to me, it's less about, is this year better than last year? The issue in my mind is, you know, how long is this runway? And how do we, as a firm, focus our efforts on continuing to gain market share? And we've always talked about our firm as a market share and not a market size story.
I, I think it is just a month, but maybe when we have our conversation, you know, at the end of Q1, we'll have more clarity. But the reality is, 2025 was a pretty darn good year, with volumes up, however you count it, 35, 40, 40+ percent, the second best year. It does create, you know, a high bar. So to me, it's less about, is this year better than last year? The issue in my mind is, you know, how long is this runway? And how do we, as a firm, focus our efforts on continuing to gain market share? And we've always talked about our firm as a market share and not a market size story.
Speaker #4: But the reality is 20, 25 was a pretty darn good year, with volumes up however you count it, 35, 40, 40-plus percent the second best year.
Speaker #4: It does create a high bar. So, to me, it's less about, is this year better than last year? The issue in my mind is, how long is this runway?
Speaker #4: And how do we as a firm focus our efforts on continuing to gain market share? And we've always talked about our firm as a market share and not a market size.
Speaker #4: Story. And what that means is as long as we have a relatively healthy deal backdrop and as long as deals can get done, our goal is to win over clients one at a time and to be more relevant and more active and more geographies more industries with more capabilities and a longer and longer record of excellence.
Paul Taubman: What that means is, as long as we have a relatively healthy deal backdrop, and as long as deals can get done, our goal is to win over clients one at a time, and to be more relevant and more active in more geographies, more industries, with more capabilities and a longer and longer record of excellence. So in my mind, if things get a little tougher, that's actually good, 'cause it just means that advice matters more. And when advice matters more in the selection process, that's good for our firm. So I'm still highly constructive on the M&A environment. I just am not sure anyone can tell you exactly how good it's gonna be.
What that means is, as long as we have a relatively healthy deal backdrop, and as long as deals can get done, our goal is to win over clients one at a time, and to be more relevant and more active in more geographies, more industries, with more capabilities and a longer and longer record of excellence. So in my mind, if things get a little tougher, that's actually good, 'cause it just means that advice matters more. And when advice matters more in the selection process, that's good for our firm. So I'm still highly constructive on the M&A environment. I just am not sure anyone can tell you exactly how good it's gonna be. But relative to what we, what we dealt with in 2022 and 2023, and, you know, pockets of 2024, there's no doubt that we're in a much more favorable, constructive environment.
Speaker #4: So, in my mind, if things get a little tougher, that’s actually good because it just means that advice matters more, and what advice matters more in the selection process—that’s good for our firm.
Speaker #4: So I'm still highly constructive on the M&A environment. I just am not sure anyone can tell you exactly how good it's going to be, but relative to what we dealt with in '22 and '23 and pockets of '24, there's no doubt that we're in a much more favorable constructive environment.
Paul Taubman: But relative to what we, what we dealt with in 2022 and 2023, and, you know, pockets of 2024, there's no doubt that we're in a much more favorable, constructive environment.
Speaker #7: That's helpful, Collier. Thank you, Paul. And I guess for my follow-up, we've talked a lot about the match creation of the platform on this call.
Brendan O'Brien: That's helpful color. Thank you, Paul. I guess for my follow-up, you know, we've talked a lot about the maturation of the platform on this call, and one thing that stood out to me in your deck is that you're entering 2026 with the lowest percentage of partners on the platform for less than two years since you went public by a pretty significant margin. I was hoping you could help us think through the implications of this for your ability to generate comp leverage and revenue growth in 2026, just given you'll have less underearning partners on the platform.
Brendan O'Brien: That's helpful color. Thank you, Paul. I guess for my follow-up, you know, we've talked a lot about the maturation of the platform on this call, and one thing that stood out to me in your deck is that you're entering 2026 with the lowest percentage of partners on the platform for less than two years since you went public by a pretty significant margin. I was hoping you could help us think through the implications of this for your ability to generate comp leverage and revenue growth in 2026, just given you'll have less underearning partners on the platform.
