EVR - Earnings call transcript Q4 2021

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Operator

Good morning and thank you for standing by. Welcome to Evercore's Fourth Quarter and Full-Year 2021 Financial Results Conference Call.

During today's call, all parties will be in listen-only mode.

Following the presentation, the conference call will open up for questions. [Operator Instructions] As a reminder, this conference call is being recorded today, Wednesday, February 2, 2022. to Interim conference Jamie Head like your over Easton. now Evercore's host, of would turn call the to I Investor Relations, Please go ahead.

Jamie Easton

us Relations. conference call. Good you Jamie Easton, quarter Michelle. and Head I'm full-year today of Interim joining Investor and results you, fourth for financial Thank XXXX Evercore's Evercore's morning for thank

webcast for After our complementary website CEOs, available For and hour of Investors call Celeste Joining me live are Earlier today available open to and call is and questions. remarks, after John release, Weinberg press will section our XXXX on of issued of today Co-Chairmen our conclusion release at CFO. which our results. archive we on the be conference and prepared our we This our Ralph approximately quarter will website, A of it discussion is a beginning one Schlosstein, the being call. Evercore's in announcing today, Mellet, results evercore.com. an for the financial the is and the press full-year days XX fourth this call

remind be update otherwise presentation statements. performance. the assumes financial are unless our we non-GAAP our indicated, Form to, risks are want on During evaluating These measures make reports statements. cause which of are include, subject X-K. uncertainties, that XX-Q adjusted that on annual Any that today, statements we discussed statements. factors differ indicated SEC, we of Evercore's those believe and we conference limited actual important company XX-K, to in there reports but report materially and factors various to filings to Form make that forward-looking these In with any a measures, outcomes will forward-looking to quarterly and duty this the may when are those in meaningful company's including current discussing the course I the number no are forward-looking Form on call, you could not from

the For contained on detailed our GAAP release, the to press financial data measures should refer posted these disclosures within is on and our website. reconciliations, you which

to We evaluate annual to that Evercore's basis. it performance an important continue on believe is

As previously, the for by any over of to transaction influenced now timing the quarter noted I'll particular are we closings. our call results have turn John.

John Weinberg

Jamie. serve are. you, year to this collaboration a later, When morning, And last be we its and and good be COVID, sustaining continued And firm. Thank volatile, never still unique has times these while wrestling everyone. our would time although effectively clients across continue Evercore that, our here trying we to we with fostering we yet year, imagined deep spoke and culture

intensely return to adjusted to subsides, While their on remain clients we pandemic the our on to life forward focused of and, look teams after importantly, ebbs priorities. our our advising Omicron pressing most have strategic flows and office successfully

had adjusted way adjusted Before XXst we records billion $X with a ever to EPS. final We history. the achieved first and is just adjusted no record Ralph's the all our for impressive in There's earnings and income year time successful announced. adjusted net It that year better call. call. his go and by firm's is quarterly of record is we've his best the exceeded income, hard year into results, was I the operating we've revenue is and far XXXX that and today this want believe to than to quarter leadership It salute note that record

and XXXX. our ever. eight we future, class In team We promoted join adding more recruited had two Advisory, in largest SMD continued senior invest recruits talent directors, to month, senior managing in additional our our last

research, coverage reach businesses. in and most of important two also We in expanded our capabilities added and equity sectors our

greater in to in more begin our nearly and advisory reported a than a As straight of quarter is billion $XXX the But result, preview, than in $X.X fifth million are I $X billion achievements. our our call. positioned our highlight like financials more well detail few of XXXX important XXXX. would We Celeste later revenues to discuss more advisory a firm than XXXX. revenues as will

Our underwriting another million generated surpassing $XX quarter, is booking This more business than with well $XXX our underwriting million. in second year solid revenues. revenues

our well, while the continued business time. equities first $XX Our business Management to billion Wealth perform AUM for in exceeded

while XX%, adjusted from the margins, of quarter for $X.XX EPS fourth increased prior. our operating margin quarter we year As adjusted delivered our a of XX% fourth

to will Street. talent these us large and started environments. Ralph of ago, on Evercore today, being what would to that him for earnings but with leading increased our to growth, on commend repurchases, the But For continue adjusted incredibly executing sustained feel businesses him review. we year-end my long-term than our in as stated to earnings is will in invested still path million successful, Ralph to year, hear margin from we annual to be five of over our dividends loved years leadership on $XX.XX to blocks to last vision, a all per returned Later issued diverse enough compensation shareholders, nimble building the a a Also, first full Evercore guided in the his want our adjusted years of from path in share before business our through across employees. XXXX. a detail $XXX to my goal firm first, XXXX, well more our broad variety and of of Ralph. the our the that I partner was highest follow. not assemble fortunate we it capabilities addition of to extraordinary XX% grow shares XX%, returning lead building a have skills, target. ultimately exceeding friend. and over and more deep share related firm shareholders call, Full-year that I provide XX I've management with operating offsetting And we also Ralph's will do, the in quality in is

that of Beyond is being for and extraordinary leader, the firm will I extraordinary an running person. in support his business an know his Evercore active miss passion continue. will and the he involvement

now to me over turn Let Ralph. it

Ralph Schlosstein

Thank you, John.

