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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lazard Inc | NYSE:LAZ | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
4.56 | 10.53% | 47.87 | 48.455 | 44.00 | 44.29 | 1,019,098 | 17:30:45 |
Lazard, Inc. (NYSE: LAZ) today reported both net revenue and adjusted net revenue1 of $685 million for the quarter ended June 30, 2024, and net revenue of $1,450 million and adjusted net revenue1 of $1,431 million for the first half of 2024.
On a U.S. GAAP basis, second-quarter and first-half 2024 net income were $50 million or $0.49 per share, diluted, and $86 million or $0.84 per share, diluted, respectively. Adjusted net income1 was $53 million or $0.52 per share, diluted, for the second quarter of 2024, and $119 million or $1.17 per share, diluted, for the first half of 2024.
"Lazard’s record revenue in Financial Advisory for the first-half of 2024 demonstrates the ongoing, successful execution of our long-term growth strategy,” said Peter R. Orszag, Chief Executive Officer, Lazard. “Our Asset Management business continues to produce solid results as we effectively serve clients while evolving to meet their investment priorities. Overall, our performance reflects an unwavering focus on delivering excellence in advisory and investment solutions for our clients, our renewed ambition for growth, and our increasingly commercial and collegial culture.”
(Selected results, $ in millions,
Three Months Ended
Six Months Ended
except per share data and AUM)
June 30,
June 30,
U.S. GAAP Financial Measures
2024
2023
%'24-'23
2024
2023
% '24-'23
Net Revenue
$685
$643
7%
$1,450
$1,186
22%
Financial Advisory
$411
$352
17%
$865
$630
37%
Asset Management
$285
$288
(1)%
$581
$572
2%
Net Income (Loss)
$50
($124
)
NM
$86
($146
)
NM
Per share, diluted
$0.49
($1.41
)
NM
$0.84
($1.68
)
NM
Adjusted Financial Measures1
Net Revenue
$685
$620
10%
$1,431
$1,147
25%
Financial Advisory
$408
$344
19%
$855
$618
38%
Asset Management
$265
$267
(1)%
$541
$532
2%
Net Income
$53
$23
133%
$119
$–
NM
Per share, diluted
$0.52
$0.24
117%
$1.17
$–
NM
Assets Under Management ("AUM")
($ in billions)
Ending AUM
$245
$239
2%
Average AUM
$245
$235
4%
$246
$231
6%
Note: Endnotes are on page 5 of this release. Reconciliations of U.S. GAAP to Adjusted results are shown on pages 13-15.
NET REVENUE
Financial Advisory
Financial Advisory net revenue and adjusted net revenue1 were $411 million and $408 million for the second quarter of 2024, 17% and 19% higher than the second quarter of 2023, respectively.
Financial Advisory net revenue and adjusted net revenue1 were $865 million and $855 million for the first half of 2024, 37% and 38% higher than the first half of 2023, respectively.
During and since the second quarter of 2024, Lazard has been engaged in significant and complex M&A transactions globally, including the following (clients are in italics): WestRock's $33.5 billion combination with Smurfit Kappa; Renault’s creation of HORSE Powertrain Limited with Geely and the sale of a 10% equity interest to Saudi Aramco, valuing the new company at €7.4 billion; Rivian’s $5 billion strategic investment from Volkswagen Group; Vertex Pharmaceuticals' $4.9 billion acquisition of Alpine Immune Sciences; Synlab's $4.3 billion acquisition by Cinven; KPS Capital Partners’ €3.5 acquisition of Innomotics from Siemens AG; Roquette Freres’ $2.9 billion agreement to acquire IFF Pharma Solutions; Neiman Marcus Group’s $2.7 billion sale to HBC, parent of Saks Fifth Avenue; Sanofi's $2.4 billion acquisition of Inhibrx; HASI's $2 billion strategic partnership with KKR to invest in sustainable infrastructure projects; Elecnor Group’s sale of its Spanish based renewables business Enerfin to Statkraft for €1.8 billion; Air Products & Chemicals' $1.8 billion sale of its LNG business to Honeywell International Inc.; Thales’ sale of its Ground Transportation Systems business to Hitachi Rail, for an enterprise value of €1.7 billion; Bpost’s $1.3 billion acquisition of Staci; CVC Capital Partners' €600 million acquisition of La Piadineria; Ultra Maritime's $550 million sale of its Signature Management & Power Business to ESCO Technologies, Inc.; EIG and West Burton Energy’s £450 million sale of is operational CCGT and BESS to TotalEnergies; Allen & Overy LLP's combination with Shearman & Sterling and CVC Capital Partners’ investment in Hempel.
