Evercore (EVR) 1 Feb 222022 Q4 Earnings call transcript

Good day and welcome to the Evercore Fourth Quarter and Full Year 2022 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Evercore management and the question-and-answer session. [Operator Instructions]

I will now turn the call over to Katy Haber, Managing Director of Investor Relations and ESG at Evercore. Ma'am, please, begin.

(ph). [Chelsee] you, Thank thank and joining results full and Evercore's conference today fourth quarter year you morning, us for for call. Good XXXX financial ESG. Haber, Katy Evercore's of Relations I'm Head and Investor

John Joining Weinberg, Celeste me our our up will After remarks, CFO. call questions. the on today call Mellet, our and for CEO; the Chairman and we open prepared is

Earlier financial results. XXXX quarter and today, we full-year issued a press release announcing Evercore's fourth

call. evercore.com. on our This Investors to Our call discussion the complementary XX our approximately hour of website it is which section an days is webcast at our being one for of press after available conference For is be this live website, results release the conclusion available the will beginning archive today in and of of

this we from differ various to factors are These number factors course forward-looking that call, actual Any statements. could the there make to in forward-looking and that may we materially are During statements cause important those statements. uncertainties indicated and of of these make a risks subject conference outcomes Form remind are company discussed no Form with our I duty in including update SEC, Form Evercore's report forward-looking but reports not to the those on the current on quarterly and statements. want annual reports any limited XX-Q, you XX-K, on that filings include X-K. to to assumes

evaluating are when discussing measures, which financial meaningful adjusted are company's presentation our be that indicated, unless today, we measures will In performance. believe we otherwise non-GAAP the

our website. financial For is on release contained press detailed you within which GAAP reconciliations, should refer disclosures these data to the the on measures and posted our

annual to We is evaluate continue basis. to on important it an that Evercore's believe performance

transaction quarter any our results timing by As we have the for are particular closings. influenced previously, noted of

John. turn now over I will call to the

able challenging Thank Yet was all you, business. macro-driven and in through the environment. and undoubtedly everyone. complex headwinds, And volatility Evercore serve strategically was invest to our our and Katy. of XXXX a clients morning, good

quarter the year. well, both to continued and in full for We perform the

In revenue, was second year our per and on billion the best million in record net $XXX earnings XXXX income, for $X.X in fact, in share. firm with $XX.X

and the in made further of and bulge we For progress top bracket the Evercore narrowing quarter, on of goal three gap the advisory between fees. firms full year our terms also fourth

advisor XXXX for for continued also senior important of marked execute year promoted hired managing growth will as A-plus our investment senior the talent one we strategy. seven including a long-term strategic XXXX. to that firm, advisory Evercore long-term directors in target and value our drive in areas on We and

build to and important to also clients our capabilities continued product diversify our business more our We connect deeply. with

had XXXX, including previously, of diversification The at we As one-third and private markets, stems of meaningfully historically. more capabilities, advice our the today than across each many trading, capital management. they business we've and capital including filled revenue. our of scale from discussed accounted restructuring, past and private and fundraising, are our least capital non-M&A the equity been our diverse sales execution, four businesses revenues In wealth markets for years, advisory

sheet balance cycles. invest to the to our managed our create through franchise we've Additionally, capacity in

execute We highest on areas our areas see opportunities we in will strategy by to growth having of continue investing and in impact. targeted where long-term the

have leaving we worked quarter us. I'd firm. recent year, quarter, begin her while like final Celeste with fortunate Celeste's This the to Before Last contributions the value announcement. that touch to sad her to announced go, I Evercore. recapping the we we she our with And and are be quickly has on CFO feel is see to made will

our that Tim excited CFO we will X. LaLonde are seen, March As you may effective share become have to

Evercore partner are look We creation. will growth. CFO that forward a He his in been to leadership, the position superior driving knowledge he Over record and of highly contributions the role and with has of as value part excellence. a sustainable integral Tim as last confident successful long-term an is the operational XX firm's Evercore's deep respected delivering the years, brings of a firm for

a want fashion in to -- similar our dialog and a teams and and, that, clients. future. year the view to With of very with detailed a constant global again, advisory, provide I execution strategic our constant with year-ago, remain outline for the plans past active with more Starting

