Second Quarter Overview
- Record Quarterly Revenues of $346 million, an increase of 49%
from a year ago
- GAAP Pretax Income of $54 million and Adjusted Pretax Income of
$55 million, an increase of 24% and 13%, respectively
- GAAP Diluted EPS of $0.86 and Adjusted EPS of $0.99, an
increase of 16% and 13%, respectively
Six Months Overview
- Record First Half Revenues of $546 million, an increase of 14%
from a year ago
- GAAP Pretax Income of $83 million and Adjusted Pretax Income of
$86 million, a decrease of 11% and 18%, respectively
- GAAP Diluted EPS of $1.53 and Adjusted EPS of $1.52, a decrease
of 12% and 19%, respectively
Capital Management and Balance Sheet
- 1.9 million share and share equivalents repurchased YTD
- $226 million of cash, cash equivalents and short-term
investments and no funded debt
Paul J. Taubman, Chairman and Chief Executive Officer, said,
“Our record revenue performance for the three and six months
reflected extraordinary absolute performance in our Restructuring
business combined with strong relative performance in Strategic
Advisory. We have significantly accelerated the pace of our senior
hiring and are confident that 2023 will be our most consequential
hiring year ever. We will continue to invest to enhance our
franchise and we remain highly confident in our future growth
prospects.”
PJT Partners Inc. (the “Company” or “PJT Partners”) (NYSE: PJT)
today announced its financial results for the second quarter and
six months ended June 30, 2023.
Revenues
The following table sets forth revenues for the three and six
months ended June 30, 2023 and 2022:
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
% Change
2023
2022
% Change
(Dollars in Millions)
Revenues
Advisory
$
323.8
$
186.6
73%
$
491.9
$
368.3
34%
Placement
20.0
49.5
(60%)
47.6
109.8
(57%)
Interest Income & Other
2.5
(3.0
)
N/M
6.8
1.3
413%
Total Revenues
$
346.3
$
233.1
49%
$
546.3
$
479.5
14%
_________________
N/M Not meaningful.
Three Months Ended
Total Revenues of $346 million in the current quarter, up 49%
from $233 million in the prior year.
Advisory Revenues of $324 million, up 73% from $187 million in
the prior year, principally due to an increase in restructuring
revenues.
Placement Revenues of $20 million, down 60% from $49 million in
the prior year, principally due to a decrease in fund placement
revenues.
Interest Income & Other of $2.5 million, up from a loss of
$3.0 million in the prior year. Last year's results reflected the
reduction in fair market value of certain equity securities
received as part of transaction compensation.
Six Months Ended
Total Revenues of $546 million in the six months ended June 30,
2023, up 14% from $479 million in the prior year.
Advisory Revenues of $492 million, up 34% from $368 million in
the prior year, principally due to an increase in restructuring
revenues.
Placement Revenues of $48 million, down 57% from $110 million in
the prior year, principally due to a decrease in fund placement
revenues.
Interest Income & Other of $6.8 million, up from $1.3
million in the prior year. Last year's results reflected the
reduction in fair market value of certain equity securities
received as part of transaction compensation.
