PWP - Earnings call transcript Q2 2024 | Perella Weinberg Partners

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Operator

Good morning, and welcome to the Perella Weinberg Second 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

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

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

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

Andrew Bednar

year reported Taylor, in first of $XXX occurred days up record in million more were second than Okay. morning. Thank quarter quarter. related In our in increase quarter. with fees of to XX% million, and record relevant were first revenues was quarter, half ago. the more required the a in in And the a first year-over-year, relatively few accounting material to within Included second third and the revenue quarter associated than with $XXX to Today, quarter principles, million larger and for the compared closings closings that accordance you, which of transaction we we XX% we $XX the revenues firm, good large a our doubling experienced versus quarter-over-quarter. up

results, but our one our pleased very are business. define quarter with We doesn't

are timing a franchise. outperformance building at very our that continues the a market both that our this the certain distinct still have our of enjoyed closings factors we in of And not hard with X over quarter. and world-class progress We forward in were positioning now work tailwind transaction platform We years. recognize favorable

Contribution years, strategic provider. Both tackle and as transactions. firm and our part In just that from right with continue opinion momentum and seeing they drove boutique new management up clients a a who more as partners as a key challenges. a go-to and both year-over-year. in us perspective. liability our business strategic the a is right across collaboration a over putting of a in The deliver business simply our reflection few today, state not The from to game the as place revenue partner and market is for results in restructuring past financial M&A adviser, more across These clients has changed we significantly well are as teams view our the geographic fee-for-service second clients. not the but repeat provider, high for for complex

adviser, go-to firm and added talent, have slated to X and you the be To this advisory join X need year-to-date, partners we later have another year. the the

relationships well new current will add they introducing that confident our client by are to both our client with clients as We increase expertise. servicing expanded and points as our revenue, touch firm,

conflicts reflected in rates our and uncertainty, in we now receding, deal to the capital fog, the away, larger declining especially a better market. geopolitical in leaning these build. pending and announcement continues which ahead, see than rather as the elections, through conditions signs anticipation and in benchmark pools our advantage dynamics next of backlog, other Inflation conditions large especially are quarter, the look Fed move, we navigating around the risks are clients record of of shying As though taking undeployed on remain, We alongside of they ground. revenue global see

been we sponsor more activity corporates experiencing activity revenue did a led than by increase The of representing source funds, level in growth matter of but term. an M&A The rebound see this potential a normal if. are a not long more is return we to has of quarter, sponsor when,

activity financing and see we strong elevated solutions our Across with and to business, continue clients. engagement capital

well restructuring and with team maturity event distinctions as bankruptcies recent clients and proactive to we our see in their Congratulations highlighted for financing management. see are situations publication awards don't and team. reorg. more While And horizon, we proud extremely with to as we more, more on and a assist watershed the complex opportunities our stressed of

Before represents quite the a that our over let in turn for recently moment. accomplished lot reflect we of since listing. call a while time. this only a me to marked And years history, the firm's We I rich have Alex, public X portion

risen over have shares our XX%. date, To

returned equity count have We holders, roster. share long-term our traded allowing we while increasing have float our $XXX managed investors than to and publicly new answer to more simultaneously shareholder million down our

clients expanding invested increased need recognition us. the whenever have and and by our We visibility diversified brand advisory to our reputation partnership, offering growth support wherever our and of in our they

and honored add and here our to teammates through scale proud our for and new at Perella as continue investors to Most for we with remain We are clients. on our companies to These who our we always mission world-class Weinberg thick thin. clients continue work are on business. and importantly, we

teammates quarter. for our that building for you all business for firm importantly, and loyal thank exceptional your our to Thank to deliver excellent positions all clients clients shareholders. and our our and to you an our

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

Alexandra Gottschalk

Thank you, Andrew.