XX% announced M&A Looking to at market activity in more our down levels record compared activity global broadly, was XXXX.

volumes generally line in historical in were M&A XXXX However, with averages.

compared XX% was for XXXX bracket For to Evercore peers. down our declines transactions specifically, global XX% announced X% about our only independent number of in bulge for and the of peers,

we While business large what advising on to than our from portion $X is in meaningful transaction do, core very of globally value. much stems billion deals a M&A less transactions

the and Over complex situations, which highly last an in seeking increase unique XXXX. we reached in public-to-private year, clients on advice record levels saw including deals

active, to as healthcare be continued and industrials. for tech well As as sectors,

in renewables, traditional infrastructure. saw strength We energy, also and

region from our Next, team making year, last had we've very representative Europe in geographic a the been several strong over the investments years. in of perspective, a

Our in business well Evercore's financials, debt sectors, across European energy, infrastructure advisory advisory. utilities and had saw as strength the as history. its We and year best

expansion were end, mentioned on to SMD hires that earlier on continue globe. of international. We the focus XXXX the two efforts region in To around our I that -- and

global other be advisory, to outside active M&A. in areas of traditional we continue Within

representing value with Evercore advisory the U.S., and campaigns, this the the largest First, market we our and defense have the as strategic has continuous, team trend number companies defense very particularly par in Street. space, from in activist team XXXX of on targeting XXXX almost of dedicated in professionals on in over Wall year. in large-cap campaigns advised levels. companies activist of trillion remains The of $X.X was prior active XXXX shareholder XX% representing

business and settlements, ranging to growth restructuring, bankruptcies management a in to XX are assignments, opportunities. business the reflects a and the financing. increase of of won Turning and and out-of-court in the with company liability we entering distressed over significant pipeline from months past assignments a mix XXXX robust The creditor

well for significant While team relatively bankers team. industry rising with to our should restructuring our margin low, this continues restructuring collaborate opportunity are to most default rates the cycle advice. comprehensive and still clients positioned our We're upcoming provide corporate rates for and additional with pressure present

these teams businesses second and driven real continued capital the in Next, collaboration focused capital, funds, on our private market in build out continuation We've GP represented across on Crisis. will capital since private also include privately a XXXX and debt synergies the great executes our capital best be complex these of placed which record issuance well leading year the Financial on fundraising, business teams well buying The lowest our resulting team. down has and which and industry and advises to markets sponsor as aggregate, LP team issues. of balance underwriting as stakes, selling M&A the growth. year and for businesses as estate a to structure and had financings challenging platform sheet XX%, with as and Great year industry for equity issuance continue

on impacted once gain While trends share broad to of in outperformed year. industry half returned business, continued relative basis and activity a the second our we

five greater equity were and book in IPOs, four as of transactions was XXXX. market our in continues all on linked participated our largest of role Notably, XXXX. While in $XX runner all U.S. U.S. quiet, we the equity than and million, IPOs Evercore to underwriting of one-third IPO in elevate

Healthcare and deals XX% continued involved standout of were to we in all sector underwriting a XXXX. be for us, healthcare almost in

product an to Additionally, additional momentum which in convertibles, offering other for to continued we've continued and gain invest products provide clients. as our such

a see are expect We with the in pleased stabilizes. when of our advancements the to market pick-up business underwriting activity and

Next, navigate and to focus and our markets. equities providing franchise the our research clients continues highest-quality as service uncertain on they volatile with

number Street. finally, have year. any in and institutional and had of our declined, business investor noteworthy a to long-term number an We while the And year, impacted market broad research clients' Wall time the assets management on ranked continued wealth retention. strong management weighted the by and client on first for basis under top-three franchise portfolios, performance analysts the of had ever for were firm Our individual the one highest