Expenses
The following tables set forth information relating to the
Company’s expenses for the three and six months ended June 30, 2023
and 2022:
Three Months Ended June 30,
2023
2022
GAAP
As Adjusted
GAAP
As Adjusted
(Dollars in Millions)
Expenses
Compensation and Benefits
$
246.6
$
246.6
$
150.6
$
146.9
% of Revenues
71.2
%
71.2
%
64.6
%
63.0
%
Non-Compensation
$
45.5
$
44.2
$
38.9
$
37.1
% of Revenues
13.1
%
12.8
%
16.7
%
15.9
%
Total Expenses
$
292.1
$
290.8
$
189.5
$
184.0
% of Revenues
84.4
%
84.0
%
81.3
%
78.9
%
Pretax Income
$
54.2
$
55.5
$
43.7
$
49.1
% of Revenues
15.6
%
16.0
%
18.7
%
21.1
%
Six Months Ended June 30,
2023
2022
GAAP
As Adjusted
GAAP
As Adjusted
(Dollars in Millions)
Expenses
Compensation and Benefits
$
379.7
$
379.7
$
309.8
$
302.1
% of Revenues
69.5
%
69.5
%
64.6
%
63.0
%
Non-Compensation
$
83.2
$
80.7
$
75.8
$
72.1
% of Revenues
15.2
%
14.8
%
15.8
%
15.0
%
Total Expenses
$
462.9
$
460.4
$
385.6
$
374.1
% of Revenues
84.7
%
84.3
%
80.4
%
78.0
%
Pretax Income
$
83.4
$
85.9
$
93.8
$
105.3
% of Revenues
15.3
%
15.7
%
19.6
%
22.0
%
Compensation and Benefits
Expense
Three Months Ended
GAAP Compensation and Benefits Expense was $247 million compared
with $151 million in the prior year. Adjusted Compensation and
Benefits Expense was $247 million compared with $147 million in the
prior year.
Six Months Ended
GAAP Compensation and Benefits Expense was $380 million compared
with $310 million in the prior year. Adjusted Compensation and
Benefits Expense was $380 million compared with $302 million in the
prior year. The adjusted compensation accrual rate increased to
69.5% compared with 63.0% in the prior year and 64.1% for full year
2022.
Non-Compensation Expense
Three Months Ended
GAAP Non-Compensation Expense was $45 million compared with $39
million in the prior year. Adjusted Non-Compensation Expense was
$44 million compared with $37 million in the prior year.
The increase in GAAP and Adjusted Non-Compensation Expense
compared with the prior year was principally due to increases in
Professional Fees, Other Expenses, and Occupancy and Related
expenses. Professional Fees increased principally due to higher
consulting expense relating to the firm's business activities.
Other Expenses increased principally due to higher bad debt
expense. Occupancy and Related increased principally due to the
further expansion of our New York office.
Six Months Ended
GAAP Non-Compensation Expense was $83 million compared with $76
million in the prior year. Adjusted Non-Compensation Expense was
$81 million compared with $72 million in the prior year.
The increase in GAAP and Adjusted Non-Compensation Expense
compared with the prior year was principally due to increases in
Professional Fees, Occupancy and Related, and Travel and Related
expenses. Professional Fees increased principally due to higher
consulting expense relating to the firm's business activities.
Occupancy and Related increased principally due to the further
expansion of our New York office. Travel and Related increased due
to increased levels of business travel.
Provision for Taxes
As of June 30, 2023, PJT Partners Inc. owned 62.5% of PJT
Partners Holdings LP. PJT Partners Inc. is subject to corporate
U.S. federal and state income tax while PJT Partners Holdings LP is
subject to New York City unincorporated business tax and other
entity-level taxes imposed by certain state and foreign
jurisdictions. Please refer to Note 11. “Stockholders’ Equity” in
the “Notes to Consolidated Financial Statements” in “Part II. Item
8. Financial Statements and Supplementary Data” of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2022 for
further information about the corporate ownership structure. The
effective tax rate for GAAP Net Income for the three months ended
June 30, 2023 and 2022 was 24.2% and 19.4%, respectively. The
effective tax rate for GAAP Net Income for the six months ended
June 30, 2023 and 2022 was 17.2% and 15.1%, respectively.
In calculating Adjusted Net Income, If-Converted, the Company
has assumed that all outstanding Class A partnership units in PJT
Partners Holdings LP (“Partnership Units”) (excluding the unvested
partnership units that have yet to satisfy certain market
conditions) have been exchanged into shares of the Company’s Class
A common stock, subjecting all of the Company’s income to
corporate-level tax.
The effective tax rate for Adjusted Net Income, If-Converted for
the six months ended June 30, 2023 was 26.7% compared with 26.0%
for full year 2022.
Capital Management and Balance Sheet
As of June 30, 2023, the Company held cash, cash equivalents and
short-term investments of $226 million and no funded debt.
