PWP - Earnings call 3 2023 | Perella Weinberg Partners

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Operator

Good morning, and welcome to the Perella Weinberg Third Quarter 2023 Earnings Conference Call. [Operator Instructions] This conference call is being recorded. At this time, I'd like to turn the conference over to Taylor Reinhardt, Head of Investor Relations and Corporate Communications. Please go ahead.

Taylor Reinhardt

Thank you, operator, and welcome to our third quarter 2023 earnings call.

Andrew Officer. Executive are Barancik, and today Financial Chief me Bednar, Officer; Chief Gary Joining of call X replay November on conclusion A this the XX, the Investors through of company's page XXXX. the website broadcast approximately slide hours the will following through be available

you of been For who call. today, initial XXXX, have not remind November subsequent the remarks to made earnings this presentation, rebroadcast X, those the of herein updated the to we listen that are as and

note to statements, like this call of I'd financial forward-looking begin, we performance outlook. that may contain and including future Before industry expectations PWPs and and business conditions

not inherently are of performance. or refer materially statements risks could those of future cause to uncertainties results Please recent SEC these of PWP's subject discussion Forward-looking and are and a from assumptions uncertainties. forward-looking that filings guarantees to risks, certain the for discussed events differ to in most actual and statements

and forward-looking statements undertakes based current to on no our The and are any statements. the obligation firm update forward-looking expectations, beliefs

also reconciled most there in with performance which website. metrics, measures, press some are During the relevant which to the items Form PWP today's of discussion measures which release financial company's be believes business. has assessing found the X-K, a the on non-GAAP of are in comparable financial GAAP be these the management filed call, the will can

results. now call Bednar I discuss over the turn our Andrew will to to

Andrew Bednar

ago. we morning. down revenues and million, X% Taylor, you, of quarter year-to-date year Today, a from good third and from $XXX a X% revenues ago, Thank down reported of year million, $XXX

strong model. of the slowly recovering resiliency our of trusted results, Our and M&A global a business backdrop market, the adviser produced demonstrate foundation the against

in flat quarter-over-quarter, same experienced announced sectors, volume M&A the third an slightly across and up is backlog in for to announced the periods. our During market while meaningfully both down year-over-year the we activity quarter, our broadly with increase

announced volumes from in reflect lines the calendar backlog. the Our elongated time a a prior quarter causing in lag with does our revenue periods lower effect booked in adjustment

in revenue and favorably business, care revenue and revenue. in quarter. health increase M&A capital contributed a particular, And technology to an offset energy, raising partially had decline the restructuring Our in we franchises, capital that within our solutions financing in

Our very active. remains restructuring business

continue lead on the market extensions And of largest credit We are bankruptcy clients key the with to amendments our exchanges, a increasingly market navigating mandates, an be adviser indebtedness. other through in assisting today. on on we complex existing and

with more are returns. on recently and nonlinear a advisory in been, capital has more as toward believe It clients growth our is a move. in once-in-a-generation for be in industries, clients to as well activism and by encouraged order growth private to a seek advice way for seeing the will we early as and regular as we very basis. connection well and we and expertise in engagement markets Moreover, investment, our for analytics on platform secular debt products continue areas In transactions dramatic tailwind business, business, focus both capture of We of regions our leverage credit that On shareholder are we advisory corporate opportunities. independent the shift financing our sponsors. investments made

platform growth about front diversify our firm. for position potential to investments of of core base we their years, client us current is XXXX, best our the so from than business what's our our and very in in current X Today, and less and strong. without partners strategic is advisory The advice. we from financial simply partners businesses our adjacencies have additional away of executing clients X/X X our X grow seats in In have us committed providing substantial. join Ongoing and X to and managing well directors, the added serve on an we distract and the already upside partners to embedded need in

Perella bear Here we efforts at we're laser-focused Weinberg, are seeing on execution, fruit. and our

ahead we prudently is invest M&A are to Our market the trending deliberately of our cycle and and reach serve to recovery, more up continuing broader across enhance to and clients announced globally. backlog capabilities the

and approach support I loyal you, and our around things: have we As the investors thankful from deep we and globe, our our all want analysts. hard to for relationships teams how built say am with the the work of the holidays, X the clients, continuing I and of we've dedication

thank the of firm to counsel colleagues Before you I your Perella and for behalf turn on of Gary, I years and to Weinberg, partnership, friendship. for your call your want your service to the over, and strategic

and leader both resource tremendous a transition been have a and including and colleague, invaluable in as company to through my CEO. public an our You transition to adviser

in approach well disciplined your the We Gary, transitioning Alex Gottschalk. role are CFO job positioned financial and over excellent of the now because for thank to did to as of a future the you, you and you. to result leadership

