Evercore Inc. (NYSE: EVR):
Second Quarter Results
Year to Date Results
U.S. GAAP
Adjusted
U.S. GAAP
Adjusted
Q2 2024
Q2 2023
Q2 2024
Q2 2023
YTD 2024
YTD 2023
YTD 2024
YTD 2023
Net Revenues ($ mm)
$
689.2
$
499.4
$
695.3
$
505.1
$
1,270.0
$
1,071.6
$
1,282.6
$
1,082.9
Operating Income ($ mm)
$
108.2
$
57.7
$
114.3
$
63.4
$
192.4
$
164.6
$
204.9
$
178.9
Net Income Attributable to Evercore Inc.
($ mm)
$
73.8
$
37.2
$
78.7
$
40.4
$
159.5
$
120.6
$
171.6
$
133.6
Diluted Earnings Per Share
$
1.81
$
0.95
$
1.81
$
0.96
$
3.89
$
3.02
$
3.94
$
3.13
Compensation Ratio
66.6
%
67.8
%
66.0
%
67.0
%
66.7
%
65.8
%
66.0
%
65.1
%
Operating Margin
15.7
%
11.6
%
16.4
%
12.6
%
15.1
%
15.4
%
16.0
%
16.5
%
Effective Tax Rate
25.8
%
28.9
%
26.9
%
29.6
%
11.0
%
19.8
%
11.0
%
20.2
%
Business and Financial
Highlights
■
Second Quarter Net Revenues were $689.2
million and $695.3 million on a U.S. GAAP and an Adjusted basis,
respectively, representing a record second quarter by both
measures
■
Second Quarter Operating Income of $108.2
million and $114.3 million on a U.S. GAAP and an Adjusted basis,
respectively, increased 88% and 80%, respectively versus 2023;
Second Quarter Operating Margins of 15.7% and 16.4% on a U.S. GAAP
basis and an Adjusted basis, respectively, increased 415 and 388
basis points, respectively, versus 2023
■
Year-to-date, we have advised on three of
the six largest global transactions, including General Electric on
its spin-off of GE Vernova for ~$36 billion; Synopsys on its ~$35
billion acquisition of Ansys; and ConocoPhillips on its $22.5
billion acquisition of Marathon Oil
■
Evercore won two awards from The Banker's
2024 Investment Banking Awards including "Investment Bank of the
Year for M&A" and "Investment Bank of the Year for Private
Placements"
■
Evercore was also recognized by The Banker
for "Deal of the Year for M&A" for Nippon Steel's $15 billion
pending acquisition of U.S. Steel
■
In our Equity Capital Markets business in
the second quarter, Evercore was lead-left bookrunner on AZZ Inc.’s
$322 million follow-on offering, and lead-left bookrunner on
Lithium America Inc.'s $275 million follow-on offering
Talent
■
One Investment Banking Senior Managing
Director joined Evercore in May; Jeffrey Haller, in our Financial
Institutions Group
■
Since our last earnings call, three
Investment Banking Senior Managing Directors and one Senior Advisor
have committed to join Evercore:
■
In Paris, two Investment Banking Senior
Managing Directors and one Senior Advisor
■
In the U.S., one Investment Banking Senior
Managing Director specializing in the banking sector
Capital Return
■
Quarterly dividend of $0.80 per share
■
Returned $395.6 million to shareholders
during the first six months of 2024 through dividends and
repurchases of 1.8 million shares at an average price of
$178.61
Evercore Inc. (NYSE: EVR) today announced its results for the
second quarter ended June 30, 2024.
LEADERSHIP COMMENTARY
John S. Weinberg, Chairman and Chief Executive Officer,
"We are in the midst of a gradual market recovery and we continue
to be encouraged as momentum builds across many of our businesses.
We provide a broader range of products than we ever have before to
a larger, more diverse set of clients, presenting significant
opportunity for Evercore."
Roger C. Altman, Founder and Senior Chairman, "Evercore
produced the strongest second quarter net revenues in our history.
This reflects the consistent expansion in the number of SMDs, which
is continuing."
Evercore's quarterly results may fluctuate significantly due to
the timing and amount of transaction fees earned, 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.
Business Segments:
Evercore's business results are categorized into two segments:
Investment Banking & Equities and Investment Management.
Investment Banking & Equities includes providing advice to
clients on mergers, acquisitions, divestitures and other strategic
corporate transactions, as well as services related to securities
underwriting, private placement services and commissions for
agency-based equity trading services and equity research.
Investment Management includes Wealth Management and interests in
private equity funds which are not managed by the Company, as well
as advising third-party investors through affiliates. See pages A-2
to A-7 for further information and reconciliations of these segment
results to our U.S. GAAP consolidated results.
Non-GAAP Measures:
Throughout this release certain information is presented on an
adjusted basis, which is a non-GAAP measure. Adjusted results begin
with information prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP"),
and then those results are adjusted to exclude certain items and
reflect the conversion of certain Evercore LP Units into Class A
shares. Evercore believes that the disclosed adjusted measures and
any adjustments thereto, when presented in conjunction with
comparable U.S. GAAP measures, are useful to investors to compare
Evercore's results across several periods and facilitate an
understanding of Evercore's operating results. Evercore uses these
measures to evaluate its operating performance, as well as the
performance of individual employees. These measures should not be
considered a substitute for, or superior to, measures of financial
performance prepared in accordance with U.S. GAAP.
