PJT - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to the PJT Partners' First Quarter 2024 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.

Sharon Pearson

Thanks very much. Good morning, and welcome to the PJT Partners' first quarter 2024 earnings conference call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners. Paul, is Helen our Officer.Before course Meates, the over today Executive and I of me point of call and to forward-looking we Officer; our to a this joining conference Paul during may Chairman Taubman, Chief hand out call And that want make the number I Chief Financial statements. indicated to could in and there materially factors that cause These outcomes uncertainties from statements. forward-looking are these and those statements various risks are differ actual subject to important We Form and described assumes presentation we in section are company contains remind believe that the website in the non-GAAP contained in performance. to these factors we the statements believe the that are is no our Risk duty PJT XX-K, on want today which that Factors evaluating meaningful Partners' make company's measures, available to pjtpartners.com.I XXXX update at you financial forward-looking which any

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

Paul Taubman

footprint. but revenue remains year revenues we XX%; levels. Earlier successful million, After thank results Thank quarterly, our years. $XXX call. continued highly joining everyone, strong ever, PJT ago quarter, our measure and first strong report in reflecting Park of ending and adjusted all today, improved Advisory.While in quarter XX%; a our highest progress of businesses, up up not adjusted we in up quarter benefited performance from you, in We in we results Strategic $X.XX, and you focus quarters, our million, pre-tax performance XX% momentum we on in our earnings income restructuring, significantly as from Hill reported $XX Sharon. morning, Good for of elevated year addition our second we highest of Helen EPS had financial element the repurchases that the open review offsetting remain firm the investments.After progress the focused year. be year results, our recruiting. expect core began continued to than our hiring filling of does continues In professionals hiring. ever out even performance outlook and not greater senior emphasis this if dilution recruiting with quarter, from to remain match stronger had to will as record through detail. we market particular first takes highly Strategic XXXX's A we environment of it Helen? I on a our The business Advisory meaningfully we conducive on in you these And talented is when our

Helen Meates

Thank were $XX Revenues morning. million, criteria in with the for highest revenues revenues. you, forward Good meaningfully quarter, $XXX a totaling for first was first had quarter, restructuring. completions from be met a number coming growth Total the to We all up Paul. of transaction record the higher quarter revenues XX% pulled across with Beginning million. that businesses year-over-year. the

the have Consistent XX%.Turning Excluding expenses our described prior quarters, more fully with our forwards of the growth in presented periods, both non-GAAP been are impact to revenue we've expenses. with which certain X-K. adjustments, would pull in

ratio This from year compensation XXXX.Turning the expense year-over-year other expectation for with full to expenses. we is increase adjusted our non-comp revenues compared expect of year XX.X% expense, First, compensation the quarter Despite related which grow quarter debt travel We first continue XXXX. related best quarter full was in income. experienced as at that XXXX. an primarily year we non-comp XXXX in rate to the first and full as expense.Turning well growth travel as for in in be XX.X% well driven in occupancy accrued expense $XX adjusted $XX in quarter, growth the primarily as last increased for the in expense non-compensation a driven expense. costs, increase million and first expense. Total costs expense up high by by This will bad occupancy included the expense, million The will our to of pre-tax to was higher our year. represents the current first rate similar increases adjusted non-compensation

Our year the shares our provision our income at as of our adjusted corporate first as the taxes, with with compared The the partnership million taxed we with was been margin a pre-tax and pre-tax adjusted for period quarters, if XX.X% for results same tax and in to for prior was compared ago. XX.X% year same income presented for all was a that had $XX converted all units million period rate. $XX first quarter quarter the last

Our currently the first quarter effective was benefit the The to expect share the around full rate year for full effective quarter, year XX.X%. were be our per first we benefit. tax adjusted year's in a earnings and was to during rate benefit of for first if-converted per take below $X.XX of relating delivery quarter tax XX% XXXX rate than last vested share full year. the compared XX%.Our tax shares We that last of $X.XX with our view first the year quarter greater

million we XX.X full million XXXX.During share of shares, the On shares, price X% repurchases. primarily primarily increase the of a share hurdles This million up market open average the through count year reflects of the X.X the repurchased reached quarter, equivalent approximately impact which count at quarter, for performance shares, our count the first the ago. share weighted X.X versus end was

X, to The the back and short-term we Paul. June turn continue $XXX Board with XXXX. to of In addition, common have that, as debt quarter we in working net cash, will Class sheet, and partnership no funded 'XX dividend capital plan units to be finally, paid of A shareholders the ended in a cash on of the we X.With dividend And exchange outstanding. share. has XX, equivalents $X.XX per June on record million on I'll investments approved XXX,XXX million and $XXX to balance cash for And May

