PJT - Earnings call 4 2023 | PJT Partners Inc.

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Operator

Good day, and welcome to the PJT Partners Fourth Quarter 2023 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead, ma'am.

Sharon Pearson

Thank you very much, Todd, and good morning, and welcome to the PJT Partners Full Year and Fourth Quarter 2023 Earnings Conference Call. of at Head Partners. Pearson, Sharon Investor PJT Relations I'm our is Chief our And today Taubman, Chief Chairman Officer. Meates, joining me Helen Paul and and Executive Financial Officer;

outcomes to call this risks of call, and differ to are these These we to number there Paul, turn forward-looking the a conference over important make uncertainties could forward-looking We I that during statements. those the I Before cause from factors various want indicated of no described financial the want point may the to statements out Partners' performance. I meaningful course subject on actual to materially that statements. measures, and forward-looking are are in non-GAAP factors these presentation update in is in are website evaluating contained our Factors to PJT remind that make any Form available duty XX-K today the in contains assumes that which Risk you pjtpartners.com. section we company's believe that at we XXXX company the believe

For release the should press refer that, website. turn detailed financial with GAAP to reconciliations, over morning, the the within metrics, you non-GAAP And data contained issued available disclosures on to this I'll also our their Paul. call we and on

Paul Taubman

firm's and you at and Sharon, our results for the $X.XX for full were year-over-year. this joining quarter billion, XX% year us history Today, you, Thank thank in highest end we all up morning. reported financial XXXX. Revenues

$XXX adjusted was was pretax million, year, per full income adjusted the and share. For $X.XX EPS

Strategic the year, of of This a while augment count recruiting these our coupled industry rewarded Many as are added but Advisory firm-wide key for absolute has we Strategic on in operating hiring record margins, very as of revenues. performance this and This in for Advisory. challenging results confident were was XX%. MD partners in increased partner a industry head managing restructuring, drivers in and strong shareholders performance year expertise grew Strategic investment. environment, and with directors will bring relationships, strong record breadth XX that hires depth considerable also which be senior we this principally footprint. differentiated XX% and weighed the deliver operating will we our significantly relative In Advisory our Total our headcount time,

During balance we year the the with almost share repurchased these share hand million million on sheet Even repurchases, $XXX firm's our of year, than with in history. ended the X.X strongest cash more and significant we equivalents.

resulting in of strength the balance dilution the our continuing our and mitigating our Given franchise. investment emphasis from sheet, on continued

has financial share authorization. supersedes Our I Helen? new a initiatives million and you Board authorized $XXX repurchase results, through takes repurchase Helen greater business our our performance, recruiting review which the outlook in will program detail. After current

Helen Meates

with Thank morning. revenues. you, Good Beginning Paul.

with were revenues compared significant in Park restructuring total XXXX, a year increase XX% revenues up year full Advisory Hill the significant year-over-year, decline than levels. more in For modest a PJT billion, in ago $X.XXX Strategic decline offsetting to and a

increase modest significant quarter, a PJT fourth year-over-year, declines in strategic up in restructuring XX% For revenues the million, revenues in total offsetting with $XXX a increase than advisory more were and Parkhill.

Consistent more expenses. are our fully expenses adjustments described to adjustments. non-GAAP Turning These X-K. prior presented with quarters, we certain with in the

XX.X%. year-over-year compensation was the XX% as expense. compensation First, up million, a adjusted with [ just ] expense of year compensation $XXX Full ratio

X through of fourth months Given resulting year, accrued compensation the XX.X%. ratio was at the XX.X% first the we service quarter

first when accrual We will quarter compensation report provide guidance our on we for for results. expense our XXXX

quarter. noncompensation expense. $XXX noncompensation adjusted the to full the for Total expense $XX million million for Turning was year and adjusted XXXX fourth

and driven primarily year higher XX.X% XX% expense occupancy full quarter. XXXX was for professional in Adjusted our the revenues, grew for the of XX.X% noncompensation fees percentage a expense As costs. year-over-year noncomp fourth XXXX and by adjusted higher

step ahead, XX-year expect primarily renegotiated in be total in occupancy to compared by in our office grow a XXXX. a rate XXXX lease to increase in York. we space driven New recently This as similar will a we noncomp Looking function our expense at our costs

will space We years. additional are next in taking other some regions on over that into grow we the several