Evercore's Adjusted Diluted Shares Outstanding for the three and
six months ended June 30, 2024 were higher than U.S. GAAP as a
result of the inclusion of certain Evercore LP Units and Unvested
Restricted Stock Units.
Further details of these adjustments, as well as an explanation
of similar amounts for the three and six months ended June 30, 2023
are included in pages A-2 to A-7.
Selected Financial Data – U.S. GAAP
Results
The following is a discussion of Evercore's consolidated results
on a U.S. GAAP basis. See pages A-4 to A-6 for our business segment
results.
Net Revenues
U.S. GAAP
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
% Change
June 30, 2024
June 30, 2023
%
Change
(dollars in thousands)
Investment Banking & Equities:
Advisory Fees
$
568,231
$
374,556
52
%
$
998,069
$
837,118
19
%
Underwriting Fees
30,999
38,200
(19
%)
86,534
61,083
42
%
Commissions and Related Revenue
53,199
50,048
6
%
101,437
98,113
3
%
Investment Management:
Asset Management and Administration
Fees
19,200
16,575
16
%
37,899
32,533
16
%
Other Revenue, net
17,595
20,040
(12
%)
46,100
42,715
8
%
Net Revenues
$
689,224
$
499,419
38
%
$
1,270,039
$
1,071,562
19
%
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
% Change
June 30, 2024
June 30, 2023
%
Change
Total Number of Fees from Advisory and
Underwriting Client Transactions(1)
244
236
3
%
381
360
6
%
Total Number of Fees of at Least $1
million from Advisory and Underwriting Client Transactions(1)
95
77
23
%
186
155
20
%
Total Number of Underwriting
Transactions(1)
17
15
13
%
36
29
24
%
Total Number of Underwriting Transactions
as a Bookrunner(1)
14
14
—
%
30
26
15
%
1. Includes Equity and Debt Underwriting
Transactions.
As of June 30,
2024
2023
% Change
Assets Under Management ($ mm)(1)
$
13,160
$
11,488
15
%
1. Assets Under Management reflect end of
period amounts from our consolidated Wealth Management
business.
Advisory Fees – Second quarter Advisory Fees increased
$193.7 million, or 52%, year-over-year, and year-to-date Advisory
Fees increased $161.0 million, or 19%, year-over-year, reflecting
an increase in revenue earned from large transactions and an
increase in the number of advisory fees earned during 2024.
Underwriting Fees – Second quarter Underwriting Fees
decreased $7.2 million, or 19%, year-over-year, reflecting a
decrease in the dollar amount of the transactions we participated
in during the second quarter of 2024. Year-to-date Underwriting
Fees increased $25.5 million, or 42%, year-over-year, reflecting an
increase in the number of transactions we participated in during
2024.
Commissions and Related Revenue – Second quarter
Commissions and Related Revenue increased $3.2 million, or 6%,
year-over-year, and year-to-date Commissions and Related Revenue
increased $3.3 million, or 3%, year-over-year, primarily reflecting
higher subscription fees and trading commissions.
Asset Management and Administration Fees – Second quarter
Asset Management and Administration Fees increased $2.6 million, or
16%, year-over-year, driven by an increase in fees from Wealth
Management clients, as associated AUM increased 15%, primarily from
market appreciation. Year-to-date Asset Management and
Administration Fees increased $5.4 million, or 16%, year-over-year,
driven by an increase in fees from Wealth Management clients, as
associated AUM increased 15%, primarily from market
appreciation.
Other Revenue – Second quarter Other Revenue, net,
decreased $2.4 million, or 12%, year-over-year, primarily
reflecting lower gains on our investment funds portfolio, partially
offset by higher interest income. The investment funds portfolio is
used as an economic hedge against our deferred cash compensation
program. Year-to-date Other Revenue, net, increased $3.4 million,
or 8%, year-over-year, principally reflecting higher interest
income.
Expenses
U.S. GAAP
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
% Change
June 30, 2024
June 30, 2023
%
Change
(dollars in thousands)
Employee Compensation and Benefits
$
458,935
$
338,374
36
%
$
846,640
$
705,246
20
%
Compensation Ratio
66.6
%
67.8
%
66.7
%
65.8
%
Non-Compensation Costs
$
122,046
$
103,329
18
%
$
231,036
$
198,775
16
%
Non-Compensation Ratio
17.7
%
20.7
%
18.2
%
18.6
%
Special Charges, Including Business
Realignment Costs
$
—
$
—
NM
$
—
$
2,921
NM
Employee Compensation and Benefits – Second quarter
Employee Compensation and Benefits increased $120.6 million, or
36%, year-over-year, reflecting a compensation ratio of 66.6% for
the second quarter of 2024 versus 67.8% for the prior year period.
The increase in Employee Compensation and Benefits compared to the
prior year period principally reflects a higher accrual for
incentive compensation, higher base salaries and higher
compensation expense related to senior new hires. The Compensation
Ratio was impacted by higher net revenues, as described above,
during the current year period compared to the prior year period.
Year-to-date Employee Compensation and Benefits increased $141.4
million, or 20%, year-over-year, reflecting a year-to-date
compensation ratio of 66.7% versus 65.8% for the prior year period.
The increase in Employee Compensation and Benefits compared to the
prior year period principally reflects a higher accrual for
incentive compensation, higher base salaries and higher
compensation expense related to senior new hires. See "Deferred
Compensation" for more information.