As my And seen earnings and release as XXst our may the in call. every and morning, year. earnings last this have record both another the this John in for is you quarter mentioned, respect, for

$X.X Total During fold grown experienced from XXXX million from XXXX. XX revenues very have in fold to strong $XXX have here, my in over over XX million to financial and $X.X almost we significant $XXX XX revenues years net both grown have adjusted growth billion Advisory And billion. performance. well

income XXXX operating $X to million evident risen to the XXXX. we a per been from earnings. earnings $X.XX in XXXX being only Adjusted XXXX close. few And at earnings our months have not grown XXXX roughly yesterday's fold XXX-and-a-fraction And a exception it number let down stock from have and also X.X% earnings when share didn't times even from joined things financials share, say I I XX review better little those in to have revenues from in in in more. am billion over X% a of share in XX per I XX $X.X operating of full XX% has that XXXX. stock revenues somewhat $XX.XX Our increased adjusted if and per margins proud price. And has adjusted bit And from at trailing might our to which a XXXX. grown our extremely has trade with for were have $XX a years records me of when are There been share X.X necessarily these. or to paltry are X

XXXX, America. we globalized First, revenues outside of $X the have million North roughly Advisory our firm. of million clients of from were In $XXX

roughly outside last have of our of come continent. third a four this clients years, revenues the Over from

we our practice, and Second, which we the I the restructuring defense corporate firm. have M&A number were split, debt practice; able one When restructuring advisory; have advise range services. and spins, additional to expanded advisory etc.; Today, advisory; full matters essentially of the we are an a equity dramatically number activist one clients. we joined, on

an underwriting research only trading firm capability the an are and with business. independent We and equity equity

on capital assert, or do their As result, confidently more any at advise and business I of can almost are Evercore that to want do a they that with the John firm. front clients without our strategically challenge, recruit and independent than clients And to in anything we markets. significantly in sit at able other they can any

been has been become over only of three our that senior have a and number case. Equities internal managing we managing were development year, half we today the Almost the the clients one that year promoted The them almost promoted double having have the emphasized than our integrity the month, and the firm internally. of our of Third, business. inclusive the collaborate promotions new aspire Advisory directors When we number first hires had And importance most And in and joined have and working excellence, advisory that finally, essentially our clients of more internally hired SMDs we consistently We hard our Advisory as culture teamwork. benefit diverse externally. business. have who and same and to in ever, our we those of in Last advisory the I XX firm, SMDs XX collaboration. last from directors talent business And we putting productivity have internally external of the promoted. is are promoted senior machine. first,

in clients. client, more working fact, or each SMDs three than XX% of XX% revenues with our or more of to the have serve In together and our almost more years, had four had have last working two SMDs Advisory our

Advisory Asian corporate business, of generation all business, four General of XXs. leader US and of leaders Advisory our have in And from of been developments, three proud we Three much sectors. capabilities, of over CFO leaders the They meaningfully array Counsel years, a the leaders that our less of our XXs than and all-weather have as the the am one these all the our As our and European historically. next are all in I much than important their Equities businesses our very leader come of have early our leadership of are more or they volatile last almost of we installed geographies, were an our business, we XXXX. wider roles. result of business, we Advisory are of proved firm also revenues a in

grow come. the to well is to positioned So, firm and many succeed for extraordinarily years

of chairman the am end I human He almost a succeed I being, day as that seven at deeply me at part Finally, team. both prospects about I very met the first from optimistic hoped, future And trusted skilled CEO in ago. more clients fully role look fine be month, Chairman not John had forward could superbly this is to at as With will by thrilled being I years as the I Emeritus. and our Evercore. sole of and helm, that him and our business, him future the for success new my much

the back that I been turn saying I me the single conclude by has have interacted. best to this John, let job Before thing call with whom about people the

talented management you. me a XX remarkably this Our our John, Senior yes, directors, Chairman, with our committee, analysts all by and truly board, the Altman, call. our It employees, fulfilling my Founder has almost of interactions shareholders, and years, on our enhanced Roger many managing for our even senior been

me John. to turn Let now back it

John Weinberg

of of more future now end our client clients Thank provide of going will geography, to deeply the which XXXX you more to will we growth. continue your In by our some which in review I turn sector, Evercore, new to our know forward. and thank in were and also capability, transaction of do past for our you, all sources your type. dedication broad, each revenue will I behind year Ralph. Advisory, I biggest broad a of the firm, defined our incredible year, as at our calendar Again, want drivers detailed context size, role. shareholders

drove regarding board, significantly size, transaction our strong up fees. activity the First, volume high and across merger was which levels

deals large XXXX. above largest dollar $X looking those the volume XX% of increased and at the billion, XX% For the defined deals, as increased market number globally from these overall,