Turning $XXX to $XX reported We adjusted for year the adjusted fourth XXXX million income. for pretax pretax full quarter. the of income million and

for and pretax year quarter. the the taxes. adjusted Our provision margin was The for fourth in full XX.X% XX.X%

units to income at partnership As taxed all with shares, results that presented rate. if prior we converted was and as of years, our a had our all been tax corporate

the estimated the year year, for allocation XX.X% applied full a income the we that reflecting months Our was first level X the final XX.X% of effective for rate taxes. rate state below tax of

expect the would around converted at earnings tax was XX%, count XXXX, the in quarter quarter. share to was In fourth The $X.XX will year view count refine and $X.XX of shares, be as the the from to share million we effective our weighted first share XXXX share unchanged per we compared XXXX, in end $X.XX the rate or Earnings year. essentially year for in compared XXXX. average $X.XX full for XX.X to the prior our ended our adjusted per and

repurchases. of the X.X open repurchased we equivalent year, million shares During primarily the approximately market through

quarter, in service our will the up shares, of our the count average fact QX shares, our average the this met XX% which to weighted million share in quarter, be XX.X and during performance have reached weighted average count. For reflected X.X the QX price increase Of requirements. was these count X.X is share XXXX partially are reflected year-over-year. units, fully performance attributable fourth million X.X% hurdle million we on fourth that the portion weighted A share

cash $XXX impact Paul our repurchase Board capital invest million consistent share we excess continue reduce And mentioned, using while the issuance. to with the has to share program. a our As dilutive authorized of new priorities, franchise will in

net ended cash we working On in funded investments the $XXX million have we short-term and cash, year capital, $XXX the balance sheet, no and in with million outstanding. debt equivalents and

And share. it a on per paid I'll $X.XX March as with that, approved to A Board The Paul. of back common dividend record be will of XX, dividend turn the X. shareholders March to Class XXXX, of Finally, has

Paul Taubman

Beginning Helen. you, higher in globe. economic significant We sharply capital the rates, interest with and in growth saw dislocated Thank around activity XXXX, slowing driven by markets growth restructuring restructuring.

capitalized Our backdrop, this the management adviser on fourth management complex in-court as results engagements. active full restructuring delivering to assignments year. increasingly for continue across were restructuring stellar results business be the go-to we liability favorable record and for for and both liability the We quarter

the and a row. ranked For Restructuring we of IFR year renamed full we and Adviser Global Year by fourth #X in in year restructurings XXXX, U.S. the for in globally, both announced the

and making and in size commitments. revenues year Last difficult significantly uptick characterized activity class record with Against PJT XXXX allocated to in was highly and XXXX, led to and restrained to the be a number After as in the significant declined an backdrop, fundraising The full and fundraises. Park new capital revisions postponed elongated best return, to of of year's fundraising IPO proved alternative Hill. in Turning investments quarter one XXXX fund dearth difficult. fourth investors of the PJT lines targets year-on-year. Park environment Hill M&A and reduction environment to leaving downward asset for many over extraordinarily alternatives time our this

public early constructive signs positive fundraising the has of gap some and and environment. between see the private a valuations side, now more On narrowed, we

and strategic row meaningfully announced markets, economic XXXX to trend not activity and M&A greater Advisory. in global Strategic to marked in the rates, second M&A year of below levels activity. global higher caused a interest of seen weighed decade. The on sharply volatile pace volumes uncertainty, Turning all uncertainty with declining the geopolitical a by

Our industry-wide fourth revenues volumes. These declines quarter favorably up were strategic were year slightly measured compare against when revenues slightly year-over-year. in strategic and our advisory full advisory the down results

talent. to Turning

us pace Our dislocated build-out a hiring. senior to recruiting of most the continues XXXX to priority strategic strategic markets franchise. advisory M&A significantly accelerate the our when important of favorable environment be was enabled

While hiring levels. it remain in XXXX, XXXX's we not expect may record our equal elevated

but and couple we more fundraising. up private markets environment to expect fundraising. in a and capital Hill, improve greater IPO for M&A an capital valuations, for as Narrowing PJT improved should years activity after result receptive spreads to we the As ahead, look LPs steadily public between returns in backdrop slowly Park of and difficult picks

be business the M&A markets expect should positive, to benefit opportunities employ also funds increased time monetization from while from response Executives unclear. as take although of by create as activity macro M&A, The solutions the GPs cause to to anticipated demand travel get companies deal the capital a market we additional relationships In remains to broader continuation back technological between private to lower be conducive to for should they on to rate historical in innovation. tool Our the benchmarks. to direction their cuts LPs. of remain and to seek more disruptions volatility such their remake focused Higher equity recovery significant pace should environment M&A caused strategic making. valuations, and

