- First quarter GAAP revenues of $217.5 million; first quarter
Adjusted revenues of $217.5 million, up 17% from the prior year
period
- GAAP and Adjusted net income of $0.22 per share for the first
quarter of 2024; GAAP and Adjusted net income includes a $0.14 per
share (diluted) tax benefit
- Continued to execute on our growth strategy:
- Promoted seven advisory professionals to Managing Director
- Hired four Managing Directors - three in the Energy sector and
one to cover credit funds
- Strong balance sheet with cash and short-term investments of
$124.9 million and no debt or goodwill
- Declared quarterly dividend of $0.60 per share
Moelis & Company (NYSE:MC) today reported financial results
for the quarter ended March 31, 2024. The Firm's first quarter GAAP
revenues were $217.5 million as compared with $187.8 million in the
prior year period. On an Adjusted basis, the Firm’s first quarter
revenues of $217.5 million increased 17% from the prior year
period. The Firm reported GAAP net income of $17.5 million and
$0.22 per share (diluted) for the first quarter of 2024. On an
Adjusted basis, the Firm reported net income of $18.3 million and
$0.22 per share (diluted) for the first quarter of 2024, which
compares with net income of $3.8 million and $0.05 per share
(diluted) in the prior year period. GAAP and Adjusted net income
for the first quarter of 2024 include net tax benefits of
approximately $0.14 per share (diluted) related to the settlement
of share-based awards.
"Following our strategic investments in core areas of growth,
our pipeline continues to strengthen and we are better positioned
than ever to service our clients as the M&A market recovers,"
said Ken Moelis, Chairman and Chief Executive Officer.
The Firm’s revenues and net income can fluctuate materially
depending on the number, size and timing of completed transactions
as well as other factors. Accordingly, financial results in any
particular quarter may not be representative of future results over
a longer period of time.
Currently 92% of the operating partnership (Moelis & Company
Group LP) is owned by the corporate partner (Moelis & Company)
and is subject to corporate U.S. federal and state income tax. The
remaining 8% is owned by other partners of Moelis & Company
Group LP and is primarily subject to U.S. federal tax at the
partner level (certain state, local and foreign income taxes are
incurred at the company level). The Adjusted results included
herein apply certain adjustments from our GAAP results, including
the assumption that 100% of the Firm’s first quarter operating
result was taxed at our corporate effective tax rate. We believe
the Adjusted results, when presented together with comparable GAAP
results, are useful to investors to compare our performance across
periods and to better understand our operating results. A
reconciliation between our GAAP results and our Adjusted results is
presented in the Appendix to this press release.
GAAP and Adjusted (non-GAAP) Selected
Financial Data (Unaudited)
GAAP
Adjusted (non-GAAP)*
Three Months Ended March
31,
($ in thousands except per share
data)
2024
2023
Variance
2024
2023
Variance
Revenues
$
217,485
$
187,820
16
%
$
217,485
$
185,299
17
%
Income (loss) before income
taxes
10,031
355
N/M
10,252
355
N/M
Provision (benefit) for income taxes
(7,454)
(3,208)
132
%
(8,046)
(3,472)
132
%
Net income (loss)
17,485
3,563
391
%
18,298
3,827
378
%
Net income (loss) attributable to
noncontrolling interests
919
(103)
N/M
—
—
N/M
Net income (loss) attributable to Moelis
& Company
$
16,566
$
3,666
352
%
$
18,298
$
3,827
378
%
Diluted earnings (loss) per share
$
0.22
$
0.05
340
%
$
0.22
$
0.05
340
%
N/M = not meaningful
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Revenues
We earned GAAP revenues of $217.5 million in the first quarter
of 2024, as compared with $187.8 million in the prior year period.
On an Adjusted basis, we earned revenues of $217.5 million, as
compared with $185.3 million in the prior year period, representing
an increase of 17%. The increase in first quarter revenues was
driven by an increase in fees earned from our non-M&A
businesses, as compared with the prior year period.
We continued to execute on our strategy of organic growth.
During the first quarter, we hired three Managing Directors in the
Energy sector and one Managing Director to cover credit funds.
Expenses
The following tables set forth information relating to the
Firm’s operating expenses.