Non-Compensation Costs – Second quarter Non-Compensation
Costs increased $18.7 million, or 18%, year-over-year, primarily
driven by an increase in professional fees and travel and related
expenses, largely due to higher levels of business activity and
increased headcount, as well as an increase in other operating
expenses. The second quarter Non-Compensation ratio of 17.7%
decreased from 20.7% for the prior year period. The
Non-Compensation Ratio was also impacted by higher net revenues, as
described above, during the current year period compared to the
prior year period. Year-to-date Non-Compensation Costs increased
$32.3 million, or 16%, year-over-year, primarily driven by an
increase in professional fees and travel and related expenses,
largely due to higher levels of business activity and increased
headcount, as well as an increase in communications and information
services, principally reflecting higher license fees and research
services in 2024. The year-to-date Non-Compensation ratio of 18.2%
decreased from 18.6% for the prior year period. The
Non-Compensation Ratio was also impacted by higher net revenues, as
described above, during the current year period compared to the
prior year period.
Special Charges, Including Business Realignment Costs –
Year-to-date 2023 Special Charges, Including Business Realignment
Costs, relate to the write-off of non-recoverable assets in
connection with the wind-down of the Company's operations in
Mexico.
Effective Tax Rate
The second quarter effective tax rate was 25.8% versus 28.9% for
the prior year period. The year-to-date effective tax rate was
11.0% versus 19.8% for the prior year period. The effective tax
rate is principally impacted by the deduction associated with the
appreciation in the Firm's share price upon vesting of employee
share-based awards above the original grant price. The year-to-date
provision for income taxes for 2024 reflects an additional tax
benefit of $30.9 million versus $13.8 million for the prior year
period, due to the net impact associated with the appreciation in
our share price upon vesting of employee share-based awards above
the original grant price.
Selected Financial Data – Adjusted
Results
The following is a discussion of Evercore's consolidated results
on an Adjusted basis. See pages 3 and A-2 to A-7 for further
information and reconciliations of these metrics to our U.S. GAAP
results. See pages A-4 to A-6 for our business segment results.
Adjusted Net Revenues
Adjusted
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
% Change
June 30, 2024
June 30, 2023
%
Change
(dollars in thousands)
Investment Banking & Equities:
Advisory Fees(1)
$
568,378
$
374,699
52
%
$
998,904
$
837,332
19
%
Underwriting Fees
30,999
38,200
(19
%)
86,534
61,083
42
%
Commissions and Related Revenue
53,199
50,048
6
%
101,437
98,113
3
%
Investment Management:
Asset Management and Administration
Fees(2)
20,910
17,974
16
%
41,246
35,329
17
%
Other Revenue, net
21,784
24,221
(10
%)
54,477
51,067
7
%
Net Revenues
$
695,270
$
505,142
38
%
$
1,282,598
$
1,082,924
18
%
1.
Advisory Fees on an Adjusted basis reflect
the reclassification of earnings related to our equity method
investments in Luminis and Seneca Evercore of $0.1 million and $0.8
million for the three and six months ended June 30, 2024,
respectively, and $0.1 million and $0.2 million for the three and
six months ended June 30, 2023, respectively.
2.
Asset Management and Administration Fees
on an Adjusted basis reflect the reclassification of earnings
related to our equity method investments in Atalanta Sosnoff and
ABS of $1.7 million and $3.3 million for the three and six months
ended June 30, 2024, respectively, and $1.4 million and $2.8
million for the three and six months ended June 30, 2023,
respectively.
See page 4 for additional business metrics.
Advisory Fees – Second quarter adjusted Advisory Fees
increased $193.7 million, or 52%, year-over-year, and year-to-date
adjusted Advisory Fees increased $161.6 million, or 19%,
year-over-year, reflecting an increase in revenue earned from large
transactions and an increase in the number of advisory fees earned
during 2024.
Underwriting Fees – Second quarter Underwriting Fees
decreased $7.2 million, or 19%, year-over-year, reflecting a
decrease in the dollar amount of the transactions we participated
in during the second quarter of 2024. Year-to-date Underwriting
Fees increased $25.5 million, or 42%, year-over-year, reflecting an
increase in the number of transactions we participated in during
2024.
Commissions and Related Revenue – Second quarter
Commissions and Related Revenue increased $3.2 million, or 6%,
year-over-year, and year-to-date Commissions and Related Revenue
increased $3.3 million, or 3%, year-over-year, primarily reflecting
higher subscription fees and trading commissions.
Asset Management and Administration Fees – Second quarter
adjusted Asset Management and Administration Fees increased $2.9
million, or 16%, year-over-year, primarily driven by an increase in
fees from Wealth Management clients, as associated AUM increased
15%, primarily from market appreciation. The increase was also
driven by a 22% increase in equity in earnings of affiliates.
Year-to-date adjusted Asset Management and Administration Fees
increased $5.9 million, or 17%, year-over-year, primarily driven by
an increase in fees from Wealth Management clients, as associated
AUM increased 15%, primarily from market appreciation. The increase
was also driven by a 20% increase in equity in earnings of
affiliates.
Other Revenue – Second quarter adjusted Other Revenue,
net, decreased $2.4 million, or 10%, year-over-year, primarily
reflecting lower gains on our investment funds portfolio, partially
offset by higher interest income. The investment funds portfolio is
used as an economic hedge against our deferred cash compensation
program. Year-to-date adjusted Other Revenue, net, increased $3.4
million, or 7%, year-over-year, principally reflecting higher
interest income.