Today, more field we opportunities. have capitalize formidable a team on decidedly on to these the

We areas, growth certain and are key better including health technology, in positioned care consumer.

brand than stronger ever. capabilities Our our and are

an a at XX% conversations number from levels, strategic mandate engaged increasing in near of record our We are is and count year up ago.

lower for capital must some in in pressures number that the pending will management rebound elevated XXXX the However, in companies backlog lower restructuring with interest in-court markets liability we a and of structural facing refinanced XXXX close relief companies, believe likely than be of come. to the time of restructurings are given sheer activity, what quantum with may for expand in this be typical cycle we cycle early multiyear of slowdown debt In the provide some rates announced together a begin transactions. deal restructuring, while we activity an days increasing of activity and will

long-term about with confident confident will growth now And strategy, your questions. our businesses, are about our our and take we We are about are we prospects. we that, confident

Operator

Instructions] [Operator

will Our with Ryan from Securities. come first question JMP Devin

Devin Ryan

everyone. Thanks. Good morning,

a business. So between talk your of where then about restructuring strategic by advisory a maybe outlook to, kind this that record advisory And bit and the start interplay does environment XXXX growth into curious, and a restructuring kind the offset strength. XXXX, commentary on restructuring with was little and M&A then XXXX had you feel of the M&A some saw And to the of a recovery. I'm like just normalizing and want XXXX Paul, you just

working scenario? both part and of kind the that what plays see based are extent see that -- of to recovering you where then do scenario M&A you you a is environment maybe the businesses seeing macro Or out do on laid today, the of So out? business kind you're

Paul Taubman

a 'XX, it's XXXX think I Yes, different vs bridge far from 'XX.

and overnight, the cycle So it incredibly sun for the a compressed let's but went just the up raining, came all these XXXX of abbreviated we the in then executions of the Restructuring first. restructuring wet given stopped and accelerated to was all inactive dried dime. out an situation seemingly look incredibly grounds on urgency time from at active frame and and

Here, some have what we've caught have we multiyear and restructuring for we a early. period seen, of and that is wave talking this about been wave, time

it our economy expect continue is strengthens restructuring capabilities I and have to build come in back cycle. leveraging an to we very in We such will a go earlier all expand it with the cycle this if that good some footprint. hand-in-hand this footprint our increased job restructuring down, caught rates most. Clearly, than effect multiyear a on cycle. the have and And have way extent strategic done advisory the out to to

industries to rates I'd that should we've we middle simply getting without models. effects that. as and have of rates for terms restructuring. what the on on having restructuring if then There overnight we're look be Technology cycle. of you the the at being #X but innovation, business 'XX, seeing destruction, going far the being were look losers. is as 'XX And that But a to others. there also part we even created in the early Point think default so trend default at out extended further point pressures we point that than we're helps an in can other creative we're innings winners major of also be quantum impact And of on look make below that the profound can't what's -- #X. better it experienced that at also That's in trend decade

dislocation coexist So benign you environment. macro severe disruption and relatively can a with have

very it sheer and been then at. in rates a debt time, with to point long which And this of needs ways meaningfully This long world refinanced don't melted relatively I is debt about creating third the that for the the in talking needs debt refinanced runway. be lose than companies should M&A just 'XX on in And you walls think was And dime. cycle. these going be different years. think at a that assisting all balance be coming a sheets And creative if and covenants restructuring on a on different about of put that the maturity at to when the the is look here. and up be the to the side, the see outstanding in way, to seemingly higher books you we're I've this is quantum and

we've bottom. are building expect stronger an in touched We're We a I to M&A perspective. foundation. from year be global -- up a this

to And playing be it But if look of down a pivot good you [indiscernible] from look recovery. steady we had news globally, sort if not But never at to things saw you how strength. are recovery, gain 'XX, going at M&A 'XX the X in is build, first going But year to X. here you of look to I out, is I after historically, we've to to that 'XX modest it's when that a think slow, sitting February, and think going is from the see continue 'XX. this you're in typically

marketplaces. different very very, So

Devin Ryan

it. Got Yes.