Speaker #7: And one thing that stood out to me in your deck is that you're entering 2026 with the lowest percentage of partners on the platform for less than two years since you went public by a pretty significant margin.
Speaker #7: I was hoping you could help us think through the implications of this for your ability to generate comp leverage and revenue growth in 2026, just given you'll have less under-earning partners on the
Speaker #7: platform. It was so ironic about all of
Paul Taubman: Yeah, what's so ironic about all of this, and I think we introduced this concept when we went public, and we just, you know, sort of broke out two-year partners because we made the observation at the time that it was quite difficult for any new partner, when you actually went through the calendar, to generate any revenues of consequence in the first two years. 'Cause by the time someone came onto the platform, they still had non-solicit issues. Then, after those handcuffs came off and they went to engage with all of their clients, they needed to get-to-know-you process, so that they could better introduce their new firm. Then, you needed to see whether or not a mandate was available. And then, if a mandate was available, that might or might not lead to an announcement, and if- even if it led to it...
Paul Taubman: Yeah, what's so ironic about all of this, and I think we introduced this concept when we went public, and we just, you know, sort of broke out two-year partners because we made the observation at the time that it was quite difficult for any new partner, when you actually went through the calendar, to generate any revenues of consequence in the first two years. 'Cause by the time someone came onto the platform, they still had non-solicit issues. Then, after those handcuffs came off and they went to engage with all of their clients, they needed to get-to-know-you process, so that they could better introduce their new firm. Then, you needed to see whether or not a mandate was available. And then, if a mandate was available, that might or might not lead to an announcement, and if- even if it led to it...
Speaker #4: I think we introduced this concept when we went public, and we just sort of broke out two-year partners because we made the observation at the time that it was quite difficult for any new partner, when you actually went through the calendar, to generate any revenues of consequence in the first two years, because by the time someone came onto the platform, they still had not solicited issues.
Speaker #4: Then after those handcuffs came off and they went to engage with all of their clients, they needed to get to better introduce their new know-your-client process so that they could firm.
Speaker #4: Then you needed to see whether or not a mandate was available. Then if a mandate was available, that might or might not lead to an announcement.
Speaker #4: And even if it led to so we started out by just sort of saying, "Don't even expect any revenues for two years." And somehow that's now the view that that's like a fully functioning mature partner on the platform.
Paul Taubman: So we started out by just sort of saying, "Don't even expect any revenues for 2 years." And somehow, that's now the view that that's like a fully functioning, mature partner on the platform. And the reality is that every year that those partners are on our platform, every year, there should be greater and greater productivity. So it's not like the magic. In year 3, there's the calendar invites the opportunity for there to be real revenue, but year 4 is better than year 3, year 5 is better than year 4. That's the first point I would make. The second point I would make is that in many areas, we have added our first or second partner, and if you're adding 1 or 2 partners to a greenfield initiative, it might take 4 or 5 partners until you get to critical mass.
So we started out by just sort of saying, "Don't even expect any revenues for 2 years." And somehow, that's now the view that that's like a fully functioning, mature partner on the platform. And the reality is that every year that those partners are on our platform, every year, there should be greater and greater productivity. So it's not like the magic. In year 3, there's the calendar invites the opportunity for there to be real revenue, but year 4 is better than year 3, year 5 is better than year 4. That's the first point I would make. The second point I would make is that in many areas, we have added our first or second partner, and if you're adding 1 or 2 partners to a greenfield initiative, it might take 4 or 5 partners until you get to critical mass.
Speaker #4: And the reality is that every year that those partners are on our platform, every year, there should be greater and greater productivity. So it's not like the magic.
Speaker #4: In year three, there’s the calendar invites—the opportunity for there to be real revenue. But year four is better than year three. Year five is better than year four.