Lazard's preeminent restructuring and liability management practice has been engaged in a broad range of complex restructuring and debt advisory assignments, including company roles involving Belk, Enviva and LivePerson and creditor and/or related party roles involving Endo Pharmaceuticals, Hilding Anders, JOANN, KLDiscovery, Rite Aid and SVB Financial Group.
Our capital advisory and solutions practices remain active and engaged in assignments, including Ceva Sante Animale’s €2.4 billion Term Loan B repricing and resizing; CVC Capital Partners on a single asset continuation fund; Eir Partners’ closing of $496 million Investment Program II; Exosens’ initial public offer on Euronext Paris valuing the company at $1.1 billion; Kingswood Capital's closing of $1.5 billion Kingswood Capital Opportunities Fund III; Morrisons, a portfolio company of CD&R, on its £1.1 billion debt reduction exercise; and UL Standards & Engagement on the IPO of UL Solutions. Our sovereign advisory practice continues to be active in advising governments and sovereign entities across developed and emerging markets.
For a list of publicly announced transactions please visit our website.
Asset Management
For the second quarter of 2024, Asset Management net revenue and adjusted net revenue1 were $285 million and $265 million, respectively, both 1% lower than the second quarter of 2023.
Management fees and other revenue, on an adjusted basis1, were $263 million for the second quarter of 2024, 1% higher and 2% lower than the second quarter of 2023 and first quarter of 2024, respectively.
Incentive fees, on an adjusted basis1, were $3 million for the second quarter of 2024, compared to $6 million for the second quarter of 2023.
Average assets under management (AUM) were $245 billion for the second quarter of 2024, 4% higher than the second quarter of 2023, and 1% lower than the first quarter of 2024, respectively.
For the first half of 2024, Asset Management net revenue and adjusted net revenue1 were $581 million and $541 million, respectively, both 2% higher than the first half of 2023.
Management fees and other revenue, on an adjusted basis1, were $531 million for the first half of 2024, 2% higher than the first half of 2023.
Incentive fees, on an adjusted basis1, were $10 million for the first half of 2024, compared to $11 million for the first half of 2023.
Average AUM for the first half of 2024 was $246 billion, 6% higher than the first half of 2023. AUM as of June 30, 2024, was $245 billion, 2% lower than March 31, 2024, and 2% higher than June 30, 2023, respectively. The sequential change from March 31, 2024 was driven by market appreciation of $2.5 billion, foreign exchange depreciation of $1.7 billion and net outflows of $6.6 billion.
OPERATING EXPENSES
Compensation and Benefits Expense
For the second quarter of 2024, compensation and benefits expense on a U.S. GAAP and adjusted basis1 were $453 million and $452 million, respectively, compared to $572 million and $424 million, respectively, for the second quarter of 2023. The adjusted compensation ratio2 for the second quarter of 2024 was 66.0%, compared to the second-quarter 2023 ratio of 68.4%.
For the first half of 2024, compensation and benefits expense on a U.S. GAAP and adjusted basis1 were $1,003 million and $945 million, respectively, compared to $1,022 million and $823 million, respectively, for the first half of 2023.
We focus on the adjusted compensation ratio to manage costs, balancing a view of current conditions in the market for talent alongside our objective to drive long-term shareholder value. Our goal remains to deliver an adjusted compensation ratio over the cycle in the mid- to high-50s percentage range, while targeting a consistent deferral policy.
Non-Compensation Expenses
For the second quarter of 2024, non-compensation expenses on a U.S. GAAP basis were $169 million, 7% lower than the second quarter of 2023 which included charges associated with our cost-saving initiatives. On an adjusted basis1, non-compensation expenses were $149 million, 3% higher than the second quarter of 2023, primarily reflecting higher professional services and technology spending.
The adjusted non-compensation ratio3 was 21.7% for the second quarter of 2024, compared to 23.2% for the second quarter of 2023.
For the first half of 2024, non-compensation expenses on a U.S. GAAP and adjusted basis1 were $329 million and $283 million, respectively, 6% and 1% lower than the first half of 2023, respectively.
The adjusted non-compensation ratio3 was 19.8% for the first half of 2024, compared to 24.9% for the first half of 2023.
Our goal remains to deliver an adjusted non-compensation ratio between 16% to 20% over the cycle.
TAXES
The provisions for income taxes, on a U.S. GAAP and adjusted basis1 were $12 million and $9 million, respectively, for the second quarter of 2024. The effective tax rate on an adjusted basis1 was 14.0% for the second quarter of 2024, compared to 31.2% for the second quarter of 2023.