SPAC billion also the of XX $XX X advising of including increased We AerCap GE advising And Kansas we global largest was ever. XXXX. the sale directors which billion its of on on board activity grab largest acquisition deal the XXXX, $XX Southern, Evercore. advised pending saw in its lead of Holdings, year-over-year largest City to Canadian to Aviation the transportation billion Further, notably $XX SPAC Capital at on advisor on serving as transactions Pacific merger, the deal top in its

from deals to range. a globally, advising of $X M&A business our transactions While midcap as billion we remain the defined and the active $X significant largest on billion stems portion in

both deals. $X billion volume in volume And completed For doubled our with and number the we that, this and of in an to deals corresponding billion uptick the saw number $X of in range the range. market,

of terms XXXX. drove increase saw the deal dollar XX% In in geography, XX% US, growth the in market's Next, number the of global volume year-over-year. the US volume of the deals XX% and market M&A in

the US are much While business continue a larger business we very our came overall we percentage versus XXXX, in a diversity. revenue from geographic of and see to the market global

As diversity, every we in for major sector saw activity sector.

particular, activism outside multiple Sector XXXX. very annual to capital restructuring, overall, were our was as and active and capital over Capital traditional pool active estate. healthcare, our funds our real in and our fee were growing more Similar with stream, capabilities For Within technology private in in advisory, importantly, estate strategic more here. a the to combined such raising we compounded us and a diversity the also seen revenue our to most advisory. capital capabilities years. revenues serve group services, in ways also consumer, market we've growth transact in evident. Having clients energy, was opportunities become rate we've defense, market, has and the financial M&A, and grow very we them. capital at Advisory, XX% past the prominence advisory, diverse over three active Yet advisory industrials, gained of real gives private

of Let's to our subset a now review capabilities. turn

a in a market practice and activity activity as US defense the $X.X no trillion represented Further, and as are preeminent particularly activism increasingly campaigns. signs of it in continuing built highs. defense. activism activist XXXX record activity campaigns. help here XX% is advising are it of market companies often in we've to in value we in showing at currently more is decelerating. record attacks Evercore all grow including are Large approximately is did highlighted, their to As XXXX, cap only does, targeted; activists year, activism Not companies ESG-related drive representing

restructuring Even our business our addition active we we the management debt was and Our creditor years But busy. ago, array broad private shifted firm's in as is built a default mix to become environment. creditor than practice a less almost liability at a is more varied perform our restructurings, in ever diverse in has of with engagements, exclusively debtor Today, than positioned out-of-court XX%. balanced grown, advisory better market and team now increasingly work X% activity. to proven. It business Several a mandates have also XXXX, our financing overall practice before. assignments, that in can with and advisory practice. a rate was team We've has

TMT, broad sector strength retail industrials. consumer and business. evolve our capital markets across also including activity We sectors to build saw on our and healthcare, continue our a to We've plan increase equity executed historical of in range and diversity outside of financials

XX our value gain in we of and convertibles, Equities, market in in towards private direct Dealogic invested focus bookrunner while every dedication XXXX again in service. XX% increase the equity continue on fees for increase. institutional been and excellence. deals, for listing our as block quality XXXX to making to also client of clients. of our excluding US XX bookrunner position the participated and for to on and we capabilities, adding enhancing Further, to transactions we virtually from Advisory, period exchanges, In adding highest are able deals placements add issue latest issuer IPOs the ATMs. XX versus executed on great product. a and top way underwriting we've equity-linked top equity recognition also expanding our of as XX XX% team deals we equity-linked to Outside underwriting success the new are our research listed or focused in our pipes, and continue XXXX by also in transactions in our on across equity had share. members We the and seeing and and in to XXXX, of sector we expertise, over equity all intensely of in estimated XXXX, We We Notably, X XX-month ranked and underwriting XX once largest remain impact and

formally investor, recognized our work institutional by was Our analysts XX with ranked, individual mark ever. highest

six companies We XXXX. also sectors new cover the added industry over increased and coverage by nearly of XX% number we

about clients. and Finally, talk of let's our importance, utmost

our our clients, and institutional sponsor financial heart drives and what on clients Our of focus soul are culture. corporate, the

data, estimate clients prominence activity assessing comes especially discern our with that outside available given it of from institutional M&A. our by corporate traditional to revenue percentage levels sponsors, is While one of publicly can harder financial the and our

past XX% the sponsored were advisory company. of sponsor revenue top Over of related, meaning this been at the has our we we sponsor-related the to XX% years, three range. advise approximately end XXXX, or In

Let give on, additional highlight and and opportunity beyond ahead. serve portfolio Early buying in companies. well that we and that on well capital deepened and with we of raising the our extended potential expertise growing important to initiatives. establishing you were leader fast early sponsor to this me assignments. market GP and focus capabilities identified M&A an share on in sponsors growing selling also have growth traditional In and sponsor-driven connectivity our areas and background continuation some capabilities just the effort, as investments, in secondary growing These we will stakes, fund serve more continue us clients financial

dry equity powder talent is While opportunity relationships is healthy, team. global to believe trillion with our of added the with ahead vast, our and we depth the combined given private we've the very sponsors activity in already $X.X the

Turning the to future.