the Our and adjusted represents for compensation year of full half our accrual. ratio XX% current the was for our year estimate first

same the XX% half million grew Our adjusted for $XX half. quarter for to the $XX in non-compensation first the million expense was Adjusted second year. last first the compared non-compensation and period

prudently manage with consistent aggressively will operating expenses We business. our to continue our

a be for the the rate Our count. listed. X.XX full RSU million the we we A lower tax of were retire XX% our March, We to to just our from the end shares proceeds and May. fully partnership adjusted units committed count Class includes in the mentioned, units XX.X tax We remain the which offset only is share and used quarter, of share This dilution offering cash common stock managing have outstanding. that as vesting in hand was quarter year share for million was first XX% Not second actively that of we Andrew the XX%. on for At approximately when rate million XX.X our from X.X had first with will half. anticipate than second million impact

our X this float $XXX quarter we morning, share. We investing by a increased have the months equity dividend with Additionally, growth. year, while in cash declared million In quarterly traded more XX%. returned million we ended of of per $X.XX we debt. than $XXX first and still This publicly holders, the to future no for

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

Operator

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

Devin Ryan

backlog. on want Just start the to

the in is building. I quarter. So obviously, still I record heard at record announced backlog a impending believe

feel get that. question So where share far the market I'd a M&A record Because color from market. in like clearly, in we're a just We're love you're of just X-part you backdrop? little to gaining on not that. around bit

where market if accelerating. extent is it And from? of the you you're the types to the driving backlog, also look So the share through coming appears results new is to these deals at then speed process

well. that some want So on get to as driving color I what's just

Andrew Bednar

nuance Yes, idiosyncratic Look, closed. lot and about period-over-period sure, Devin. I in issues the a to come that too get that's these when transactions of excited want about exactly changes. There's they

closings, great. large fortunate were some the that's we we in had and period So that current very fee

corporate sponsor us matter we're remarks, leading a and the been said but we're in we've as clients. important the They're beneficiary clients not We've side. And a we on indexed of bit one. that the call I said is I and more on to bit a if, just what everyone's a so of our seeing, weighting are in out corporate out we'll just activity, think trough. I versus our M&A sponsor I on us, we're both I last more see got reporting, trough that corporate coming think said very fund number as opening are clients focused clients. of and the that same of do when, activity think quite recovering the weighting corporate corporates it's nicely my really back, towards toward

to time engagement to get what and to more the engagement announcement to which in the some we've the material a Europe In announcement engagement are the announce not United closing, also regulatory taking sign taking is really It's but and difference time that and time still both and signing. taking regimes, period the transactions and in matter some putting time that, as taking drive and to to that of to close, there is transactions quarters. factors as last few longer world on of here constraints more just line that reported time terms many for seeing between more is in from to and generally the these I'm and well related around States the from close,

less to have more sense it people urgency. I healthy, I less quite thoughts. second rush think their and that's transactions I think and as are careful taking leads there's just But people and actually time, of think to sometimes bit remorse a

I leads actually, healthier to time I think lines, to So transactions. it the announcement even elongated, though engagement think they're

Devin Ryan

then comp That's a follow-up just great like for the Andrew. ratio. on color, And probably

still above So first XX% normal the half the target mid-XXs. in for is the

then the helpful. how that's much year, else to new where are. of targeting of that keeping backlogs trying through conservative to would half for just it the kind given hires versus the And think what back just kind So the be that you're How anything in year? read for for of there what within implies kind rest Is of that is that elevated? of the

Andrew Bednar

Yes, Devin.

multivariable teams properly are fairly you continue seats need for their X. that's so be that of about. investment know, and for deliberate bit a do as Number we to that their and all our very they're what compensate we number we're only steady have of thinking firmly to rewarded efforts, So because equation not us we about a and being X, in

look at our continue marketplace. the that We addition with we so where of set what's the have is lastly, grow firm to the to in we happening have competitive factor talent, and in. And to will

more toward quarter, we'll X accrued best first out we see we've together half as what and but those in our recently, indicated I fourth been come to like Right for a which what now, variables change. that that's at needed. to our today, is our mid-XXs. outer margin some target stay We and as as for public that We adjustments as range. reason. estimate We've think, our we do So bounds will comp is head make listing, good third subject the we put within of the was

this of ratio time know, for and of many really the [ CapEx lot that going you look accountful revenue is the but that, comp said we to affect future our and some comp to As going forward. battle have a I've ] with I times, at lose investing on as driving

