MC - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone, and welcome to the Moelis & Company Earnings Conference Call for the Fourth Quarter of 2024. To begin, I'll turn the call over to Mr. Matt Tsukroff. Please go ahead, sir.

Matthew Tsukroff

Good afternoon, and thank you for joining us for Moelis & Company's Fourth Quarter and Full Year 2024 Financial Results Conference Call.

are Financial Chairman Officer. today Joe CEO; phone Chief Simon, the Ken and Moelis, and On

contain which to Actual Before note and made statements. may that The begin, Risk uncertainties, the materially from forward-looking differ we I Factors from remarks on would including those this time the & various firm subject to are in could no like identified of to certain risks statements to Moelis forward-looking Company's currently results anticipated. update filings time section with undertakes obligation the any SEC. call those

the by to Our better comments measures, required Joe today adjusted now understand The earnings on reconciliation our our our results measures investors.moelis.com. website adjusted We other include presented compare financial the comparable Reg to references believe results. when to which at G these GAAP our operating can GAAP with and results. together firm's over provided across to investors be with these the found call in certain Relations release, measures, information information discuss of several to measures. relevant and financial to Investor useful turn are financial is I'll periods

Joseph Simon

through Thanks, business. of comment XXX% On call, Matt. fourth our increase an million the the Ken quarter, reported today's Good of then versus financial year $XXX further I'll afternoon, and We go results, the period. everyone. will on revenues prior in

to increased adjusted our XX% For revenues year, billion. the full $X.X

all revenue powered Our increases growth was year-over-year products. by across

for the year. and for adjusted our full the was compensation fourth expenses, expense quarter XX.X% Regarding ratio XX%

expenses. the quarter the full of million fourth the $XX include Our for approximately year. XX.X% million XX.X% $X noncomp of expense for was and ratio Non-compensation fourth expenses in quarter transaction-related

fourth and noncompensation the expenses the spend. a trend of T&E and in In We occupancy technology, result XX.X% of XXXX, XX.X% full as a for achieved year. an quarter margin for expected increase pretax we higher anticipate to

tax our and Consistent compensation was driven years, The benefit to the month. was prior later rate in RSUs vesting of effective corporate is occur related of XX.X%. for normalized XXXX. will excess XX.X%, our quarter the difference tax taxes, delivery in the of with tax the Regarding primarily year this first rates rate annual the by equity-based

of X, For expect price vesting adjusted to the quantifying excess $X.XX price in share. the tax benefit between purposes grant the be to we EPS for a $X.XX of quarter impact approximately $XX difference each and

So of $X.XX. EPS as impact an if $XX, on be best the at time would example, market estimated price were

of per Regarding call and increase cash capital over I'll maintain allocation, dividend $X.XX the with $XXX X% And we to turn now share, debt. no lastly, from balance quarterly the an prior a Board of regular quarter. million to declared a strong sheet Ken. the continue

Kenneth Moelis

across performance XXXX Thanks, team all their good strong pleased and We're by afternoon, All dedication Joe, relentless and collaboration, year-over-year executing the with on in driven our our clients. our commitment and global for focus and products sectors. everyone. of

managing remaining have directors exceeded energy developing from During significant we XXXX. large sectors highlighted and in by new year. internal in resulting of promotion committed performance in the investments the key talent, deeply technology, industrials the earlier slowdown, made in and while XXXX products our to XX made we this The expectations M&A investments

an strong the increasing as have be weapon strategic to had in largest The the sectors fact, providers sector quite play a energy markets. financing transaction our been and Group In accelerates year and also Capital technology was private continues Markets role and the to XXXX And revenues. industrials capital contributor dealmaking active. a

business. to positioned energized capabilities for join new we're restructuring Looking this it activity. capabilities at provide in for and to pro-growth elevated commitment the hire better capital evidence that, advisory, week, administration's coverage announced our benefit rates results the the and solutions of We've the a innovative our private of firm our our as future sponsor capital we deliver providing never Global and banker will Head is shareholders, ahead, optimistic of In for globally. I've enhanced market-leading our in to I'll been sponsors our I'm Private open constructive appointment time, And and market for who limited earlier same With creditor And more structure clients pickup of environment XXXX. This for poised partners Funds up solutions never The expanding about the a early the seeing M&A a strategy. firm. to questions. Advisory. been from underscores

Operator

Instructions]. first from Citizens JMP. question will [Operator today take Ryan, Devin I our