The provisions for income taxes, on a U.S. GAAP and adjusted basis1 were $26 million and $41 million, respectively, for the first half of 2024. The effective tax rate on an adjusted basis1 was 25.5% for the first half of 2024, compared to 67.8% for the first half of 2023.
CAPITAL MANAGEMENT AND BALANCE SHEET
In the second quarter of 2024, Lazard returned $70 million to shareholders, which included: $45 million in dividends; $19 million in share repurchases of our common stock; and $6 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.
In the first half of 2024, Lazard returned $192 million to shareholders, which included: $89 million in dividends; $41 million in share repurchases of our common stock; and $62 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.
During the first half of 2024, we repurchased 1.1 million shares at an average price of $38.66. On July 24, 2024, our Board of Directors authorized additional share repurchase of $200 million, which expires as of December 31, 2026, bringing our total outstanding share repurchase authorization to approximately $360 million.
On July 24, 2024, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on August 16, 2024, to stockholders of record on August 5, 2024.
Lazard’s financial position remains strong. As of June 30, 2024, our cash and cash equivalents were $848 million.
ENDNOTES
Beginning in the first quarter of 2024, Lazard has updated the names of certain non-U.S. GAAP ("non-GAAP") measures and metrics. The nomenclature change did not result in any change to the components of our non-GAAP measures and metrics compared to prior periods. Reconciliations of U.S. GAAP to Adjusted results are shown on pages 13-15.
1
A non-GAAP measure. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. See attached financial schedules and related notes for a detailed explanation of adjustments to corresponding U.S. GAAP results. We believe that presenting our results on an adjusted basis, in addition to the U.S. GAAP results, is a meaningful and useful way to compare our operating results across periods.
2
A non-GAAP measure which represents adjusted compensation and benefits expense as a percentage of adjusted net revenue.
3
A non-GAAP measure which represents adjusted non-compensation expenses as a percentage of adjusted net revenue.
CONFERENCE CALL
Lazard will host a conference call at 8:00 a.m. ET on July 25, 2024, to discuss the company’s financial results for the second quarter and first-half of 2024. The conference call can be accessed via a live audio webcast available through Lazard’s Investor Relations website at www.lazard.com, or by dialing 1 800-343-4136 (toll-free, U.S. and Canada) or +1 203-518-9843 (outside of the U.S. and Canada), 15 minutes prior to the start of the call. Conference ID: LAZQ224.
A replay of the conference call will be available by 10:00 a.m. ET, July 25, 2024, via the Lazard Investor Relations website at www.lazard.com, or by dialing +1 800-839-5637 (toll-free, U.S. and Canada) or +1 402-220-2562 (outside of the U.S. and Canada).
ABOUT LAZARD
Founded in 1848, Lazard is one of the world's preeminent financial advisory and asset management firms, with operations in North and South America, Europe, the Middle East, Asia, and Australia. Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals. For more information, please visit www.lazard.com.
Cautionary Note Regarding Forward-Looking Statements:
This press release contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our strategies, business plans and initiatives and anticipated trends in our business. These forward-looking statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by these forward-looking statements.
These factors include, but are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A “Risk Factors,” and also discussed from time to time in our reports on Forms 10-Q and 8-K, including the following:
Although we believe the statements reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, achievements or events. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this release to conform our prior statements to actual results or revised expectations and we do not intend to do so.
Lazard, Inc. is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, Lazard and its operating companies use their websites, and other social media sites to convey information about their businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of assets under management in various mutual funds, hedge funds and other investment products managed by Lazard Asset Management LLC and Lazard Frères Gestion SAS. Investors can link to Lazard and its operating company websites through www.lazard.com.
***
LAZ-EPE
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP - unaudited)
Three Months Ended
% Change From
June 30,
March 31,
June 30,
March 31,
June 30,
($ in thousands, except per share data)
2024
2024
2023
2024
2023
Total revenue
$707,991
$785,481
$662,318
(10%)
7%
Interest expense
(22,642
)
(20,728
)
(19,204
)
Net revenue
685,349
764,753
643,114
(10%)
7%
Operating expenses:
Compensation and benefits
452,560
550,824
572,231
(18%)
(21%)
Occupancy and equipment
32,031
32,857
32,800
Marketing and business development
25,493
23,599
28,582
Technology and information services
46,406
44,917
51,370
Professional services
23,734
19,880
21,402
Fund administration and outsourced services
27,114
26,140
28,968
Amortization and other acquisition-related costs
68
68
95
Other
14,303
11,907
17,739
Non-compensation expenses
169,149
159,368
180,956
6%
(7%)
Operating expenses
621,709
710,192
753,187
(12%)
(17%)
Operating income (loss)
63,640
54,561
(110,073
)
17%
NM
Provision for income taxes
11,587
14,337
10,303
(19%)
12%
Net income (loss)
52,053
40,224
(120,376
)
29%
NM
Net income attributable to noncontrolling interests
2,144
4,469
3,637
Net income (loss) attributable to Lazard, Inc.
