Lazard Ltd Q2 FY2025 earnings call

Peter Orszag noted Financial Advisory had a strong first half with adjusted net revenue of $861 million, showcasing geographic and product diversity, including record revenue in France and Germany, and over 40% of Financial Advisory revenue in the past 12 months associated with private capital. Mary Ann Betsch highlighted the second quarter firm-wide adjusted net revenue of $770 million, up 12% year-over-year, driven by Financial Advisory's record $491 million in the second quarter, with participation in marquee transactions. Asset Management had adjusted net revenue of $268 million in the second quarter, with management fees up 1% due to higher average fees offsetting lower average AUM, and net inflows of $700 million during the quarter. Peter also mentioned ongoing client engagement, talent pipeline growth with 14 Financial Advisory managing directors hired in 2025, and Asset Management's progress with record gross inflows, new ETF launches, and hiring Eric Van Nostrand as Global Head of Markets and Chief Economist.

Financial Advisory achieved adjusted net revenue of $861 million for the first half of the year, with the second quarter seeing a record adjusted net revenue of $491 million, up 20% from the same period last year. Asset Management had adjusted net revenue of $533 million for the first half of the year, and the second quarter reported adjusted net revenue of $268 million, up 1% compared to the second quarter of 2024 and up 2% sequentially. Average AUM for the second quarter was $239 billion, 3% lower than the second quarter of 2024 but up 3% sequentially. As of June 30, AUM stood at $248 billion, 2% higher than June 2024 and 9% higher than March 2025.

Peter Orszag expected an improving environment for Financial Advisory activity with resolution of tariff issues, broadening dialogue with corporate strategics, and constructive financing markets. Anticipated Asset Management business to benefit from evolving investor preference outside the U.S. due to extensive global offerings, and plans to launch additional ETFs later in the year.

• Market uncertainty could impact advisory and asset management activity. • Regulatory environment changes, such as antitrust scrutiny, may affect M&A deals. • Fluctuations in financing markets, including IPO market conditions, could influence business.

Q: Devin Ryan asked about the trajectory of recovery in the advisory business and distribution in Asset Management.

A: Peter Orszag said advisory business mix is roughly 60-40 M&A to non-M&A, with non-M&A growing, and in Asset Management, changes in sales and distribution teams, clarity and accountability, and strong investment performance are driving progress.

Q: Ryan Kenny asked about the comp ratio and timing to hit 60% or below.

A: Peter Orszag said comp ratio depends on market conditions, hiring, and productivity, with no specific timetable but aiming for the goal.

Q: Alexander Scott Bond asked about hiring in Europe and hiring pipeline.

A: Peter Orszag said there's strong lateral recruiting in Europe, attracting high-quality talent due to Lazard's brand, culture, and strategy.

Q: James Mitchell asked about attrition in Asset Management.

A: Peter Orszag said gross inflows and outflows are natural, with institutional investment decisions taking time, and progress towards an inflection point.

Q: James Yaro asked about AI in the business and Asset Management flows.

A: Peter Orszag talked about AI's transformational potential in different aspects, and in Asset Management, the flow picture improved despite initial skepticism.

Q: Brendan O'Brien asked about advisory mix evolution.

A: Peter Orszag said advisory mix has a higher non-M&A share, with growth in restructuring, liability management, and fundraising.