Speaker #4: That's the first point I would make. The second point I would make is that in many areas, we have added our first or second partner, and if you're adding one or two partners to a greenfields initiative, it might take four or five partners until you get to critical mass.
Speaker #4: So the productivity curve of going from zero to one, one to two, two to three might be quite light. But when you add that fourth to that fifth, all of a sudden you have a step-function change, because you light up the network for all of those partners.
Paul Taubman: So the productivity curve of going from zero to one, one to two, two to three, might be quite light. But when you add that fourth to that fifth, all of a sudden, you have a step function change because you light up the network for all of those partners. So it's not, you know, as easy to, to model. And the third point, which I talk about all the time, is the walk-in business, where people reach out to you because they've heard of the firm. There have been very positive experiences. Their chairman has a direct experience, their CEO, someone else in the C-suite, or someone else in the ecosystem. And every day that goes by, that continues to expand, and that also is a meaningful driver of productivity, which is what I call sort of the firm or the franchise value.
So the productivity curve of going from zero to one, one to two, two to three, might be quite light. But when you add that fourth to that fifth, all of a sudden, you have a step function change because you light up the network for all of those partners. So it's not, you know, as easy to, to model. And the third point, which I talk about all the time, is the walk-in business, where people reach out to you because they've heard of the firm. There have been very positive experiences. Their chairman has a direct experience, their CEO, someone else in the C-suite, or someone else in the ecosystem. And every day that goes by, that continues to expand, and that also is a meaningful driver of productivity, which is what I call sort of the firm or the franchise value.
Speaker #4: So it's not as easy to model. And the third point, which I talk about all the time, is the walk-in business, where people reach out to you because they've heard of the firm.
Speaker #4: There have been very positive experiences. Their chairman has direct experience. Their CEO, someone else in the C-suite, or someone else in the ecosystem.
Speaker #4: And every day that goes by, that continues to expand, and that also is a meaningful driver of productivity, which is what I call sort of the firm or the franchise value.
Speaker #4: So all of those elements are still very much in play, and I think we're in the very early days of getting to that potential that we aspire to, which is to continue to build the world's best investment bank.
Paul Taubman: So all of those elements are still very much in play, and I think we're in the very early days of getting to that potential that we aspire to, which is to continue to build the world's best investment bank. I think as we do it bit by bit, brick by brick, you know, we should have financial rewards that come along with it.
So all of those elements are still very much in play, and I think we're in the very early days of getting to that potential that we aspire to, which is to continue to build the world's best investment bank. I think as we do it bit by bit, brick by brick, you know, we should have financial rewards that come along with it.
Speaker #4: And I think as we do it, bit by bit, brick by brick, we should have financial rewards that come along with it.
Speaker #4: it. Great.
Speaker #7: Thank you so much for taking my questions.
Brendan O'Brien: Great. Thank you so much for taking my questions.
Brendan O'Brien: Great. Thank you so much for taking my questions.
Speaker #4: Sure. My
Paul Taubman: Sure. My pleasure.
Paul Taubman: Sure. My pleasure.
Speaker #4: pleasure. We'll move next
Operator: We'll move next to Alex Bond with KBW. Your line is open.
Operator: We'll move next to Alex Bond with KBW. Your line is open.
Speaker #1: To Alex Bond with KBW, your line is open.
Speaker #8: Thanks. Good morning, everyone. Most of my questions have been asked already, but maybe a quick one for Helen just on the non-comp side. So I know I heard the guide for the year of roughly similar to the year-over-year increase to last year, but maybe if you could just help us think through what are going to be the main drivers there of the higher nominal amount in 2026, that would be
[Analyst] (KBW): Thanks. Good morning, everyone. Most of my questions have been asked already, but maybe a quick one for Helen just on the non-comp side. So I know I heard the guide for the year of roughly similar to the year-over-year increase to last year. But maybe if you could just help us think through what are gonna be the main drivers there of the higher nominal amount in 2026, that would be helpful.