During the second quarter 2023, the Company repurchased 592
thousand shares of Class A common stock in the open market,
exchanged 143 thousand Partnership Units for cash and net share
settled 2 thousand shares of Class A common stock to satisfy
employee tax obligations.
In total during the second quarter 2023, the Company repurchased
737 thousand share equivalents at an average price of $63.37 per
share. During the six months ended June 30, 2023, the Company
repurchased 1.9 million share equivalents at an average price of
$72.05 per share.
As of June 30, 2023, the Company’s remaining repurchase
authorization was $70 million.
The Company intends to repurchase 2 thousand Partnership Units
for cash on Aug 1, 2023 at a price to be determined by the
volume-weighted average price per share of the Company’s Class A
common stock on July 27, 2023.
Dividend
The Board of Directors of PJT Partners Inc. has declared a
quarterly dividend of $0.25 per share of Class A common stock. The
dividend will be paid on September 20, 2023 to Class A common
stockholders of record as of September 6, 2023.
Quarterly Investor Call Details
PJT Partners will host a conference call on July 25, 2023 at
8:30 a.m. ET to discuss its second quarter 2023 results. The
conference call can be accessed via the internet at
www.pjtpartners.com or by dialing +1 (888) 256-1007 (U.S. domestic)
or +1 (720) 452-9217 (international), passcode 6805008. For those
unable to listen to the live broadcast, a replay will be available
following the call at www.pjtpartners.com.
About PJT Partners
PJT Partners is a premier, global, advisory-focused investment
bank that was built from the ground up to be different. Our highly
experienced, collaborative teams provide independent advice coupled
with old-world, high-touch client service. This ethos has allowed
us to attract some of the very best talent in the markets in which
we operate. We deliver leading advice to many of the world's most
consequential companies, effect some of the most transformative
transactions and restructurings and raise billions of dollars of
capital around the globe to support startups and more established
companies. To learn more about PJT Partners, please visit our
website at www.pjtpartners.com.
Forward-Looking Statements
Certain material presented herein contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). Forward-looking
statements include certain information concerning future results of
operations, business strategies, acquisitions, financing plans,
competitive position, potential growth opportunities, potential
operating performance improvements, the effects of competition and
the effects of future legislation or regulations. Forward-looking
statements include all statements that are not historical facts and
can be identified by the use of forward-looking terminology such as
the words “believe,” “expect,” “opportunity,” “plan,” “intend,”
“anticipate,” “estimate,” “predict,” “potential,” “continue,”
“may,” “might,” “should,” “could” or the negative of these terms or
similar expressions.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations, and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy, and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks, and
changes in circumstances that are difficult to predict, many of
which are outside our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not place undue
reliance upon any of these forward-looking statements. Important
factors that could cause our actual results and financial condition
to differ materially from those indicated in the forward-looking
statements include, among others, the following: (a) changes in
governmental regulations and policies; (b) cyberattacks, security
vulnerabilities, and internet disruptions, including breaches of
data security and privacy leaks, data loss, and business
interruptions; (c) failures of our computer systems or
communication systems, including as a result of a catastrophic
event and the use of remote work environments and virtual
platforms; (d) the impact of catastrophic events, including
business disruptions, pandemics, reductions in employment and an
increase in business failures on (1) the U.S. and the global
economy, and (2) our employees and our ability to provide services
to our clients and respond to their needs; (e) the failure of
third-party service providers to perform their functions; and (f)
volatility in the political and economic environment, including as
a result of inflation, rising interest rates, international
conflict, and recent events affecting the financial services
industry.
Any of these factors, as well as such other factors discussed in
the “Risk Factors” section of the Company’s Annual Report on Form
10-K for the year ended December 31, 2022, filed with the United
States Securities and Exchange Commission (“SEC”), as such factors
may be updated from time to time in the Company’s periodic filings
with the SEC, accessible on the SEC’s website at www.sec.gov, could
cause the Company’s results to differ materially from those
expressed in forward-looking statements. There may be other risks
and uncertainties that the Company is unable to predict at this
time or that are not currently expected to have a material adverse
effect on its business. Any such risks could cause the Company’s
results to differ materially from those expressed in
forward-looking statements.