Devin Ryan

is, looks then great. I flavor guess of other that pipeline that's in just folks CapEx just of the give any is there can And year, you the variables Andrew? like recruiting remainder the the that suggested, I That's assume just through what you of in one that the would terms part around bringing because how of

Andrew Bednar

would good elongated. say a the lines seeing I much opportunities are pipeline. more time We're transaction bit recruiting in Yes. time that the the lines, like

firm think still a will have we people probably a we But I which admit than year. our function interested more being busy, people time a bit dynamic. firm, now of of our generally, that's is good in to little

rush much And thoughtful I deliberate think off more both think the parties a people more earlier better said transactions, they job are, about change into like also the are. the I I before

healthy year that probably year. So still or a that's from again, have pretty this X on don't X with we track partners We're or every probably and or think X much aberration said X. X we on see I a average, I dynamic. have year, we retirements what

or investing. we're may the every partnership indicated one-off have X between on people pace year-over-year then opportunity probably more So generally, or pace. And X grow we've I will still bit our listing with while, in that public once in think where early and we're retirements X on periods. that we still a what have we little But a have on X

Operator

will take our Research. And O'Brien from next with question we Brendan Wolfe

Brendan O'Brien

Europe if to indicate lagged. I to if sense some as following We've relative you how your I activity to to specifically want activity see trends I I sponsors, touch ECB. recent guess just the the so pickup have with would Europe. compare to wanted the on in by heard in seen that moves any just And get a of want peers you've there And U.S.

Andrew Bednar

Europe announcements. think I lagging on is

to even don't that. tell You need you

You available from the data. publicly can see that

Our between terms in mix the U.S., Europe shifted revenue our today. of and a announced the bit leading down more little U.S.

you think in more terms we aligned metrics are of they activity. dashboard, on that in would our I much the look other terms at think of

robust. we when things the business So generally, letters, look different new think our I are at activities for And engagement of clients quite both like with reviews, sides Atlantic reasons.

exposure exposure lot and European of there of companies I on the different companies think we United many, Europe, to different are ground. many global particularly for well to their does the their boots their pressure a U.S., desires, think growth the into opportunity play areas increase are where rethink I looking example, which points to to in different States, for footprint, have which European

a European the largely in the pool. percentage terms are of U.S. of fee M&A and business greater it's probably of activity, We announced a XX% markets,

we activity. there United transactions of of But from Europe the type So that play positioned out think transactions. you're for seeing the in versus drivers I that different of see And well very types you that States. feel are

but I right terms lag over the referencing, think -- I think so that catch start you absolutely I up. have time you're of you're Usually, does in which to effect that about, think as business the will as sector European with head XX. expect into as of activity over half that our back I do for the likely into improve 'XX well where we and revenue it is, revenue

and in not material a because I material don't terms moves, of think in sponsor now a September. a move ECB expect activity, I change because likely change of of Fed

either assets continuation monetize think that or to see vehicles in a through sales IPOs. will need backlog generally, way, or significant through of through we I very sponsors some

early community little I matter And that that more activity. as to sponsor needs will they're the recovery, supply I overall a chain capital. a just here, we're I'll abnormally get days $X private flowing a to between it say credit mentioned dry And infrastructure, of naturally Xx sophisticated if But and low sponsor proportion I of more, now, do a of lead you in worth very there, it's come than think of of again, even the that. deployment investors. I've in bit of $X if think when, more pools an trillion significant not they're And it's capital and think, or trillion back. and sponsors powder add very equity