$49,909
$35,755
($124,013
)
40%
NM
Attributable to Lazard, Inc. Common Stockholders:
Weighted average shares outstanding:
Basic
92,886,364
91,260,465
88,729,654
2%
5%
Diluted
100,627,867
99,351,769
88,729,654
1%
13%
Net income (loss) per share:
Basic
$0.53
$0.38
($1.41
)
39%
NM
Diluted
$0.49
$0.35
($1.41
)
40%
NM
Note: For the three month periods ended June 30, 2024, March 31, 2024 and June 30, 2023, Financial Advisory net revenue was $411,308, $453,507 and $352,477, respectively; Asset Management net revenue was $285,487, $295,476 and $288,313, respectively; Corporate net revenue (loss) was ($11,446), $15,770 and $2,324, respectively.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. GAAP - unaudited)
Six Months Ended
June 30,
June 30,
($ in thousands, except per share data)
2024
2023
% Change
Total revenue
$1,493,472
$1,224,229
22%
Interest expense
(43,370
)
(38,679
)
Net revenue
1,450,102
1,185,550
22%
Operating expenses:
Compensation and benefits
1,003,384
1,022,198
(2%)
Occupancy and equipment
64,888
64,573
Marketing and business development
49,092
51,344
Technology and information services
91,323
95,410
Professional services
43,614
45,728
Fund administration and outsourced services
53,254
55,544
Amortization and other acquisition-related costs
136
143
Other
26,210
38,042
Non-compensation expenses
328,517
350,784
(6%)
Benefit pursuant to tax receivable agreement
–
(40,435
)
Operating expenses
1,331,901
1,332,547
–%
Operating income (loss)
118,201
(146,997
)
NM
Provision (benefit) for income taxes
25,924
(11,422
)
NM
Net income (loss)
92,277
(135,575
)
NM
Net income attributable to noncontrolling interests
6,613
10,610
Net income (loss) attributable to Lazard, Inc.
$85,664
($146,185
)
NM
Attributable to Lazard, Inc. Common Stockholders:
Weighted average shares outstanding:
Basic
92,073,414
88,160,753
4%
Diluted
99,989,817
88,160,753
13%
Net income (loss) per share:
Basic
$0.91
($1.68
)
NM
Diluted
$0.84
($1.68
)
NM
Note: For the six month periods ended June 30, 2024 and June 30, 2023, Financial Advisory net revenue was $864,815 and $630,051, respectively; Asset Management net revenue was $580,963 and $572,357, respectively; Corporate net revenue (loss) was $4,324 and ($16,858), respectively.
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
(U.S. GAAP - unaudited)
As of
June 30,
December 31,
($ in thousands)
2024
2023
ASSETS
Cash and cash equivalents
$847,555
$971,316
Deposits with banks and short-term investments
203,809
219,576
Restricted cash
33,089
34,091
Receivables
725,488
762,319
Investments
687,507
701,964
Property
220,663
232,516
Operating lease right-of-use assets
451,707
407,213
Goodwill and other intangible assets
393,967
394,928
Deferred tax assets
507,572
497,340
Other assets
455,837
414,518
Total Assets
$4,527,194
$4,635,781
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY
Liabilities
Deposits and other customer payables
$382,115
$443,262
Accrued compensation and benefits
550,189
781,375
Operating lease liabilities
522,864
485,191
Tax receivable agreement obligation
84,137
115,087
Senior debt
1,852,149
1,690,200
Other liabilities
540,619
550,804
Total liabilities
3,932,073
4,065,919
Commitments and contingencies
Redeemable noncontrolling interests
80,931
87,675
Stockholders' equity
Preferred stock, par value $.01 per share
–
–
Common stock, par value $.01 per share
1,128
1,128
Additional paid-in capital
218,455
247,204
Retained earnings
1,382,703
1,402,636
Accumulated other comprehensive loss, net of tax
(306,293
)
(289,950
)
Subtotal
1,295,993
1,361,018
Class A common stock held by subsidiaries, at cost
(837,338
)
(937,259
)
Total Lazard, Inc. stockholders' equity
458,655
423,759
Noncontrolling interests
55,535
58,428
Total stockholders' equity
514,190
482,187
Total liabilities, redeemable noncontrolling interests and stockholders' equity
$4,527,194
$4,635,781
Note: "Property" includes $70 million and $73 million of property held for sale at June 30, 2024 and December 31, 2023, respectively.
