PWP - Earnings call transcript Q1 2024 | Perella Weinberg Partners

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Operator

Good morning, and welcome to the Perella Weinberg First Quarter 2024 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.

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

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

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

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

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

Andrew Bednar

we reported million, you, Taylor, and the quarter our good morning. that business. revenues of of Thank $XXX do strength first Today, results underlying reflect not

for our high We are record time. pending and announced transaction last and firm, largest the at year revenue the year-to-date a level lead adviser stands this announced in XX X nearly of transactions at backlog today double the the

occur and recognition transaction time unusually experienced with we of where are in elongated and periods. lines an quarter, closing This subsequent revenue announcements expected to amount closing large

for improve, backdrop larger market continues to especially The transactions.

we even is as increased seeing the our are complexity. with market to something across drive growth. values clients, move of This and many along industries more is scale geographies increase, needle and needed For

very market advice the top exclusive XX favorably corporate firm's that XX the also boutique and a buyers benefiting transactions, and industry strategy that co-adviser. values a with as strategic aligning our as more and than ever, and our with or joint having more capabilities. we trends So from are independent carve-outs, contribution this a asset announced broadly stated see sponsors year, We transactions bids with are our of

The with to higher-for-longer capital rates, consensus the interest demand both management maturities investors for combined and continues advice on liability solutions fuel impending remain from for borrowers strong. need and

in While clients financing Recruiting strategic not transactions, base credit spreads valuations capital. to to sponsor priority media a of on the new scale higher, hurdles a firm. active our It's Institutions have we present earlier and partner of year. a rates And access We remains availability. be narrowed terms believe we are in accretive and have to to and which sector, corporate and plenty welcomed will including with Financial our business. Managing very that interactive the April, mission this a entertainment, Director welcomed gaming, focus

our choose talent We on the as and clients are who strategy exceptional with our of addition Weinberg trusted their enhancing franchise and Perella executing globally growth world-class adviser.

clients beyond, with our advice, relationships sponsors strengthening operate corporates, across our investing the serving on highest for shareholders. and and, focused scale are We delivering turn, at caliber in to our

progress in of strength reflect our underlying results that the time, confident reported are We business. will and our

detail. Alex, and results to I'll management our over capital now turn financial the review to you call more in

Alexandra Gottschalk

Andrew. you, Thank

full year percentage expense revenues a of accrual. For was XX%. first of denominator a not and quarter, This low of a our as adjusted is reflective a was the compensation result revenue

normalize to historic ratio target this progresses. year as expect toward our the We

ago our adjusted range trending and from we quarter, expense $XX X% Our on the the indicated non-compensation was up million call. year last in within a

to manage expenses earnings. drive continue these We to prudently

taxes. to Shifting

awards compensation a and benefit tax if than Our granted. quarter of first effective includes rate reflects tax the stock a higher at converted, vesting the price for adjusted, impact

Excluding be $XXX million successfully we this sheet ended rate trading On March XX%. our expect and completed X, full the and cash the would share a We been we year million to the float liquidity. in debt. tax balance adjusted very offering, and impact, below with strong no tax have quarter XX% rate increasing with a X.XX

some in With reduction in the offering cash tax certain X expect million least outstanding. will on for proceeds and hand, result in we share units using equivalents our at of which settle a partnership purposes to our QX,

a And managing per our declared dividends. In million quarterly proactively $XX first is equivalents, to we the distributions a share. settlement, As we share dividend share our we've returned holders the this quarter, net priority. morning, indicated $X.XX previously, and equity count through of

that, line please the questions. open for operator, With

Operator

with [Operator first Ryan Citizens our JMP. question Instructions] take And we Devin from will