Gary Barancik

with like at I'd rest the it's this opportunities our start Peter as and was years firm been a final earnings my grateful is of also PWP, the the of Joe the the public over get has founded, great a I'm you, as thank to and take M&A firm know to been years, and XX the also incredible rewarding immensely analysts CFO, way. investors. and to my partner call. Andrew, taking along by spent to to serving it's all for After a an and pleasure since incredibly past I've as moment research colleagues provided and you working here few PWP this

to Now our results. turning

performance top a review line begin our spoke expenses. Andrew As his with of to in remarks, the already I'll

represented as the of revenues XX% reflecting of both the adjusted estimate compensation expense our and end. quarter Our period, third best quarter annual in year-to-date

same our XX% guidance for compared about reflecting last was Our third the XX% communicated for the period to non-compensation XX% $XX support and tracking up expense million investment to quarter to for within Adjusted XXXX, X adjusted the is range, $XXX non-compensation needed million year, growth. months. spend year-to-date previously

dividends, returned share of issuances, we've through a common $XX in rata million settlement lieu to net stock and Year-to-date, distributions. total pro of investors repurchases,

Additionally, we dividend morning, declared $X.XX this quarterly of a share. a

to continue strategic and not committed investment are to a We that our capital business needed capital maintain returning is or support to earmarked to shareholders for position strong operations.

With now the the that, we'll turn back questions. call operator open to to the for line

Operator

question Instructions] our will from JMP with Securities. first [Operator And Devin Ryan come

Devin Ryan

you Andrew and guys? Gary, how are

Andrew Bednar

How Thanks. Devin. morning, Good you? are

Devin Ryan

to good. with know you to job. been terrific sentiment Gary. pleasure a did and you to to echo working I you a Good, It's get want the and

hopefully the in missed, but things future So you'll be better for you.

touch. hopefully, So stay in

Gary Barancik

Devin. Thanks,

Devin Ryan

the Andrew, ahead about talked turning backlog market. environment. you the M&A to up, think, the I want on I just of start

deals sense on announcements? what some bit to kind -- maybe of to of just tone And that that. transactions backdrop is So appreciate dig of been with guys clients currently? other willingness moving going pretty what the the from in on to in you still a backlog is complicated, move backlog any macro in are are forward start the the I Like hearing time. just deals the kind but for have are forward in little the on that Are and backlog

Andrew Bednar

Devin. Yes. Thanks,

a moves, And that. about for macro from client to there probably more environment seen I think the be or is are the that conducive decision-makers. out what they others base our context rather accepting challenging, as think I making we the strategic our to different today client better decisions and of today's are and environment. question backdrop in may no increasingly base think waiting have And continues I be for complex than conditions

their So planning, I of we're Broadly, for think tethered People cases, to the to overall with waiting market strategic with, game size. and and some you in less the on move our M&A as some changes, financing in business is over. with business, cases, because our have their know, changes.

the given So we the relative to continue market. size broader scale just market relative gains of have the to our can to outsized

Devin Ryan

Got it.

just then business here little on advisory X quarter. from I appreciate this that And helpful. on That's restructuring business. was a that the more contribution Okay. there bit another

acceleration peers mandates business in in they're at you of on type that of really When doing tracking seen more kind have because restructuring. the of the kind year-to-date on are revenues guys Some your we're of based of you well. an restructuring, mandates the kind increase? in for story more do the of like Perella XXXX you the Or is feel Have a Weinberg a yet degree to mandate contribution? restructuring of the revenues of kind through of come much for as kind you look guys

Andrew Bednar

thanks. Yes,

an in my business. seeing increase as an and activity are that remarks, in We some did upfront We financing our decline increase mentioned team. offset revenue restructuring in had our I in period-over-period for

a the think I of longer are term. mandates lot

we the the see. are revenue largest X As we're in engagement the initial activity and I that assignments involved bankruptcies in long-term mentioned, lag does where the market. Those of

So more less that, we near in but into 'XX revenue we about do today. the be expect will our see 'XX, that as term, activity increase into

Operator

James comes Sachs. from Goldman next Our Yaro question with

James Yaro

Firstly, working the luck Gary, we it's the turn with trends been you and to great future. M&A in just can Maybe here. good

about one then a you're eventual the for industry you're longer-term thinking term, the the seasonality across fourth strongest The just one. longer-term cadence is thinking a the is and So And the how obviously one typically, of the recovery? then how industry. about short just shorter-term in M&A quarter, that the quarter

something for well? So you expect as we is that should that

Andrew Bednar

Yes.

