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Perella Weinberg Partners (PWP) Q1 2025 Earnings Call Highlights: Record Revenue and Strategic ...
Perella Weinberg Partners (PWP) Q1 2025 Earnings Call Highlights: Record Revenue and Strategic ...

Yahoo

time03-05-2025

  • Business
  • Yahoo

Perella Weinberg Partners (PWP) Q1 2025 Earnings Call Highlights: Record Revenue and Strategic ...

Revenue: $212 million, up more than 100% year over year. Adjusted Compensation Margin: 67% of revenues. Adjusted Non-Compensation Expense: $49 million, including over $10 million of litigation-related costs. Adjusted Tax Rate: 29.5%, excluding stock compensation impact. Capital Returned to Equity Holders: $121 million, including over $14 million in open market repurchases. Shares Outstanding: 62 million shares of Class A common stock and 26 million partnership units. Cash and Debt: $111 million in cash and no debt. Quarterly Dividend: $0.07 per share. Warning! GuruFocus has detected 3 Warning Sign with PWP. Release Date: May 02, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Perella Weinberg Partners (NASDAQ:PWP) reported first quarter revenues of $212 million, marking a more than 100% increase year over year and the highest first quarter revenue in the company's history. The firm experienced a significant uptick in demand for its restructuring liability management and financing advisory business starting in April. PWP's client engagement metrics, including new business reviews and client calls, are at all-time highs, indicating strong client interest and a robust pipeline. The company successfully recruited new talent, including a Managing Director focused on transportation, leasing, and logistics, and plans to add more in healthcare, software, financials, and industrial sectors. PWP returned $121 million to equity holders in the first quarter, demonstrating strong capital management and shareholder returns. Policy actions from the US government have slowed down deal announcements, creating uncertainty and causing clients to pause rather than terminate deals. The firm's announced and pending backlog has declined from record levels, indicating potential future revenue challenges. PWP's adjusted non-compensation expenses increased due to over $10 million in litigation-related costs, impacting overall profitability. The compensation margin was set at 67% of revenues, which may be adjusted based on business conditions and investment decisions, indicating potential volatility in future margins. The current market volatility and uncertainty in the M&A environment have led to a slowdown in announcements, affecting the firm's immediate growth prospects. Q: Can you explain the recent slowdown in M&A activity and whether it's due to companies changing plans or market volatility? A: Andrew Bednar, CEO: The slowdown is more about clients pausing rather than terminating deals due to market volatility and uncertainty. Once there's more clarity, we expect M&A activity to pick up sharply, similar to post-COVID recovery. Q: How is the restructuring business performing, and is it due to market conditions or gaining market share? A: Andrew Bednar, CEO: Our restructuring and liability management business is doing well, driven by both market conditions and our growing brand presence. We don't break out revenue specifics, but we've seen increased demand, especially during recent market volatility. Q: Are you seeing any differences in M&A activity between the US and Europe? A: Andrew Bednar, CEO: Europe is showing more unified and positive trends post-policy actions, with a more accommodative regulatory environment. However, like the US, Europe is also in a pause, waiting for more clarity on trade policies. Q: How is the current market environment affecting your recruiting efforts? A: Andrew Bednar, CEO: The current slowdown in M&A activity is creating better recruiting opportunities. We are seeing more talent available and are committed to accelerating our hiring efforts this year. Q: Can you provide more details on the 67% compensation ratio and its future outlook? A: Alexandra Gottschalk, CFO: The 67% comp ratio reflects our best estimate and may adjust as the year progresses. We aim to provide leverage in our comp ratio and remain committed to improving it. Q: What was the impact of litigation costs on non-compensation expenses, and what is the outlook for the year? A: Alexandra Gottschalk, CFO: Litigation costs were over $11 million this quarter, which is seasonal and not expected to recur. Our guidance for a single-digit increase in non-comp expenses for the year remains unchanged. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.

Q1 2025 Perella Weinberg Partners Earnings Call
Q1 2025 Perella Weinberg Partners Earnings Call