ratio. follow-up as then that environment question there subdued the of well. the operating also meaningfully on the headcount incredibly in grew you just a obviously were businesses X And XXXX, we're just an then out dynamics In Okay. in here X and was competitive you're where comp

for the margins X trying businesses. to explain ratio to it ratio more guys how a maybe XX.X% all relative of So would kind frame XXXX normalized in incremental environment here. about way from there's of just And another comp you that to like just kind think comp from

Paul Taubman

very X more in look years, And headcount didn't just our Strategic XXXX. of pretty in quantum that business. we in if investments to added made at over issue, formidable, an a that you investment me, have have are it significant And Look, the Sure. levels we it's XXXX, simple a a where these stronger, record is which return. last is significant for out firm where verticals demonstrably Advisory know while row, a down in it have this And X we you're where in we if get build doing start you extraordinary. the meaningful was the conflict years as between more going opportunities are you environment complete you're M&A to

And you confident payback. we've comp and investment doing. have more to it's return the gating much that a it But don't little at But and return, a the that's begins you to day a need short markets. to before for you term, X in it's don't investments, principal and just earn return item pretty it take margins. looking we're but you get to announcements, these And pressures a all closings that's need as in see it is of the of constructive investment bit -- M&A not going and make what the been ratio, quite with time. oftentimes We're get you

hits where not of with to the seeing it's it's a normal side our reward to comp to -- We there's part doing a on its And attractive of shareholders. other up. would term, of add. to it when get the thing. going right as It's just long-term And but ratios going be This are remiss return. to see we're the And who comp but are we our ones we're not higher, would move confidence ratios not our business it the short is this, only if me go the the apply we're of complete that lot journey. in and we're payback stride be expect going it I

Devin Ryan

is, there little normal. down mean the backdrop are to mature I a where way like [indiscernible] bit it into drill to any ratio comp just numbers more or just quantify could revert it. you the the as the businesses to going and where way is either or see like any around Got like more

Paul Taubman

just Well, realistic, about for is is And anyone ratio not look, the one of you you we've things overlay. X you Are talks think -- conditions, the always what's again, with it's challenge need be of reason not market? comp normal. not it's comp all is a said which I who your you peer Are hiring no to as bear normalized ratios ratios in why our time. in a market in in Are bull a leveled out. market? in should line part There's

most operating some before you the well to set us little is firms reality a who that some need The bit a circumstances. little But sort higher, were lower. of XX% in circa comp a ratio, came assume of

right that So time. ratio. have much That's suggest trend that's should the where evidence over unless to not until we other pretty this

Operator

comes Our Goldman question Sachs. from James Yaro next with

James Yaro

just -- picture bigger a start one. with to maybe Paul, macro of sort

seeing the corporate we're generally think your love are that's I'd but dialogues I mark-to-market get macro then on M&A evolving And announced in factoring to how somewhat boardrooms. with how better separately, M&A trends. industry you mix, how conversations into generally, are sponsors. about thinking and

Paul Taubman

-- that. it's industry, one-size-fits-all It Right. of that to on It's depends or there's size depends sure it's not talking Well, transaction. whether you're geography. I'm answer look, about a sponsors. strategics on It

sponsors Let's about just talk first.

sponsors. on double-click Let's

sponsors is look companies it as well and when portfolio for reload assets. sponsor on sponsors supply with And of assets very the value. near Sponsors, creating without people and private M&A. exits and incredibly as more And to seeing think were when is also may the portfolios, buyers portfolio about of on because many of they're at order interest of is But term [indiscernible] work sellers environment. X are to tend investments. they is, rate timing the given a potential in you make new dampening the to sources demand one acquired focus created near meds them I reality alts maximum their they activity, books those sponsors at an when their exits, you're sell for in gets not in the as of they world as they monetize get reality assets. M&A things And incredible impetus, investments the equity which math restrained The and