Adjusted Expenses
Adjusted
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
% Change
June 30, 2024
June 30, 2023
%
Change
(dollars in thousands)
Employee Compensation and Benefits
$
458,935
$
338,374
36
%
$
846,640
$
705,246
20
%
Compensation Ratio
66.0
%
67.0
%
66.0
%
65.1
%
Non-Compensation Costs
$
122,046
$
103,329
18
%
$
231,036
$
198,775
16
%
Non-Compensation Ratio
17.6
%
20.5
%
18.0
%
18.4
%
Employee Compensation and Benefits – Second quarter
adjusted Employee Compensation and Benefits increased $120.6
million, or 36%, year-over-year, reflecting an adjusted
compensation ratio of 66.0% for the second quarter of 2024 versus
67.0% for the prior year period. The increase in adjusted Employee
Compensation and Benefits compared to the prior year period
principally reflects a higher accrual for incentive compensation,
higher base salaries and higher compensation expense related to
senior new hires. The adjusted Compensation Ratio was impacted by
higher net revenues, as described above, during the current year
period compared to the prior year period. Year-to-date adjusted
Employee Compensation and Benefits increased $141.4 million, or
20%, year-over-year, reflecting a year-to-date adjusted
compensation ratio of 66.0% versus 65.1% for the prior year period.
The increase in adjusted Employee Compensation and Benefits
compared to the prior year period principally reflects a higher
accrual for incentive compensation, higher base salaries and higher
compensation expense related to senior new hires. See "Deferred
Compensation" for more information.
Non-Compensation Costs – Second quarter adjusted
Non-Compensation Costs increased $18.7 million, or 18%,
year-over-year, primarily driven by an increase in professional
fees and travel and related expenses, largely due to higher levels
of business activity and increased headcount, as well as an
increase in other operating expenses. The second quarter adjusted
Non-Compensation ratio of 17.6% decreased from 20.5% for the prior
year period. The adjusted Non-Compensation Ratio was also impacted
by higher net revenues, as described above, during the current year
period compared to the prior year period. Year-to-date adjusted
Non-Compensation Costs increased $32.3 million, or 16%,
year-over-year, primarily driven by an increase in professional
fees and travel and related expenses, largely due to higher levels
of business activity and increased headcount, as well as an
increase in communications and information services, principally
reflecting higher license fees and research services in 2024. The
year-to-date adjusted Non-Compensation ratio of 18.0% decreased
from 18.4% for the prior year period. The adjusted Non-Compensation
Ratio was also impacted by higher net revenues, as described above,
during the current year period compared to the prior year
period.
Adjusted Effective Tax Rate
The second quarter adjusted effective tax rate was 26.9% versus
29.6% for the prior year period. The year-to-date adjusted
effective tax rate was 11.0% versus 20.2% for the prior year
period. The adjusted effective tax rate is principally impacted by
the deduction associated with the appreciation in the Firm's share
price upon vesting of employee share-based awards above the
original grant price. The year-to-date adjusted provision for
income taxes for 2024 reflects an additional tax benefit of $33.2
million versus $14.7 million for the prior year period, due to the
net impact associated with the appreciation in our share price upon
vesting of employee share-based awards above the original grant
price.
Liquidity
The Company continues to maintain a strong balance sheet. As of
June 30, 2024, cash and cash equivalents were $631.6 million,
investment securities and certificates of deposit were $1.1 billion
and current assets exceeded current liabilities by $1.6 billion.
Amounts due related to the Notes Payable were $373.9 million at
June 30, 2024.
Headcount
As of June 30, 2024 and 2023, the Company employed approximately
2,330 and 2,245 people, respectively, worldwide.
As of June 30, 2024 and 2023, the Company employed 184(1) and
182(2) total Investment Banking & Equities Senior Managing
Directors, respectively, of which 143(1) and 142(2), respectively,
were Investment Banking Senior Managing Directors.
(1)
Senior Managing Director headcount as of
June 30, 2024, adjusted to include three additional Investment
Banking Senior Managing Directors committed to join in the third
and fourth quarters of 2024.
(2)
Senior Managing Director headcount as of
June 30, 2023, adjusted to include seven additional Investment
Banking Senior Managing Directors that joined in 2023 and in the
first quarter of 2024 and to exclude for a known departure of one
Investment Banking Senior Managing Director.
Deferred Compensation
Year-to-date, the Company granted to certain employees 1.7
million unvested restricted stock units ("RSUs") (which were
primarily granted in conjunction with the 2023 bonus awards) with a
grant date fair value of $312.0 million.
In addition, year-to-date, the Company granted $143.2 million of
deferred cash awards to certain employees, related to our deferred
cash compensation program, principally pursuant to 2023 bonus
awards.
The Company recognized compensation expense related to RSUs and
our deferred cash compensation program of $128.4 million and $246.4
million for the three and six months ended June 30, 2024,
respectively, and $123.9 million and $230.7 million for the three
and six months ended June 30, 2023, respectively.
As of June 30, 2024, the Company had 5.2 million unvested RSUs
with an aggregate grant date fair value of $755.0 million. RSUs are
expensed over the service period of the award, subject to
retirement eligibility, and generally vest over four years.
As of June 30, 2024, the Company expects to pay an aggregate of
$383.9 million related to our deferred cash compensation program at
various dates through 2028, subject to certain vesting events.
Amounts due pursuant to this program are expensed over the service
period of the award, subject to retirement eligibility, and are
reflected in Accrued Compensation and Benefits, a component of
current liabilities.
Capital Return
Transactions
On July 23, 2024, the Board of Directors of Evercore declared a
quarterly dividend of $0.80 per share to be paid on September 13,
2024 to common stockholders of record on August 30, 2024.