GAAP
Adjusted (non-GAAP)*
Three Months Ended March
31,
($ in thousands)
2024
2023
Variance
2024
2023
Variance
Expenses:
Compensation and benefits
$
164,475
$
148,239
11
%
$
163,331
$
148,239
10
%
% of revenues
75.6
%
78.9
%
75.1
%
80.0
%
Non-compensation expenses
$
47,208
$
40,972
15
%
$
47,208
$
40,972
15
%
% of revenues
21.7
%
21.8
%
21.7
%
22.1
%
Total operating expenses
$
211,683
$
189,211
12
%
$
210,539
$
189,211
11
%
% of revenues
97.3
%
100.7
%
96.8
%
102.1
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Total operating expenses on a GAAP basis were $211.7 million for
the first quarter of 2024. On an Adjusted basis, operating expenses
were $210.5 million for the first quarter of 2024, as compared with
$189.2 million in the prior year period. The increase in Adjusted
operating expenses is attributable to increased compensation and
benefits and non-compensation expenses as compared with the prior
year period.
Compensation and benefits expenses on a GAAP basis were $164.5
million for the first quarter of 2024. Adjusted compensation and
benefits expenses were $163.3 million for the first quarter of
2024, as compared with $148.2 million in the prior year period. The
increase in Adjusted compensation and benefits expenses in the
current year period is attributable to increased headcount.
Non-compensation expenses on both a GAAP and Adjusted basis were
$47.2 million for the first quarter of 2024, as compared with $41.0
million in the prior year period. The increase in Adjusted
non-compensation expenses in the current year period is broad based
and is primarily due to increased headcount.
Other Income (Expenses)
GAAP
Adjusted (non-GAAP)*
Three Months Ended March
31,
($ in thousands)
2024
2023
Variance
2024
2023
Variance
Other income (expenses)
$
4,229
$
1,746
142
%
$
3,306
$
4,267
-23
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Other income (expenses) on a GAAP basis was $4.2 million for the
first quarter of 2024, as compared with $1.7 million in the prior
year period. On an Adjusted basis, other income for the first
quarter of 2024 was $3.3 million, as compared with $4.3 million in
the prior year period.
Provision for Income Taxes
The corporate partner (Moelis & Company) currently owns 92%
of the operating partnership (Moelis & Company Group LP) and is
subject to corporate U.S. federal and state income tax on its
allocable share of earnings. The remaining 8% of activity is
subject to certain state, local and foreign income taxes (including
New York City Unincorporated Business Tax), which is accounted for
at the partner level through the noncontrolling interests. For
Adjusted purposes, we have assumed that 100% of the Firm’s first
quarter 2024 operating results were taxed at our corporate
effective tax rate and together with the excess tax benefit of
approximately $11.5 million related to the delivery of equity-based
compensation, we have a net tax benefit of approximately $8.0
million.
Capital Management and Balance Sheet
Moelis & Company continues to maintain a strong financial
position, and as of March 31, 2024, we held cash and liquid
investments of $124.9 million and had no debt or goodwill on our
balance sheet.
The Board of Directors of Moelis & Company declared a
regular quarterly dividend of $0.60 per share. The $0.60 per share
will be paid on June 20, 2024, to common stockholders of record on
May 6, 2024.
Earnings Call
We will host a conference call beginning at 5:00pm ET on
Wednesday, April 24, 2024, accessible via telephone and the
internet. Ken Moelis, Chairman and Chief Executive Officer, and Joe
Simon, Chief Financial Officer, will review our first quarter 2024
financial results. Following the review, there will be a question
and answer session.
Investors and analysts may participate in the live conference
call by dialing 1-888-300-4150 (domestic) or 1-646-970-1530
(international) and using access code 8014191. Please dial in 15
minutes before the conference call begins. The conference call will
also be accessible as a listen-only audio webcast through the
Investor Relations section of the Moelis & Company website at
www.moelis.com.
For those unable to listen to the live broadcast, a replay of
the call will be available for one month via telephone starting
approximately one hour after the live call ends. The replay can be
accessed at 1-800-770-2030 (domestic) or 1-609-800-9909
(international); the conference number is 8014191.
About Moelis &
Company
Moelis & Company is a leading global independent investment
bank that provides innovative strategic advice and solutions to a
diverse client base, including corporations, governments and
financial sponsors. The Firm assists its clients in achieving their
strategic goals by offering comprehensive integrated financial
advisory services across all major industry sectors. Moelis &
Company’s experienced professionals advise clients on their most
critical decisions, including mergers and acquisitions,
recapitalizations and restructurings, capital markets transactions,
private fund raisings and secondary transactions and other
corporate finance matters. The Firm serves its clients from 23
locations in North and South America, Europe, the Middle East, Asia
and Australia. For further information, please visit:
www.moelis.com.