Now, I model. our client is coverage our and long enhancement expansion our want of the the to strategy roadmap to turn growth base and important of pillar to term. An for tied

as a our focused areas fintech, on remain well we geographic fill where to continue of the space sector traditional expand. expanding areas such in to cleantech, strong very traditional white and as growing and We have economy, room investing and M&A as segments including business of technology software, more footprint. there global We the fastest is ample of biotech,

practice. both effort. business continue there develop private are invest and serve and this and our base, We've capital incremental client to opportunities increased on We in this sponsor M&A believe businesses, our sponsor to our in expanding client coverage focus

continued last space. U.S. mentioned added Sponsors to Financial this invest to we important in as as Group addition, In we bankers senior we several our quarter,

many opportunistically product our Overall, we doing see capabilities. strong our across real so. opportunities from and broadening of investing from We're and returns business see selectively deepening

these make all investments, for for continue active high hires. navigate the to a We'll recruit selectively we while A-plus talent will and talent. we market stay bar As maintaining

We later SMDs business. as joining capabilities, our year, across as about various and advisory committed talents. success, our this excited additional to our to one had this promoted have begin our of and core well and in capital talent sectors is XXXX in an Cultivating we with of pipeline quarter. next Already equities are business we seven generation our the newly SMD advisory businesses private underwriting

first That will want base, record of comments. another and comp as the begin durable and Before a a sheet. on non-comp, of it to that few recession I over and our around quite to both make results repeat be to probability we financials, a the review the said, turn bit There's our be XXXX balance we I had complex XXXX. focused liquid half difficult in we expense of the Celeste to discussion year and maintaining XXXX. will remain call final

although We're activity others While we will was record. M&A a we believe with are not. down where the from we one, enter well-positioned. year it for year is feel way, starting backlog a Either do on ago, strongest the off strong new followed year it which some

and continues high remains last strategic to slower to of is influence the greater economic field continue clients and risk will closings activity, stability as continue to transaction And levels. quarter, conditions market with timing elongated. be very execution at Similar dialog there while announcements of

in that We capitalize we stabilizes. business. to market for lies current forward, environment the are and our the confident ahead look on As believe well-positioned the the firm we is as outlook opportunity

to With Celeste. over me it that, let turn

Thank you, John.

is with to sell-side our shareholders. I research this thank a the team earnings pleasure to great been this Before of and rest the call has I team as final It my as work with well review Evercore. analysts financials, the want as John and

million, $XXX For million, income, $XXX respectively. and were net net on the revenues, fourth GAAP quarter a of XXXX, and EPS $X.XX, basis

For the when on which full and billion, we year, net income, will believe are metrics, GAAP useful $XX.XX, million, on basis evaluating My comments a $X.X from respectively. were $XXX EPS focus revenues, net and results. our here non-GAAP

Our reconciliation standard our adjusted our website. results a be press GAAP release, of GAAP which in is on reporting found to and can

share results. versus quarter of earnings and decreased respectively. adjusted million, XX% net adjusted revenues fourth net of was versus of adjusted quarter. XXXX. XX% net million basis, a operating quarter record full-year decreased fourth the quarter quarter income Fourth billion $XXX declined record XX% of XXXX's million, a Fourth to revenues of which per XXXX, XX% $XXX compared declined to adjusted and XX%, On $XXX income the fourth Adjusted $X.X of $X.XX

adjusted $XXX earnings per For the XXXX. $XX.X decreased year, income and the while XX% decreased adjusted XX%, of versus of full and income year both share operating $XXX adjusted million full net million

quarter Our with fourth the pre-XXXX averages. was for XX.X% operating margin line and the adjusted in for year, historical XX.X%

best quarter for the third accordance businesses, $XX underwriting to million pending approximately XXXX. year, of quarter and/or relevant recognized for $XXX our million quarter XX% declined Turning advisory. accordance of $XX our $XXX principles. the second were transactions XXXX that $X.X compare, in and with XX% and Advisory $XX compared at. a year-over-year. XX% ever To revenues other of period quarter fourth fourth XXXX, decline we down Fourth January conditions quarter with In to of early million in accounting advisory XXXX billion from accounting the million million principles, a in to revenues the includes of same the were revenues revenue in the had compared year closed fourth

