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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A reveal several positive indicators: strong talent acquisition, optimistic asset management inflows, and balanced advisory services. Despite some uncertainties in achieving specific financial goals, the overall sentiment is positive with strong M&A prospects, especially in Europe, and a promising secondaries business. The market cap suggests moderate sensitivity to these factors, supporting a positive stock price movement prediction in the range of 2% to 8% over the next two weeks.
Total firm-wide revenue (first 9 months of 2025) $2.1 billion, including record financial advisory revenue of $1.3 billion. Reasons for change: Strong performance in M&A across various sectors and successful recruiting efforts.
Asset Management revenue (first 9 months of 2025) $827 million. Reasons for change: Improved investment performance, focus on key products and strategies, and favorable market conditions.
Firm-wide revenue (third quarter of 2025) $725 million, up 12% year-over-year. Reasons for change: Activity across both Financial Advisory and Asset Management businesses.
Financial Advisory revenue (third quarter of 2025) $422 million, up 14% year-over-year. Reasons for change: Participation in marquee transactions and collaboration across banking teams.
Asset Management revenue (third quarter of 2025) $294 million, up 8% year-over-year. Reasons for change: Increased management fees, higher incentive fees, and net inflows.
Average AUM (third quarter of 2025) $257 billion, 5% higher year-over-year. Reasons for change: Market appreciation and net inflows.
AUM as of September 30, 2025 $265 billion, 7% higher year-over-year. Reasons for change: Market appreciation of $12 billion and net inflows of $4.6 billion, partially offset by foreign exchange depreciation.
Compensation expense (third quarter of 2025) $475 million, ratio of 65.5% compared to 66% in the prior year. Reasons for change: Disciplined expense management.
Non-compensation expense (third quarter of 2025) $149 million, ratio of 20.5% compared to 21.4% in the prior year. Reasons for change: Disciplined expense management.
Effective tax rate (third quarter of 2025) 21.4% compared to 32.5% in the prior year. Reasons for change: Not explicitly mentioned.
Shareholder returns (third quarter of 2025) $60 million, including a quarterly dividend of $47 million. Reasons for change: Not explicitly mentioned.
ETF Business Expansion: Six strategies launched in 2025, with plans for further global expansion in the coming months.
Active ETFs: Two new active ETFs launched in Q3 2025, including Lazard U.S. Systematic Small Cap and listed infrastructure ETFs.
Geographic Expansion: Opened new offices in the Middle East and Northern Europe in 2025.
Client Engagement: Strong demand across investment platforms, particularly in quantitative and emerging market strategies.
Revenue Growth: Record firm-wide revenue of $725 million in Q3 2025, up 12% year-over-year.
Asset Management Performance: Achieved net positive flows of $1.6 billion year-to-date, with total AUM up 17%.
Financial Advisory Revenue: $422 million in Q3 2025, up 14% year-over-year.
Long-term Growth Strategy: On track to achieve or exceed 2030 objectives, including expanding financial advisory MDs by 10-15 net per year.
AI Integration: Focus on becoming the leading AI-enabled independent financial services firm.
U.S. government shutdown: Potential temporary effects on the timing of deal approvals and other related impacts.
Geopolitical and macroeconomic turbulence: Clients face challenges navigating shifting geopolitical and macroeconomic landscapes, which could impact business operations and strategies.
Restructuring and liability management: Businesses are repositioning to address evolving market conditions, indicating potential financial and operational challenges.
Sub-advised funds outflows: These funds have disproportionately contributed to outflows over the past few years, posing a challenge to asset management revenue stability.
Foreign exchange depreciation: A $400 million depreciation in foreign exchange partially offset market appreciation and net inflows, impacting overall financial performance.
Dependence on private equity and secondary funds: The firm's expanded connectivity to private capital is critical, but reliance on private equity and secondary funds could pose risks if market conditions change.
AI and technological advancements: While offering opportunities, advances in AI require significant adaptation and could disrupt traditional business models.
Financial Advisory Outlook: The company anticipates an increasingly constructive environment for advisory activity, with demand for M&A increasing and restructuring and liability management activity remaining strong. Expanded connectivity to private capital is expected to position the company well as private equity activity resumes. Growth is expected across major geographies, including the United States, Europe, and the Middle East.
Asset Management Growth: The company sees 2025 as an inflection point for its asset management business, with improved investment performance, favorable market conditions, and record gross inflows. The company plans to expand its range of offerings, including active ETFs, and expects further global expansion in the coming months. The appointment of Chris Hogbin as CEO of Lazard Asset Management is expected to accelerate progress toward long-term growth.
Long-Term Growth Strategy (Lazard 2030): The company remains on track to achieve or exceed its 2030 objective of expanding its team of financial advisory MDs by 10 to 15 net per year. It aims to continue raising productivity, targeting average revenue per MD of $10 million by 2028. The company also plans to double firm-wide revenue from 2023 to 2030 and deliver an average annual shareholder return of 10% to 15% over the same period.
AI and Technology Integration: The company is leveraging AI to scale intellectual capital and enhance client relationships. It aims to become the leading AI-enabled independent financial services firm.
Geopolitical and Market Trends: The company is focusing on geopolitical advisory and expanding in the Middle East, leveraging expertise in business and geopolitical trends to navigate shifting macroeconomic and geopolitical landscapes.
Quarterly Dividend: In the third quarter of 2025, Lazard returned $60 million to shareholders, including a quarterly dividend of $47 million. Additionally, a quarterly dividend of $0.50 per share was declared.
The earnings call summary and Q&A reveal several positive indicators: strong talent acquisition, optimistic asset management inflows, and balanced advisory services. Despite some uncertainties in achieving specific financial goals, the overall sentiment is positive with strong M&A prospects, especially in Europe, and a promising secondaries business. The market cap suggests moderate sensitivity to these factors, supporting a positive stock price movement prediction in the range of 2% to 8% over the next two weeks.
The earnings call summary presents a mixed picture: positive strategic initiatives and shareholder returns, but uncertainties in the advisory business and high attrition in asset management. The Q&A reveals optimism in future M&A activities and asset management progress, but lacks specifics on achieving key financial goals and AI implementation. The market cap indicates moderate stock sensitivity. Overall, the neutral rating reflects balanced positives and negatives, suggesting limited stock price movement in the short term.
The earnings call revealed strong financial performance with a notable increase in EPS and revenue growth driven by private capital. The strategic focus on asset management and future mandates suggests continued growth. Despite competitive pressures and regulatory challenges, the share buyback program and increased market share in financial advisory are positive indicators. The Q&A highlighted uncertainties but did not reveal significant negative trends. Given the market cap, a positive stock price movement of 2% to 8% is expected over the next two weeks.
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