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Adjusted Basis - Non-GAAP - unaudited)
Three Months Ended
% Change From
June 30,
March 31,
June 30,
March 31,
June 30,
($ in thousands, except per share data)
2024
2024
2023
2024
2023
Net Revenue:
Financial Advisory
$407,936
$446,634
$344,167
(9%)
19%
Asset Management
265,219
275,934
267,058
(4%)
(1%)
Corporate
11,487
23,997
8,801
(52%)
31%
Adjusted net revenue
$684,642
$746,565
$620,026
(8%)
10%
Expenses:
Adjusted compensation and benefits expense
$451,864
$492,733
$424,097
(8%)
7%
Adjusted compensation ratio (b)
66.0
%
66.0
%
68.4
%
Adjusted non-compensation expenses
$148,612
$134,293
$143,677
11%
3%
Adjusted non-compensation ratio (c)
21.7
%
18.0
%
23.2
%
Earnings:
Adjusted operating income
$84,166
$119,539
$52,252
(30%)
61%
Adjusted operating margin (d)
12.3
%
16.0
%
8.4
%
Adjusted net income
$52,869
$66,606
$22,692
(21%)
133%
Adjusted diluted net income per share
$0.52
$0.66
$0.24
(21%)
117%
Adjusted diluted weighted average shares (e)
102,188,981
101,532,219
95,620,902
1%
7%
Adjusted effective tax rate (f)
14.0
%
32.6
%
31.2
%
This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.
See Notes to Financial Schedules
SELECTED SUMMARY FINANCIAL INFORMATION (a)
(Adjusted Basis - Non-GAAP - unaudited)
Six Months Ended
June 30,
June 30,
($ in thousands, except per share data)
2024
2023
% Change
Net Revenue:
Financial Advisory
$854,570
$618,028
38%
Asset Management
541,153
531,703
2%
Corporate
35,484
(2,687
)
NM
Adjusted net revenue
$1,431,207
$1,147,044
25%
Expenses:
Adjusted compensation and benefits expense
$944,597
$823,187
15%
Adjusted compensation ratio (b)
66.0
%
71.8
%
Adjusted non-compensation expenses
$282,905
$285,935
(1%)
Adjusted non-compensation ratio (c)
19.8
%
24.9
%
Earnings:
Adjusted operating income
$203,705
$37,922
NM
Adjusted operating margin (d)
14.2
%
3.3
%
Adjusted net income (loss)
$119,475
($256
)
NM
Adjusted diluted net income per share
$1.17
$–
NM
Adjusted diluted weighted average shares (e)
101,860,599
88,160,753
NM
Adjusted effective tax rate (f)
25.5
%
67.8
%
This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Selected Summary Financial Information and Notes to Financial Schedules.
See Notes to Financial Schedules
ASSETS UNDER MANAGEMENT
(unaudited)
As of
% Change From
June 30,
March 31,
December 31,
March 31,
December 31,
($ in millions)
2024
2024
2023
2024
2023
Equity:
Emerging Markets
$27,044
$24,779
$25,288
9.1
%
6.9
%
Global
54,026
55,544
53,528
(2.7
%)
0.9
%
Local
52,738
54,841
52,208
(3.8
%)
1.0
%
Multi-Regional
56,618
60,089
59,114
(5.8
%)
(4.2
%)
Total Equity
190,426
195,253
190,138
(2.5
%)
0.2
%
Fixed Income:
Emerging Markets
9,250
9,080
9,525
1.9
%
(2.9
%)
Global
11,167
10,664
10,762
4.7
%
3.8
%
Local
5,729
6,378
6,080
(10.2
%)
(5.8
%)
Multi-Regional
19,965
21,098
21,740
(5.4
%)
(8.2
%)
Total Fixed Income
46,111
47,220
48,107
(2.3
%)
(4.1
%)
Alternative Investments
2,897
3,201
3,330
(9.5
%)
(13.0
%)
Private Wealth Alternative Investments
3,033
2,643
2,799
14.8
%
8.4
%
Private Equity
1,501
1,486
1,623
1.0
%
(7.5
%)
Cash Management
702
629
654
11.6
%
7.3
%
Total AUM
$244,670
$250,432
$246,651
(2.3
%)
(0.8
%)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2024
2024
2023
2024
2023
AUM - Beginning of Period
$250,432
$246,651
$232,140
$246,651
$216,125
Net Flows
(6,599
)
(6,630
)
(997
)
(13,229
)
2,002
Market and foreign exchange appreciation
837
10,411
8,197
11,248
21,213
AUM - End of Period
$244,670
$250,432
$239,340
$244,670
$239,340
Average AUM
$245,302
$246,950
$235,352
$246,126
$231,110
% Change in Average AUM
(0.7
%)
4.2
%
6.5
%
Note: Average AUM generally represents the average of the monthly ending AUM balances for the period.