issuance. year, full $XXX down decline million, For the market in a XX% versus reflecting XXXX, revenues overall underwriting were

year-over-year. revenue related quarter the and fourth X% Commissions of in million down $XX were

year million revenues compared administration decreased market to For the in year-over-year, full Fourth XX% AUM, driven adjusted were X% by and depreciation. reflecting $XX year, compared of related $XXX while of decline full commissions revenue million asset to flat of XXXX. decreased fees management $XX quarter and million, a XXXX,

$XX part fourth net quarter. value reflecting hedge quarter funds equity value was of gain our is as other in the million, approximately a investment of as in increase a in Fourth DCCP the which adjusted commitment, used revenue in markets -- for or in rallied portfolio,

For was a equity million was million XXXX, the driven a other loss full $XX revenue year, of market. net for in markets by adjusted were as revenue equity Other the of positive year. negative gain $X

to Turning compensation ratio was adjusted XX.X%. quarter expenses, the fourth for the

Our year of comp the full comp the a in $XX year year ago, compensation other operating when full exclude driven compared ratio were to same versus XX.X% expenses. ratio by hedge been in to non-compensation XXXX. X% decrease for XX.X% a reported XXXX our primarily down the slightly adjusting Fourth in making XX.X% DCCP, the would from adjusted lower million costs XX.X% adjustments. was ratio When for the at quarter have

the reflected the XXXX. was offset created charitable Foundation. by quarter contribution increased of resume partly and fourth the to to year XXXX, which Evercore initial newly during began in Last throughout travel, This increases

of of occupancy travel return increased related during on year, cost increases as expenses driven levels $XXX more office, to a return as up travel services, well full as costs non-compensation more XX%, the were largely For to pressures added to higher professional to due in and inflationary we technology, and space XXXX. million by normalized

expense are comp non-comp. focused have our management we and previously As mentioned, across practices we on

June. since Our down and quarter-over-quarter headcount is

[Technical to lower and manage Difficulty] continue out replacement incremental hires. We

On the expenses managing we side, are non-comp tightly.

the travel but We in increases expect saw we inflationary across pressures in significantly as in XXXX, related than and practices, increases. will non-comps what This travel XXXX. rent space a new lower be driven at by of growth continued continued tech, occupancy rate both as in driven by and well contractual annualization normalization

increase the subsequently improves back deal in environment expenses. market activities an If related and up, we picks could see

for rate year. also versus The meals last local [Technical XX.X% expenses. XX.X%, adjusted up for The Our entertainment quarter and the year. adjusted year full tax well driven primarily and Difficulty] full as taxes were including last versus by was and in year the state and quarter nondeductible tax stock-comp rate as increase was up the expenses,

to Turning sheet. balance our

As cash investment of XX, our $X.X December and securities about totaled billion.

remain through committed returning sheet. invested business durable In returned maintaining time, and and is with average in excess million cash $XXX.XX. while low-teens. of than and investment not a as our in environment of our the a more shareholders to excess percentage excess current run review uncertainties firm cash repurchases total to Our total our and excess We persist. cash million we the balance a continue an business position over to $XXX what we to the to at all shareholders the hold dividends all as capital, to of -- securities shares of price respect economic We cash market cash is X.X required XXXX,

that bonus expect we so granted of fully dilution our to and we continue offset compensation part process than RSUs as During from do the the annual were future in XXXX, periods. more to

fourth is count diluted share to by Relative down adjusted quarter million $XX.X quarter the year awards, primarily $XX.X price, $XX.X of fourth to our increase the the slightly from from in count XXXX, share quarter million repurchases. in offset XXXX. the ago, partially in third investing a share million Our share reflecting of increased significantly of

we that, With the line open questions. for now will

Thank you.

