PWP - Earnings call 4 2023 | Perella Weinberg Partners

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

Operator

Good morning, and welcome to the Perella Weinberg Full Year and Fourth 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 Communications and Marketing. Please go ahead.

Taylor Reinhardt

Thank you, operator, and welcome all.

Joining me today are Andrew Bednar, Chief Executive Officer; and Alex Gottschalk, Chief Financial Officer.

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

statements to events Forward-looking statements cause results refer or are the obligation for filings and performance. differ most discussion to not uncertainties based in certain assumptions from discussed of current statements that Please SEC actual risks and those firm forward-looking any risks, PWP's these materially and uncertainties. The forward-looking are statements. could and guarantees beliefs subject of inherently a are and our to of on the recent to forward-looking expectations, undertakes update future no

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

Andrew Bednar

broader market; navigated performance. scale, morning. a of XXXX's outperformance Three large market offering. reported weighting our how our quarter market factors contributor to from and we M&A XX%. broader globally Today, and and full strong corporate revenue, clients our to year $XXX XXXX pleased million, We're year down revenues of the the relative compared our revenues towards Taylor, you, growing year ago, Thank closings a service from with $XXX challenging ago environment, year good our saw X% up while fourth drove million, we a with up full XX% our

resilience, our only ability continue seek clients to through demonstrated outperform an advice and Our business value to as not cycles. but model

a and market improvement experiencing deals number within our M&A performance of was with nearly of fees, and all saw especially which announced year-over-year industries XXXX, financial activity at growth in with Our higher inflection, begin conditions our of by pending quarter sectors our of levels. signs today, supported across business. Early high. a our which backlog given we to second broader record sentiment, stands way in market has And driven and and a the dialogue large have

we of We to some the expect traditional at begun. still historical backlog of the the in slower has our for resumption speed than this revenue, which larger into M&A deals especially Nevertheless, markets be a growth norms. recognize

restructuring, in The and terrific Our at client growing. financing restructuring high elevated and XXXX management and remains part and also The and higher and as increasing advice in includes a interest in made certain financing telecom and progress challenges industries, which to is the response during such result capital activity business, levels. complexity technology. solutions need for liability markets rate structural of in environment

to bankruptcy, including our mandates, in addition crypto our in been activity, fueling lead large role largest several XXXX uptick considerable there In has recent is pipeline. a which the exchange

development has to has advisory matter financing in subject growth. has dialogue our fully debt industry and collaborative M&A remain particular, our credit, and now into acquisition and mandates ingredients future leading generating client often increased and platform. and Capital Talent success financing expertise, to as seamlessly around and proven valuable our recent substantially many business, private team and requiring model our integrated restructuring essential integrated with Our of level Markets better the deep outcomes activity. In

shareholder coverage we XXXX, to and advisory we X services services we In our We and industry and activism. capabilities in new new managing added clients. In intend business increasing are partners industry our matter X adding and and XXXX, that and subject directors, matter analytics technology, knowledge during XXXX, the the in second disciplined in in join U.S.-based firm segments senior Already a to active in our expected have recruiting strategically attractive remaining in to while our Managing partner the welcomed remain admissions have and Europe quarter. Director team bankers to criteria.

Our with measured progress revenue and journey top line more. results $X achieving and our much by to scale billion continues in

more team current a than ago, to in-place productivity. partner is and firm's the diversified Our revenue stronger the and year capacity with per increase

expenses are our including and the Our X you X to in lead we to of inflection review business evidenced client in January, exclusive announced expanded transactions a relationships with create capital to were industrials. for I'll have the call in These by in and in deepened XXXX. Alex, recent now X management. market or largest our high-profile over as in transactions which X adviser, tailwind beginning financials factors, and the combined the turn in

Alexandra Gottschalk

Andrew. you, Thank

in Our investment expense conditions X% revenues given December, of XXXX. targeted represented approximately compensation industry appropriate as talent cycles. in indicated response we and XX% above believe market Exactly and continued XXXX, we the and our through to adjusted

XX% up and noncompensation year we at was adjusted ago start million Our range the expected the from full the of for XXXX. expense within year provided a XXXX, $XXX

range, the we in spend be expect increase investment to and T&E related increase percentage elevated XXXX, in and For and the driven spend single-digit some IT. with abate to by the noncomp depreciation expense

continue time a We evident, up maintain expenses. to with grows. $XXX expect revenue as position as capital million of we debt. in And and no and in strong a revenue to fall We we manage revenue, be operating short-term as investments as our leverage percentage cash our carefully scale noncomp will

settlement our repurchases, count of In to committed to shareholders million returning investors capital distributions. we and dividends in total share compensation. stock-based and from returned XXXX, excess mitigate lieu $XX share are dilution a of issuances, managing through to net We to

$X.XX morning, Additionally, for line open a share. With of we that, the questions. per quarterly dividend operator, declared this please

Operator

Devin Ryan JMP take with question Instructions] We'll from our [Operator first Securities.