for growth. review roadmap Let's our

which there the fill sector to of in and geographic plenty will is of expand. we whitespace, areas First,

the the growing of will in fastest – technology. green fintech, focus our be the segments four of Some biotech techs tech, economy, and

invest will on from talent A by we Next, intensely to plus within. and cultivating continue externally both focusing in talent,

on I over our potential to meet the clients support mentioned, pipeline in the levels XX, our to ECM, positioning sponsor-focused senior selected broadened advisory reach capabilities, and not in the In and to bolster we and debt meaningful build who robust of at core forward and to Ted class the they they all we our were ramping significance. enhance focus director, recently clients of senior XXXX our and our for advisory basic Jonathon regards the reach geographic do with addition increasing to to have most the to what three Ben hiring us we fourth continue promotes elevated conversations Furthermore, to with generate month ever, firm, recently, revenue, in advisory equities. our advisory and announced at importance, recruits their sector in values. David industrials to practice pace continue Inoue to needs continuing with only our practice. Eldredge, which to internal joined in additional of areas of we've will growth. expanded capital each activity. talent advisory include As in M&A, hiring look addition will strategic and debt materials. fintech. embodies enhance we our their and serve outstanding adding promoted, will the levels, were capabilities new is and are And continued XXXX, large who further we of In but who and one our with for of Lischer, external and our Asia, managing XXXX, across of quarter, Michaels renewables, and Kaufman Spain to We talent ability most to And equal SMDs. our begin of SMDs continued who footprint Through SMDs in first and power build welcomed in Takeshi impact

serve communities. philanthropic an announce the efforts. to and of diversity, Before our the foundation part initial will important social ESG that comment interest as proud I moment narrow Foundation, an on of The a address for with take the set employees to We're vehicle inclusion. to to a want to Evercore responsibility, to over contribution turn as firm's the Celeste of focus Evercore Foundation review that, to that at was call areas formed the we firm's a of global on capitalized and financials, and on $XX equity activities. include million of are our I our sustainability This some focus emphasis last year, our and end be of will on focused particular organizations a

a important pledge part communities live execute to vehicle are back responsible an will committed and from more impact socially on a Foundation to of firm. The lasting work. to we having and giving be and which We in our is on our be which to this commitment, as it positive

published and report look updates we spring In in years. this subsequent our and providing to we forward spring, addition, more inaugural coming sustainability last

to let the turn Now, me over Celeste. call

Celeste Mellet

Thank you, John.

revenues, the net quarter For fourth respectively. million and EPS on income $XXX of a record and net $X.XX XXXX, were basis billion, $X.X a GAAP

billion, record GAAP from year, will and income, were full comments basis $XX.XX we million $XXX are useful on results. revenues, the EPS believe metrics, on focus non-GAAP evaluating $X.X here My For our which net when respectively. net EPS and a

reconciliation year, $X.X adjusted adjusted can surpassed quarter ever, increase billion full net for our $X.X XX% $X.X revenues grew revenues release, the standard billion first website. press adjusted quarter full million on net Fourth XX% to a the months. $X.X grew XXXX. and for to $XXX and best of XXXX. billion net This On revenue increased revenues basis, Advisory and best of XX reporting represents a were the Our quarter year of a and Fourth compared compared our time in year-over-year XX% GAAP of which year XX% be found to is billion adjusted GAAP results year-over-year. our

period-end million of and accounting approximately million of according the we Our early that XXXX January pending $XX $XX quarter principles. relevant quarter closed and and/or those with from at fourth other Along conditions XXXX. in $XX million transactions recognized includes in the revenue in had lines, third

advisory current maintain our on to fees ranking underwriting results maintain estimates, investment publicly all banks in consensus million and based our among down and quarter among fees to number number position were XX% we banks. compared Given traded $XX XXXX. independent QX X X our Fourth expect record of

For fact the there is revenue in fees the that had our for year to were XX% Commissions $XX largest quarter we the year, And X% underwriting year-over-year. up related $XXX XXXX. less down year-over-year. two XXXX, was activity attributed million in significant of in The one and fees full million, decrease the very were of in fourth sectors.

full year, $XXX the related million of fees commissions For and were flat compared XXXX. to

quarter of X% Lastly, XX% asset million administration fees asset of fees fourth and full-year and year-over-year management million $XX and compared management increased XXXX. increased $XX administration to

Turning to expenses.

Our costs adjusted funding was non-compensation the million $XXX Evercore and comp Fourth John our driven were $XX was travel by for XX.X% quarter ratio of compensation that the ratio discussed higher XX.X%. million quarter earlier. Foundation full-year and the and of fourth entertainment

million For per million of and earnings the of income operating XX%, $XXX the $XXX $XXX non-compensation and and adjusted increased of year, XX% up respectively, net costs full million $X.XX adjusted quarter fourth XXXX. versus share increased X%. quarter were income of and XX% adjusted Fourth

XXX and net XX% We basis share XX.X%, of to versus XX% expansion $X.X XXXX. $XX.XX $XXX the and For full quarterly produced of margin year adjusted fourth XX%, and year, operating margin operating quarter of million the income points income, earnings of adjusted the compared per million, full XXXX. and adjusted respectively, increased a increased of adjusted

reflects of compared expansion basis XX% of points XXX adjusted XXXX. margin operating full-year margin to Our

and a remain John and excess of record $XXX shares shareholders our million through X.X average of committed dividends million or As to returned of capital net returning to repurchases $XXX shares to price issuance. we X.X million an shareholders at mentioned,

for than more issued, pressure year, we on driven RSUs, the settlement substantially the substantially increased count weighted share count buybacks upward from while of net share adjusted stock bought back now a due our price. full those by the share For higher treasury method, of we shares including and average timing the

our aforementioned principally adjusted fourth XXXX partially our share XX.X for million reflecting of compared the net fourth the of impact stock of to However, XX.X from method. issuance, decline million, quarter buyback to quarter program offset the period-end count by treasury the