conduct from with will of conference. Instructions] come portion first Brennan Hawken [Operator We the UBS. will now the Our question-and-answer question

Your open. line is

taking for question. my Thanks morning. Good

often likely often it's quite perspective, to do and most that's were question to lot a curious what one about recency something because is folks me reflecting bit looking that which results recovery Fed more So, of this accommodative. a know you than like, debated, thing I But tough aided was might at bias answer, look but uncertainty. the your recent a to a we're recoveries by outlook the in from used think hearing, I'm limited commentary was

And if cycles bank, a you that we you And play a to seeing which would prior think cycles, so, how -- in recovery? up accommodative end we central when you might think look through less do apt generally back recovery most enter whether a or out on not playing Thanks. as what we what recession or obviously, be might might not, and based depending look see today? here on we'll you a like, when sit but can

the this question. for how Thanks versus in of And chart terms other cycles. we would cycle

standing way lot a a situation. a this about I looking exogenous there are is there to public to wait things We've because that think is credit such I Fed. think happens some messaging the it's it lot see back is because certainly, the liquidity and in And market for that watching so by from the boards we're happen, there's teams back see the think The that, think that is what they're and think management a And the see saying, side. so is in that on happening of and I today of what Fed I I unique sponsors, seen But it's the up still that by think hard, and and clearly, waiting is standing market are that we grade many transactions. in -- now -- strategic opened happening. strategic investment and could so, and mode. a beginning has the

to behaving continuing to how situation. also watching are I and is are people people inflation the monitor think I geopolitical see think

that strategic want working think as really love they teams their have management boards and would growth their dialogs I on and patterns. start generally, to what working -- on think I to start

values to the markets, few private And I forward, it's closer the go forward. but it's -- there is waiting be is And to a start the market. think people investment people that, see I way with reaction we're to whether transactions non-investment are out and are that And seeing. go still I this carefully the see available, enough also for together. Clearly, buyers what you're credit On and going side, those drive not sellers leveraged watching coming the grade play going to out as big finance restricted. to really a see think expectations and is. And huge sponsor to somewhat that watching will are think market, are

of I will at deals their planning think I accelerating an I recovery start many real participate. rates for history, of relatively though I what the then the could more as you're momentum sponsors from wanting and look to I is, going see going see looking recent taking some think the plans. you'll and been remain transactions. have and that really start do accelerating. And -- get the regard recent see time you'll think positive that And even done, think to of to -- recovery to people some it teams to to are things high going to see so want getting that on recovery with see I think could management this do you'll start as pace see I

All right, John. Thanks for that color.

Thank you.

Our next Sachs. come with Yaro question will James Goldman from

Your line is open.

to the of opportunity? that's of a speed have the M&A far M&A to negative pressures seem John deals this you I January, just could we're my questions. if this so impact could for holding restructuring an the debt Celeste. in have I impact of And markets, which reopened some what subsided more Maybe extent just speak then do terms ask recovery. Hey, the to conversely, up quickly reducing February. to some and seeing, on in whether Thanks financing in and how and taking guess, have and wanted could financing

respect of often I at continuing think and start your see picking first, easily which terms in very for real going both really specific. pace -- and opportunities, I merger restructuring company the application structures. I question, see Well, broad the it's with It's distress -- could doesn't happen, market is need of not easily restructuring. this of with part restructuring terms of could capital high really a up I'll specific, really financings, activity companies lot latter type advice their broad diversity this a of just is because industry that restructuring to on And a in seeing of our a that There's in group. we're really

forward So, could even merger the if recovering. that I see markets moving

the don't have investment to And watching they strength really the of then opening of no when at receptive will see doing to of able really corporates they markets, look really access credit to But deals. that really the deals, the not terms and the being that that be helped credit markets In market. big really, to big market the the recovery really markets there's the has question are I the it's market see grade companies credit and could recovering. that do is

that no credit and there's And to markets management confidence move But I to actually so, to boards be easier. that question make situations their forward think really I getting think that the teams going drive sizable it's it strategy. the with

is corporates real pent-up there demand a think from deals. and to I sponsors do

to be And think think there's I've see going as the it's I to to build. deals, you're they going I to start. going said, And so, think acceptance that broad it minute

That's really Thank you. clear.