Devin Ryan

Andrew and are Alex, you? how

Andrew Bednar

Good. you. Thank

Devin Ryan

of kind announcement. just get a sense deals questions revenue Andrew in the mandate seeing from on A pipeline. here around of velocity trend couple pending you're to just of the interrelated remarks and record heard to I in moving backlog. the announced what Love of

seeing the And you're you what elongation talked of be just kind of can about deal there? that know I specific. closings. So even then sometimes

a just is seeing as better you getting if the in any mentioned? as step back, acceleration are environment you you take maybe So closing speeds

Andrew Bednar

Thanks Yes. for question, Devin. the

better the large getting think I is deals environment getting announced much for and closed.

counterparty for transaction is of engagement quarters, to beginning to at And elongated the lines time several is for for from and Perella it's our environment the they're last discussion of what to to and I which been the similar spectrum along idiosyncratic think And with there the think don't that clients. stage reasons the every finally that elongation. I Weinberg anything it's then are announcement closing. different to

with I aligned think transactions, larger with complexity. more we're more aligned we're

the think of getting arena of is to anything improved transactions don't do But lines. not environment report. I we for I have to new take tend these think there's in announced, longer. have types in better they time that that terms but So transactions

some of probably are even elongated, In time lines further fact, the Devin.

Devin Ryan

just And it. comp then the Got ratio. Okay. one on

comp because I Alex's mentioned. about comments puts the takes where placeholder ratio we out? of getting is of that and could more about maybe year historical full I kind as versus the revenue Just of pressure should think things comp about we kind a the trying of think dynamics back How as things upward some some just timing around to on about could more potentially that the of of of So downward a kind a heard pressure create more that think appreciate And into range. maybe and settle quarter create could you ratio normalized basis? this

Andrew Bednar

benefits, think, right? awards of accrual. then look, and prior amortization comp not bonus I just of looking and really modest this of really math the a and best the base estimate is It's Yes, It's our comp at ratio. quarter math, payroll

low So is be ratio full revenue a designed comp this of not quarter. for the reflective really to our reflection It's an year. abnormally of

So we've don't pressures the to year. to seen think the broader I similar The see we extrapolatable is historically. full compensation what it's in arena

have abated. increases the think I

don't absorbed surprises I I think are well. of think there stack. kind that in the we've any

really think I well. It's revenue we've managed that early the and the about very in of revenue course year. is very, through the This driving game.

again, behind. for in full be, that reiterate targets To in here target target. that And our in so and XXs that path. was our but and objective And remarks, always year. back I'll objective that year. the to the the where early to stand much very we've to We're I get is we've we'll think the our get said to on it's predict is

Operator

Chubak from our Research. And next we question will Wolfe take Steven with

Steven Chubak

rumored franchise wanted given be to announced to robust I just expect the reports, of just a it? be terms So your a specific continued energy to in just in or sizable space, what a levels and you're with least robust. per has hearing activity to want the to strong activity going within in that of of get been a on question at There's deals to press from sense area, you're sector -- quite start how there's of corporates been positioned whether works some the number you the for dialogue, as

Andrew Bednar

we Yes. we first finish which couple be of you business are strong Dealogic. a advised quarter near beyond in and positioning. very in and feel large, upstream a We've in of is We traditional course infrastructure in always and the and pending our and to the the very during consolidating significant but activity which don't business quite way The can things a happens We also had couple about and where the We've we're in transition in transaction energy looks line. fourth in increasing had team now quarter get on. see a to in that renewables misses expanding franchise that space announced overall involved a for unfortunate We're and the got our downstream. good that energy. and

a that that, developments the and but interesting about. and that's the we about to obviously, FTC but we us So might decree was read shale impact and watching very good the consent it one-off, Energy, Exxon. have think feel of probably impending with with beyond, the overnight the in for all we're

Steven Chubak

it. Got question on the comp a commentary. just ratio clarifying And

normalize year the as and comp Certainly, Is commentary the revenues. that that the X revenues should comp quarters the timing ramp. Or to just least just over normalization ratio of mid-XXs? backlog that remaining sounds supportive ratio we some the start expectation as of that a Is in is or it full expectation? weakness, bit? of improvement year revenues course revenue is a do anomalous So function more some a or a XQ the in at see as record