Forward-Looking
Statements
This press release contains forward-looking statements, which
reflect the Firm’s current views with respect to, among other
things, its operations and financial performance. You can identify
these forward-looking statements by the use of words such as
“outlook,” “believes,” “expects,” “potential,” “continues,” “may,”
“will,” “should,” “seeks,” “target,” “approximately,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates” or the negative
version of these words or other comparable words. Such
forward-looking statements are based on certain assumptions and
estimates and subject to various risks and uncertainties.
Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those
indicated in these statements. We believe these factors include,
but are not limited to, those described under "Risk Factors"
discussed in our Annual Report on Form 10-K for the year ended
December 31, 2023, subsequent reports filed on Form 10-Q and our
other filings with the SEC. These factors should not be construed
as exhaustive and should be read in conjunction with the other
cautionary statements that are included in this release. In
addition, new risks and uncertainties emerge from time to time, and
it is not possible for us to predict all risks and uncertainties,
nor can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as a prediction of actual results. The
Firm undertakes no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
Non-GAAP Financial
Measures
The Company prepares its consolidated financial statements using
accounting principles generally accepted in the United States
(GAAP). From time to time, the Company may disclose certain
“non-GAAP financial measures” in the course of its earnings
releases, earnings conference calls, financial presentations and
otherwise. The Securities and Exchange Commission defines a
“non-GAAP financial measure” as a numerical measure of historical
or future financial performance, financial position, or cash flows
that is subject to adjustments that effectively exclude, or include
amounts from the most directly comparable measure calculated and
presented in accordance with GAAP. Non-GAAP financial measures
disclosed by the Company are provided as additional information to
analysts, investors and other stakeholders in order to provide them
with greater transparency about, or an alternative method for
assessing our financial condition, operating results, or capital
adequacy. Adjusted results are a non-GAAP financial measure which
provide additional information on management’s view of operating
results. These measures are not in accordance with, or a substitute
for GAAP, and may be different from or inconsistent with non-GAAP
financial measures used by other companies. Whenever we refer to a
non-GAAP financial measure, we will also generally define it or
present the most directly comparable financial measure calculated
and presented in accordance with GAAP, along with a reconciliation
of the differences between the non-GAAP financial measure we
reference and such comparable GAAP financial measure.
The Company’s Adjusted revenues includes amounts reflected
within other income (expenses) which are considered the equivalent
of revenues for compensation. Such adjustments may include gains on
founder investments where our employees and the Moelis advisory
platform contributed meaningfully to the value creation; or the
mark-to-market impact of equity instruments held by the Company
that were originally received as payment for our banking services
and included in revenues. We believe these adjustments are useful
to allow comparability of period-to-period operating performance
and compensation levels.
The Company’s Adjusted compensation and benefits expenses may
include adjustments reflected within other income (expenses)
associated with compensation awards forfeited due to the
enforcement of non-compete provisions. Management views the credits
associated with such forfeitures as an offset to compensation and
benefits expenses since the Firm will utilize the forfeited
economics to recruit and or retain talent. We believe the netted
presentation of forfeiture credits and compensation expenses is
useful to allow comparability of period-to-period operating
performance.
The Company’s Adjusted non-compensation expenses and other
income (expenses) may exclude certain one-time items that reduce
the comparability of our operating performance as well as the
amounts related to revenues and compensation and benefits expenses
discussed above and adjustments to our provision for income taxes
discussed below. Such adjustments increase the comparability of our
financial performance across reporting periods and versus our
peers.
The Company’s Adjusted provision (benefit) for income taxes is
adjusted to illustrate the result as if 100% of the Firm’s income
is being taxed at our corporate effective tax rates for the periods
presented. Adjusted provision (benefit) for income taxes
periodically includes the tax impact related to the settlement of
share-based awards, the reclassification of TRA liability
adjustments, or adjustments to our deferred tax assets and
liabilities that occur in connection with new tax legislation. Such
adjustments increase the comparability of our financial performance
across reporting periods and versus our peers.
The Company’s Adjusted basic and diluted shares of Class A
common stock outstanding is presented for each period as if all
outstanding Class A partnership units have been exchanged into
Class A common stock. The Adjusted presentation helps analysts,
investors, and other stakeholders understand the effect of the
Firm’s ownership structure on its results, including the impact of
all the Firm’s income becoming subject to corporate-level tax.