Non-GAAP Financial Measures
The following represent key performance measures that management
uses in making resource allocation and/or compensation decisions.
These measures should not be considered substitutes for, or
superior to, financial measures prepared in accordance with
GAAP.
Management believes the following non-GAAP measures, when
presented together with comparable GAAP measures, are useful to
investors in understanding the Company’s operating results:
Adjusted Pretax Income; Adjusted Net Income; Adjusted Net Income,
If-Converted, in total and on a per-share basis (referred to as
“Adjusted EPS”); Adjusted Compensation and Benefits Expense and
Adjusted Non-Compensation Expense. These non-GAAP measures,
presented and discussed in this earnings release, remove the
significant accounting impact of: (a) transaction-related
compensation expense, including expense related to Partnership
Units with both time-based vesting and market conditions as well as
equity-based and cash awards granted in connection with the
acquisition of CamberView Partners Holdings, LLC (“CamberView”);
(b) intangible asset amortization associated with Blackstone Inc.’s
(“Blackstone”) initial public offering (“IPO”), the acquisition of
PJT Capital LP, and the acquisition of CamberView; and (c) the net
change to the amount the Company has agreed to pay Blackstone
related to the net realized cash benefit from certain
compensation-related tax deductions. Reconciliations of the
non-GAAP measures to their most directly comparable GAAP measures
and further detail regarding the adjustments are provided in the
Appendix.
To help investors understand the effect of the Company’s
ownership structure on its Adjusted Net Income, the Company has
presented Adjusted Net Income, If-Converted. This measure
illustrates the impact of taxes on Adjusted Pretax Income, assuming
all Partnership Units (excluding the unvested Partnership Units
that have yet to satisfy certain market conditions) have been
exchanged for shares of the Company’s Class A common stock,
resulting in all of the Company’s income becoming subject to
corporate-level tax, considering both current and deferred income
tax effects. This tax rate excludes a number of adjustments,
including the tax benefits of the adjustments for
transaction-related compensation expense and amortization
expense.
Appendix
GAAP Condensed Consolidated Statements of Operations
(unaudited)
Reconciliations of GAAP to Non-GAAP Financial Data
(unaudited)
Summary of Shares Outstanding (unaudited)
Footnotes
PJT Partners Inc.
GAAP Condensed Consolidated Statements
of Operations (unaudited)
(Dollars in Thousands, Except Share and
Per Share Data)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Revenues
Advisory
$
323,794
$
186,649
$
491,884
$
368,307
Placement
20,028
49,482
47,613
109,833
Interest Income and Other
2,455
(2,990
)
6,768
1,320
Total Revenues
346,277
233,141
546,265
479,460
Expenses
Compensation and Benefits
246,614
150,587
379,657
309,819
Occupancy and Related
9,920
8,658
19,931
17,600
Travel and Related(1)
8,314
7,977
15,286
13,030
Professional Fees
11,454
7,226
18,381
14,277
Communications and Information
Services
3,761
4,241
7,838
8,664
Depreciation and Amortization
3,597
4,094
7,040
8,401
Other Expenses(1)
8,448
6,670
14,770
13,833
Total Expenses
292,108
189,453
462,903
385,624
Income Before Provision for Taxes
54,169
43,688
83,362
93,836
Provision for Taxes
13,117
8,495
14,324
14,175
Net Income
41,052
35,193
69,038
79,661
Net Income Attributable to Non-Controlling
Interests
18,911
16,025
29,561
34,789
Net Income Attributable to PJT Partners
Inc.
$
22,141
$
19,168
$
39,477
$
44,872
Net Income Per Share of Class A Common
Stock
Basic
$
0.88
$
0.76
$
1.56
$
1.79
Diluted
$
0.86
$
0.74
$
1.53
$
1.74
Weighted-Average Shares of Class A Common
Stock Outstanding
Basic
25,238,144
25,141,339
25,234,983
25,065,684
Diluted
26,333,261
26,421,087
26,625,890
26,486,899
PJT Partners Inc.