Thank you.

next Moon come from Our will KBW. with question Matt

open. is line Your

Good morning. Hi.

imagine advisory in relation contribution trended over a third kind guess, of would has this the But fees, restructuring closer you've to kind revenue pie dynamics to private but a Just curious, of push-and-pull this total larger wanted underwriting considering to the of is this past from recently advisory touch what I'm year, coming I number the to and the the how capital to the lower on over few as More of years. in contribution. side. non-M&A spoken I past

we're proportion M&A So, XXXX, to that -- this and one, what these XXXX with pure came about you've we in should M&A on revenues be three-year within specifically? wondering of that outlook advisory what about how two, kind similar advisory period; bucket: shift thinking over non-M&A if disclosed on the particularly figure this seeing the the

total where still as these in are of to coming our in terms businesses out you. Well, revenue. generally, we're I actually Thank one-third the area Sure. think

Whether strong think is it's generally for actually businesses prospects very are the same we're that very, place. in They're These lot and restructuring, the very is productive. a many taking they've think, got well do. They're very positioned. good right promoted senior on it's I to think to director them. going new in busy I and another that managing in very are, And we investing who be I now. these assignments businesses

And good think feel business. that so, I about we that

Private for and And best-in-class equity I And capital opportunities a we're we markets we in we're seems really there to us. it too. that's advisory, equity We're investing there businesses the well-positioned in to capital trading businesses mean, be think are real pour then opportunity strategic gaining trying and think other we relative them some it's everybody ground to have a like on. important. sense. grow. and thinking We're giving actually

I debt So think, doing is Wealth advisory, same. quite management, the well.

now, opportunities -- grow. think to think, they don't will think these are one-third performance. think continue the I your the I change I I in so, area. businesses answer Right continue and merger to drive our -- that to think I that's will be they question good to going And because is that

in now, So, like dialogs we're dramatically than those there. having we're of good really -- the I prospects I we how -- the we're it's feel not about I think that businesses and think feel other changing -- right

do you on say more want anything that? Celeste, to

a as as Yeah. the merger the will business us firm. said, I for John business most mean, remain important

of invested ECM think the flow. important a lot as help diversification But that number can us of the ECM a investing us and XX ebb remain A John will I but mentioned, leverage. operating in happy and over years. and year that for things As out, helps our in with you we're strong most of businesses that pointed lot will last the very all we're merger we've -- business delta provides

you. Great. Thank

Thank you.

will next Mitchell come from Global. Our Seaport Jim with question

open. Your is line

morning. Good Hey.

You off a too. just record did the It -- you've year year. strong last there but from know is environment perspective, been investing mentioned being heavily I Europe having start

your both about have just your bit a little you you the well can from the as talk own there, outlook standpoint, investment So as environment? momentum

strong same environment think last of you of basically the a environment the thing. The our The cool little I of know to part as bit latter felt towards I competitors, out very beginning Sure. year. started the lot at a and think, off the year started

prospects are we this are business. good of about feeling actually Our that, we with the that see year part that beginning

quarter, midway we I were through it's third through like or the but kind midway -- actually think we wondering, of towards we feel were strengthened.

so, feel we that And about good business.

In terms investment in certain stay we that and our We there. really we do continue should really we are of course making we is think our that it we to actually we basically which areas productively build the investments strategic Europe, targeted been, have on that think shareholders. for can

so, invest to there. willing to we're And continue

looking some opportunities aggressively important are we fact, of to the middle very, In I think, I those in for dialogs. areas really grow. And think we're in

continue And a are it. well to being to there thoughtful what in money when be to but do to work way we where quite how working and when actually about putting it's grow shareholder we're to about continue making careful sure diligent we we and and -- intention do our it really is Europe, right returns. we're I we're doing it there So now and going that careful think that

Okay. Thanks for the color.