Devin Ryan

think this XXXX? we there kind quarter? here Really Devin. through quarter what in just year backlogs this environment. should been and a or quarter should we or in backlog see look of we of more bit that at on then or is have strong the wanted that And ratio kind then ratio I as of a timing just kind kind been -- turnover the you're has of change a been of in kind conversion been But just moving little seeing it And know from really there's into we about I records seasonality think more here. about I'm just guys. if this curious slow. deals you dig broadly, you've bit nice a for maybe catalyst end of timing being where conversion Obviously, as saying the of to how

Kenneth Moelis

pipeline felt with conversion did happened seasonality the of is talked ever. you something your have levels fourth up. election, kind about, we is, the pipeline a What's you pace emptied and deals of our of as significant happened some to interesting at book-to-bill like quarters. but fourth but the increasing. pick and the this like can amount Well, just other it like always you revenue, me it to at look pipeline say of there's some always It's highest quarter something been this of and have the the closing, opposed in might the felt But one

even converting. is backlog building it we're than faster So than

just I even regulatory the David, was, took the start in rapid longer deal now. There started was more when uncertainty. it uncertainty Where just long period to pipe was through quite effect It it finish, some was really problem to just get of go different that just -- that some as XXXX, feels. started in it from a move. not in took clearer everything But from completion It's feels much -- your and was rates I time. everything start of Fed it's quick to deal guess, think to accordion to and maybe XXXX, to but it

Devin Ryan

it. Got

mention, for inflationary of heard as And some you ahead. then expense kind Joe. I I follow-up think, Okay. That's great color, Ken. noncomp items look a we

there one can I'm So into XXXX? Because contracted then there's any sense I'm on obviously, if a curious that we less significant or degree just my if flesh of correct. how will little of kind have how to noncomp be bit. expenses, you those Is end, those is SVB out think growth maybe probably about but also

wanted noncomp I the and of we just to expenses are modeling some think kind about out 'XX. of So puts for as takes

Joseph Simon

Yes, sure.

to But count. continued run are clear, rate be related in is increase and to head by going no over expenses. adds driven transaction perfectly SVB -- primarily say underlying 'XX it's I'd to more there the there 'XX So

probably I the in building transaction out We're think out thinking U.K. took if space around 'XX, XX%. and expenses adding I projecting into I'm

events. success We are having client tremendous with

on expect to count that. definition, And information grows, grow so then always, particularly we that services, by And as as and well. expand technology expense head will

Operator

next question Sachs. Goldman Your is Yaro from James

James Yaro

and for quickly. turn to it's restructuring wanted you XXXX. strong Obviously, Just for very industry in to the

markets? this hold to much ability we you here? rough just outlook ability restructuring give you of there could of As Is versus in potential for then any further about a think what's to split any the a acceleration level versus M&A from the was the activity? from see quarter for how revenue XXXX, that And capital

Kenneth Moelis

based it's interest always as the restructuring economy, hard an a The have because year. to Look, major that now, economy intent enough is strong we of don't -- did I Look, cause very see would project a feels that disruption. good rates. on

are volatile that to say like in have that. around also like things and and Of course, government things the things I the pretty

that XXXX the as world. without a XXXX in I restructuring happen So year like lot anything events a would now. external any that's could expect And looked of to be

I think the our about your is of The restructuring. capital all markets, revenue was the it by mean answer, for markets numbers, XX% -- rest And really on way, doesn't those was to full year. are restructuring. M&A. capital That and the

James Yaro

the ratio. comp Maybe That's very Okay. quickly just on clear.

about? the range XXXX think sensitivity Maybe XXXX. for you for be context were and the something that could provide any is progression the thinking that comp within comp gave still just you well should we ratio of the I you ratio if to whether on sensitivity

Kenneth Moelis

algorithm I -- it more gave pretty So a and think to gets Look, for year. it the complicated. stuck it's we good

to As to you progression. flattening out. get market-based closer not start going XXs it's low It's a comp, linear

we get just down That's I of everything and as those savings think it not going for what the kind exciting of reiterate, leverage we on year, do what -- I doing. low with just and you that linearly becomes XX% everybody same, competitive -- per kind and gave you I near I to $XXX else million will say have of want think the do savings we're is anything we the planning again, market get we through stayed XX% capacity. if the probably didn't of XXs, if that's is but the

intend and will But advisory aggressive. private how have business we'll we -- We big build us that do hire think a an made, to how around that. like then important position. to we affect be do market-leading funds other have for we we fast we and put us, project we in do market-leading you to this things that. banker But it's intend think a