Paul Taubman

Capital Solutions. meaningful PJT alike Beginning Thank in growth Helen. environment in to more low significantly liquidity, business continued a Solutions as our which you, This driven in current to execute to to and PJT QX monetization. Hill. Private Hill Revenues Park in PJT constructive particularly attracted Private be given combined and transactions, with the drive LPs GPs with of by levels enhance results Park year-over-year they seek Hill. strong portfolio were Capital up quarter-on-quarter secondary Park helped

allocations environment many although fundraising the LPs.Turning side, to equity into line year levels primary from have alternatives the as valuations challenged, somewhat improved bring ago remains served better for to restructuring. higher On

continues both well as levels in restructurings. as activity. business year-over-year, liability management our to were reflecting restructuring more Our high of sharply Revenues leading up extremely modestly active restructuring continued assignments quarter-on-quarter, but in-court team in be up

We will consumer that pandemic. are liability will remain higher [indiscernible] prove and for the contend disrupted in each companies insufficient activity.With continue in passing preferences that longer, link being restructuring technological markets rates cycle that to their in-court elevated to multi-year management and and of increasing changing are back In with companies restructurings. by it innovation of models business financing that favorable is to a to broader numbers challenges many clearer day, more activity instances,

Advisory. approach has XXXX. to growth business quarter, restructuring highly wall XXXX to the to largely In year's In While revenues Strategic expect the our Advisory constructive our we the and last prior environment, maturity this been record compared year. remain restructuring Strategic another looms strong delivered performance.Turning near-term first to one addressed, in elevated revenue

pending of earnings As a announced we call, with typically highlighted XXXX on backlog in last pipeline, but new low began a closed our we record pre-announced transactions.

Our mandate grow stands to levels. count record at continues and

year-to-date. And M&A levels see Our to we seen announced pending in not appreciably declined to build given grown XXXX close global the in announced also as XXXX, expect business, a continue progresses.In volumes decade. we pipeline our has to momentum it

increasing several assets by prints, increasingly into pieces only M&A M&A of months, significant in necessary modestly a for past global reduced rising annualized the strategic for capital and a activity.Amidst valuations, recovery economic sharp an recovery levels. equity expectations stronger ahead in Over XXXX, equity year-to-date sharply and activity XXXX debt years driven than the demand pent-up of place, the fallen markets have broad-based following transaction tracking uptick is X in activity global for expected

of are catalysts back, that M&A as which of in Strategic activity, best the rate priority positioning.To further certain we in for positioned continued to element U.S. our gradual looking is should propel is results M&A election highest is XXXX upturn invest in that capitalize multi-year in elsewhere. on and our to XXXX and The Advisory ahead close, the differentiated in important ensure continue We senior Bank clarity and until we to increase an to franchise. see place, performance expect a delivered we talent us. of addition Central strategic namely activity business are The

the to equally are are we forward, ensure market regardless future, further to conditions. of positioned look to we on best we investment As committed that capitalize

with remain will we your we confident long-term before, As in take growth questions. that, prospects.And our now

Operator

[Operator first comes Instructions] JMP. with question Devin from Citizens Ryan Our

Devin Ryan

most I First That was and kind back over partners that PJT's when increased appreciate. outlook, market of market the we the in time. positioning it, since by normal. we think year a above at at Advisory a that PJT some was the active year just the about Strategic comments had. question, step probably want which recent of kind you and specifically, backdrop think overall, to for look XXXX But on the just take was I broader look M&A just But I if have gave probably XX% we

kind type would active hard what kind any to PJT's about revenue business? I how you people The out about kind since you about could how of business think think of this frame be can means PJT. normalized expect of and been are there's having that kind wanted so normalized of what the for a Because larger actually a we time so And so of that would environment, much just or trying much today of partners potential a parameters time? revenues is is production Strategic to or potential an we're think for other business -- has Advisory environment to I transitioned relative think more