I but been of on and I think have M&A positive, the to of seen industry think the as flashes broader they been the I have market, would steady haven't we see. light like as that rest quite

let's we speed So mentioned receptivity being in way. That we've in and as more had market being rather question, sustained getting waiting. seeing way. get on in with key into change I along decisions with more client along those to a with recovery, where bumps obstacles thought client we on the We've are but some the response and moments Devin's think reaction to a business than were about earlier conditions been met the we've had our get we said, I

through that think choppy waters like people are the healthy travel it I abate. will to a orders seem is doesn't because that choppy sign So willing

other we have to relative respect think the seasonality, I stronger on and your question had with quarters fourth industry historically, to quarters.

see we to emerge pattern get I the some of And fourth that starting to be that case. and quarters. that stronger are do I back to of again think expect

James Yaro

your expected, the the And comp ratio strong back any shouldn't of quarter. reason years strong the about despite very helpful. we think discipline And the years. over you're It comp than next how a normalized leverage the ability get a environment? I of of the to super over why more talk you next hiring couple be most ratio, course able thinking more normal generated you just on comp year. in comp over level few than generate could then about That's peers was better better Maybe this to to

Andrew Bednar

Yes.

our is That we out put estimate. ratio based first, on end. So comp our quarter

a have close annual what We quarter. the we determine usually fourth comp at when very will look ratio be. That's

the given head all the fourth move the So year-end. and in the period, closely And the to from of our events in to quarter, we the have as scale that action fourth up business really to we to for not fee potential period significant is watch lead quarter. into

of I we to As incentivized investors like more term. think we're and properly for than quarter-to-quarter, and in are got kind term, I've have make said baseball. that, we is know in comp are keeping our the much lot playing really a that that long longer we CapEx, but and think part, sure of And to analysts assets historically, to place and we cricket

making thinking in place sure So people we years to look our many about that keep business. and driving we've incentivized best our in got out and assets, our many,

invest appropriately. through had think ratios think disciplined you the do the sector. across have investing to we a the business there's I again, see the comp best partnership. and team to in to our conditions, sure bit. we you have want structural simply we've But advantage But a And compensation go grown the growing and we've in turbulence, just behind to of will approach jump the add to be that, that. will a team moments disciplined grow around where reason when in turbulent our to do also or very taking to there's So We opportunities you're We behind no want have again, team. continue it, don't make we'll ratio we partnership change people. And to to around say the

Operator

question comes Chubak Wolfe from next Our Steven Research. with

Brendan O'Brien

luck. I in for you. role O'Brien Gary, working to guess best on guess has it congrats over This question, see of I public the data, levels been like filling Brendan seems what the a running start, start, to turning the Steven. ask at wanted pleasure new just U.S. activity Europe. in just is been to I to at and on It's my the region we From in the can similar with

U.S. economies. the bifurcation of we've and the However, some strength in seen European

trends, in clients your following these compare of there's conflict European I whether could the and you Given and East? tone dialogues Middle with in was the dialogues hoping U.S. the any differences

Andrew Bednar

can terms So as a we the thanks as in place, for course, is of of what volumes, data it. bit is to see see weaker it. see the Europe albeit as question. activity the U.S. we'd in you as recovery Broadly than not much lagging. a see we strong European like as on

in of we see of through post a don't see dialogue the the of both the also think difference the the course I terms recovery, we all. at the that October, of conversations in nature material events but

and see thrives. in those activities, but sometimes pressed a to of midst make with which range as scenario widening business when And to are the move having when still times think revenue if get critical people the decision-makers effects of called. just And the in quite generally, when business anything, marketplace, of geopolitical of decisions it and credit of is advisers in increasing that's time and our their this the takes about that's planning, and uncertainty from forward of risks types complexity strategic financial of range challenging, uncertainty market,

the feel is business. we complexity, about good nature the friend about the a to in feel our so dialogue. We our And And franchise. of good case,

Brendan O'Brien

for an TPH. ask That's you of I helpful to is guess which I through follow-up, energy, strength for area color. my wanted on

a seen activity the in of of the space energy months. past over flurry You've couple

trend like to sector. a you what seems growth. are get your the to inorganic these if hearing persist? shareholders it from capital clients to sense could And activity firms you're So in this elevated business the wanted pivoting returning in through from think investing to as of I

Andrew Bednar

we in think there there the a X or quarter. that additional patch, do transactions Yes. the be will on is That's We a that do about transactions in good from energy that X last in to and significant capital question. how change thinking occurred deploy follow that think the

believe for And and so prepared we positioned getting that for there's to come. getting that more that are and

Operator

today's portion the concludes call. of That question-and-answer

to So Andrew I'd closing like to the turn over for floor Bednar back remarks.

Andrew Bednar

analyst Obviously, is Great. you best thank of you, support all next you, Gary, from support Thank luck and continuing clear. for again your And Weinberg, to you very you. your and forward the 'XX, operator. until a wishing look talk endeavor. of Perella thank of we season the wish again, on community And you, and want in because everyone I speaking holiday to won't Thank early happy all a reflective again XXXX. and for one

Operator

concludes XXXX ladies Conference and Quarter Perella you, Third gentlemen, Earnings Weinberg Thank this Call. today's

You time. may disconnect any at

Perella Weinberg Partners (PWP) 7 Nov 232023 Q3 Earnings call transcript