Operator

UBS. up Brennan Next Hawken, is

Brennan Hawken

Curious on capital, Ken.

the know fully growing the on clear of What and from an dividends fondness your employee excess comp? at capital to dividend have thoughts average that saw the for basis confidence of and to buy and whatnot. being diluted 'XX with you capital from shares some But your in I 'XX allocating XQ So by increase XX%. club to dividend neutralize back increasing you on expressed generation or are XQ sign

Joseph Simon

you Can I just Brennan. correct one thing that said,

count share and may remember, when only is have end the you You're with result the at as count fully of you to you looking is And 'XX, basic in 'XX. losses, respect run what at did we diluted what you're looking count. accounting which an

answer oranges. did But not you apples Ken are I'll let XX%. grow basically at by So It looking the question now. and

Kenneth Moelis

on of do question, our our call what the think, excess To XX months away with the we're from, being I earnings we're capital. this being was look, gist we're safe. to asked And today, asked dividend which if is, going

generation, and the away it's confident what So we think quickly be in because cash that. increased we're gives dividend timely and excess we will very

raised we stock against repurchased return there, a a And will So We're large amount We capital. of right? of the It a might be the be stock It may series we not dividend. from ago. things, years few repurchases. that.

So capital do with back the the we're we I'll determined our substantial that. it's be excess discussing by capital against is to But versus make you, good of It's going be to we market, can what dividend. things. want conversation, we're again, us, how the series a get and to Board, our to not a going

me, will we we'll possible. as in and be we best of address not capital. of will believe as any It way think the And So the keep quickly that. can returned

Brennan Hawken

if thanks X.X get for X irony no fair, then Joe, years, just And Totally convert nearly and we the to that's X%, and Okay. out, over Ken, I pointing XQ, years. that there's it's doubt.

it's of amount dilution sure. a modest more So for

all it. I describe way about When other that. So you're did levels, in you right? no quite productivity I great So very did thinking guys strong year. job to there's the mean here XXXX, really a you to finish really, the appreciate a

per $X nearly You revenue MD. like got advisory trailing to million of

added. and what really a all caliber solid of How So you've thinking -- to we banking a was into be pretty that were the given going talent one. year quite quantum bad turned the

year. new metric? And perspective? You contribution here teams we really thinking stretch the should the about I be a that team is such Ken. capabilities, given XXXX the know and that year, guys did the new you flagged from this How a tech XX.X% productivity

Kenneth Moelis

I it. months only look, the know but I answer into it's will full tech the remember Well, that, to team, XX don't say

and head So time per we're run team. is the with build benefits at again, we that in on up, Suisse. I team industrials it This think -- added revenue don't full takes the seeing rate from to we're Credit our

the energy. in then that's big And investment you're And and energy, more. happy very garden very energy, excited, lastly, -- it's going it's about advisory. year-end, that's also So peers, see a we're leave a extremely our a And some about large had It's been many to I business have and maybe us. to with funds then ramp business And people. little made a a of on but we we for for up. a big think I'm a small private

that's So the the same and calling a the effort head the count of lot -- to sponsors. same --

think but We the revenue MD will add there, there. I MDs per

tech know hope that this gut just leave was the is and up don't I'm but it. up by opportunity really in do you a glaring beginning pretty go-to-market, my no good way, an out significantly. up XXXX year. a tech I of a answer, the private the XXX, which hole was probably It's of have memory, had XXXX, capital Brennan, of in amount especially significantly. because kind that, significantly, feel was deals, to larger at probably is global in business S&P team yes, I'll we The my doing the larger with economy the our XXXX, is

find look, I'm excited out. So to

Let's out. leave to that. it to find excited it I'm I'm find I've that, not limiting we'll that way. but never out, it limited and to

Operator

is today O'Brien Brendan from Wolfe Research. question Next

Brendan O'Brien

I sponsor to just start business. guess on the

the was elevated LME meaningful And been starting there you're among could there. that to of just on get to a sponsor subdued sponsor-backed a backdrop? has a M&A that, between any the the as signs said Would of top You sponsor activity. great start among activity to is how of see see. sense activity connection lot to we and clients. restructuring acceleration of an pickup restructuring whether wondering focused I companies through be