As of cash totaled XX, our $X.X investment and securities December billion.

total digit. strong a the the increase in excess fourth quarter the and from is when the operating quarter of to of inflows was digits, cash our The securities low-double Our as was same at up quarter. attributed investment results, percentage the in cash the single and our particularly number end strong previous

one-quarter addition, cash generally buy aggressively on November excess said, a In December, did That back deploy to stock taking we advantage sold the and lag. cash robust we off our our when position. act in of market

a and are needs. business obligations capital needs our dynamic influenced relative generation excess timing of heavily and by our can cash As compensation fluctuations and reminder, cash our in are of Expected return result position.

Turning to XXXX.

interruption, below will are non-comp XXXX. up while in another the that COVID increase. you expenses related term T&E likely were to COVID As saw in expect levels, absent by depressed expenses remain fourth significant beginning historical and quarter, And we still be travel long to

grows, and items facing with certain to from and and And in most you due are will inflationary per As continue head amortization know, as the see COVID. after increase, vendors other minimal along companies to also like increase. including we and equipment, related occupancy only firm increases, depreciation expenses suppliers, XXXX expenses certain tech-related increases several

achieved are XXXX. We of in very proud what we

As we months. our to strong. enter as XXXX, visibility our to three pipelines are But limited is always, six

conflict which most are indicators engagement including checks, letters, strong. forward forward backlogs, risked are our unrisked Our and all looking, and

the up over to turn John. back open questions, for call we let the Before me line

John Weinberg

high the good to the global the further coupled rapidly drive growth activity in with market. strong that believe future Thank financial levels evolving about underlying a very you, will in We economy, Celeste. and technology, continue and feel sponsor community

impact course, of could continue as monitor as rates, which issues well While strong, volatility, regulatory for set market to availability, relation actions, pandemic equity the interest issues. conditions economic today credit and and, are environment, we talent levels, activity competition including the inflation,

we financial needs to almost address scale, than positioned have by clients before capital and intelligent we and teams any the results, are proven tools, ever capital, our intellectual in better As our environment. advise needs, to across those strategic holistically

well, see of extremely are answer us the open franchise to that, perform the long-term even huge to prospects to we our business and Our for pleased opportunity We continues lines. strengthen growth a please ahead further. exciting. Operator, questions. are With Evercore's

Operator

Instructions]. [Operator

comes with Chubak question Wolfe from first Our Steven Research.

Steven Chubak

Celeste, off expense I actually was hoping outlook. to with the question start on a

your expansion the side. to non-comps the inflationary hint some of on significant One competitors did in comp addition of in pressures that

You year. really of nice job did this a expenses guys managing

beyond You is did But little the flex bit of bit backdrop if can extent a a challenged six revenue inflationary pressures. the to allude to more limited? the where more expenses what visibility some remains months you next

Celeste Mellet

tailing growth we'd or used to would off November to in On start of fourth normalize hopefully increase firm bit. non-comps, in we a T&E do world sort around grows, bigger occupancy of as was travel ways we the I people expect the a back as with third they our saw and from expect and we as In the to a headcount to normal. said, business then, to. T&E quarter, those then what increase equipment. pre-pandemic the But expense will see And as and gets

that. you that. you know, And continue like of year have – the with and then expenses, saw this increase as and you next to year. person, like every time XXXX then, things will licenses hire You a some tech-related that cost That associated – in

as based at pressures. we So, you those headcount about are will to mentioned, continue grow then, And And inflationary last X% growth, today. have headcount growth our the least where was with we'll this on which year, year.

the careful our So, what we do we'll obviously, to and environment expenses can we with will great, if very manage be them. isn't revenue

have We have those we implemented, controls that and great Bob will continue place. in place to cost in

driven comp to And the revenue our to by is relates our of comp, As that performance. bulk much more related is it revenue.

based on paid are revenue bonuses well are – SMDs And their on performance. performance performance performance. SMD, as Our below as paid individual are on based based firm

So, that's where overwhelming most for firm. expense we expenses and, over of our obviously, would the have percentage from flex an the the perspective

Steven Chubak

you've should XX accomplished I shame First me, have started a off, deal on over great years. that. the last with Ralph,

for new in my just the you wishing for So, best question just And follow-up, a maybe the John. role.

markets equity gearing and to or not and you to the How sensitivity, that And in growing primary market were sponsors strongly with market declines much of for certainly I aversion M&A that strategics. hoping what declines, just higher businesses companies on market how transactions function transact to of years? just levels, the recent the impacting cap been to fee a seeing large, beta recent Given was a of indicated higher speak just particular. bull could both extent to your traditional rates volatility, and cap are have the investors the capital some couple correlated market the be market many ECM, heavier willingness was sustainable? we've of may that are last the at over