Thank you.

Our next Securities. question come will with Devin from JMP Ryan

Your line is open.

morning. Good Great.

we clients. Just But continues brings kind looking which around for advisory for global what's track demand M&A bigger one thing people proxy And at I more lot for capabilities look of kind as that the the a market is as I of market the think to much other it of always advice. mean, at really than question is just think to evolve, a happening. that all volumes. picture and the the a about

evolved little has M&A so, the the to types a that's other advice market of you of changed? and of pay the would how, clients broadly with just demand advice capabilities. bit go to And to And for wanted more -- beyond just how get or a you John, how also clients, How just frame of sense for willingness really changed? just

Thank the question. you for

want become clients. we for that, the is Our to strategic philosophy our advisor

go-to-client strong is, really capabilities think build And we senior that so, we and them. and relationships want offer to decision best-in-class situation, when enter and what are products, are important to do we with what we very to the try want things the a with them makers, help

days In were were clients. we base, didn't we more -- the products the but doing product firm, that, many have were smaller the much early quite I also client having by think to much limited we very -- and offer -- a we as of

really beginning connectivity at looking ideas to Now, much into with to we that relationship result, of coming I And a we're clients. and opportunity as in way giving And clients. those advisory and help capital them able of more go things. it's assignments whether have broader better M&A a for the CEOs going offer have I bond it's structures, activist we're with us And can it's much heads a create products. set we're growth, And a a think much finding that having really dialogs ongoing that's actually do able real interesting of we broader whether set. and suite do -- we and as in all more CFOs really or and for and result, of to or that think can us

what to broaden trying we've with impact. And standpoint, what really So reach to think our respect we're real clients. to from starting and we've is our some in have I really invested done

investing base. that we're and in time, client clients so, more more And over building

level. of base will advisors We are them to the continue able build products to offer that be and think who in able client best-in-class highest successful they at if importantly front we're to the and put them very they value to very, will be

I the think now. model good right So is the is, answer feeling

pay John, just beyond advice And one their to types that's just just of clarification Okay. willingness for on something transactional.

Understood. advisory restructuring fees. definitely really getting advisory We're able advisory Debt fees, fees. get fees, we're to

non-transactional some being driven And transaction so, be having always really driver I one are fees and the much the we're the very firm, I merger are a best. the on for are think advisory. for and think, of the because fees that that really just base paid revenue larger deal fees actually big are larger of going to that hand,

expertise I the that get able I to is, different merger So, able that. we're your transaction we're more guess, able our is, set building able product we're debt that and And the think successful, more of if broader advisory connectivity and actually to be parts to charge to answer and that question we're from and a the the we're maybe have where then do have also fees. to

clients, And to We're adding anything, -- to and really think learning they value us it's what And so, worthwhile. as it's capabilities on we apply that. that's how the is much as therefore, real our think going that work well. to continuing

Thank you. Great.

Thank you.

come Our with from Chubak Steven next will question Wolfe Research.

is Your line open.

Good is Steven. in morning. filling This for Brendan O'Brien

So, comp I ask the ratio. on wanted to

significant comp the and hedge than surrounding driver was this of like feels ratios a it uncertainties at At the are Given your entering a persist outlook of it backlogs last, impact year with comp incremental all first half. ratios time, the same year the this like DCCP to level seen into weaker the at year. the least likely sounds the

I start So to good the should seen a as a next? to get this be for accrual to place XX% levels year whether sense wanted

And how also could I help about you from frame was here. thinking leverage should if incremental comp be hoping we

expense comp same expect to full versus year overall decline Would X% down in your XX% XXXX? revenues. Your in was a about dynamic that you hold

question. your Thanks for

So, for at on our that by ratio April. time, the the based driven full with continue And environment. year. one be in the be estimate so ratio share in and set this based comp to at will but it's the we for it time that will that our year not outlook you revenue And comp quarter, -- on will

part are largest performance our comp Difficulty] our paid SMDs As of expense. [Technical by reminder, a