RECONCILIATION OF U.S. GAAP TO ADJUSTED RESULTS (a)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
($ in thousands)
2024
2024
2023
2024
2023
Net Revenue
Financial Advisory net revenue - U.S. GAAP Basis
$411,308
$453,507
$352,477
$864,815
$630,051
Adjustments:
Reimbursable deal costs, provision for credit losses and other (g)
(3,372
)
(7,501
)
(8,310
)
(10,873
)
(12,091
)
Interest expense (h)
–
41
–
41
68
Losses associated with cost-saving initiatives (i)
–
587
–
587
–
Adjusted Financial Advisory net revenue
$407,936
$446,634
$344,167
$854,570
$618,028
Asset Management net revenue - U.S. GAAP Basis
$285,487
$295,476
$288,313
$580,963
$572,357
Adjustments:
Revenue related to noncontrolling interests (j)
(4,054
)
(4,097
)
(3,227
)
(8,151
)
(7,229
)
Distribution fees and other (g)
(16,216
)
(15,448
)
(18,028
)
(31,664
)
(33,428
)
Interest expense (h)
2
3
–
5
3
Adjusted Asset Management net revenue
$265,219
$275,934
$267,058
$541,153
$531,703
Corporate net revenue (loss) - U.S. GAAP Basis
($11,446
)
$15,770
$2,324
$4,324
($16,858
)
Adjustments:
Revenue related to noncontrolling interests (j)
(866
)
(3,006
)
(3,010
)
(3,872
)
(9,831
)
(Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements (k)
1,201
(9,373
)
(9,675
)
(8,172
)
(26,128
)
Provision for credit losses (g)
–
–
–
–
(7,500
)
Interest expense (h)
22,598
20,606
19,162
43,204
38,501
Asset impairment charges
–
–
–
–
19,129
Adjusted Corporate net revenue (loss)
$11,487
$23,997
$8,801
$35,484
($2,687
)
Net revenue - U.S. GAAP Basis
$685,349
$764,753
$643,114
$1,450,102
$1,185,550
Adjustments:
Revenue related to noncontrolling interests (j)
(4,920
)
(7,103
)
(6,237
)
(12,023
)
(17,060
)
(Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements (k)
1,201
(9,373
)
(9,675
)
(8,172
)
(26,128
)
Distribution fees, reimbursable deal costs, provision for credit losses and other (g)
(19,588
)
(22,949
)
(26,338
)
(42,537
)
(53,019
)
Interest expense (h)
22,600
20,650
19,162
43,250
38,572
Asset impairment charges
–
–
–
–
19,129
Losses associated with cost-saving initiatives (i)
–
587
–
587
–
Adjusted net revenue
$684,642
$746,565
$620,026
$1,431,207
$1,147,044
This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules.