X and be can plans that desires can a companies conditions, never to something use of company's on And going M&A And bear initiatives as when having see up at in finance that their M&A pursue likely crested investors of we less they In is I bear what as will is has and way. And M&A. commit they that XXXX. capital more in subdued. not margin, they're flywheel Lots actually ] markets likely because for value meaningful transaction have at strategic for to heat [ a ] opposed agree have slightly that typically have a to be no start in X to and strategic game. considering have said -- the always to is that tool have the And you is sometime years seriously these activity. I And there the that has restrained are pointed when balance, in they when willingness the think that exits very the challenging because middle with And see oftentimes sign out of to subdued rates interest DPI M&A, is, on to on many they in because [ been also going execute. what here market. I've you market be first cut, you're of to that's And wavered. executives a most even need the side, to

that little still time and in why that's corporate-driven driven. because and the less takes too more a been we've you of market the sponsor if bit And will, impediments has leader, this. But are to there seen resuming reopening

business trust the company about of current ultimately There be how and order concerns review. And signing and take, to happen it the the cap that a will closing whether an be be in process to some what underlying the will bounced take targets how the much about to risk, may has and be not entire so over and the review may stack in but regulatory deal difficult in about I extended long refinanced, environment. more long could

steam. I get little lot is a So make M&A is then is reopen I you've got what's tool think to and lots if using of going to to say take bit positive. that tend direction a And transactions would transactions time refer which is are I the competitive of And different equally travel fomo that pro-cyclical, that's to the your a to responses. point markets But get but your pick probably these in last as to line. of clear accelerate competitors we taking we time elements, of advantage as transactions M&A and up

If sense can it your a buy your competitor gives isn't you time. security probably doing anything, you of that

we've building history subdued, So although first But up. if like what that touched is it's base curve clearly clearly just looks the... it to and tell, recovery in then a the exactly back year hard bottom. tends picks We're to up steam be a guide,

James Yaro

clear. very That's

normalize. what you the their of my sponsor the that means more appreciate what could this Fundraising and Hill course at for this hearing relative side. us a sponsors fully And on event XXXX, commentary that's line medium-term improving. I question over ability Park revenue to you you're to remains do constructive for follow-up, your then on maybe related update from on But or Hill Park accelerate to just XXXX. point somewhat to just a what spoke of something on bet, As to XXXX fundraising time expectation? Is the

Paul Taubman

it's 'XX, get direction the fully 'XX we'll half to where think a 'XX. positive we to it in to some in back to I levels for But the saw 'XX. in We that in don't I X-year normal got moment it in the of over probably weakening would a carried to think But marketplace XX. latter I think in defer I begins to. gets process say of that. direction revisit the travel

the a M&A think vein I to commentary. in similar

more now time. bottom but will it's some and take I constructive, think we've touched that

all challenges with fully capital bit of And vibrant capital. affordability a IPO one you're the issue, a this really not into of monetization and markets, returning not one that's on a of little pulling an the is back ways of And still you're system is the open gets as Also, which lot and capital of lack is they're credit called ripping M&A has the with but equilibrium. a tool tighter. it, in been the that put and subdued damper the is market which

You're starting to of and see recap signs early dividend some the deals alike.

liquidity think back I an in marketplace. the be And term. Park to flow the is for think I But clearly, So beginning Hill 'XX that's the up all positive intermediate very in business year. will

Operator

from will Our Wolfe question next come with Steven Chubak Research.

Steven Chubak

on Paul, find a that potential asked as and fairly they've activity. I've in Admittedly, you a recent election of of been deal dismissive impact. risk interview management the other overhang

hoping maybe of upcoming of generally how from game to theory impact ahead the just corporates this hearing I deal you're walk through could is you what And the And overhang some election? across so going different was election activity sectors.

Paul Taubman

Yes.

going surprised assigning risk as risk a hear at a tomorrow. me I'm one not let And that What focusing really that -- the summer, clear. was be come all now. election just no But risk that talking it's are think in people will on of are principal some said I a people your was what to not not they say that today therefore, about. be not. therefore, to today I And is that's because right be you all conversations,

like have we I is policy we very rhetoric do we where the as initiatives, as competing and I some have have close a possibility mischief as that freezing we're But heats election up, China and get is be going where immigration, -- the in I relations to and I've to the into may unclear expect also there it election, believe effect. said, as some create to for that election. intervention policies, terms a the and of that, foreign think tax near

talk this in tens people around goes of geopolitical I've And by that thin the any county don't decided X literally when or that's that votes of elections thousands to a or been made point risk, it razor we've to had X since risk, be form time expect about So have that of different. then I comes X down third geopolitical an the election. but

therefore, a of the form is possibility of And risk. what brings, geopolitical that election another disputed which and

want at that simply to people's is some be just the pointing ceiling, that where that point, one things of think and with I like screens radar get talking on I'm debt today, mate. and sudden, can't seen it not on out So we'll about something don't talks a it. then we've all a screens stop radar no people's I they about

that be perspective. would So my

Steven Chubak

color, management. capital uptick the helpful authorization. follow-up on Certainly just meaningful my And Paul. in for Very nice a repurchase that. see Certainly to

want alluded in her to ahead, the about should cadence year trajectory prepared count better Helen the remarks. of think and how to the Just we share given the had understand prior some in buyback of impact of which year awards,