Andrew Bednar

to that going we period-over-period, Yes. listing. focused the to happens It's and movements. margin, us came end downs where for level ups hard still the try What we and around year We're out to have overall we're sort really the that that. of with mid-XXs committed of at on very you're to targeting time and quarter-to-quarter our predict the

want very also very, unambiguous margin only by backlog. transaction our predict That not is. of the And mean so flows, the is announced what it what and business, the not be to And revenue revenue to but is given I I pending nature resulting about pipeline. hard our comp

announced Our that's strong, mean terms and engagement corroborated interchangeable front clear take pipeline but their and them. that, announced letter and are I where those transactions and have Dealogic way which is revenue data announced that very at know something, be are that very of to again, transactions expect and to where set we what folks is And some well. a But that want very us, that also opportunities have see on pending in toward the I been sometimes that are we is we all an we the there pending of is that's closing. as closing. interchange by different

Operator

our will question next from with Aidan we Hall take KBW. And

Aidan Hall

and capital activity pending M&A this call, mix I and the management But you're that liability if quarter as Great. restructuring touch on to. levels record on the well levels The business a touch from -- I reflective in quarter XQ announced you year? strategic of of the revenue and wasn't it the expectation levels financing M&A Obviously, the or the between and quarter. was speaking wanted the solutions the of as elevated the could this a of some dynamics of to M&A. so was pipeline revenue you that for remainder mix and standpoint reasonable wondering noted

Andrew Bednar

Yes.

disclose specific we know, that course of development don't last you the As similar over We're mix. plus. of pretty the the quarter seeing a

largely about ago what M&A business the a core I restructuring. business on announced growth the Financing and over a from of Solutions end business lot just get be seconds not my we've the going related. more and M&A we just a the similar is mix to that's Capital But it call management pending and year now our We're broader much have through to remarks and that we time. think year-end, will few the by based liability time coming had a

our what mix from we material business. last business bit compared a we've years in So the probably but at will that look broad mix. towards And the it seen weigh more to couple M&A, of a traditional not M&A the on change

Aidan Hall

Got it.

switching I color. appreciate the just Okay, to the gears Maybe recruiting environment.

mentioned remain active in XXXX. As an you've year that you to it expect previously

for quarter strategy sector, you activity, at us end? where we're contextualize maybe that can just purposes, a just of partner headcount modeling whether So by maybe seeing and region, for lot

Andrew Bednar

partner quarter end. was Yes. headcount The XX at

We FIG space have who in partner one who and space. one joined MD in interactive media joined the the

that movements from and our mentioned our The is institutions. environment still center particularly think, a money recruiting good environment we I think I comments. for, away industry in large very

decisions quarter, I And people is continuing. year. of the were busier just some and fourth quarter, et trend of make see do then that I annual recruiting. that's until saw you bit of bit leave that and quarter and think toward non-competes, think and second is seeing first to then because than I compensation think what garden being plus dialogue move the third a just making typically, that we see some the delay people and wait a I also their you arrival then have don't cetera, changes a -- lower of seasonally, function through which last

So to a for active. that environment the as of to recruiting the the bit elongation and year. last of is of it's has saw trending many high, very an still we busier we think do what you similar led But us is well. pipeline still Dialogue

Operator

we from take will question James Goldman And Sachs. our last with Yaro

James Yaro

side, et So might your in is able your With representative starting comments quarter's cetera, think and this the given the about of normal. maybe strong think than into you and range the given wider there course just that offer strength us results to perhaps of I the over help revenue of to is for point is the starting year that on of forward the the backlogs, business, outcomes this going revenue be XXXX? revenue that anything your mind, build not