John Weinberg

the and transactions conversations companies, diversity Steve, impactful, we're At that really our out are say, as what we seeing expect look from portfolio and be and high board. that across full. as really really in that It's I are momentum look look it beta will the be sponsor financial would at there strong beta expect, in that seeing to strong companies, quite that anecdotally, we we we're continuing backlog, just coming we diverse. at this very backlog. continues companies, be low

and the see Right to always don't we about market that that carefully. could way. we're could business. when don't really And watching look clearly six now, companies right our confidence to now we merger we of really But be it months CEO now. confidence things the we're which change So, the see as are markets, really merger of we course, and are the stability out or more impacting aspirational could strategic gives right things thinking the of where be turn businesses, to the and dramatically, down change we three at one more any Clearly, even there instability. dealing with what

Operator

Next Morgan Manan from Stanley. Gosalia question comes with

Manan Gosalia

now? this this while four not are how pulling available? is its interest the do companies you know activity, widely of with means I hikes get stock clients pretty deal was right the wondering four, the maybe What zero I is in this cheap rate past, Fed sheet advising you point the for we've Or have robust still gone forward along you half with back economy do the through sort five in year? shrinking we enough activity to Is as to provided is the rate year. impact think on think try that a of hikes financing it balance of as still this the could but here? environment that

John Weinberg

understand desperately that do going because selling moving see to we Well, say There's really historically. right clearly things rates sponsors we're clients, have Transactions, to question, still really they hikes though, be Having now, financings to one leaning Obviously, we four really believe be still get do tap also. returns, that that low buying they get their they that discount. very the rates to lower though, dealing now. to because rates would financings borrow, on level that, really done. as wanting with done relatively in financial that no they're is we of think anybody that is activity We on of clients is things so are the are they which impact there rates but I rates a be will that the forward. are seeing nothing said are who when don't thinking believe up. that deals low also are advantaged doing by And need healthy will

sponsor see that very as we that But we focused is at the ahead, materially. think would to and don't at on going backlog look levels. see I you much that, impacted we what really our rates look we So, the be say and activity

CEOs rate and is everybody I And I'd inflation. boards that Although that that both are hikes say focused. aware, no watching everybody's would say and the question there's

Manan Gosalia

the give midsize much last over there business the on couple activist to opening how to can of we you revenues year? deal thoughts years? practice next the them how the about contributed activity, color businesses Is defense those on and all comments. in appreciate Or revenues contributing total restructuring over I any the John, think your should

John Weinberg

say, our the But XX% it's call We just I have and sponsor would And that in what continue potential. would very say really XX% are of say businesses these give they that business, to detail. kind in to can't real we Advisory. did that, I upside healthy, of our in revenues

Manan Gosalia

the And Ralph, congrats a best. all very great on tenure.

Ralph Schlosstein

business going transparent. not business John much. very we line giving continue that It's that blurred. you very want line between be Thank lines not by some to revenues. And of are And tradition the to these of the it's is don't

for. it's you're so, hard And really granularity to give asking you of kind that the

Operator

Next question comes Mitchell Research. Jim from Seaport with

Jim Mitchell

to speak with can intermediate growth long-term sort we more Maybe opportunities detail. of

multiple the You stock your growth. of doesn't pointed believe up Ralph as the to put on implies this revenue kind low strong market of out, continue level continue. But guys can

if sense shareholders be speak key So, you seem can growth term, from can disconnect, very just you it's counterweight the see you guys current to of where to long a – M&A I that for what levels optimistic slows down? shareholders don't. think a get the most of about intermediate growth,

John Weinberg

talking our do in best little We'll growth. bit a our about

before, can where think we important As we ways. we we've in One growth continue be that invest they're in articulated whether different that sectors whitespace, we whether are to geographic invest those think that is about or several really that we areas in. sectors see

fin grow. tech, whitespaces those biotech, sectors for clean are really example, large So, like definitely tech, where there we in can sectors

think those we very a raising buying have are leverage very we sponsors coverage the of That's driving holistically but a relationships about about, side. we those addition financial the basic and in very strong we client continuity cover that initiatives feel off sponsors have, and that. then good relationships, selling importantly, and very important funds, can for more stakes for strong, and strong using where are we we whether us, investment really, very excited area to of number GP addition, and M&A In funds, or these LP,

more happening. in that hired already, to and David addition, Brad we a the we so we for dry out to the much continue In invest Coast invest opportunities there. it's we're there's And there, powder West there look more the seeing that

we addition, investing Germany, France really geographically, closely whitespace think in And Europe. opportunities, there or feel those there. a like we In we at lot places in be of great is opportunity there's whether looking like are in but those

we are addition, relationships our with investing in In multinationals.

franchise. increase really we of for and in are investing We looking down coverage Also, are those that some doubling effort client an we have capabilities. our at to in terms our of multinationals,

One could where see of you you the well, say things is, opportunities.