During the second quarter, the Company repurchased 22 thousand
shares from employees for the net settlement of stock-based
compensation awards at an average price per share of $189.97, and
0.3 million shares at an average price per share of $186.36 in open
market transactions pursuant to the Company's share repurchase
program. The aggregate 0.3 million shares were acquired at an
average price per share of $186.63. Year-to-date, the Company
repurchased 1.0 million shares from employees for the net
settlement of stock-based compensation awards at an average price
per share of $176.67, and 0.8 million shares at an average price
per share of $180.87 in open market transactions pursuant to the
Company's share repurchase program. The aggregate 1.8 million
shares were acquired at an average price per share of $178.61.
Conference Call
Evercore will host a related conference call beginning at 8:00
a.m. Eastern Time, Wednesday, July 24, 2024, accessible via
telephone and webcast. Investors and analysts may participate in
the live conference call by dialing (800) 225-9448 (toll-free
domestic) or (203) 518-9708 (international); passcode: EVRQ224.
Please register at least 10 minutes before the conference call
begins.
A live audio webcast of the conference call will be available on
the Investor Relations section of Evercore’s website at
www.evercore.com. The webcast will be archived on Evercore’s
website for 30 days.
About Evercore
Evercore (NYSE: EVR) is a premier global independent investment
banking advisory firm. We are dedicated to helping our clients
achieve superior results through trusted independent and innovative
advice on matters of strategic significance to boards of directors,
management teams and shareholders, including mergers and
acquisitions, strategic shareholder advisory, restructurings, and
capital structure. Evercore also assists clients in raising public
and private capital and delivers equity research and equity sales
and agency trading execution, in addition to providing wealth and
investment management services to high net worth and institutional
investors. Founded in 1995, the Firm is headquartered in New York
and maintains offices and affiliate offices in major financial
centers in the Americas, Europe, the Middle East and Asia. For more
information, please visit www.evercore.com.
Basis of Alternative Financial
Statement Presentation
Our Adjusted results are a non-GAAP measure. As discussed
further under "Non-GAAP Measures", Evercore believes that the
disclosed Adjusted measures and any adjustments thereto, when
presented in conjunction with comparable U.S. GAAP measures, are
useful to investors to compare Evercore's results across several
periods and better reflects how management views its operating
results. These measures should not be considered a substitute for,
or superior to, measures of financial performance prepared in
accordance with U.S. GAAP. A reconciliation of our U.S. GAAP
results to Adjusted results is presented in the tables included in
the following pages.
Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, which reflect our
current views with respect to, among other things, Evercore's
operations and financial performance. In some cases, you can
identify these forward-looking statements by the use of words such
as "outlook," "backlog," "believes," "expects," "potential,"
"probable," "continues," "may," "will," "should," "seeks,"
"approximately," "predicts," "intends," "plans," "estimates,"
"anticipates" or the negative version of these words or other
comparable words. All statements, other than statements of
historical fact, included in this release are forward-looking
statements and are based on various underlying assumptions and
expectations and are subject to known and unknown risks,
uncertainties and assumptions, and may include projections of our
future financial performance based on our growth strategies and
anticipated trends in Evercore's business. Accordingly, there are
or will be important factors that could cause actual outcomes or
results to differ materially from those indicated in these
statements. Evercore believes these factors include, but are not
limited to, those described under "Risk Factors" discussed in
Evercore's Annual Report on Form 10-K for the year ended December
31, 2023, subsequent quarterly reports on Form 10-Q, current
reports on Form 8-K and Registration Statements. 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 Evercore to predict
all risks and uncertainties, nor can Evercore 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 and Evercore does not assume any
responsibility for the accuracy or completeness of any of these
forward-looking statements. Evercore undertakes no obligation to
publicly update or review any forward-looking statement, whether as
a result of new information, future developments or otherwise.
EVERCORE INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED
JUNE 30, 2024 AND 2023
(dollars in thousands, except per
share data)
(UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenues
Investment Banking & Equities:
Advisory Fees
$
568,231
$
374,556
$
998,069
$
837,118
Underwriting Fees
30,999
38,200
86,534
61,083
Commissions and Related Revenue
53,199
50,048
101,437
98,113
Asset Management and Administration
Fees
19,200
16,575
37,899
32,533
Other Revenue, Including Interest and
Investments
21,784
24,221
54,477
51,067
Total Revenues
693,413
503,600
1,278,416
1,079,914
Interest Expense(1)
4,189
4,181
8,377
8,352
Net Revenues
689,224
499,419
1,270,039
1,071,562
Expenses
Employee Compensation and Benefits
458,935
338,374
846,640
705,246
Occupancy and Equipment Rental
21,801
21,521
43,745
41,900
Professional Fees
34,288
27,465
65,507
51,602
Travel and Related Expenses
21,384
17,422
40,606
32,625
Communications and Information
Services
19,586
17,836
38,753
33,571
Depreciation and Amortization
6,439
5,952
12,732
12,525
Execution, Clearing and Custody Fees
3,051
2,965
6,392
5,730
Special Charges, Including Business
Realignment Costs
—
—
—
2,921
Other Operating Expenses
15,497
10,168
23,301
20,822
Total Expenses
580,981
441,703
1,077,676
906,942
Income Before Income from Equity Method
Investments and Income Taxes
108,243
57,716
192,363
164,620
Income from Equity Method Investments
1,857
1,542
4,182
3,010
Income Before Income Taxes
110,100
59,258
196,545
167,630
Provision for Income Taxes
28,367
17,097
21,688
33,228
Net Income
81,733
42,161
174,857
134,402
Net Income Attributable to Noncontrolling
Interest
7,975
4,956
15,406
13,819
Net Income Attributable to Evercore
Inc.