do So I of community coming activity a time. over see lot that from

Brendan O'Brien

And few on That's great there. the kind guess my for I touching a themes follow-up of color. of

puts the the the on in potential specifically, election, on and regime Just of U.S. takes hand, the one and change in a

sense just I other somewhat like hand, tailwind one accommodative headwind hand, the benefit. more you which of should have potentially the would or tariffs the On but guess activity. the on a But maybe potential puts a side might a be see FTC, takes, I higher a the a and not of the from FTC, get to FTC? accommodative and potential tariff like both [indiscernible] on more you tailwind how

Andrew Bednar

I'll service and just banker. I'm with not a I'm start that not a announcement just I'm the politician a public macroeconomist.

So I'll what view worth. it's my for give you

and what overthought in will probably Now many lives, parts have have I in and other do consequences. like for they're witnessed XX-year important career. mean my X our the really I career, people elections of elections they think have I really my of implications markets

having the change both regulation. And antitrust least are have probably been I think commentary my that review specifically, antitrust party at M&A now, lifetime. leaders some I that it and interested to think effects given the for that in in seems overstated

I be So on positive. balance, will that a think

Fed least that think at in lowering looking you I at rates. now have a motion to begin

have a signal. probably I debt that And think candidates have do focused emphasis spending. broadly. place helps we that less to is national less an a our and high seem and also and But important of be pivot on on think X that priority I markets

I be long-term they I financial in see or the down rate we'll the crisis. we COVID So to do zero, normally rates did over periods. think have probably during than don't had way higher a going

live wouldn't So just high, for time, you economy. to with rates painfully it just in be not the I that think a but above we're want going way troubled because prices levels really higher but a to long probably any signals

because hearing people So we're out it election the and clients of once removes We're that election. that processes not anything time out post appropriate not planning because for settled they're hearing from periods models uncertainty that But good next taking accelerating generally from any do I because are the they're of election. is stopping of and clients thinking horizon their actions. in an here think then

business. So in our good time that's a people for generally

Operator

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

James Yaro

just Now level XQ? over the that in year, typical how much average Just to back rise so we're X to stronger of should this it more half? think between in then how are I'll the the revenue Or and anchor likely past goalposts and for expect the here? more impacts we to the the summer -- trying between the revenue about sometimes quarter, between the to than about should Is this go-forward we quarters. thinking off see halfway continue for you we stop relatedly, slowdown be And into results or XQ there. conceivable dealmaking? revenue came And

Andrew Bednar

don't stay I'll far James, as that. from really give kind thanks so question. any guidance, away We revenue the of just for you know,

overly first quarter, given in going downside be There's I we quarters, more upside second quarter. to and in bit a that on first what we're volatility the reported mean about the the reversion. we've and overly weren't -- the some getting scale, there's not X excited our the think in here excited

people clients think pressure, a franchise. So we just be important engaging How sign clients have how are fee franchise. impossible But larger transactions many expect really a the to of It's look task. that. What that many market just value And what those us. of trying particularly not to lot to us, fact predict bring. complex for more we're an in I of see revenue a for that example, The strong at not calling going that's and indicia we and a I we successful seeing healthy really healthy all is are quarter-over-quarter. is at looking a paying

to we're unsatisfying answer job, just So of to quarter-to-quarter. We're world-class you not a it'll franchise, trying and trajectory multiply think build quarter be but great by take that, people think this it a we're volatility. but trying we don't have to business we're to your and X. in we simply And James, think the will just I do on most and

James Yaro

could on look about especially peers. in Just think they non-comp because trying year-on-year think Maybe light number that pressures us clear. the noncomp And did that's full the ahead. you just as I understand to little I been inflationary previously just rise the Maybe of bit more than trajectory many growth you've help cited by given. your dollars, super we a -- the that X% think of that year have

Andrew Bednar

take you do that Alex, to one? want Sure.