Appendix
GAAP Consolidated Statement of Operations (Unaudited)
Reconciliation of GAAP to Adjusted (non-GAAP) Financial
Information (Unaudited)
Moelis & Company
GAAP Consolidated Statement of
Operations
Unaudited
(dollars in thousands, except
for share and per share data)
Three Months Ended March
31,
2024
2023
Revenues
$
217,485
$
187,820
Expenses
Compensation and benefits
164,475
148,239
Occupancy
7,089
5,834
Professional fees
6,165
4,946
Communication, technology and information
services
12,244
10,834
Travel and related expenses
11,963
10,968
Depreciation and amortization
2,375
2,073
Other expenses
7,372
6,317
Total Expenses
211,683
189,211
Operating income (loss)
5,802
(1,391)
Other income (expenses)
4,229
1,746
Income (loss) before income
taxes
10,031
355
Provision (benefit) for income taxes
(7,454)
(3,208)
Net income (loss)
17,485
3,563
Net income (loss) attributable to
noncontrolling interests
919
(103)
Net income (loss) attributable to Moelis
& Company
$
16,566
$
3,666
Weighted-average shares of Class A common
stock outstanding
Basic
70,228,589
67,008,526
Diluted
75,102,099
71,462,547
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
0.24
$
0.05
Diluted
$
0.22
$
0.05
Moelis & Company
Reconciliation of GAAP to
Adjusted (non-GAAP) Financial Information
Unaudited
(dollars in thousands, except
share and per share data)
Three Months Ended March 31,
2024
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Compensation and benefits
164,475
(1,144)
(a)
163,331
Other income (expenses)
4,229
(923)
(a)(b)
3,306
Income (loss) before income taxes
10,031
221
10,252
Provision (benefit) for income taxes
(7,454)
(592)
(b)(c)
(8,046)
Net income (loss)
17,485
813
18,298
Net income (loss) attributable to
noncontrolling interests
919
(919)
(d)
—
Net income (loss) attributable to Moelis
& Company
$
16,566
$
1,732
$
18,298
Weighted-average shares of Class A common
stock outstanding
Basic
70,228,589
6,327,095
(d)
76,555,684
Diluted
75,102,099
6,327,095
(d)
81,429,194
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
0.24
$
0.24
Diluted
$
0.22
$
0.22
(a)
Reflects a reclassification of $1.1
million of other income to compensation and benefits expense
associated with the enforcement of non-compete provisions.
(b)
Tax Receivable Agreement liability related
adjustments are made to other income (expenses) for GAAP purposes.
The adjustment of $0.2 million is reclassified to the provision for
income taxes line.
(c)
An adjustment has been made to illustrate
the result as if 100% of the Firm’s income is being taxed at our
corporate effective tax rate for the period stated. Together with
the tax benefit related to the settlement of share-based awards of
$11.5 million, we have a net tax benefit of $8.0 million.
(d)
Assumes all outstanding Class A
partnership units have been exchanged into Class A common
stock.
Moelis & Company
Reconciliation of GAAP to
Adjusted (non-GAAP) Financial Information
Unaudited
(dollars in thousands, except
share and per share data)
Three Months Ended March 31,
2023
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
187,820
$
(2,521)
(a)
$
185,299
Other income (expenses)
1,746
2,521
(a)
4,267
Income (loss) before income taxes
355
—
355
Provision (benefit) for income taxes
(3,208)
(264)
(b)
(3,472)
Net income (loss)
3,563
264
3,827
Net income (loss) attributable to
noncontrolling interests
(103)
103
(c)
—
Net income (loss) attributable to Moelis
& Company
$
3,666
$
161
$
3,827
Weighted-average shares of Class A common
stock outstanding
Basic
67,008,526
6,095,051
(c)
73,103,577
Diluted
71,462,547
6,095,051
(c)
77,557,598
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
0.05
$
0.05
Diluted
$
0.05
$
0.05
(a)
Reflects a reclassification of $2.5
million of other income to revenues related to losses from the
mark-to-market impact on shares received as partial payment for
advisory services provided on certain transactions.
(b)
An adjustment has been made to illustrate
the result as if 100% of the Firm’s income is being taxed at our
corporate effective tax rate for the period stated; together with
the tax benefit related to the settlement of share-based awards of
$3.6 million, we have a net tax benefit of $3.5 million.
(c)
Assumes all outstanding Class A
partnership units have been exchanged into Class A common
stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424221110/en/
Investor Contact: Matt Tsukroff Moelis & Company t: +
1 212 883 3800 m: +1 917 526 2340 matthew.tsukroff@moelis.com
Media Contact: Alyssa Castelli Moelis & Company t: +
1 212 883 3802 m: +1 929 969 2918 alyssa.castelli@moelis.com
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