$
73,758
$
37,205
$
159,451
$
120,583
Net Income Attributable to Evercore
Inc. Common Shareholders
$
73,758
$
37,205
$
159,451
$
120,583
Weighted Average Shares of Class A
Common Stock Outstanding:
Basic
38,502
38,211
38,470
38,360
Diluted
40,857
39,288
40,969
39,863
Net Income Per Share Attributable to
Evercore Inc. Common Shareholders:
Basic
$
1.92
$
0.97
$
4.14
$
3.14
Diluted
$
1.81
$
0.95
$
3.89
$
3.02
(1) Includes interest expense on long-term debt.
Adjusted Results
Throughout the discussion of Evercore's business and elsewhere
in this release, information is presented on an Adjusted basis,
which is a non-generally accepted accounting principles
("non-GAAP") measure. Adjusted results begin with information
prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP"), adjusted to
exclude certain items and reflect the conversion of certain
Evercore LP Units and Unvested Restricted Stock Units into Class A
shares. Evercore believes that the disclosed Adjusted measures and
any adjustments thereto, when presented in conjunction with
comparable U.S. GAAP measures, are useful to investors to compare
Evercore's results across several periods and facilitate an
understanding of Evercore's operating results. The Company uses
these measures to evaluate its operating performance, as well as
the performance of individual employees. These measures should not
be considered a substitute for, or superior to, measures of
financial performance prepared in accordance with U.S. GAAP. These
Adjusted amounts are allocated to the Company's two business
segments: Investment Banking & Equities and Investment
Management. The differences between the Adjusted and U.S. GAAP
results are as follows:
- Assumed Exchange of Evercore LP Units
into Class A Shares. The Adjusted results assume
substantially all Evercore LP Units have been exchanged for Class A
shares. Accordingly, the noncontrolling interest related to these
units is converted to a controlling interest. The Company's
management believes that it is useful to provide the per-share
effect associated with the assumed conversion of substantially all
of these previously granted equity interests and IPO related
restricted stock units, and thus the Adjusted results reflect their
exchange into Class A shares.
- Special Charges, Including Business
Realignment Costs. Expenses during 2023 that are excluded
from the Adjusted presentation relate to the write-off of
non-recoverable assets in connection with the wind-down of the
Company's operations in Mexico.
- Income Taxes. Evercore is
organized as a series of Limited Liability Companies, Partnerships,
C-Corporations and a Public Corporation in the U.S. as the ultimate
parent. Certain of the subsidiaries, particularly Evercore LP, have
noncontrolling interests held by management or former members of
management. As a result, not all of the Company’s income is subject
to corporate level taxes and certain other state and local taxes
are levied. The assumption in the Adjusted earnings presentation is
that substantially all of the noncontrolling interest is eliminated
through the exchange of Evercore LP units into Class A common stock
of the ultimate parent. As a result, the Adjusted earnings
presentation assumes that the allocation of earnings to Evercore
LP’s noncontrolling interest holders is substantially eliminated
and is therefore subject to statutory tax rates of a C-Corporation
under a conventional tax structure in the U.S. and that certain
state and local taxes are reduced accordingly.
- Presentation of Interest Expense.
The Adjusted results present Adjusted Investment Banking &
Equities Operating Income before interest expense on debt, which is
included in interest expense on a U.S. GAAP basis.
- Presentation of Income from Equity Method
Investments. The Adjusted results present Income from Equity
Method Investments within Revenue as the Company's Management
believes it is a useful presentation.
EVERCORE INC.
U.S. GAAP RECONCILIATION TO
ADJUSTED RESULTS
(dollars in thousands, except per
share data)
(UNAUDITED)
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Net Revenues - U.S. GAAP
$
689,224
$
499,419
$
1,270,039
$
1,071,562
Income from Equity Method Investments
(1)
1,857
1,542
4,182
3,010
Interest Expense on Debt (2)
4,189
4,181
8,377
8,352
Net Revenues - Adjusted
$
695,270
$
505,142
$
1,282,598
$
1,082,924
Other Revenue, net - U.S. GAAP
$
17,595
$
20,040
$
46,100
$
42,715
Interest Expense on Debt (2)
4,189
4,181
8,377
8,352
Other Revenue, net - Adjusted
$
21,784
$
24,221
$
54,477
$
51,067
Operating Income - U.S. GAAP
$
108,243
$
57,716
$
192,363
$
164,620
Income from Equity Method Investments
(1)
1,857
1,542
4,182
3,010
Pre-Tax Income - U.S. GAAP
110,100
59,258
196,545
167,630
Special Charges, Including Business
Realignment Costs (3)
—
—
—
2,921
Pre-Tax Income - Adjusted
110,100
59,258
196,545
170,551
Interest Expense on Debt (2)
4,189
4,181
8,377
8,352
Operating Income - Adjusted
$
114,289
$
63,439
$
204,922
$
178,903
Provision for Income Taxes - U.S.