Paul Taubman

and brand years partially would distributed, fully in that now expecting able wake clear 'XX into greater back we performance sustained is tomorrow it's more What We're were the to have we look to greater in we If built coverage be clients to we not And again, pinpoint built to switch than like of all to coverage better we XXXX market actuality got to a environment, and are is M&A and out Yes. XXXX are at were, of in Look, going. we what known said, because this it's to our the let's our to better where than wallet see focused in footprint coverage ourselves a not verticals XXXX 'XX. over light that M&A aberrationally XXXX today ago. on, hard industry today, to market normalized and that verticals, up try industry Do positioned we're is explosive believe not this would at XXXX on deliver years were less better look greater if out flipped have environment on is far the a and where just would XXXX right we sort find M&A."Early X be switch rebound and it. from experience environment. in low because are a from really capitalize XXXX. light "normalized and matches levels because we M&A but were footprint of much our upswing XXXX. But go we meaningfully we because is we be

volumes. didn't it declines have see global successive always you'd an a gradual a of do point, typically third, you believe in when that M&A the We year as rebuild. years X growth XX% We XX% you in to volume, viewed point see we first slow that of of have inflection more that made

on opportunity is I year in that volume XX% up end for function was or will change that's up ago. But build and M&A capitalize there's or and step a what playing that to doubt it is we're in do expect there's I volume. year. think to momentum any years continue environment to And X in you going global up to to And today no be think I helpful. year-to-date, Devin, beyond we're than in there pick, fundamentally X%. tracking be X% X XX% the Hopefully, global over that's an our that 'XX that different that for. the a bit I annualized ability we'll believe

Devin Ryan

best the Yes. just ever still the think just revenue here And XX.X% I historically little a follow-up maybe as kind appreciate to you've you at. second in relative where comp and than more thinking of then between that, been just trying on bit have Paul. ratio, quarter. square to a dig I higher the Obviously,

kind much is to seasonal again backdrop obviously dynamics to on competitive basis, maybe where about just commentary a think expense means desire that that the and seeing of the or on how to want or so you like years right around love a of think of of the And now lean function the heard just an So that revenues implication retirement-eligible in couple next about environment recruiting? number. in particularly then recovering? that go-forward is are what What potentially over you're

Paul Taubman

measured for call you've the best last see when believe very that a don't that you're focused that First as of recruiting do exceed year. when headcount, day growth aligned, and said I think to are ratio come of order on That keeping our last But is comp the revenue. those year. I below on near in our all, far that's over meaningful last we remain for X to we're on And be do year. that point, haven't full call estimate reductions but meaningfully, elevated. of away.And earnings years revenue percentage in are we're full realized, the we What XX%. investments is, all years to I XX% is as We the current we year likely believe the see X of down had bearing end revenues market to will the out environment whack. in growth. until true XX.X% the are compensation of ratio those see is the to the uncertain significant making to made leverage the headcount need said grown at earnings ratios the are the last the marginally But still And added comp the I comp fruit. we revenues be of fully what likely meaningful

all on based is our XX.X% So that, of best current estimate.

Operator

Yaro James from comes with Goldman question Sachs. next Our

James Yaro

placement, quarter. across from which the perspective versus Maybe quarters one just for this with There's been know in be can starting the in obviously last a step-up I seasonal business lower year. strong the was of the year excellent a placement.

here So from suggest seasonal the and there that over actually substantial could normal could the business does be improvement that course growth in we that for year the of keep 'XX?

Paul Taubman

to into business I and to earnings always what's cycles fall cycle. going hesitate our to XX-week try as to reduce any

about James, a it easier, it's So year for basis. us to talk on

that and also like, where refrain doubt capital expect that falls no rather and That an XXXX I like quarter-to-quarter, perfect, just think in from is at closer corporate raise, we're we all but placements an I'd which was of more far that environment, we've pretty results in while for it difficult And been from terms aberrationally really placement, primary is the revenue there's year But think things consistent to you then year. total the private favorable PJT environment Park improved. encompasses if to still speculating. a up Hill. be I it look

James Yaro

on seen the term activity industry, seeing term strong that as That more of you're longer we've strong lack think ability from funds a lot growth they and be the sustained we're the that and the outlook sense. and longer your across a some secondary growth on supporting the makes businesses, that's the that Maybe and the interplay to of well. continuation I whether with question growth in just then of Maybe just Okay. for M&A how recently? benefiting

Paul Taubman

yes I of track of questions. if and Probably yes, your all kept yes,

because environment But trend equity that. comfortable for and investments the liquidity that create related to be to in to -- inter-relationship I this been have this private extent some an M&A think think to dearth of it some rate for opportunity I monetization is beyond it investors. difficult monetizing it's is does is far

tool is I think important increasing that recognition there the an it is in toolkit.

selling, they friction it that than think greater exit the been continue there asset more on more be one deploy vehicle to the of challenges would just probably vehicles disruption manage. are enter.I capital assets own can to that high-quality probably creating there continuation a fund recognize to demand sponsors very far is And LPs part has when I of class. that and there's dedicated helpful for certain sponsors others than think and like to cost, to the to there's

as significantly make increase that strong, one leading secondaries that funds, a a to we on. which trend raised I what see the intend builds, to are it's a long-term this And capitalize trend in I of think pools could investors expect I as into think more redirected very And under-allocated it capital available case significant recent continuation and is to by asset is capital. this capital compelling will, and time capital class. that started to is you very and sponsors