Alex Bond: Thanks. Good morning, everyone. Most of my questions have been asked already, but maybe a quick one for Helen just on the non-comp side. So I know I heard the guide for the year of roughly similar to the year-over-year increase to last year. But maybe if you could just help us think through what are gonna be the main drivers there of the higher nominal amount in 2026, that would be helpful.
Speaker #8: helpful. Yeah.
Speaker #3: So, as I said, we'll give a more refined view in the first quarter, but if you think of the tailwinds going into '26, we definitely should experience less occupancy growth.
Sharon Pearson: Yeah, so as I said, we'll give a more refined view in Q1. But if you think of the tailwinds going into 2026, we definitely should experience less occupancy growth. We've made some pretty significant investments in New York and London, so that growth should slow. And we're always gonna get leverage out of some of our fixed costs around our IT infrastructure or some of the professional fees that we have relating to being a public company. So they would be the tailwinds. And I think the headwinds are more people. More people brings more travel, more market data, more IT and comm support. So I think against that, that's where we're gonna see the growth and just trying to figure out how we manage that.
Yeah, so as I said, we'll give a more refined view in Q1. But if you think of the tailwinds going into 2026, we definitely should experience less occupancy growth. We've made some pretty significant investments in New York and London, so that growth should slow. And we're always gonna get leverage out of some of our fixed costs around our IT infrastructure or some of the professional fees that we have relating to being a public company. So they would be the tailwinds. And I think the headwinds are more people. More people brings more travel, more market data, more IT and comm support. So I think against that, that's where we're gonna see the growth and just trying to figure out how we manage that.
Speaker #3: We've made some pretty significant investments in New York and London, so that growth should slow. And we're always going to get leverage out of some of our fixed costs around our IT infrastructure or some of the professional fees that we have relating to being a public company.
Speaker #3: So they would be the tailwinds. And I think the headwinds are more people. More people brings more travel, more market data, more IT and comm support.
Speaker #3: So I think against that, that's where we're going to see the growth, and just trying to figure out how we manage that. I think it would be fair to say we've been very disciplined in how we manage our expenses.
Sharon Pearson: Well, I think it would be fair to say we've been very disciplined in how we manage our expenses, but there are some just activity-related expenses that are gonna drive those non-comp up.
Well, I think it would be fair to say we've been very disciplined in how we manage our expenses, but there are some just activity-related expenses that are gonna drive those non-comp up.
Speaker #3: But there are some just activity-related expenses that are going to drive those non-comps up.
Speaker #8: Got it. That makes sense. And that's helpful. I'll leave it there. Thank you,
[Analyst] (KBW): Got it. That makes sense. That's helpful. I'll leave it there. Thank you, everyone.
Alex Bond: Got it. That makes sense. That's helpful. I'll leave it there. Thank you, everyone.
Speaker #8: everyone. Thank
Sharon Pearson: Thank you.
Helen Meates: Thank you.
Speaker #1: Thank you. That concludes our question-and-answer period. I would now like to turn the call back over to Mr. Taubman for closing remarks.
Operator: Thank you. That concludes our question and answer period. I would now like to turn the call back over to Mr. Taubman for closing remarks.
Operator: Thank you. That concludes our question and answer period. I would now like to turn the call back over to Mr. Taubman for closing remarks.
Speaker #4: Well, just once again, we want to thank everyone for joining us this morning as we reported our full-year results. We're very excited to get on with 2026, and we look forward to reconvening to report our Q1 results in April.
Paul Taubman: Well, just once again, we want to thank everyone for joining us this morning as we reported our full year results. We're very excited to get on with 2026, and we look forward to reconvening to report our Q1 results in April. Thank you very much and have a great day.
Paul Taubman: Well, just once again, we want to thank everyone for joining us this morning as we reported our full year results. We're very excited to get on with 2026, and we look forward to reconvening to report our Q1 results in April. Thank you very much and have a great day.