GAAP
$
28,367
$
17,097
$
21,688
$
33,228
Income Taxes (4)
1,261
426
(69
)
1,200
Provision for Income Taxes -
Adjusted
$
29,628
$
17,523
$
21,619
$
34,428
Net Income Attributable to Evercore
Inc. - U.S. GAAP
$
73,758
$
37,205
$
159,451
$
120,583
Special Charges, Including Business
Realignment Costs (3)
—
—
—
2,921
Income Taxes (4)
(1,261
)
(426
)
69
(1,200
)
Noncontrolling Interest (5)
6,236
3,583
12,080
11,309
Net Income Attributable to Evercore
Inc. - Adjusted
$
78,733
$
40,362
$
171,600
$
133,613
Diluted Shares Outstanding - U.S.
GAAP
40,857
39,288
40,969
39,863
LP Units (6)
2,558
2,815
2,583
2,785
Unvested Restricted Stock Units - Event
Based (6)
12
12
12
12
Diluted Shares Outstanding -
Adjusted
43,427
42,115
43,564
42,660
Key Metrics: (a)
Diluted Earnings Per Share - U.S. GAAP
$
1.81
$
0.95
$
3.89
$
3.02
Diluted Earnings Per Share - Adjusted
$
1.81
$
0.96
$
3.94
$
3.13
Operating Margin - U.S. GAAP
15.7
%
11.6
%
15.1
%
15.4
%
Operating Margin - Adjusted
16.4
%
12.6
%
16.0
%
16.5
%
Effective Tax Rate - U.S. GAAP
25.8
%
28.9
%
11.0
%
19.8
%
Effective Tax Rate - Adjusted
26.9
%
29.6
%
11.0
%
20.2
%
(a) Reconciliations of the key metrics
from U.S. GAAP to Adjusted results are a derivative of the
reconciliations of their components above.
EVERCORE INC.
U.S. GAAP SEGMENT
RECONCILIATION TO ADJUSTED RESULTS
FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2024
(dollars in thousands)
(UNAUDITED)
Investment Banking &
Equities Segment
Three Months Ended June 30,
2024
Six Months Ended June 30,
2024
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
568,231
$
147
(1
)
$
568,378
$
998,069
$
835
(1
)
$
998,904
Underwriting Fees
30,999
—
30,999
86,534
—
86,534
Commissions and Related Revenue
53,199
—
53,199
101,437
—
101,437
Other Revenue, net
17,581
4,189
(2
)
21,770
45,698
8,377
(2
)
54,075
Net Revenues
670,010
4,336
674,346
1,231,738
9,212
1,240,950
Expenses:
Employee Compensation and Benefits
448,064
—
448,064
825,351
—
825,351
Non-Compensation Costs
118,304
—
118,304
223,855
—
223,855
Total Expenses
566,368
—
566,368
1,049,206
—
1,049,206
Operating Income (a)
$
103,642
$
4,336
$
107,978
$
182,532
$
9,212
$
191,744
Compensation Ratio (b)
66.9
%
66.4
%
67.0
%
66.5
%
Operating Margin (b)
15.5
%
16.0
%
14.8
%
15.5
%
Investment Management
Segment
Three Months Ended June 30,
2024
Six Months Ended June 30,
2024
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Asset Management and Administration
Fees
$
19,200
$
1,710
(1
)
$
20,910
$
37,899
$
3,347
(1
)
$
41,246
Other Revenue, net
14
—
14
402
—
402
Net Revenues
19,214
1,710
20,924
38,301
3,347
41,648
Expenses:
Employee Compensation and Benefits
10,871
—
10,871
21,289
—
21,289
Non-Compensation Costs
3,742
—
3,742
7,181
—
7,181
Total Expenses
14,613
—
14,613
28,470
—
28,470
Operating Income (a)
$
4,601
$
1,710
$
6,311
$
9,831
$
3,347
$
13,178
Compensation Ratio (b)
56.6
%
52.0
%
55.6
%
51.1
%
Operating Margin (b)
23.9
%
30.2
%
25.7
%
31.6
%
(a) Operating Income for U.S. GAAP
excludes Income (Loss) from Equity Method Investments.
(b) Reconciliations of the key metrics
from U.S. GAAP to Adjusted results are a derivative of the
reconciliations of their components above.
EVERCORE INC.
U.S. GAAP SEGMENT
RECONCILIATION TO ADJUSTED RESULTS
FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2023
(dollars in thousands)
(UNAUDITED)
Investment Banking &
Equities Segment
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
374,556
$
143
(1
)
$
374,699
$
837,118
$
214
(1
)
$
837,332
Underwriting Fees
38,200
—
38,200
61,083
—
61,083
Commissions and Related Revenue
50,048
—
50,048
98,113
—
98,113
Other Revenue, net
19,442
4,181
(2
)
23,623
40,743
8,352
(2
)
49,095
Net Revenues
482,246
4,324
486,570
1,037,057
8,566
1,045,623
Expenses:
Employee Compensation and Benefits
328,498
—
328,498
685,569
—
685,569
Non-Compensation Costs
99,846
—
99,846
191,855
—
191,855
Special Charges, Including Business
Realignment Costs
—
—
—
2,921
(2,921
)
(3
)
—
Total Expenses
428,344
—
428,344
880,345
(2,921
)
877,424
Operating Income (a)
$
53,902
$
4,324
$
58,226
$
156,712
$
11,487
$
168,199
Compensation Ratio (b)
68.1
%
67.5
%
66.1
%
65.6
%
Operating Margin (b)
11.2
%
12.0
%
15.1
%
16.1
%
Investment Management
Segment
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Asset Management and Administration
Fees
$
16,575
$
1,399
(1
)
$
17,974
$
32,533
$
2,796
(1
)
$
35,329
Other Revenue, net
598
—
598
1,972
—
1,972
Net Revenues
17,173
1,399
18,572
34,505
2,796
37,301
Expenses:
Employee Compensation and Benefits
9,876
—
9,876
19,677
—
19,677
Non-Compensation Costs
3,483
—
3,483
6,920
—
6,920
Total Expenses
13,359
—
13,359
26,597
—
26,597
Operating Income (a)
$
3,814
$
1,399
$
5,213
$
7,908
$
2,796
$
10,704
Compensation Ratio (b)
57.5
%
53.2
%
57.0
%
52.8
%
Operating Margin (b)
22.2
%
28.1
%
22.9
%
28.7
%
(a) Operating Income for U.S. GAAP
excludes Income (Loss) from Equity Method Investments.