Paul Taubman

prospects. hand. big to shareholders obligation a we our company be and good to and in in in capital, feel believers are hand And go also Look, things those our our of X an we stewards

years, you the the because if after well to And shareholders. for that how back aggressive and last we others, dilution expect use and avoid beyond. to for look can playbook in should you next over X years goal, back to we've us relative So that X to accomplished stock that's our the we can continue our value using to buy we our capture capital be and X certainly years very intend

And you it any sheet more on What had. any cash, balance dimension. firm's therefore, have to in firepower best is and comp cash we've basis, we ever measure happen into now history less our the working with come we've year also it's we this capital, than whether said payable net

to not ever been. purchases market open our expect should you more So robust they've as if than be robust,

because half year, equal, awards thing other is, tried algorithm. match if issued. there's the to the else year of no sheet. The no with mindful with bigger just we've second the more do easier there's because we be first always it's in which of probably typically it is shareholders half matching. can It's put of philosophy, the do the basic just to the better prudent black to than in all repurchase, just we're front box so balance get and also half us going of year repurchases the we're Always that that in But a buyers for first

Helen Meates

the just match the those closely part and about intention repurchases into X X.X issued will mentioned, matched you comp. they have pretty get that our count, additional we over I come you the year-end of shares when add, if back, million And be shares share will last as our into go there's coming it would years, but what are as not to perfectly may be it account. we look

Operator

will come from with Hawken question next UBS. Brennan Our

Brennan Hawken

So Helen, remarks, this drill bit. but you your hoping in to down on little touched a prepared

You metrics. touched on a VWAP believe it target. I was the hitting performance

I hit December. think that you in guys

if XXXX also of could more did fully from but then And I in? that. should And So Could well? much as you expense confirm average impact that a in quarter averaging the impacted to how there's it the said you come. was think that what you we compensation first the sense diluted give us in shares expect more

Helen Meates

XXX,XXX the in in XXXX, question not It and terms expense is does not come came -- impact it of those the of the another X.X,XXX,XXX -- in crystallization QX. in, of is sizing [indiscernible] that so units. And I'll compensation answer in will

Paul Taubman

was clearly, to in it the the back of ratio. just And beginning of no investing number and the the affected But way triggering But expensed not of years. continues a award in the granting sorry. 'XX for of in on that. it's comp I'm the 'XX award triggering clarify, the

Brennan Hawken

Understood.. Staying expenses. on

revenue to you've got hard really and of that predict So is because beginning got trying to under the revenue in February. comp it's challenging, you've very totally appreciate predict and February ratio or expenses right,

were if were grow maybe revenue a out all right? So the scenario, XXXX you could to like hire a bankers, you XXXX. just we If no employees total expect lay grow and was in by to sort XX%, existing in comp to So magnitude for we were what that of right? had scenario of base see you to more expense

Helen Meates

your trying to we're just assumptions. XX% you look, said. are as So up clarify what Revenues

Brennan Hawken

to trying embedded, operating done kind recruiting get how lunch. have of impacted? a was you sense and headcount ratio of much XX% up leverage how just is much the comp I'm Revenue operating What that given leverage? the guys is

Paul Taubman

to to XX%, but reaction our talent distributed okay, if Yes. Then compensation, they at first businesses? I that and start start then hypotheticals going were which my up environment to get you back X how hard macro answer got it's Are like XX% it -- right to the is having down. of mean the revenues you we're to for at is business you then [indiscernible] junior got XX%, XX% is all or because associate the BP really is because amongst cost into [ I on you've more inflation up levels, to what's the it come say, broader get that think the costs one you've guess there. off be next ] up WestoPyramid the takes issue, next year deflation, and or then going be lot where it's looks to the could fixed

so into get hypotheticals. many to You start

And quite about platform reduce we've revenues to leverage, is, If client to a how the kind we But think not the drag added and comp on be who in of have platform function exactly you to progress in going get going hard drifts of or to those of the really constructive only the gets our want it our relative near XX% count then time, M&A ratio. actually where a answer but that. is that they of way head change less back bottom as last sort backdrop sense, trying year, talk I in a in And in head count, we're that and about step confident grown we're the over back that's very revenues. to it's this what have productive normal. which about at kind to sort line, XX%. investment on X years, the over all is. making X revenue into individuals know reflected the translate to the like are it be in an productive we to it's XX% hypothetical And It's not

getting with it is really -- to But I'm facts trend. that down our will return elevated doing that's the you normal is just before confident more individuals year, confident to a and investment certainly level. at P&L, that's we got relative and the the in by how where sit the to I'm that which they're to fundamentally, You of all return these We begin are what all and expanding it see practice show to financial a effect. return. why well a lag end see are the

