Evercore Inc. Q2 FY2025 earnings call

Evercore entered into an agreement to acquire Robey Warshaw, a leading U.K.-based advisory firm. In the second quarter, Evercore delivered strong results with adjusted net revenues of $839 million, up nearly 21% year-over-year. The first half of 2025 saw over $1.5 billion in adjusted net revenue, a 20% increase compared to the same period the previous year. Business conditions improved since late March and early April. The company made progress in talent recruitment with 4 senior managing directors joining the investment banking practice and 3 investment banking SMDs committing to join. Notable M&A transactions were advised on, including Cox Communications' merger with Charter Communications. European business grew with increased activity across most sectors. Private Capital Advisory had a record first half and second quarter. Equity capital markets showed signs of recovery, and Wealth Management reached a record AUM.

In the second quarter of 2025, adjusted Advisory fees amounted to $698 million, marking a 23% year-over-year increase, which is a record for the second quarter. Second quarter Underwriting revenues stood at $32 million, up 4% from the previous year. Commissions and related revenue in the quarter reached $58 million, a 10% year-over-year rise. Second quarter adjusted Asset Management and Administration Fees were $21 million, seeing a 3% year-over-year growth. Second quarter adjusted other revenue net was approximately $29 million, compared to $22 million in the same period last year. Wealth Management achieved a record quarter-end AUM of approximately $14.5 billion, driven by market appreciation and net inflows.

The acquisition of Robey Warshaw is expected to close around the beginning of the fourth quarter of 2025. It is anticipated to be accretive to Evercore's adjusted and GAAP EPS in the first full year together and thereafter. The company remains confident in delivering solid results in the second half of the year, as its diversified business model performs well in various environments.

Forward-looking statements are subject to various risks and uncertainties. Important factors that could cause actual outcomes to differ materially from those indicated in forward-looking statements include those discussed in Evercore's filings with the SEC, such as the annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.

Q: James Yaro with Goldman Sachs asked about the business profile of Robey Warshaw aside from M&A advisory.

A: John S. Weinberg stated that Robey Warshaw is a top-level adviser spending much time in the C-suite and with Boards, is strategic, has an extraordinary client franchise and trusted relationships with many important companies, and marrying its relationships with Evercore's capabilities will be powerful.

Q: Ryan Kenny with Morgan Stanley inquired about Evercore's global expansion strategy and future acquisitions.

A: John S. Weinberg said the most important means of growth is continuing to hire high-quality talent one by one. The acquisition of Robey Warshaw was due to finding an extraordinarily high-quality organization with a good cultural fit and business synergies, but not ruling out future acquisitions if suitable.

Q: Devin Ryan with Citizens asked about business diversification.

A: John S. Weinberg said the merger business is building, non-merger businesses like PCA, restructuring, and activism defense are healthy, and they intend to continue investing in non-merger businesses while the merger business picks up.

Q: Alex Bond with KBW asked about the outlook for industry secondary volumes and competitive dynamics.

A: John S. Weinberg said competition will heat up, Evercore is well-positioned with an outstanding team and track record, and strong activity levels are expected to continue in the second half though maybe not ramping as fast as the first half.

Q: Brendan O'Brien with Wolfe Research asked about expenses and the comp ratio.

A: Tim LaLonde said the compensation ratio improved, non-compensation expenses increased due to occupancy and technology investments, and they consider non-comps on a per head basis considering inflation and growth.

Q: James Yaro with Goldman Sachs followed up on Robey Warshaw financing and performance incentives.

A: Tim LaLonde said a private notes offering raised $250 million, the Robey Warshaw consideration is payable in 2 tranches with the first at closing in stock and the second at the 1-year anniversary with possible stock or cash, and there's potential additional consideration based on performance and achieving synergies.