Alexandra Gottschalk

debt our been we relative leverage to particular, we also item the are over a but well a we on line a results it's first Yes, year. do generally -- that unfortunate controllable litigation and time, noncomp costs, very had and James. regular would item this sure. basis. Thanks, ongoing bit as that think episodic have improvement period. for margin. year, to higher to reflect a does bad those doing half should wouldn't some think very We're what more In the what long-term the those substantially which I I scale, in on for characterize see expect and I with with prior our costs with see are of Look,

James Yaro

non you're the. near comp the ratio term to talking the cover So of just about of in when dollars terms clear, be the

Alexandra Gottschalk

comp non terms near of dollars The yes. term, the in of

James Yaro

Yes.

Then Great. Okay. one. just last

to any how I and think to is right you was And think guess, high, near-term the forward? the reflective calculated versus over I triggers way that potential count on I share in the share going thinking next about notably we this historically. any unlocks then which was difference few be think update about need the this the share quarters? in count

Andrew Bednar

on we're you little forecast then a take through expecting? what don't why us but current bit Alex, count, the share Yes. the of

Alexandra Gottschalk

Yes, sure.

XX, So when outstanding look, buybacks in of to we that $XX I which QX. think our June the effected count $XXX function QX number million that really you're aggressive offering focus on under just is of is the in seeing the a obviously, timing million, the as is relative to very of

comp, from a we issue forward-looking So in that's do public obviously, share-based perspective, our all reflected of filings.

QX X an account shares. repurchases net the anticipating this units course would by That's intend choose market that And our end that the settled for open practice, enter again, And this is settle of we net or consistent do additional of the of on and our retirement basis those QX. year, any we're to million if before to past over and with a year. we shares

Operator

question And Aidan KBW. our with comes next from Hall

Aidan Hall

TPH. part M&A of been has acquisition growth historically of PWP's a

Although it's X foregoing really years ago. public

growth secondary more PWP? complementary it businesses, strategies kind sense And for I'd primary your fundraising, any versus on you to build Andrew, it's if make opportunities? where get be there's advisory curious whether buy to would any of other So thoughts inorganic think or

Andrew Bednar

Good Look, we're in Yes. the question. M&A business.

our ways the materially we business of by is change constantly out. brick, than been rather you other to about TPH, as correctly So we've than brick the what point nature which job doing think doing

that adjacencies and something some interesting. found be There and are financially We've strategically We looked over that would culturally compelling. are things time. at some haven't

restructuring added debt a added We've a and activist franchise. shareholder liability We team. now have advisory terrific We've a and core terrific advisory M&A and been team.

large little acquired more on had company market where that ] to the or talent, deals. acquisition go to we've but deals That's not have challenging always not full-on team We a [ companies.

to that. minded open are We

sense makes for us. that anything seen haven't just We

actively build that's worked extending mentioned, well very brick that only on so I has think as we're and not not off have But something And something attractive going and people and to looking an actively by some to capabilities core we are And being firm, reviews looking from keep for are And additional capabilities. we will adjacencies our lucrative and for line, is stray that have a course the right that us. which we're outside to team that at. continue there I product of just the advisory that we that.

Operator

that appears questions it at time. this I remarks. presenters no further our we to now will And have for turn or the back closing program additional any

Andrew Bednar

who Okay. and hope joining have especially We really Madison, everyone, relaxing call end you you the and of I the since appreciate you, in a the all of you, Thank the your firm who of today. to inside continue X and believed thank our potential continued summer. support, believe Perella firm as do Weinberg we franchise. and really day for a reflective those have unique

Bye-Bye. a for Have again you summer. nice thank joining. So

Operator

Earnings Weinberg does Call. today's XXXX Perella your Quarter This participation. Second Thank conclude Conference for you

time. any at disconnect may You

Perella Weinberg Partners (PWP) 2 Aug 242024 Q2 Earnings call transcript