Brennan Hawken

platform -- that appreciate challenging be trying And in that. you to Paul. [indiscernible] on struggle one it'd come if the consider up maybe granular about it'd how I great could great -- is I and really the expansion? do it's you could I that's slide, all leverage Yes. this appreciate is adding you with would question around color maybe the with but just much No, from is so that, of more sort know totally a because to leverage the some guys be -- embedded I think into how compensation future? this

Paul Taubman

simply are best paradox When But More business. gangbusters to financially than happy most and easiest to the your absorb dislocated it. hardest the to I've that get it's the P&L attract investment revisit we're possible opportunities investment, the of to And new time the into you worst it's as M&A to new is When it's out is franchise. the when said, build just the trying to make of markets that absorb it. and here's M&A investment. going

the down right many constantly things. AMI driver But And we're it the learned wheel, people talent. that's we're of is because when road. the steering best the And willing at. invested which when we to was get the doing. we're in doing at far to That's I you That's look we're decades the make that's paradox, in ago what the most were depth measuring sure move. where could really that's market

that quite historic levels. as -- is return heal. and the still think was but quickly will for rebound that, into normal to M&A I market to dealmaking, not with environment my as attractive this to commentary, 'XX continues market expect then attractive by begins as levels, I these as more be as will, ratios we start then slowly it that consistent but know

Brennan Hawken

I had this way. if can I queue one last I the because requeue but question, in Am more

Helen Meates

Go fine. ahead. That's

Brennan Hawken

Okay. Park Great. I Hill. love would about to ask

been has Hill Park So struggling.

to headwinds You spoke a broadly in good environment. that about business the deal the

appreciate that we revenue business. that. growth. a seeing But speed strength So just your I to competitor and private totally actually asset they of had in advisory their prior were

some What Hill estate So showing causing points? that creating certain those maybe are some show the bit when you happens data causing think classes you a share asset problems? speak might like do maybe business? so Is industry, weakness are resilience. you Park be more that -- there of to real that's some to losing in in into others Could consolidation divergent

Paul Taubman

and match I'll to Hill one, observations. make year hard few always Number It's in XXXX. a but mix record Park had everything, another

put So after after at this perspective, to after that. just record record look in you've got record, to setting

of sometimes, for all someone to it's is. So easy have growth, quite what it's base a question your

And unlike there's and as how the idiosyncratic versus firms business to So the much are it's one we're at how number Number actually fact weighted lens to in just than at dealing of tend the which the look that very anything business, way appear gets think heard that of be a gets not an you've you've as other, that within our record secondary role the to be timing to And no slightly in noise pushed think rebound a tailed versus what we moves two, XXXX, listened in with that things that again closed if longer is else. my third XXXX, emphasize particularly M&A to to in one. primary I on plays to important into important lot it you've long this quite and what all, composition are the results with a constructive results earlier with one other. fundraisers are the doubt or got the I nature is, next year, a more commentary, the year.

Brennan Hawken

Hill you classes? the give some large business, Park pretty around texture have some different estate Does asset of real Okay. a could though,

Paul Taubman

phones. Well, business, hedge primary funds, credit as is PE side real probably on is second estate the largest be fundraising as largest would business, a but principal and the

Operator

comes KBW. question with next Brown from Our Michael

Unknown Analyst

from morning, Good wanted the talent ask about I everyone. ramping base. potential Paul, to the here

maybe And advisory you expansion potential So dive restructuring. higher assume for expansion would see into you the than could the I the as where be greatest. strategic productivity

what the it the terms revenue kind of back in was to the focus per peak you -- XXXX highest be would the on opportunity advisory recent the strategic would possible And so season if as to advisory get side, a guys you for is think -- I And peak higher platform? which be the where on of partner. PJT