(b) Reconciliations of the key metrics
from U.S. GAAP to Adjusted results are a derivative of the
reconciliations of their components above.
EVERCORE INC.
U.S. GAAP SEGMENT AND
CONSOLIDATED RESULTS
(dollars in thousands)
(UNAUDITED)
U.S. GAAP
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Investment Banking &
Equities
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
568,231
$
374,556
$
998,069
$
837,118
Underwriting Fees
30,999
38,200
86,534
61,083
Commissions and Related Revenue
53,199
50,048
101,437
98,113
Other Revenue, net
17,581
19,442
45,698
40,743
Net Revenues
670,010
482,246
1,231,738
1,037,057
Expenses:
Employee Compensation and Benefits
448,064
328,498
825,351
685,569
Non-Compensation Costs
118,304
99,846
223,855
191,855
Special Charges, Including Business
Realignment Costs
—
—
—
2,921
Total Expenses
566,368
428,344
1,049,206
880,345
Operating Income (a)
$
103,642
$
53,902
$
182,532
$
156,712
Investment Management
Net Revenues:
Asset Management and Administration
Fees
$
19,200
$
16,575
$
37,899
$
32,533
Other Revenue, net
14
598
402
1,972
Net Revenues
19,214
17,173
38,301
34,505
Expenses:
Employee Compensation and Benefits
10,871
9,876
21,289
19,677
Non-Compensation Costs
3,742
3,483
7,181
6,920
Total Expenses
14,613
13,359
28,470
26,597
Operating Income (a)
$
4,601
$
3,814
$
9,831
$
7,908
Total
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
568,231
$
374,556
$
998,069
$
837,118
Underwriting Fees
30,999
38,200
86,534
61,083
Commissions and Related Revenue
53,199
50,048
101,437
98,113
Asset Management and Administration
Fees
19,200
16,575
37,899
32,533
Other Revenue, net
17,595
20,040
46,100
42,715
Net Revenues
689,224
499,419
1,270,039
1,071,562
Expenses:
Employee Compensation and Benefits
458,935
338,374
846,640
705,246
Non-Compensation Costs
122,046
103,329
231,036
198,775
Special Charges, Including Business
Realignment Costs
—
—
—
2,921
Total Expenses
580,981
441,703
1,077,676
906,942
Operating Income (a)
$
108,243
$
57,716
$
192,363
$
164,620
(a) Operating Income excludes Income
(Loss) from Equity Method Investments.
Notes to Unaudited Condensed Consolidated Adjusted Financial
Data
For further information on these adjustments, see page A-2.
(1)
Income (Loss) from Equity Method
Investments has been reclassified to Revenue in the Adjusted
presentation.
(2)
Interest Expense on Debt is excluded from
Net Revenues and presented below Operating Income in the Adjusted
results and is included in Interest Expense on a U.S. GAAP
basis.
(3)
Expenses during 2023 that are excluded
from the Adjusted presentation relate to the write-off of
non-recoverable assets in connection with the wind-down of the
Company's operations in Mexico.
(4)
Evercore is organized as a series of
Limited Liability Companies, Partnerships, C-Corporations and a
Public Corporation in the U.S. as the ultimate parent. Certain of
the subsidiaries, particularly Evercore LP, have noncontrolling
interests held by management or former members of management. As a
result, not all of the Company’s income is subject to corporate
level taxes and certain other state and local taxes are levied. The
assumption in the Adjusted earnings presentation is that
substantially all of the noncontrolling interest is eliminated
through the exchange of Evercore LP units into Class A common stock
of the ultimate parent. As a result, the Adjusted earnings
presentation assumes that the allocation of earnings to Evercore
LP’s noncontrolling interest holders is substantially eliminated
and is therefore subject to statutory tax rates of a C-Corporation
under a conventional tax structure in the U.S. and that certain
state and local taxes are reduced accordingly.
(5)
Reflects an adjustment to eliminate
noncontrolling interest related to substantially all Evercore LP
partnership units which are assumed to be converted to Class A
common stock in the Adjusted presentation.
(6)
Assumes the exchange into Class A shares
of substantially all Evercore LP Units and IPO related restricted
stock unit awards in the Adjusted presentation. In the computation
of outstanding common stock equivalents for U.S. GAAP net income
per share, the Evercore LP Units are anti-dilutive.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240723229408/en/
Investor Contact:
Katy Haber Head of Investor Relations & ESG
InvestorRelations@Evercore.com
Media Contacts:
Jamie Easton Head of Communications & External Affairs
Communications@Evercore.com
Shree Dhond / Zach Kouwe Dukas Linden Public Relations
Evercore@DLPR.com (646) 722-6531
Evercore (NYSE:EVR)
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Evercore (NYSE:EVR)
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