Kenneth Moelis

it -- I and year my of know mean, a six. that But I XX, six. was XX, don't do at people forward. wanted Again, estimate on think expect give I think is to and it and the think get of I I again, I was one a a XXXX ago, think sponsors we're anything anything". full it "Hey, -- I'd I on like, we're at year are coming scale a where we're But definitely a guess, to selling feeling -- a probably when to speed. think again, a go of I of to don't We're rough very I'd scale a not was at as a opposed kind we're we people to to at active. same is kind buying time, doing ago don't and XX, are everybody really one

and we're -- more and to to things, it's think doing I we expect more. do do want

I desire So bias to the is the . think aggressive. more and be

into On restructurings are of creditor is debtor side. mean so cover XX-XX. that do credit side Is on that in a they're or we company our companies side a answer biggest it's And trying a sell, these the now opening probably getting Probably its couldn't think that's restructurings. interesting. to sell more side, the on because we our of -- lot company like hard where point I side it's trouble. were being active can't it's lot debt. get your to much and private the I the It's don't

covers So think I M&A don't restructuring. truly

it's X ago. I more don't the think they by rates have might in years driving just But obligations of think quicker X that's would onerous restructuring come driven debt than would make I be it. or interest kind the M&A

would. of we're than In doing, pick anything, the probably more some I structured rescue private the credit that restructuring fact, preferred, very off of some staving if think capital that's M&A solutions

Brendan O'Brien

And to higher? on a could investment today? you prior -- XXs low I to billion comp That's to thought to revenues. with through the in you you a But this that's follow-up, think $X.X was want the see to I wanted to helpful sense incremental It that provided leverage number back about I a year. maybe case the business, I of get billion push Or come comp to ratio. the the for my just as bit you this comp a think your in still that alluded indicated kind you answer touch prior great has just context. $X.X the get you guess of continued when whether to question. ratio guidance,

Kenneth Moelis

remember line. saying go didn't to it that really the don't number did we it because I hit if you Yes. exactly even algorithm straight

So think that. I don't

XX have where like justify might you XX, might to low I something -- of getting that said where said rate I get. range. that's in think I that's one might quarter, that the kind by point, run we fourth having would And a back I think of be revenue, have at

hundred be So of that points. would couple a

you're by higher up, as the leverage, it's way revenue more and to. get than gets number think the difficult about. is but talking it all just way, I the you There more

Joseph Simon

And have that year, -- year, this making that headwind we've so substantial been a we make leverage to to a continue you're... we investments. expect Last yes, to operating -- the also will that's

Kenneth Moelis

investing I Yes. do we be comp We not down that. year didn't anything in It's ratio. clear this even to invest. bringing terms want of on like the did

And some think how will advisory be just can It and a little funds banker. that. so get how moving more and is inherent aggressive on fast way larger quick regular investment we XXXX private depend sector the in could than

and that. build like as move But as that to of garden things to lots we're going we quickly have out. We possibly periods can

Operator

We'll go next Ryan Kenney, Morgan Stanley. to

Ryan Kenny

at downturns and share you've in market protecting taking hiring So been really your and then and strong workforce upturn.

starts to into competitive? the do pace. at the recover, And does expect to leaning Or recruiting pace is So you more that hiring getting the hiring? continue slow market environment as of

Kenneth Moelis

I what I the is on Golden ago. can won't I be was the think the actually being, at believe major -- call been. switching capital regulatory think centric, the be banks. I private gotten financing have which call regulators insurance think as from I makes competitive. being sector, done taxpayer when out the -- you I with the was funds, the private not environment's risk sovereign commercial banks credit. it's it. That And it them. whether that financing that the about on agree actually but said of available. intent been conference continuing -- continuing the it's credit see long do transaction I restrictions, think the same But there do to economy there, I people institutional to I the I crunch bank-centric should It's it centric, is onerous I think guaranteed wealth are entire taking

and I think being to the weeks a talent intellectual there and I announced shutting best institution. the starting were independent an down was Lead -- in problems think conflicts bankers regulated people bank. not to of and realize investment want a having the come that tend do is the ago being that highly X are major see creativity all the is to think bank firm which in independent at world financial market And to to best look the and I recognized. their they entire

And continues where that lot comes talent from. happen. the of that's a to So .