Paul Taubman

benchmarks set to I'm old to new go the not firm, doing benchmark. this for back

more were So to my goal be would in than XXXX. be we productive

and So there's some be we at can't that absolutely no reason won't we point. be why

versus doing do So established the that's -- new doing partners environment with function you're that, a harvesting a partners. but to function much of in how macro of investing you're what's it's how with much order and it's

need all things. those you So of

at that in that all X we on as seen in years, of marketplace. last time don't that we're period absolutely, But haven't ceiling the growth M&A I the I view though, what observe, all the over would about. exactly

they 'XX, minus. in So of or added the the down more to M&A up much plus market period that came less flattish, it's and great time, is and a down 'XX, And be it over think that thing. you in It came head was overall would pick back pretty count. XX. went XXXX I round or first significant we've But trip. That they

But wallets but the technology, focus can't care, best consumer think among get where just be are. where you And may to up wallets and in because wallet a are best second in the I start you do of then be you where you historically fishing been wallets that, those firm opportunity, ultimately, the is health industrials, is, biggest terms have you others. or to want want you if the the biggest on bankers. waters end

to get present want to about If themselves. opportunities best those you got you've bankers, be the when opportunistic

last find we the have time, couldn't takes then we the a It that's space. have to in partner for productivity, and totality And first the that's areas one been. and people to and the new partner the to a why And and right large productive it's the It's relationships. expertise order and occupy come why that's perhaps we way, was the we didn't hadn't where it mass the you partner space, that space opposed necessarily as into an new the a to space. build the most in so very interest in out not to that's get critical when heretofore the first continue a individual in because because of

And investment. to the light starting investment, investment, make network, more competitive being individual. it's all last while but that the up really to tend you you're So stronger and and

by to networks. and fully this Now investment would mostly have made I industry journey as close built built but industry networks, now group off of some not those call complete what group, of we we've we're starting and

end like that, And then start we technology the where do there's with spikes when longer get And as productivity. you space you another game as areas like, in we play compete when wallets we some that's very big rich to bump. a in now up

advisory, has in all up also that and restructuring corporate opening firm. we of sponsor those the see continue beyond this a So And just our in ways and are colleagues. strengthen for which new we investment strategic relationships lot utility the finally, then to

of markets. more Where investment So everywhere we've to as other to and the I sponsors gains but And and our be up, it ways M&A go, amortized market constructive markets there proof we -- had corporates. penetration as that we've concept the monetized, enough same as than as take had finds expect restructuring and well. constructive heats does see far is we'll be productivity

Unknown Analyst

makes impact on that this guidance? going the Essentially, increase? transitory or increase of impact is that's Is that that's Helen a there a that permanent impacting double business Is the a I sounds a your grows, occupancy a or year kind XXXX? for that the sense. for you like just of talked kind essentially quick Maybe as about X guide. noncomp rent that one up understand

Helen Meates

there XXXX, a and step in So be occupancy will elevated. costs, stay increase in it will function

issue. It's not a not a increase. onetime it's double occupancy So

leases, beyond I it XX-year the that. just It's has increase out renegotiated the more and significant increase out as bit that majority then pointing is in And a from So come fact XXXX, we're will mentioned. a that that that, lease. we've level these of

So rents are higher.

also had was sublease market. some below income We that

mark-to-market. that's being So

lease, We And the some straight in then cash that are which an means that more our we're early is accounting of that's expensing XX-year additional lining just on there years outlay space. taking accounting an than issue.

So highlight we're trying to that. just

and sit we'll here we mentioned, today further year. and around growth noncomps refine look overall, as had in into that I the XXXX, that the we the at we As we be will expect that get growth as

Paul Taubman

is about from stays that commitments accounting estate that I of at step the mean, doesn't rent our I just way real news the number The make additional expense. bad grow. space to and at is lot we function and it we jump in news perspective simply think is fixed get an a to without have a good grow having

more time, the we debt have and and more and it space, over efficiently -- So use to same as that we add people more we effectively. nominal expense

So time. we end lumps benefit front on the we then kind our over and the take of get

Operator

closing question-and-answer remarks. would any back like our over Mr. That I concludes period. to to the turn Taubman for now call

Paul Taubman

for everyone you the look great thank Thank we to and to their interest forward and of very much, a visiting want and quarter all support, again when their spring. just day. I I first in earnings with report you have

PJT Partners (PJT) 6 Feb 242023 Q4 Earnings call transcript