Reconciliations of GAAP to Non-GAAP
Financial Data (unaudited)
(Dollars in Thousands, Except Share and
Per Share Data)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
GAAP Net Income
$
41,052
$
35,193
$
69,038
$
79,661
Less: GAAP Provision for Taxes
13,117
8,495
14,324
14,175
GAAP Pretax Income
54,169
43,688
83,362
93,836
Adjustments to GAAP Pretax
Income
Transaction-Related Compensation
Expense(2)
—
3,708
—
7,759
Amortization of Intangible Assets(3)
1,230
1,862
2,460
3,790
Spin-Off-Related Payable Due to
Blackstone(4)
54
(116
)
79
(65
)
Adjusted Pretax Income
55,453
49,142
85,901
105,320
Adjusted Taxes(5)
13,475
9,441
14,906
16,064
Adjusted Net Income
41,978
39,701
70,995
89,256
If-Converted Adjustments
Less: Adjusted Taxes(5)
(13,475
)
(9,441
)
(14,906
)
(16,064
)
Add: If-Converted Taxes(6)
15,031
12,685
22,940
27,173
Adjusted Net Income, If-Converted
$
40,422
$
36,457
$
62,961
$
78,147
GAAP Net Income Per Share of Class A
Common Stock
Basic
$
0.88
$
0.76
$
1.56
$
1.79
Diluted
$
0.86
$
0.74
$
1.53
$
1.74
GAAP Weighted-Average Shares of Class A
Common Stock Outstanding
Basic
25,238,144
25,141,339
25,234,983
25,065,684
Diluted
26,333,261
26,421,087
26,625,890
26,486,899
Adjusted Net Income, If-Converted Per
Share
$
0.99
$
0.88
$
1.52
$
1.88
Weighted-Average Shares Outstanding,
If-Converted
40,964,125
41,554,991
41,323,832
41,653,293
PJT Partners Inc.
Reconciliations of GAAP to Non-GAAP
Financial Data – continued (unaudited)
(Dollars in Thousands)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
GAAP Compensation and Benefits Expense
$
246,614
$
150,587
$
379,657
$
309,819
Transaction-Related Compensation
Expense(2)
—
(3,708
)
—
(7,759
)
Adjusted Compensation and Benefits
Expense
$
246,614
$
146,879
$
379,657
$
302,060
Non-Compensation Expenses
Occupancy and Related
$
9,920
$
8,658
$
19,931
$
17,600
Travel and Related(1)
8,314
7,977
15,286
13,030
Professional Fees
11,454
7,226
18,381
14,277
Communications and Information
Services
3,761
4,241
7,838
8,664
Depreciation and Amortization
3,597
4,094
7,040
8,401
Other Expenses(1)
8,448
6,670
14,770
13,833
GAAP Non-Compensation Expense
45,494
38,866
83,246
75,805
Amortization of Intangible Assets(3)
(1,230
)
(1,862
)
(2,460
)
(3,790
)
Spin-Off-Related Payable Due to
Blackstone(4)
(54
)
116
(79
)
65
Adjusted Non-Compensation Expense
$
44,210
$
37,120
$
80,707
$
72,080
PJT Partners Inc. Summary of Shares Outstanding
(unaudited)
The following table provides a summary of weighted-average
shares outstanding for the three and six months ended June 30, 2023
and 2022 for both basic and diluted shares. The table also provides
a reconciliation to If-Converted Shares Outstanding assuming that
all Partnership Units and unvested PJT Partners Inc. restricted
stock units (“RSUs”) were converted to shares of the Company’s
Class A common stock:
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Weighted-Average Shares Outstanding -
GAAP
Basic Shares Outstanding, GAAP
25,238,144
25,141,339
25,234,983
25,065,684
Dilutive Impact of Unvested RSUs(7)
1,095,117
1,279,748
1,390,907
1,421,215
Diluted Shares Outstanding, GAAP
26,333,261
26,421,087
26,625,890
26,486,899
Weighted-Average Shares Outstanding -
If-Converted
Basic Shares Outstanding, GAAP
25,238,144
25,141,339
25,234,983
25,065,684
Unvested RSUs(8)
1,095,117
1,282,341
1,390,907
1,423,808
Partnership Units(9)
14,630,864
15,131,311
14,697,942
15,163,801
If-Converted Shares Outstanding
40,964,125
41,554,991
41,323,832
41,653,293
As of June 30,
2023
2022
Fully-Diluted Shares Outstanding(10)
43,966,461
43,994,683
As of June 30, 2023, 1.1 million Partnership Units and 1.5
million RSUs that have yet to satisfy certain market conditions
were excluded from any share count calculations.