Andrew Bednar

not I'm it's normal. wider Yes, sure than

different here XX a in of days think mean, have history continuous I and But about very the we to that We period in will game done. the the revenue over just literally, types exactly what recorded. have closing, to a great time we're to in the revenue and transactions the comes that's the time looking and stop We we're what difficult we the we're I clients we're tell just the quarter, financial very, period. you hard it's line. time involved predict working our field. and in to very period is, which first good our sitting to and feel where on we've with very feel about just at team be predict

objective acquiring more right on revenue. is So field. our putting of do going grow that just and we the the people our We coverage the It's subsequent talent. that product clients of for are transactions to in well. we because this progressing the The on didn't clients. XX -- on experts revenue I the right that new record of think is the those we close that by period. ground having for had to are of quarter, We're kind adding days, hoped business particular We're kind in

that But true, outcomes close function don't the be a any agree but happen when in range that's I'm sure. not certainly So I of, that again, just of or out. is things wider. period, given may to get pushed

James Yaro

Understood.

Maybe range growth. noncomp in noncomp guidance on dollars. on the the updates Okay. were for just year-on-year year? single-digit Any the full for the They expectations

Andrew Bednar

tech mirror. starting last of inflation double certain We're where Alex be rearview that think, some last of last No, can to year. what but We around getting I bunch me stack. saw were parts highlighted going more a we misstated I our that, correct to year the in in efficient year. had We're and rent I is that much put X%, we think if up we remarked we

double rid settled rent. of us. offices, behind the We're our so fully have into that's We gotten

ramp-up are our a in that's going We teams in see to T&E, clients. effectively on investment good our and our our a sign. and talent but That's

more think And an think of but of so out that look that's expense it a noncomp to and as CapEx. I really not as I part back

where from on we've last think -- moves So our call. indicated nothing not significant any I we're anticipating that based

James Yaro

lastly, and Very a And update clear. quick capital return just the Okay. count. share then plans on

we be this from other the of around course then the should share And of count material puts market share quarter, any over perhaps, going the drivers buyback are anything that there didn't fact Given additional open recent the thinking issuance your that the any takes about and the year unlocks? on you do and repurchases forward?

Andrew Bednar

some Look, operators, firm. the Yes. we we past, of are said own owner as partners, as in I've and the employees XX%

effectively And that we so our count. impact buyer share ways stock on to share count, the we're many a many, very can focused we're have and of manage

with doing we get at we our share have ways when that the -- offering friction least million and so to manage with And that X-plus another settlements. the look in count, net shares related size can to price our partnership units. market really look least the cost we'll the and so proceeds, to use and a capital And we through buy now and we to

look through through you added that those listing repurchases over since dividend $XX have $XXX-plus upcoming if of million returned repurchased in shares. mechanisms. our million million over so period, back a and to June we And that XX with cash repurchase, million we've in returned $XXX-or-so that X-year 'XX, over and QX We've

comments as a buy count, we're said in have see we course as the to the our So is we'll shares. share than that upfront X the be front. will settlements certainly our we we year, that in. little prudent, a which settle in we'd where other QX, buyback lot quite to the we'll exchange plus Alex buy sense on back continue anomalous going of we the we very be net through put will million where my But have managing over is opportunities that, We'll priority on have to traditionally be all a of an net the modeling thought ahead that

share venues buyer we else the of an mitigating of stock-based significantly aggressive that and So It all is of in different terms very nothing of issue that bit stock. do just well, modeling. James, the I a in compensation annual we're add that that. managing it's would just on basis. to We're we count But that, an

Operator

remarks. closing this we I questions now back additional for the Andrew to program further at no It over have will or appears turn that any time. Bednar

Andrew Bednar

to joining our Perella appreciate you. confidence and you, your and in Weinberg, forward Thank everyone, and Thank again of next all stakeholders. for We we thank quarter. look support connecting operator, Great. Okay. you,

Operator

today's participation. you program. conclude does for Thank This your

You time. at may Goodbye. disconnect any

Perella Weinberg Partners (PWP) 3 May 242024 Q1 Earnings call transcript