See Notes to Financial Schedules
RECONCILIATION OF U.S. GAAP TO ADJUSTED RESULTS (a)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
($ in thousands, except per share data)
2024
2024
2023
2024
2023
Compensation and Benefits Expense
Compensation and benefits expense - U.S. GAAP Basis
$452,560
$550,824
$572,231
$1,003,384
$1,022,198
Adjustments:
Compensation and benefits expense related to noncontrolling interests (j)
(1,897
)
(2,108
)
(1,851
)
(4,005
)
(4,861
)
(Charges) credits pertaining to LFI and other similar arrangements (l)
1,201
(9,373
)
(9,675
)
(8,172
)
(26,128
)
Expenses associated with cost-saving initiatives
–
(46,610
)
(136,608
)
(46,610
)
(157,348
)
Expenses associated with senior management transition (m)
–
–
–
–
(10,674
)
Adjusted compensation and benefits expense
$451,864
$492,733
$424,097
$944,597
$823,187
Non-Compensation Expenses
Non-compensation expenses - U.S. GAAP Basis
$169,149
$159,368
$180,956
$328,517
$350,784
Adjustments:
Non-compensation expenses related to noncontrolling interests (j)
(881
)
(526
)
(749
)
(1,407
)
(1,590
)
Distribution fees, reimbursable deal costs, provision for credit losses and other (g)
(19,588
)
(22,949
)
(26,338
)
(42,537
)
(53,019
)
Amortization and other acquisition-related costs
(68
)
(68
)
(95
)
(136
)
(143
)
Expenses associated with cost-saving initiatives
–
(1,532
)
(10,097
)
(1,532
)
(10,097
)
Adjusted non-compensation expenses
$148,612
$134,293
$143,677
$282,905
$285,935
Operating Income (Loss)
Operating income (loss) - U.S. GAAP Basis
$63,640
$54,561
($110,073
)
$118,201
($146,997
)
Adjustments:
Operating income related to noncontrolling interests (j)
(2,142
)
(4,469
)
(3,637
)
(6,611
)
(10,610
)
Interest expense (h)
22,600
20,650
19,162
43,250
38,572
Amortization and other acquisition-related costs
68
68
95
136
144
Asset impairment charges
–
–
–
–
19,129
Losses associated with cost-saving initiatives (i)
–
587
–
587
–
Expenses associated with cost-saving initiatives
–
48,142
146,705
48,142
167,445
Expenses associated with senior management transition (m)
–
–
–
–
10,674
Benefit pursuant to tax receivable agreement obligation ("TRA") (n)
–
–
–
–
(40,435
)
Adjusted operating income
$84,166
$119,539
$52,252
$203,705
$37,922
Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes - U.S. GAAP Basis
$11,587
$14,337
$10,303
$25,924
($11,422
)
Adjustment:
Tax effect of adjustments
(2,960
)
17,878
–
14,918
10,884
Adjusted provision (benefit) for income taxes
$8,627
$32,215
$10,303
$40,842
($538
)
Net Income (Loss) attributable to Lazard, Inc.
Net income (loss) attributable to Lazard, Inc. - U.S. GAAP Basis
$49,909
$35,755
($124,013
)
$85,664
($146,185
)
Adjustments:
Asset impairment charges
–
–
–
–
19,129
Losses associated with cost-saving initiatives (i)
–
587
–
587
–
Expenses associated with cost-saving initiatives
–
48,142
146,705
48,142
167,445
Expenses associated with senior management transition (m)
–
–
–
–
10,674
Benefit pursuant to tax receivable agreement obligation ("TRA") (n)
–
–
–
–
(40,435
)
Tax effect of adjustments
2,960
(17,878
)
–
(14,918
)
(10,884
)
Adjusted net income (loss)
$52,869
$66,606
$22,692
$119,475
($256
)
Diluted Weighted Average Shares Outstanding
Diluted Weighted Average Shares Outstanding - U.S. GAAP Basis
100,627,867
99,351,769
88,729,654
99,989,817
88,160,753
Adjustment: participating securities including profits interest participation rights and other
1,561,114
2,180,450
6,891,248
1,870,782
–
Adjusted Diluted Weighted Average Shares Outstanding (e)
102,188,981
101,532,219
95,620,902
101,860,599
88,160,753
Diluted net income (loss) per share:
U.S. GAAP Basis
$0.49
$0.35
($1.41
)
$0.84
($1.68
)
Diluted net income (loss) effect of adjustments
0.03
0.31
1.65
0.33
1.68
Adjusted Basis
$0.52
$0.66
$0.24
$1.17
$–
This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules.
See Notes to Financial Schedules
RECONCILIATION OF NON-COMPENSATION EXPENSES U.S. GAAP TO ADJUSTED (a)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
($ in thousands)
2024
2024
2023
2024
2023
Non-compensation expenses - U.S. GAAP Basis:
Occupancy and equipment
$32,031
$32,857
$32,800
$64,888
$64,573
Marketing and business development
25,493
23,599
28,582
49,092
51,344
Technology and information services
46,406
44,917
51,370
91,323
95,410
Professional services
23,734
19,880
21,402
43,614
45,728
Fund administration and outsourced services
27,114
26,140
28,968
53,254
55,544
Amortization and other acquisition-related costs
68
68
95
136
143
Other
14,303
11,907
17,739
26,210
38,042
Non-compensation expenses - U.S. GAAP Basis
$169,149
$159,368
$180,956
$328,517
$350,784
Non-compensation expenses - Adjustments:
Occupancy and equipment (j)
($95
)
($1,573
)
($878
)
($1,668
)
($939
)
Marketing and business development (g) (j)
(2,944
)
(2,079
)
(5,164
)
(5,023
)
(7,892
)
Technology and information services (g) (j)
(49
)
(35
)
(7,436
)
(84
)
(7,509
)
Professional services (g) (j)
(1,085
)
(873
)
(1,989
)
(1,958
)
(3,391
)
Fund administration and outsourced services (g) (j)
(15,588
)
(15,035
)
(17,282
)
(30,623
)
(32,261
)
Amortization and other acquisition-related costs
(68
)
(68
)
(95
)
(136
)
(143
)
Other (g) (j)
(708
)
(5,412
)
(4,435
)
(6,120
)
(12,714
)
Subtotal non-compensation expenses adjustments
($20,537
)
($25,075
)
($37,279
)
($45,612
)
($64,849
)
Adjusted non-compensation expenses:
Occupancy and equipment
$31,936
$31,284
$31,922
$63,220
$63,634
Marketing and business development
22,549
21,520
23,418
44,069
43,452
Technology and information services
46,357
44,882
43,934
91,239
87,901
Professional services
22,649
19,007
19,413
41,656
42,337
Fund administration and outsourced services
11,526
11,105
11,686
22,631
23,283
Amortization and other acquisition-related costs
–
–
–
–
–
Other
13,595
6,495
13,304
20,090
25,328
Adjusted non-compensation expenses
$148,612
$134,293
$143,677
$282,905
$285,935
This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules.