Of the total 2.6 million share equivalents subject to market
conditions, 1.3 million require the Company to achieve a dividend
adjusted volume-weighted average share price over any consecutive
20-day trading period (“20-day VWAP”) of $100 prior to February 26,
2027. The remaining 1.3 million vest ratably upon the Company
achieving a 20-day VWAP between $100 and $130 prior to February 26,
2027. The awards are also subject to a five year service based
vesting requirement, with 20% vesting per annum.
Footnotes
- Certain balances in the prior period have been reclassified to
conform to their current presentation. For the three and six months
ended June 30, 2022, this resulted in a reclassification of $1.3
million and $1.9 million, respectively, from Other Expenses to
Travel and Related. There was no impact on either U.S. GAAP EPS or
Adjusted EPS as a result of the reclassification.
- This adjustment adds back to GAAP Pretax Income
transaction-related compensation expense for Partnership Units with
both time-based vesting and market conditions as well as
equity-based and cash awards granted in connection with the
acquisition of CamberView.
- This adjustment adds back to GAAP Pretax Income amounts for the
amortization of intangible assets that are associated with
Blackstone’s IPO, the acquisition of PJT Capital LP on October 1,
2015 and the acquisition of CamberView on October 1, 2018.
- This adjustment adds back to GAAP Pretax Income the net change
to the amount the Company has agreed to pay Blackstone related to
the net realized cash benefit from certain compensation-related tax
deductions. Such amounts are reflected in Other Expenses in the
Condensed Consolidated Statements of Operations.
- Represents taxes on Adjusted Pretax Income, considering both
current and deferred income tax effects for the current ownership
structure.
- Represents taxes on Adjusted Pretax Income, assuming all
Partnership Units (excluding the unvested Partnership Units that
have yet to satisfy market conditions) have been exchanged for
shares of the Company’s Class A common stock, resulting in all of
the Company’s income becoming subject to corporate-level tax,
considering both current and deferred income tax effects. This tax
rate excludes a number of adjustments, including the tax benefits
of the adjustments for transaction-related compensation expense and
amortization expense.
- Represents the dilutive impact under the treasury method of
unvested RSUs that have a remaining service requirement.
- Represents the dilutive impact of unvested RSUs that have a
remaining service requirement.
- Represents the number of shares assuming the conversion of all
Partnership Units, excluding Partnership Units that have yet to
satisfy certain market conditions.
- Assumes all Partnership Units and unvested RSUs have been
converted to shares of the Company’s Class A common stock. As of
June 30, 2023, 1.1 million Partnership Units and 1.5 million RSUs
that have yet to satisfy certain market conditions were excluded
from any share count calculations. Note: Amounts presented in
tables above may not add or recalculate due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230724232288/en/
Media Relations: Jon Keehner Joele
Frank, Wilkinson Brimmer Katcher Tel: +1 212.355.4449
PJT-JF@joelefrank.com
Investor Relations: Sharon Pearson PJT
Partners Inc. Tel: +1 212.364.7120 pearson@pjtpartners.com
PJT Partners (NYSE:PJT)
Historical Stock Chart
From Apr 2024 to May 2024
PJT Partners (NYSE:PJT)
Historical Stock Chart
From May 2023 to May 2024