Ryan Kenny

quarter? we And but we model in about as 'XX, then pull or clearly as build anything follow-up year forwards full that about fee events the into building of we Revenues Or XXXX? at quarter. be we XXXX Should strong. numbers? Any more to thinking just should revenue big think is a off XQ look idiosyncratic there the annualized were on should through really

Kenneth Moelis

about unusual really QX. nothing was there Interestingly,

is Joe, forward, pull X? our what? think I

Joseph Simon

which was same the modest third as Yes. quarter.

So...

Kenneth Moelis

There The deals unusual fourth pull The takes, no deals in deals light. forward move Very always that out interesting and move puts point mostly deals If have the anything, the quarter were regulatory. out. in, move most we and moved was wasn't is fee. there.

the other -- it couple are almost a delayed things didn't they what what from skip from to quarter. by got thought We so some I get move got normal got but delayed, had than a of quarter to in what And by versus weeks, regulatory. were the going delayed they of because X went -- it from delayed X, X about quarter months. to X not And move-outs quarter quarter was

seasonal a quarter. it's always rise Again, the amount transaction, of in spirits, animal saw we a business. been The bit of a fourth

always. have the the I think want quarter to we're seasonality is -- lightest is more than discount. We important but alone, I not always in and Usually, the quarter always fourth first best always don't over can't like course trend is the lightest. quarter of should I usually say X full I first feel the I the the just is But year, quarter. good. do annualize the that think you

Operator

Worthington, JPMorgan. Ken up Next is

Kenneth Worthington

questions a the we Big year, usually little year. answer, an The thinking is Joe, comp for we the start one placeholder compensation think placeholder for asked and the and up XXXX. the you. then ratio ratio later early true comp should largely you about as like in a answered about How in

Joseph Simon

It's Yes. a question. good

placeholder, have then would typical in a the what bump probably equity as there. in the And you quarter accelerated seasonality point, first a full the As the we'll this where to retirement-eligible and Ken month. with which know, start for always from quarter starting equity, granted incentive first . year participants I the charge describing we go then later is was due are we in as the landed and

Operator

James Instructions], go next Sachs. we'll Yaro [Operator Goldman to

James Yaro

on to comp just I here. clarify comment around the' ratio your XX% wanted

XX% bottom $XXX increase confirm, in of revenue, for that are to to million saying the that line. drop let's that Just would you say,

So that what is margin. right Is that would the XX% be like comp that -- a you...

Kenneth Moelis

just me looking algorithm not the that means. asymptotic at was was he extending say as XX, go told said, what from I at away me it's we but stepped Joe saying stay course, straight know going And no Joe will want. I you what Look, to line. happens in because one was out to that I of it's

fast. room the get It that improve. you gave writes of think go we at basis I XXX. beginning try to per points going were see just year it. There that I'll to and is and -- line. anybody XXX So doing last slow But can't it if not It's we straight

else, do you're you're low be XXX did to you go the have closer get to that. nothing So through maybe. going basis and going because But would competitive closer that's would we that again, I that, environment? right. get then look saying see around in What points you're not Maybe you As as do? getting there, to And you if change get to XXs. would going down to and what is -- that's we get was

you, So is the have I and quick how -- close, here to get offset other on, I don't look, say than new by how lot this point answer that a to think we business think it? you that to question do can when I any algorithm is of in then do right from savings a and investment an the don't think outsized outsized. is

that always do some think think to we're going I comp people. hire inside ratio, we

with. to want don't do which, that let's say, thing, we in something a if be I affect might sizable PFA, So could which too. say it, it But

and Joe complicated, and do me it, adding. not it's I told So mistake to made the

Joseph Simon

more path demonstrate in a I that's mean, to And getting wanted We why there to put that XX% an that again, ratio were out was at we algorithm. remember comp was the XXXX. that purpose reasonable. to something that we

think are the where leverage. card. But it's we the are operating some around respect be be That we Bingo to striving us of be to given to precise the I difficult investment on and will absolutely that, more opportunities with today. is before going for that

Operator

are no there this at remarks. speakers any everyone, time, things closing questions. hand I'll for additional back our further to or And

Kenneth Moelis

come about. been to improve that hope all Well, the continue and to thanks asking and back we joining elements us, you've for

you. So . thank

Operator

for today's conference. would thank everyone, your like We conclude that once does again, you participation. And to all

You may disconnect. now

Moelis & Company (MC) 5 Feb 252024 Q4 Earnings call transcript