One of we've really restructuring. creating very, capabilities have liability our and as even low we are the rate And there value more and is things we default is there management now, grown right more clients. though very invested the real said, and for in, doing

stream time has about we real over developed really it. a that's that and feel good so, And

strength able heard our is there. talk area was and you've we us about we're but that we have that mandate to as and are added We our creditor an think practice direct a time. dramatically that And addition, an ECM out service listings now converts. really business about some really quite In And debtor grown has building we set. described, as we opportunity capability. excited that for area though a provide business, growing, is

fintech a invested on basically in We other add sectors we able just always capital see call. it's too. those sectors. happen all of through really to great whether set really in have use also And had to seeing our stacks. strong as I or really about invest back call to out opportunity finally, grow And have build clean we now. as we're And are and And go actually some tech, to growth to or the that and the sectors. in pipes the real We we we areas, biotech now what product of those opportunity right those business. value talked But we then would biotech coverages

a as see are good Jonathon other Kaufman tremendous opportunity like we And a generating would our We capabilities. that, a example the opportunities and sector where hired said, sectors. in well of clean as be that tech, of I through real Ted basically those all Michaels. As

broad, opportunity. of at diverse see all we these great, looking so, that, see And we really factors,

Ralph Schlosstein

we're would four. that add I We're number one not in number just advisory revenues.

whitespace, to managing revenues And opening ramping at productivity. as internal have by John if roughly business, grow. are up industry are managing lot So that XX leading senior have activity. through our largest we directors hires, who of in said is a we promotes by John of still room you our our driven business new have in in directors of remarks, senior look definitely of business, XX% is number well And plenty and the identified multiplying and the over Advisory which their his there our that. revenues, we

identified, the So, that feels consistently our growth with that underestimated to investors our John all certainly whitespace it and of have that, me opportunities.

John Weinberg

do be the out feel That's and a that talking the important very are conversations having. where we think one, market and is good areas questions that one things which And, of you is could the discussions about those didn't And going they point. the of how one talented way, I that think but ask, by an the they fulsome We're in people to well. additive. be in to we're recruiting continuing

growth And aspect so, we're also. of to continue that going

Jim Mitchell

like could How outlook grow feel environment. the the to that's business year rates do been that one I one firing positive go that's think had as about comments very just But right in the been area think that's if a on now and you since not quite cylinders. about you start there? up, Maybe you has do two? follow-up do restructuring? restructuring a or It on weak How all next

John Weinberg

would as companies point, become distressed. do rates go history more up, Well, as

really there positioned. well into blast, the restructuring would some by mean it full sector would be kick For We're distress to in system, sector.

on business Wall restructuring best the have we think Street. I

clients I They're to there. really finding think professionals now. we've outstanding add value to ways got

activity they're becomes I clients more and even they're there's pick add to up. are and in finding now, I their environment, levels even think as to the think risk to that really more busy. ways the quite value uncertain environment going But

Operator

with Ryan question Devin JMP next comes Our securities. from

Devin Ryan

and best you in set bar Echo industry. the a high comments, wishes really the you've to

a So it's been pleasure.

kind first in on a to bit of comments. hone little question, want the, the terms guess, more In of maybe productivity banker I

past the over doubled roughly has productivity five years. Your

have makes than You doubled a it by five number we of are Valuations the of over kind industry And more back, the think when years. step take sense. I past leading a metrics.

kind having deals. You're bigger of

resources per this And economy. in You've then new efficiency Zoom greater more added deal. maybe the

transaction. of Also the that would more and there you in curious the deals? a have And actually of can fees on of kind lot baseline puts other for get the connected transactions ramping fees you're where opportunity actually kind to where are that, missing how takes per to of opportunity so, the of on of frame of platform. on just productivity. kind drive you appreciating the situations bankers kind out I'm still And Are some more you still

John Weinberg

and, transactions we're clients able value what therefore, the therefore, that to in As advisor very every is in capacity we transactions a through and, at bring be we've to provide our our longer to of client the as broadened because we look whole Number we capabilities, more and able advisory more to we're do more capabilities, two transaction. as adding in opportunity fulsome are an also think transaction larger to take every things. exclusive fee that one, relationship, to go longer important but the the life

a number what have now. believe that we being think out capabilities we is that are built of I really just

clients that to going leverage equity of we And I debt markets, in you're that volume and comes tremendous momentum build capital continuing about our capabilities and we go add grow And For as progress. ECM. in terms really think to what can feel way I through build made those and begin really that business. of capital And We've out we resources we think long have to the see terms area. we In But can that a to markets, the really good we reach out in of do. we example, sectors, we're build out build. continue business, more by to And us using further activism activism many really even marketing group, us. defense real of day-to-day when has in and in helpful value really for they're defense key the clients. a also to really really those things able there been the opportunities their to of tremendous that which and one given vehicle terms is of their has to into we've really be capabilities but and relationships been transactions. you'll both drive many, activism add managing have that to In see access relationships activism, to expand

our levels. at think continue high can I ratios productivity these So,

stretch. here, think, Now a I them that could double from to quite say we is

that as hard be to I add our think of people do. clearly, in continue would here. growing be think real will terms something we have we upside that But I we to in that. And possibilities really whitespaces, that, have think, capable would I more

look the levels business, many has activity you so if and you companies financial are dry high. there's the addition, tremendous extremely just portfolio upside. know, powder, the of sponsor In so business financial sponsors as at There's financial sponsor and much

and add resources we're in that momentum to contributor revenue. be large there to we think I as really very get that inroads, able what continue So, bringing make you'll do a see also in to will and