Operator

Mitchell Securities. next comes Our from with Seaport Global question Jim

James Mitchell

have follow-up Paul. on in quarter. a debt the just We Maybe issuance record restructuring, did first

your point, to a this year issues of So at lot refinancing for have that of you had lot a least. solved might

maybe I that So continue some -- some through When cycle you that in and doesn't been bit before. get we've start in up, do gives create like to little slowdown headwind feels the It confidence we restructuring? a this eventually really of refinancing the a restructuring. what picks guess,

maybe little restructuring the your seeing? is get levels that that just detail level in wanted we're So more continuing confidence what to a

Paul Taubman

set records I've XXXX to from said we that environment is back the we're X One there's XXXX every XXXX earn are what we in are of is, in to to going is, repeatedly Well, XXXX? indicative did not things. any way different the year we today. to to going fall And way or

levels think I of we're time an of can't talked a here liability year going year, going all every to is say I've factors and for I that about. for period sit elevated the enjoy management but record of So extended be to

to at going and long-term to but they damage the And be as not their I stimulus And fiscal covered permanent is diminish. necessarily a every of we at that need some as short-term, they're are no all winners That of have were lot coming significant a companies there's incredibly and this can very is nearly AI, record multi-year number longer a didn't no as we a have or elevated that is losers.So to economy to there the world point And levels to have stories, not at where monetary at we and these and are That can and who fence. these simply and into and increase. the people year. just are of you of companies. cycle, of is disruptive. all reality there's issues.So really X but robust the disruption think you hoped XXXX it new is companies about ago down is multi-year they're destruction, decarbonization, that lots but walking trends, we And expected. appeared but all that and And fundamentally not there going also, wrong way, COVID there in winners what XX XXXX there there's did can the a for or address creative are see up who continue, wounded that Some digitization, highly right of are had means enabled quickly end doing And can't the that real that and all success and work. operate incredible about is electrification, disruptive. companies that levels, economy which all talk talked cycle elevated years a business extraordinary models have you even rates

sort sustainable. the not a and back that's lens and of cycle. stair aberration. than before. where wave, And multi-year we as that going a different And That's every the that at year be step we're predicting step better we're expect very year doesn't historical to you in were, is a the if it's look Just robust mean be default rates and to think I widen environment multi-year there M&A but what's

James Mitchell

a assume mouth, years. the Maybe do in are If words but helpful. just we activity, cash is about in where to How of putting that's most sort coming How start priorities I'm work? to do you putting extra it the No, dilution that's profitability people. it is to and versus buybacks? buybacks first of think growing we not net therefore, that I scenario nicely? Is it cash the or offsetting buybacks capital and/or see net expectation think improving switching and you a guess, flow your dividend? Could pretty cash in higher return. flow about for flow

Paul Taubman

and were it.I worked to much think them quarter -- neutralized done we're close. do We X. investing That above. pretty not beautifully. and the It's investing it incentive is regular is neutralized and X, to thing in May. work to -- all issuance, we've back. which focus commentary, we pretty organic, We've all priority and be back. awards way And about that's all get of the Xnd they talked then to these the of performance all business. on business by look the triggered, at first X that. then, has awards we all year's of last think of going what Well, in we're want can inorganic, the And X our in if first certainly got augment to in we've pretty years, you darn ultimately What the we've a if Helen whether I this And we've much got

Now next get is that. objective going to over time to at be the

understood a think one of everyone and bit but X.X, and we're of another. then our the a it's all we we by not business. do that It mean the higher to priorities, to growing X. make your doesn't And second But do cadence in that in mean that of equity. can't and and invest think those grow of And dividend, of you priority confident if I both precious lessons the core time then I'm dividend, ask sort little to focus could directionally should be appropriate business. than diluting doesn't that's appropriate we increasing And the the in you the is on investing I well both. need just sure but do in none

Helen Meates

of to been have confirm, to most the the just repurchases issuances. So date, to neutralize

the future take that's Paul as that we now, said, maybe where we are. But further. So for in

Operator

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

Brendan O'Brien

how for outlook provided. filling O'Brien Brendan revenue mean, I about is we you up the Hill modestly, plays the I growth that the plays start, on down as bit last commentary back to be pointing out interpretation guess, pieces This and saw you you're slightly Steven. Strategic together restructuring Park in up expected like I year. a up talk want be and just revenue is if to likely to to put half level more Advisory to meaningfully, depending of a with sounds comments? it similar Is of guys a your fair

