Evercore Inc. Q3 FY2025 earnings call

• Evercore delivered record third quarter results with over $1 billion in adjusted net revenues, up 42% year-over-year. - The diversified revenue streams, strength from Senior Managing Director hires, and improving market environment contributed to the results. - Broad-based strength across businesses: U.S. M&A advisory gained momentum across sectors, European Advisory had its best quarter ever, Strategic Defense and Shareholder Advisory was busy, Liability Management had robust activity, Private Capital Markets and Debt Advisory were active, Private Capital Advisory had a record third quarter, Equity Capital Markets saw resurgence, and Wealth Management achieved record AUM. - Talent recruitment progress: Successfully closed Robey Warshaw transaction, added 168 investment banking SMDs, with a strong recruiting year-to-date.

In the third quarter of 2025, Evercore achieved record results. Adjusted net revenues were over $1 billion, up 42% year-over-year. Adjusted advisory fees were $884 million, up 49% year-over-year, a record for the quarter. Underwriting revenues were $44 million, down 1% year-over-year but up 36% sequentially. Commissions and related revenue were $63 million, up 15% year-over-year, a record third quarter. Asset management and administration fees were $24 million, up 10% year-over-year. Other revenue net was approximately $33 million, up from $26 million a year ago. Approximately 45% of total revenues in the third quarter and 50% over the last 12 months were from non-M&A sources.

• Expect trends of strong market and business performance to carry through year-end and into 2026. - Seasonality in advisory revenues likely less pronounced this year due to record year-to-date results and market volatility impacts. - Confident in delivering strong results for the fourth quarter and beyond, positioned well as the market strengthens.

• Geopolitical and macroeconomic uncertainties. - Possible temporary impact on deal timelines from the government shutdown. - Isolated losses at traditional banks and private funds potentially affecting client sentiment, but seen as not system-wide.

Q: Congrats on the strong quarter. Talk about the breadth of activity and how it's evolved over the last few months and expectations exiting the year.

A: John Weinberg said there's continued market strengthening across almost all sectors, large and midsized deals are building, backlogs are high, CEO confidence is building, and sponsor activity is picking up, with trends expected to continue into 2026.

Q: On comp leverage and incremental comp margins. How are you thinking about incremental comp margins in the coming years?

A: Tim LaLonde said they've made progress in comp ratio, focusing on value creation, striving for further improvement but not at the expense of long-term profitability, expecting full year comp ratio to be generally in line with current levels.

Q: Impact of the government shutdown on deals, especially ECM vs M&A.

A: John Weinberg said if the government shutdown goes longer, it will slow deals, both ECM and M&A will be affected, but it's a temporary blip and will recover quickly once resolved.

Q: Regulatory environment, time to close deals.

A: John Weinberg said the regulatory environment is benign, deals are moving through the system well, with expected loosening, and optimistic about deal progress.

Q: Impact of losses at traditional banks and private funds on clients.

A: John Weinberg said clients are viewing these losses as isolated, not system-wide, and are forging ahead with transactions.

Q: Outlook for DCM business and pipeline.

A: John Weinberg said the pipeline is strengthening, but there will be some slowdown with government shutdown, though backlog is building and optimism remains for deals to get done.

Q: Europe outlook and white space after Robey Warshaw.

A: John Weinberg said Europe has strong performance, significant white space, and Robey Warshaw integration is enhancing their presence, with confidence in continued growth.

Q: Where non-M&A revenue share might drift to.

A: John Weinberg said it's hard to predict, but non-M&A businesses are strong, M&A strength may affect share but non-M&A will remain influential, likely not dropping below 40%.