Yahoo

time03-05-2025

  • Business
  • Yahoo

Q1 2025 Perella Weinberg Partners Earnings Call

Taylor Reinhardt; Head of Communications and Marketing; Perella Weinberg Partners Andrew Bednar; Chief Executive Officer, Director; Perella Weinberg Partners Alexandra Gottschalk; Chief Financial Officer; Perella Weinberg Partners Devin Ryan; Analyst; Citizens Bank Brendan O'Brien; Analyst; Wolfe Research James Yaro; Analyst; Goldman Sachs Operator Good morning, and welcome to the Perella Weinberg Partners first quarter 2025 earnings conference call. (Operator Instructions) Please be advised that today's call is being recorded. I would now like to turn the call over to Taylor Reinhardt, Head of Communications and Marketing. You may begin. Taylor Reinhardt Thank you, operator, and welcome all. Joining me today are Andrew Bednar, Chief Executive Officer; and Alex Gottschalk, Chief Financial Officer. Before we begin, I'd like to note that this call may contain forward-looking statements, including Perella Weinberg's expectations of future financial and business performance and conditions and industry outlook. Forward-looking statements are inherently subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those discussed in the forward-looking statements and are not guarantees of future events or performance. Please refer to Perella Weinberg's most recent SEC filings for a discussion of certain of these risks and uncertainties. The forward-looking statements are based on our current beliefs and expectations, and the firm undertakes no obligation to update any forward-looking statements. During the call, there will also be a discussion of some metrics, which are non-GAAP financial measures, which management believes are relevant in assessing the financial performance of the business. Perella Weinberg has reconciled these items to the most comparable GAAP measures in the press release filed with today's Form 8-K, which can be found on the company's website. I will now turn the call over to Andrew Bednar to discuss our results. Andrew Bednar Thank you, Taylor, and good morning. Today, we reported first quarter revenues of $212 million, up more than 100% year over year and representing the highest first quarter revenue in our history. Our results were up across the firm with revenue in the US and in Europe, up twofold driven by larger fees per transaction, which resulted from our continued focus on client coverage and business selection. Policy action from the US government at the start of April and related reactions have not stopped deal announcements, but have slowed them down. Our clients are in an adjustment stage and are awaiting clarity on ultimate tariff and trade policy. Once the range of uncertainty narrows, we expect transaction activity to accelerate as we experienced in both '08 and '09 and COVID periods. Unlike these prior market dislocations, however, we have not seen clients today broadly terminating processes or walking away from deals just pausing, which is encouraging. Our client engagement dashboard stats, which include new business reviews, client calls and requests for meetings are at all-time highs, and our pipeline is very strong. Our announced and pending backlog, however, has declined from record levels. In the current fog, we see two bright spots. First, our restructuring liability management and financing advisory business experienced a meaningful uptick in demand from the start of April. And second, recruiting, where in the first quarter, we added a Managing Director focused on transportation, leasing and logistics, and we have a health care partner, a software partner, a Managing Director in financials, and a Managing Director in Industrial, slated to join us in the coming months. Disruption creates opportunity. This is a time to showcase the strength of our firm and lean into growth initiatives. Our client-centric model allows us to quickly pivot our resources to deliver the services our clients need from advising on their most transformative strategic initiatives to their most pressing financial needs. Our client relationships are measured by a lifetime and not by a transaction time line and it's in times like these that we gain and solidified their trust. Our brand and our team are stronger than ever and we are exceptionally well positioned. I remain very confident in our long-term prospects. With that, I'll now turn the call over to Alex to review our financial results and capital management in more detail. Alexandra Gottschalk Thank you, Andrew. Our revenues of $212 million included $23 million related to closings that occurred within the first few days of the second quarter, in which in accordance with relevant accounting principles, were recorded in the first quarter. Our adjusted compensation margin was 67% of revenues and in line with our full year 2024 accrual. The compensation margin was set based on assumptions at the end of the quarter and may be adjusted as business conditions and investment decisions progress in the coming months and through year-end. Our adjusted non-compensation expense of $49 million for the quarter included more than $10 million of litigation-related costs, which was the primary driver of the year over year and quarter over quarter increases. Our prior guidance of a single-digit increase in non-comp expense for the full year 2025 remains our best estimate at this time. Shifting to taxes. Our adjusted if converted effective tax rate for the first quarter reflects the tax benefit resulting from stock compensation awards vesting at a higher price than granted. Excluding this impact, the adjusted tax rate would have been 29.5%, in line with our tax rate expectation for the remainder of the year. Turning to capital management. In the first quarter, we returned $121 million to equity holders, including over $14 million in open market repurchases and nearly $29 million related to unit exchanges. We will continue to deploy capital for open market buybacks as opportunities arise in addition to repurchases in connection with ordinary course RSU vestings and quarterly unit exchanges with a continued focus on proactively managing our share count. At the end of the first quarter, we had 62 million shares of Class A common stock and 26 million partnership units outstanding. We ended the quarter with $111 million in cash and no debt. This morning, we declared a quarterly dividend of $0.07 per share. With that, operator, please open the line for questions. Operator (Operator Instructions) Devin Ryan, Citizens Bank. Devin Ryan Hello? Andrew Bednar Yeah, we can hear you now. Devin Ryan Sorry about that. I think my phone cut for a second. The question on the M&A environment. Obviously, a lot of uncertainty right now. I'm just curious how much of -- maybe the recent slowdown is because companies are changing plans because their business outlook is more uncertain, so maybe they're less interested in buying an asset or selling their business versus simply market conditions are volatile. And so when market conditions settle down that should reignite activity that's maybe sitting on the sideline. Andrew Bednar Yeah. Thanks for the question, Devin. As I said in the upfront remarks, broadly across the firm in the M&A business, we see clients pausing and not terminating. And so I think we have clearly a slowdown in announcements. You can see that across the board in the sector as well as for power business, but not a slowdown in the interest in M&A. And I think this is just a natural moment with the volatility, as you mentioned. And I think an increasing range of uncertainty, we always have uncertainty, but I think the range of uncertainty here is particularly broad at this moment. And so when you're driving in the fog, I think it's a natural instant to tap the brakes and that's what we see. I do think because there is not a slowdown in the interest in M&A that once you get some clarity -- some more clarity, I don't think you get complete clarity, but once you get more clarity, there's I think an opportunity to be able to transact again and plan again and then we'll see, I think, a pretty sharp response to more clarity from the policy actions. So we're anticipating this to look a bit more like coming out of COVID than slogging through the sort of March '22 time frame? Devin Ryan Great. And a follow-up on the non-M&A businesses. Can you give us any sense of percentage of contribution in the quarter? And then for restructuring specifically, your team seems like they're doing quite well there. And I'm curious if you can frame kind of how much the productivity improvements are a function of just the environment being more active versus perhaps the firm gaining market share and how you feel about just more broadly market share in that business? Andrew Bednar Yeah. We feel great about the broad liability management business. I think our team is doing a terrific job. I think the brand is gaining a lot of traction in that marketplace. We've been building that now for many, many years, and you tend to get the benefits of compounding, which we're seeing now. I think the market is quite conducive to the broad liability management service when you have these periods of volatility and moments where capital markets are quite challenging, you tend to seek help. And so that's a very good driver of our business. We don't break out the elements of our revenue, as you know, Devin, so I won't go to the -- answering that question. But as you know, we're a very client-centric model. And when our clients need more than their strategic help that they need help in connection with financings or in connection with balance sheet management, we quickly mobilized our team to address client needs. So that business has done very well. We continue to see strength coming into the year, and we saw a real pickup beginning during the volatility. In April, we saw an even further increase in the business in that month. Operator Brendan O'Brien, Wolfe Research. Brendan O'Brien I heard the comments that 1Q you saw pretty balanced growth US and Europe. But we've been hearing a lot more positive on the M&A backdrop in Europe relative to US of late. So I just want to get a sense of how (technical difficulty) and whether you're seeing relative -- Andrew Bednar Sorry, Brendan, I'm not hearing that very well. I'm not sure operator, if we can help his line. Operator Please stand by. I'll see if I can turn the volume up here some. Andrew Bednar Brendan, do you want to try again? Brendan O'Brien Yeah. Can you hear me now, sorry? Andrew Bednar Yeah, that's perfect. Brendan O'Brien Okay. Great. Sorry about that. Yeah. So I was just asking on activity in Europe relative to the US. I heard that you saw pretty balanced trends across both regions in 1Q, but there's been a little bit more positivity on the outlook for Europe. So I just want to get a sense as to whether you're seeing any bifurcation in trends there. Andrew Bednar Yeah, we're seeing Europe much more unified in the wake of the policy actions here since the April time frame. And we see a greater willingness to think about broad regional transactions and a more accommodative regulatory backdrop in Europe. So I think all of those are encouraging. I think much like the US markets, however, particularly in the last 30 days or so, I mean everybody is sort of paused and taking a step back. And again, waiting for a bit more clarity, doesn't need to be absolute clarity, but I think a little bit more clarity on where this tariff policy and broad trade relations are going to fall out. I think we'll start to see, again, a falling of what I think is a thin layer of ice, not a deep freeze, but a thin layer of ice here that will fall both in the US and in Europe. But we do like the backdrop for Europe, and we think it's trending very well and appears to be a better trending than what we saw in the last two years. Brendan O'Brien That's helpful color. And for my follow-up, I just wanted to touch on recruiting. Last year, you spoke about plans or hopes to see an acceleration hiring this year. And obviously, it sounds like you've gotten out to a good start. But while the preference is obviously for a stronger revenue backdrop, I would imagine that the current volatility and slowdown in M&A could also result in a better recruiting environment for you. So I just want to get a sense as to what you're seeing in the recruiting backdrop today and get an update on your expectations for the full year. Andrew Bednar Yeah, you're exactly right. This is a bit of the yin and yang of the business when you tend to have moments of less activity or slower announcement activity, in particular tends to lead to an acceleration in hiring opportunities. So we're always at the plate and ready to take swings at pitches that we're going to be given on recruiting. We are constantly adding talent. In this environment, we're going to see some more talent. We're not going to change our criteria, but we are seeing more talent. And as I said on the third quarter call, I think last year, we did want to accelerate our hiring for 2025 irrespective of market. And I think that market has moved more our way than when we started the year, given again the slower announcement cadence here makes it a bit easier for people to think about a job change. So that's helpful on the recruiting front. Operator James Yaro, Goldman Sachs. James Yaro On the 67% cap ratio you put up for the quarter, could you just give us a little more clarity on what sort of backdrop you baked into the ratio and then how you're thinking about the ability to make further progress on the comp ratio for this year and beyond? Andrew Bednar Yeah. Alex, do you want to go ahead and take that? Alexandra Gottschalk Yeah, sure. Thanks, James. Look, so the 67% comp ratio really reflects our best estimate at the end of the quarter and continues to reflect our best estimate at this point in time. Obviously, as the year progresses and we measure our performance, and we have better visibility on our pace of recruiting that could adjust. We're still early in the year. And I think we've demonstrated that we've provided leverage in our comp ratio and continue committed to doing that. James Yaro Okay. Non-comps rose 33% year on year in the quarter. Could you just break out how much of the non-comps were from the litigation this quarter that you highlighted, and I assume it's onetime in nature. And then could you just update us on your full year non-comp guidance relative to the single-digit year-on-year number you gave previously? Alexandra Gottschalk Sure, James. Yeah, I think I mentioned in my upfront remarks, that litigation spend, which was directly related to the trial, which has concluded was over $11 million in the quarter. So that is definitely seasonal and not something that we expect to occur in the balance of the quarters for the year. And that single-digit increase that we indicated on the last call, it still remains our best estimate for the year, the year over year increase in non-comp. Operator This concludes the Q&A portion of today's call. I would now like to turn the call back over to Andrew Bednar for any additional or closing remarks. Andrew Bednar Okay. Thank you, operator, and thank you, everyone, for your interest in our firm and for your continued support. I also want to take a moment just to thank the 700 professionals, all my colleagues at Perella Weinberg for their tireless commitment to our mission and their unwavering dedication to our clients whenever and wherever they need us. I look forward to speaking with all of you in a few months, and thank you again for joining today. Operator This concludes the Perella Weinberg Partners first quarter 2025 earnings call and webcast. You may disconnect your line at this time and have. Sign in to access your portfolio