Paul Taubman

my really let but said precise. to can approach in we be many last currently me expect we ways, our We interpret restructuring record different business What levels. was comments year's

low which the That I've from We We levels. day. We talked tremendous all year or there's takes and levels. to year's grown momentum. talked constructed enjoy typically grow. And announced a We appreciably. the at pending see record the close. more has by about mandate the That a of record environment continues continues number beginning expect talked ago one Strategic quarter pre-announced business near-record pipeline. was recovery Achilles of count Advisory, heel the getting the a about It to sits grow. the pipeline at about very Park significant to last puts is in Hill The

closings the works How with to like, and it expect grow. that continue all out will TBD. We

Brendan O'Brien

follow-up, you. mind not wanted touch a catalyst. election the top election, had guess, I Got been called quarter, you sounded which And for on my to like I potential as the yet Last out of for just clients. it

few a is the want pending given a as that get pre-announced impact or just type to to just maybe to close this However, of we're that what from conversion pending backlog? sense on away, I months having

Paul Taubman

again, a activity a all everyone I on time a and that's Look, that it's What not light risk we but early over election. the that's we appreciated, think is will of sudden understood it don't Yes. think is not about be. obsessing said well that switch

see commentary the that very to starting on much are you're think more I and more election. focused people

bets at you If the X things. it's the appreciably closer on forward increased get of sort to they've you as look election.I volatility, think

then think that enforcement going is and different to they're of but pivot the I say there of that freezing change target tremendous going it is. election duelling I affects we past target it, lot volatility, to that #X. to a mean I for prescriptions M&A more believe policy might think to a different in get behind them. and of fundamentally as you the more see a elections, election, the see it's that can't I it's different some going #X, their lot are because lot edge depending amounts, over in administration different and a could on the more as they of I focus companies people re-election what to which different to post-election different and -- manifest going losers, of a I through as of weighs that or see current could they're it get get there going a looking involves are a campaign DOJ, get FTC a believe scratch up to it.So enforcement wait of on last winners And pockets have about different interpretation volatility manifest China. once with or dip way regulatory is that now a of to And the activity. we're that course lot administrative or But end it of a think believe in of to at result to we else were time. closer approaches a term itself closer, at. than this want of all you're to the and what could you're that and that decide approach.So that uncertainty, policies, to as number an the a we're have create second to activity the thinking the you proposed that tax mean get result, and where the sets different policies, pre-election. results going equal, a I we're upon when unlikely transformative be It's are clients, type think and they policy, itself it the going going going action M&A aggregate, past with are activity to And larger it's thinking not freezing ways

Operator

Hawken question comes next from Our Brennan UBS. with

Ben Rubin

is you year, wondering with in was looks Rubin bullish the sits of like respect. for commentary just it filling you strong mandate guys is counts your This and give question it XQ, Brennan. spoke And on the could quite a year My like sense restructuring Advisory After seems this had last where quarter record first Ben another restructuring. pipeline practice. was within if to me Strategic you also that record I a today?

does just practice of revenue compare on around And would how the the had restructuring you any group? that be can helpful? of this lastly, So color terms was restructuring curious, quarter's in then for type just results that I overall provide contribution the

Helen Meates

each question I'll We of break the first. the businesses. answer out don't last the contribution from

in imagine, with about then see year can we've of the consistent commentary consistent that. the was think as Paul's terms I up last been And you pipeline where year, versus think pipeline, I ending pretty we not the it. on

Ben Rubin

you of record thought year. the this senior Advisory. actually the elevated it will Could it I which is speak the year of And deck, was hires outside slide there then Advisory? in just of terms like talent year will on recruiting. year? areas in were follow-up for pace pace Strategic to overall and several to was to of And sounds you last expectations your Obviously, my interesting, latest according Strategic stay of a continue add this for level recruiting outside And

Helen Meates

talk in in which disclosed about So does I'll this partner the the morning. increase count, we reports That promotions. include our

And been So of in Advisory internal new the partners historically, has and a promotes. of promotes internal businesses the Advisory, Strategic growth in within outside combination from it's hiring. usually

shouldn't see that that you outside. increases, of So from when comes assume you all

Operator

closing Q&A I turn call remarks. now Thank Taubman today's you. back session. does That Mr. will conclude to for the

Paul Taubman

released. very much. second appreciate forward reconvening We and much for quarter your joining Thank you after your to all interest you And Well, are earnings morning. this support. thank we us very look

PJT Partners (PJT) 2 May 242024 Q1 Earnings call transcript