But other do aggressively and replacement environment meaningful reduced additional performers. lower we've become managing hiring the more headcount headcount as this things continue in you environment. benefits as base However, quarter-on-quarter remains limiting we're more can to We're long since and so weak. June and we'll and see, our our as

really to think in us And invest the really the all together comp what franchise. like for invest based we'll all what and to However, environment those things looks A-plus we the of on those the the and continue in are we of future thoughtful opportunities how be ratio talent. will of be revenue about will come

and to going backlog, deals where be has to all one environment been and comment it's taken is And of the -- in that what ability to Just our which by at to this impacted that And the really point and additional extended. longer into comp variable done deals real with it's revenue our get been our ratio mind backlog is backlog revenue growth. strong. respect realize that all backlog really is that, most an by is is influenced revenues my

the I ratio. think And rate, of is would you'll think take revenue realization I of backlog see that is, the the so the rate of of up us go if able what and off to that say because lot start an actually backlog you'll pressure and to I the comp acceleration see strong, we're see real question comp realization a

great both. That's Thank you, color.

you. Thank

Our Gosalia Manan last Morgan from come question will with Stanley.

open. is line Your

noted pretty side. that strategic dialog Good with particularly still on morning. you active, Hey. John, clients is the

terms I of that any large activity? that is And differentiation smaller on weighing you new, now? in you're deal seeing scrutiny deals but in is dialog more antitrust still So size? seeing higher not deal right are know

stopping there from think management think with something up, to we're there actually in big all teams respect a But we're not things. really board. That's I play And that scrutiny careful important, Personally, really at carefully. and those on really people is is it's that watching looking that situations. -- because antitrust how really will something the be really glad I is think it I'm carefully healthy I said across brought watching to seeing think are antitrust. I you

going talking regularly, or I In -- some them are also quite deals healthy. bottom to that there actually it's see will I'm think the we I'm see say case, with what we often could of say, the and and some middle are accelerate. under seriously really in lot from big middle be billion But and the being $X would is the I'm a very well, bankers are seeing seeing anecdotally I this considered our led I which recovery, big going. In that deals and often the it middle-market when that

that up. this would the think those say broad it's you relatively at could in really different we be would So see it in call. in what's But which remains right I going seen so a easily right big I it back others to much to size approach now. forward, holding to now. recovery. to -- how market -- don't areas it's being differentiate interesting just But is be going pick as from still some a we really It's be based it categories small the to earlier talked quickly levels go about lot I of to start actually know, wait-and-see uncertainty transactions start those market, when or I because, have see this

Great. Thank you.

we have Hawken UBS. And follow-up you. do question Thank Brennan with a from

Your line is open.

Good Thanks One follow-up. that sort quickly. seven The advisory just does XQ but the include for the that the release morning. SMDs you promotions? recruit, that of clarification in taking XXX also my that includes note

as in be of The the of as sorry. they're but promotions reflected March -- them, -- XQ X. effective because Brennan will they're just number announced we effective

number. XQ the in included be they'll So

I be it new to in Excellent. role. know know the if And your I here. just will but hear, one can Tim next quarter, don't call, sneak Okay. on a congrats quick And

over You've held two Evercore roles. been at and decades many for

as about think the your is from So perspective, Evercore as of the company what far misunderstood most do valuation was you reflected?

is here Tim not but He situation one. be morning, a in, this may so that for sorry, medical and so into I'm charge be for going I on he's to actually don't but listening think call. he's to out able Brennan, this

for on Let's in answer our put we'll hold and we sure it you. one that call, remember next and make

Okay. I hope he's doing okay.

[indiscernible] with medical issue.

clarifying. for Yeah. Thanks

but to unfortunately. be been. have would here today fine, have He's He couldn't he Yeah. liked

Thanks enough. much. so Fair

right. you time. next Thank you, See everyone. Thank All you.

Thanks, everyone.

Ladies fourth conference and financial results today’s quarter this gentlemen, call. Evercore’s concludes XXXX

now may disconnect. You