Perella Weinberg Partners (PWP) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong client engagement, strategic recruitment, and growth initiatives. Financials show stable revenues with a diversified revenue base, reduced non-compensation expenses, and no debt. The Q&A indicates positive market trends and strategic acquisitions, though management avoided specific guidance. Shareholder returns through dividends and repurchases add positivity. Given these factors, the stock is likely to experience a positive reaction in the coming weeks, despite the lack of specific revenue guidance.
Key Financial Performance
Second Quarter Revenues $155 million, included $28 million related to closings that occurred within the first few days of the third quarter and were recorded in the second quarter.
First Half Revenues $367 million, flat year-over-year. The composition changed as the first half of 2024 had 2 transactions accounting for over 35% of revenue, while in 2025, the business broadened by industry, product, and geography with a higher average fee per engagement.
Adjusted Compensation Margin 67% of revenues, consistent with the first quarter.
Adjusted Non-Compensation Expense $36 million for the quarter, a meaningful drop from the prior year and prior quarter, largely driven by a decline in litigation-related costs. For the first half of the year, non-compensation expenses totaled $86 million, up 9.5% from the same period last year.
Adjusted Tax Rate 30% for the first half, excluding the benefit from stock-based compensation vesting at a higher price than the grant date.
Capital Returned to Equity Holders $24 million in the second quarter through net settlement of RSUs, open market purchases, and dividends. In the first half of the year, 1.7 million Class A common shares were repurchased.
Cash and Debt $145 million in cash and no debt at the end of the second quarter.
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Operating Highlights
Acquisition of Devon Park Advisors: Perella Weinberg announced the acquisition of Devon Park Advisors, a private funds advisory firm specializing in GP-led secondaries. This acquisition establishes a private funds advisory business and expands coverage of alternative asset managers, including private equity, private credit, infrastructure, venture, and real estate.
Broadened Business Composition: The company expanded its business by industry, product, and geography, recording a higher average fee per engagement. This reflects improved client targeting and prudent business selection.
Talent Investments: Significant investments were made in senior talent, with 6 partners and 3 managing directors joining by year-end, representing expertise in various sectors. Additionally, 6 managing directors were promoted to partner, marking the best hiring year since going public.
Cost Management: Adjusted non-compensation expenses dropped significantly in Q2, driven by a decline in litigation-related costs. The company is now modeling a mid-single-digit increase in non-compensation expenses for the full year, lower than previously indicated.
Shift in Client Base: The acquisition of Devon Park Advisors changes the client mix overnight, addressing the underrepresentation of financial sponsors in the client base and revenue.
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Risk or Challenges
Transaction Delays: Conversion of client dialogues and mandates into announcements, especially for large transactions, is taking longer due to factors such as financing challenges, valuation gaps between buyers and sellers, and operating weakness in certain industries.
Economic and Consumer Caution: Operating weakness in certain industries is attributed to a more cautious consumer, which could impact transaction volumes and revenue generation.
Talent Investment Costs: Significant investments in senior talent hiring and promotions may increase costs and impact short-term financial performance.
Litigation Costs: Although litigation-related costs have declined, they remain a factor in non-compensation expenses, which increased by 9.5% in the first half of the year compared to the same period last year.
Dependence on Financial Sponsors: Historically, financial sponsors were underrepresented in the client base and revenue mix, which could pose a challenge to diversifying revenue streams despite the recent acquisition of Devon Park Advisors.
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Guidance & Outlook
Revenue and Transaction Announcements: The company anticipates a broader acceleration in transaction announcements, with many active mandates currently in advanced stages. However, challenges such as financing issues, valuation gaps, and cautious consumer behavior in certain industries may delay some transactions.
Talent Investments: By year-end, the company expects to onboard 12 new partners and 9 new managing directors, marking its best hiring year since going public. This is expected to create a significant source of future revenue.
Acquisition of Devon Park Advisors: The acquisition is expected to contribute to financial performance immediately upon closing and will expand the company's capabilities in private funds advisory, targeting a fast-growing market segment.
Non-Compensation Expenses: The company is now modeling a mid-single-digit increase in non-compensation expenses for the full year, which is lower than previously indicated.
Adjusted Tax Rate: The adjusted tax rate is expected to remain at 30% for the remainder of the year.
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Shareholder Return Plan
Quarterly Dividend: Declared a quarterly dividend of $0.07 per share.
Historical Returns: Since entering the public markets 4 years ago, the company has returned over $675 million to equity holders, including the repurchase of more than 32 million shares and share equivalents.
Share Repurchase in Q2 2025: Repurchased 1.7 million Class A common shares in the first half of the year to offset dilution from stock-based compensation vesting.
Cumulative Share Repurchase: Since entering the public markets, the company has repurchased more than 32 million shares and share equivalents.
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Key Q&A
Q:What is included in the peak level of gross fee backlog?