Perella Weinberg to Announce First Quarter 2025 Financial Results and to Host Conference Call on May 2, 2025
Perella Weinberg to Announce First Quarter 2025 Financial Results and to Host Conference Call on May 2, 2025

Yahoo

time23-04-2025

  • Business
  • Yahoo

Perella Weinberg to Announce First Quarter 2025 Financial Results and to Host Conference Call on May 2, 2025

NEW YORK, April 23, 2025 (GLOBE NEWSWIRE) -- Perella Weinberg Partners (NASDAQ:PWP), a leading global independent advisory firm, today announced that it plans to release its financial results for the first quarter 2025 on Friday, May 2, 2025, before the market opens. Conference Call and WebcastManagement will host a conference call and webcast to review Perella Weinberg's results on the same day at 9:00AM ET. A webcast of the conference call will be available to the public on a listen-only basis and can be accessed through the Investors section of the Company's website at The conference call can also be accessed by the following dial-in information: Domestic: (800) 267-6316 International: (203) 518-9783 Conference ID: PWPQ125 ReplayA replay of the call will also be available two hours after the live call through May 9, 2025. To access the replay, dial (800) 756-0554 (Domestic) or (402) 220-7213 (International). The replay can also be accessed on the Investors section of the Company's website at About Perella WeinbergPerella Weinberg is a leading global independent advisory firm, providing strategic and financial advice to a broad client base, including corporations, financial sponsors, governments, and sovereign wealth funds. The Firm offers a wide range of advisory services to clients in some of the most active industry sectors and global markets. With approximately 700 employees, Perella Weinberg currently maintains offices in New York, London, Houston, Los Angeles, San Francisco, Paris, Chicago, Munich, Denver, and Calgary. Contacts For Perella Weinberg Investor Relations: investors@ Perella Weinberg Media: media@

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