Devin Ryan

with I I Great. guess to question, Andrew. picture start just want the big

pretty and obviously, XXXX, overall You've down the saw And think were meaningfully. revenues of kind market. being grew when spoken those about where firm we tethered that less scale the M&A of I to in you

a backlog the is well. mentioned You record as at

of senior would over to ability it's Perella Weinberg's years, grow thinking out think kind the couple growth kind look contextualize faster to you we market? about Just of M&A the as broader So about the than banker how of next the space? network whether trying your of white the broader are effects kind algorithm wanted growth growth the some from the of thoughts because industry? on there of to of of that plus Just of get Or all here? footprint

Andrew Bednar

Yes. Thanks, Devin.

quite scale. So the think who larger growth is that firm peers for we do algorithm the of have than the some different

and the So reason remarks, offering. our our that scale, as also outperformance I structured model part more in diversified we're the the of mentioned service client-centric but for around a our is way opening

for practice analytics, liability and other parts of can the firm, some the advisory, whole debt management, our case hire business. as that when the the but the add advisory factors, they are It's conflict well business. financing activism that our case with restructuring, leverage the when in look And when clients our to at and outperformance our so they think I those point or nonlinear as case still we MA. And market look simply of closing I partners, enhance and and come don't growth adding the shareholder not and a So that they broader X time. will the also that to we market. simply saturation to the reached It's global M&A think, continue partners where the tethered revenue we bring, to of as mix we we drive announced are our you relative overall be for haven't rather

sort look larger. So adding as We're from dyssynergy respect not you a to that we're our -- just much that you with at where forward potentially get we're we point our in planning near of algorithm. as to and growth partners get horizon some nowhere

Devin Ryan

Terrific higher in than mid-XXs It Obviously, adjusted comp for kind Andrew. a firm. bit a on follow-up Okay. the of just the And of was the ratio XX% XXXX. compensation. targeted

environment level So just you're also or get some to to to well? that nuance thinking there's revenues in there, the be about on get thoughts you as back some need how appreciating -- of want the updated

Andrew Bednar

Yes. affected, get a our firm. but as because carefully. And not to about we, very, that know, XX% own And also where employees only have equation of look shareholders. are partners at we very something Look, and comp teams our as right is it's multivariable you we the

aligned the this in competitive the was year, today. But of we exactly we're would comp a from responses our just compensation we thought investing thought it margin bit, of that a signaled state of do very the when of that some our some to the that to with so and sharing prudent take our we CapEx those accounting now you get we what that do making the market have know our think productive December is and given right. We the you're investments it shareholders we about XXX were given we prudent took spot the regarding of and what these as we've These rebound. But are down when And that ratio said I'll was the up really trying announcement and back inflationary what resources a some our points, surprise assets. basis never that marketplace past I've sure win just comp And in and the made some our at and we incentivized in so I market that with we then argument -- firm again, buy say invest are every time, the that you capabilities not stack. other community. go capabilities markets to comp in of I it, pressures the see so out

helping prudent we prudent bit again, So burden recognizing new shareholders, people, our sharing pay in investments talent up had years in but we've productive as productive as our and well we highly investments ramp shareholders. who've think in with our our those made system future to that a

Operator

next Chubak take Wolfe question Research. Steven with We'll from our

Brendan O'Brien

I but management O'Brien that a backlog at that guess greater is restructuring record and than usual. seem start, for comprised Brendan levels being you comments liability This filling is backlog Steven. of encouraging, percentage your the in to on to imply

like just evolved mix the get what sense looks I would a as want that to how backlog maybe today And last to typically that to relative what year. has see? over you So