Ralph Schlosstein

that our two so Number majority this Devin, the or And look to transactions. lead important factors. if has which is us expectations, the think there us additional I it my on has that I in secular growth, fee doing allows capabilities trend been fees of are on a on with have John you secular very to is much And the importantly, get fact we're exceeded on productivity of at doing allows a number the capture clients the broader think hit perspective we advisor of it be sole opportunities continues. all really, all same respects. more to That's – one, therefore, or transaction. – that a and, advisor we're the and the

stronger. to to of any bit the because Evercore bats just versus of the brand what just at given batting get The same is brand. means a the that is going be our average SMD of today higher few firm. is that is more a years second going in, the year, and is The brand little And five

we things two the obviously, last see is also trillion activity, activity, announced record can't predict trends the in year $X was there year of of to year. more we M&A that What year only that element contributed was certainly those last and So, a it. And, cyclical continuing. than which productivity are secular

trends we continue. cyclical So, overlay, then definitely the which predict. secular And the there's can't

Devin Ryan

obviously, leverage up and quarter some and in that the aggregate. did there future operating in going I'm huge sets comp more ratio. compensation one change, squeeze this deferrals revenue comp just Celeste really to nice revenue off coming for years. XX% thoughtful in year, How quick XX% percentage years. Want what back much Obviously, [indiscernible] increase, of one the to to of for kind increase coming be about

if what two And to that to basis with in things. year really recognizing we relative we curious you So, I'm our to strong trying on and the much So try percentage a current years? retention. given balance when generally made we expense expenses manage recognize those guys balance did to prior revenue environment, possible, deferrals as know revenue tried

So, the environments. we do think that various about and

Operator

Our with Ramsden comes Sachs. from question Goldman next Richard

Richard Ramsden

add chorus, best in your the to as as the next it's to all really life. one. just for the I the successful hope chapter Ralph, last

the of willingness that's having it to seem, on think boards you large in flagged is something the question least environment just does in it activity? number more a review. discussions? And the impact up my slowdown do number broad for you So, And the corporate about are to it think getting lead for in of M&A that growing around US. across bit little at cap transact? Can a for competition is anecdotally, talk that's you transactions could And coming sectors a a

John Weinberg

be want more respect I'll sure answer this to new. This not oversight quite And something with it. about will there think It some some volume is We've clearly are around it's known is transactions. regulatory also. louder terms I companies now. growth. for I'm to Ralph been in would been say that time part dialogue the has of Basically, clearly boards looking at but of now of time. in time the for it, for some this

large I have as and cap very I'm on it yet. transactions still say having as something But certainly that say with an plays change law could the be could out, would for on right about. it some are the I the thought also, on hasn't happen. all boardrooms on eye think ones major would And that we're the a those. put are think impact. to that the that of to And could toward at being would watching looking transactions a this people deals look Depending dampener and now, it But we have Clearly, impact. I in some it. could focused have focused how developed happened very the we're and at I what

that to is big the like companies. though, sponsors, seeing, not you're buying with things the competition element respect of issue in and a One selling is things

So to all. be that sector alone at impacted is not going

really In lot the buy just fact, out opportunity by may strengthened it be there's there and to that a of fact sell.

one, as on, think focused about I boards and I we know that it, it's on clearly number it. focused something at we think and we're So, be are look it, to talking

on it'll thought out and in now, I think dilute transactions very where to market to therefore, we atmosphere be we put how look will be that there's seeing they're dampening. right opportunity, much months, boards through don't see we whether of companies six really still deals be hold. a see It to drive And the aggressive. remains play in actually high. as this to three CEO growth. continues there seen they're system, and as developed need being to quite continues being a the aggressively. you're confidence about the major and terms overlay the the And be But

Ralph Schlosstein

made has change a hit had to And think John that involved any, at need the discussed. have really anti-trust you with. law It's no think it. that if I of But about that – we've been it this transactions on really in I talk change. And John point there's many, in sea time. definitely an effect not regulation, point

at we monitored, forward effect definitely had that on not it's of to all something yet look an certainly but activity. indicators for has it be So, the

Richard Ramsden

last As call are a pipelines bit in And, say, uncertainty that around that the I elections concerns about in impacted little emerging Or said John, has pickup you on a geographic can European you some particular. the in and you've a talk in, follow-up, Has in geopolitical continued? France seen Europe? that business? of the your just think activity skews

John Weinberg

having well. has real we European see momentum. business our that done Well, And

the look of I quite really strong. coming from those it Europe and our see are really out we as because so, And that are transactions being optimistic at lens, developed and dialogues we

forward. at larger And business, business as as Having really we finding as look are that, going vehicle is know. so, and you to we US a be we than European quite our it, our experience it it powerful said

like But momentum for in that watch going to And so, real really we carefully. we're feel we growth it's business. a and us see area

patterns those perspective, we so, from And think continue. our

Operator

to allotted any Weinberg I would closing floor the the the reached time. Schlosstein turn of end have and to now comments. John We Ralph like for

John Weinberg

Thank you, operator. for you Thank us all joining today.

We are around. obviously

you everything. us. If call can you for you other Ralph, have thank questions,

Ralph Schlosstein

I conference. next Richard, forward look at Goldman you. Sachs Thank interviewing year financial you the institutions to

John Weinberg

all. you Thank

Operator

This financial concludes quarter conference XXXX today's first Evercore results call. and full-year

now Everyone, You a may disconnect. great day. have

Evercore (EVR) 2 Feb 222021 Q4 Earnings call transcript