See Notes to Financial Schedules
LAZARD, Inc.
Notes to Financial Schedules
(a)
Selected Summary Financial Information are non-GAAP measures. Lazard believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides a meaningful and useful basis for comparison of its operating results across periods.
Beginning in the first quarter of 2024, Lazard has updated the names of certain non-GAAP measures and metrics. The nomenclature change did not result in any change to the components of our non-GAAP measures and metrics compared to prior periods.
(b)
A non-GAAP measure which represents adjusted compensation and benefits expense as a percentage of adjusted net revenue.
(c)
A non-GAAP measure which represents adjusted non-compensation expenses as a percentage of adjusted net revenue.
(d)
A non-GAAP measure which represents adjusted operating income as a percentage of adjusted net revenue.
(e)
A non-GAAP measure which includes units of the long-term incentive compensation program consisting of profits interest participation rights, which are equity incentive awards that, subject to certain conditions, may be exchanged for shares of our common stock. Certain profits interest participation rights may be excluded from the computation of outstanding stock equivalents for U.S. GAAP net income per share. In addition, this measure includes the dilutive effect of the weighted average number of shares of common stock issuable from share-based compensation programs. However, for the six month period ended June 30, 2023, this measure excluded such shares as the effect would have been anti-dilutive.
(f)
A non-GAAP measure which represents the adjusted provision (benefit) for income taxes as a percentage of adjusted operating income (loss) less interest expense and amortization and other acquisition-related costs.
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2024
2024
2023
2024
2023
Adjusted provision (benefit) for income taxes
$8,627
$32,215
$10,303
$40,842
($538)
Adjusted operating income (loss) less interest expense and amortization and other acquisition-related costs
61,496
98,821
32,995
160,317
(794)
Adjusted effective tax rate
14.0%
32.6%
31.2%
25.5%
67.8%
(g)
Represents certain distribution, introducer and management fees paid to third parties and reimbursable deal costs, for which an equal amount is excluded from both adjusted net revenue and adjusted non-compensation expenses, respectively, and excludes provision for credit losses, which represents fees and other receivables that are deemed uncollectible.
(h)
Interest expense, excluding interest expense incurred by Lazard Frères Banque SA ("LFB"), is added back in determining adjusted net revenue because such expense relates to corporate financing activities and is not considered to be a cost directly related to the revenue of our business.
(i)
Represents losses associated with the closing of certain offices as part of the cost-saving initiatives, including the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss.
(j)
Noncontrolling interests include revenue and expenses principally related to Edgewater, ESC Funds and a Special Purpose Acquisition Company.
(k)
Represents changes in the fair value of investments held in connection with LFI and other similar deferred compensation arrangements, for which a corresponding equal amount is excluded from compensation and benefits expense.
(l)
Represents changes in the fair value of the compensation liability recorded in connection with LFI and other similar deferred incentive compensation awards, for which a corresponding equal amount is excluded from adjusted net revenue.
(m)
Represents expenses associated with senior management transition reflecting the departure of certain executive officers.
(n)
Pursuant to the periodic revaluation of the TRA liability and the assumptions reflected in the estimate, the revaluation had the effect of reducing the estimated liability under the TRA.
NM
Not meaningful
View source version on businesswire.com: https://www.businesswire.com/news/home/20240725645603/en/
Media Contact: Shannon Houston +1 212 632 6880 shannon.houston@lazard.com
Investor Contact: Alexandra Deignan +1 212 632 6886 alexandra.deignan@lazard.com
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