Andrew Bednar

question. case, for Thanks Yes. actually. the not No, the that's

closing of backlog M&A announced specific that more it both pipeline than transactions, Our and M&A restructuring are of in is much is backlog in The up up. and restructuring. M&A pending

stood we stood last year. So from up and we where quarter where X those last are pipelines

announced the and M&A. that So the glad the I'm pending largely backlog to an that driven glad opportunity had clarify asked in to increase -- is I by question you and

Brendan O'Brien

want the strength of And Europe performance a well. color. can European we your of activity advisory specifically, year. on last And in guess back helpful the the data, public I in touch half out called what see as strong From to in I region of also turning peers That's one just quite the bit. to was

there's whether wanted to what and with pacing tone sense get just or any I you're the in consistent Europe? to the a difference seeing discussions between is as activity So U.S. the in of and this whether business

Andrew Bednar

So is I pace our both conditions tone on-the-ground what consistent liability as group the in in think for I to think of as and management. reporting and we activity the and activity, M&A well are see there ripe traditional pretty be restructuring with peer

a think bringing transactions lag bit on I announcement. of to to and we've got of them larger some and market our a

we the in less And well than overall of increase revenue but Europe. be quite in business as European encouraged probably the recognition as activity, level by engagements had would by our we're so suggested into in otherwise dialogue from in 'XX

Operator

next with Sachs. our question take We'll Yaro Goldman James from

James Yaro

numbers about wanted just start to productivity of some the with for I thinking you.

peers data the your that past think dramatically I longer. have I think changed years. we X been that business have quite public has like do historical the X with we the over also or for of And some

'XX year? about just it or think you more $XX million the to to saw how productivity what I mid-teens wanted in Is normalized your So this like base? XXXX, we and in 'XX, XXXX for saw millions we partner level in XXXX like closer ask and

Andrew Bednar

thanks the question. for James,

similar. So came definitely move seeking last partner. and This our per up year productivity year, moving in in are around was we up to million, we overall $XX

takeoff. function, new a overall 'XX or million. to It's in how We invest and talent because in platform. you 'XX some up. But much gradual to more course, also hire As were does revenue to And off $XX time usually, of aspire million be like category. when $XX It you ramp the of individuals certainly talent a conditions. it's is the a vertical of teams market new much take and require more you mentioned, not

and recently the the account partners least in have bring So here been those revenue we but have more who of organic will opportunity and your what gradual productivity those firm X look in-place also the built-in to they're over also is to our are years a at make where joining productivity overall promoted, their down recently right decisions. that sure to again, But are who we're partners the metrics, those productivity, ramp-up investment bit and the then at you time. making tend grow

James Yaro

And one partner models? are makes That talent I count on of just a you the some our ahead, investment. for think maybe you the -- potentially could Okay. A maybe today? one us how then you look have sense. for competition year the peers end just of the And just at XXXX. when related slowing hiring the into your quick talked about give seeing

I guess 'XX. So expectations for hiring next just year in

Andrew Bednar

Yes.

we to been XX, count and in expect partner have that. in in before we at the is and active 'XX So be 'XX as recruiting

see some recruiting that of We other haven't participated rise in the we firms. rapid in

very make financially be we hiring are strategically bankers culturally as well we're as disciplined how for senior that fit our firm. continued to want We sure in grow. and excellent an to We who have

We more and greater have a our you has us change applications, criteria. and pool if candidates been will, that more seeing gives select and in led in increase to candidates But a the not admission from. to

grow we help areas a bring strict not still into on business. I to multiplier growth, adding but partners partner as how grow. earlier, can firm, revenue come we and nonlinear on the where we're the ecosystem think And our a would we drive when about look really about just for So that thinking our to said and really really

active. continue to be we'll So

potential pipeline think and is grow healthy to our but proper prudent firm. being very we of candidates, way a there have disciplined We a

Operator

for And the line time. remarks. on the questions Bednar closing now are call there I'll further no at this to turn back Andrew

Andrew Bednar

close thanking to operator. and I'll today's you Perella contributions And speak analysts many clients dedication for to Great. Thanks firm May. call we'll and work Thank you trust again in thank investors for from and call, by their Thank team your in their saying, Weinberg. to you, hard the first, and support. our our thank joining for our for and interest our you. and

Operator

program. may This you for your today's now does conclude you and Thank disconnect. participation,

Perella Weinberg Partners (PWP) 8 Feb 242023 Q4 Earnings call transcript