A:Backlog includes announced and pending deals. The pipeline, which involves engagement letters and potential mandates, is trending at peak levels. There are challenges in getting transactions announced, but client activity and engagement are strong.
Q:What is the significance of the Devon Park Advisors acquisition?
A:Devon Park Advisors is a small firm with a significant impact, aligning strategically and culturally with the company. It enhances capabilities in private capital, including private credit, infrastructure, venture, and real estate. The acquisition addresses liquidity needs and aligns with client demands for GP-led secondaries.
Q:What is the current and projected partner headcount?
A:The company ended June with 64 partners, currently has 70, and expects at least 76 by year-end, subject to retirements or movements.
Q:What is the revenue outlook for the remainder of the year?
A:The company does not provide revenue guidance but is pleased with its performance, being only 2% down in the first half compared to last year. Leading indicators are positive, but the timing of transaction closings remains uncertain.
Q:What is the status of recruiting and its impact on the company?
A:Recruiting has picked up, with a steady flow of high-quality candidates. The company is deliberate in hiring to ensure cultural fit and integration. The focus on recruiting is expected to contribute to long-term growth.
Q:What is the outlook for large-cap deals?
A:Momentum in large-cap deals is building, with recent significant transactions serving as a positive signal. The market is trending positively, and transactions often lead to more transactions.
Q:What is the restructuring outlook through year-end?
A:The restructuring business, part of the broader financing and capital solutions segment, is trending toward a record year. Activity levels remain strong, providing a steady base for the company.
Q:What is the scale of senior banker growth and its implications?
A:The company has no limitations on hiring senior bankers, focusing on strategic and cultural fit. Growth is expected to be steady, with a mix of internal promotions and external hires. About one-third of the partnership will have been with the company for less than three years by year-end.
Q:What are the capital return aspirations?
A:The company prioritizes investing in the business to generate revenue and returns but remains mindful of returning capital to shareholders. Current focus is on business investment, including new hires and the Devon Park transaction.
Q:Review of Unclear Management Responses
A:Management avoided giving direct revenue guidance, citing the unpredictability of transaction closings. They also did not provide specific details on the long-term implications of senior banker growth on the compensation ratio, stating it was too early to determine.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Advisors fund
Alexander Scott
Alexandra Kathleen
Analyst Conference
Bond Research
Brendan OBrien
CEO Partner
CFO CEO
Devin Patrick
Director Executive
Director Head
Division Alexander
Division Edwin
ET Partners
Edwin Yaro
Executive Director
GP secondary
Gottschalk MD
Group
LLC
Research Division
Today
acquisition
announcement
consumer
end partner
environment
firm expertise
gap
hiring
mandate
partner director
past
team
PWP Transcript
Perella Weinberg Partners (PWP) Q3 2025 Earnings Call Transcript
Positive11-7
The earnings call reveals strong European growth, proactive share management, and a strategic acquisition of Devon Park, which is expected to boost future revenue. The Q&A indicates positive momentum in M&A and restructuring activities. However, management's lack of specificity in some responses adds uncertainty. The overall sentiment is positive due to solid fundamentals, growth prospects, and strategic investments, despite not achieving record revenues.
Perella Weinberg Partners (PWP) Q2 2025 Earnings Call Transcript
Positive8-1
The earnings call reveals strong client engagement, strategic recruitment, and growth initiatives. Financials show stable revenues with a diversified revenue base, reduced non-compensation expenses, and no debt. The Q&A indicates positive market trends and strategic acquisitions, though management avoided specific guidance. Shareholder returns through dividends and repurchases add positivity. Given these factors, the stock is likely to experience a positive reaction in the coming weeks, despite the lack of specific revenue guidance.
Perella Weinberg Partners (NASDAQ:PWP) Q1 2025 Earnings Call Transcript
Positive5-3
The earnings call reveals strong financial performance with record revenues and a significant increase in client engagement. Despite regulatory and economic challenges, the firm remains optimistic about future growth and client-centric services. The Q&A section highlights management's confidence in overcoming current slowdowns and leveraging hiring opportunities. Shareholder returns through dividends and buybacks are robust. While litigation costs are a concern, they are not expected to recur. Overall, the positive financial metrics, strategic focus, and shareholder returns suggest a positive stock price movement.
Earnings call transcript: Perella Weinberg Q4 2024 revenue hits record
Positive2-7
The earnings call highlights strong financial performance with a 35% revenue increase and no debt, alongside a record capital return to shareholders. Despite some challenges, like increased litigation costs and recruitment hurdles, the company is optimistic about growth in both M&A and non-M&A sectors. The Q&A section supports this positive outlook, with management indicating a strong restructuring market and potential growth in Europe. The firm's commitment to shareholder returns, coupled with optimistic guidance, suggests a positive stock price reaction over the next two weeks.
PWP Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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Why do some answers appear as “Unclear” or “Inaudible”?
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
