Evercore Inc. (NYSE: EVR):
Third Quarter Results
Year to Date Results
U.S. GAAP
Adjusted
U.S. GAAP
Adjusted
Q3 2024
Q3 2023
Q3 2024
Q3 2023
YTD 2024
YTD 2023
YTD 2024
YTD 2023
Net Revenues ($ mm)
$
734.2
$
570.2
$
739.5
$
576.1
$
2,004.3
$
1,641.8
$
2,022.1
$
1,659.0
Operating Income ($ mm)
$
122.0
$
76.8
$
134.6
$
82.7
$
314.4
$
241.4
$
339.5
$
261.6
Net Income Attributable to Evercore Inc.
($ mm)
$
78.4
$
52.1
$
90.9
$
55.5
$
237.8
$
172.7
$
262.5
$
189.1
Diluted Earnings Per Share
$
1.86
$
1.30
$
2.04
$
1.30
$
5.76
$
4.33
$
5.98
$
4.43
Compensation Ratio
66.5
%
68.7
%
66.0
%
68.0
%
66.6
%
66.8
%
66.0
%
66.1
%
Operating Margin
16.6
%
13.5
%
18.2
%
14.4
%
15.7
%
14.7
%
16.8
%
15.8
%
Business and Financial
Highlights
◼
Third Quarter and Year-to-Date Net
Revenues were $734.2 million and $2.0 billion, respectively, on a
U.S. GAAP basis and $739.5 million and $2.0 billion, respectively,
on an Adjusted basis. Third Quarter and Year-to-Date Net Revenues
increased 29% and 22%, respectively, on a U.S. GAAP basis and 28%
and 22%, respectively, on an Adjusted basis versus 2023
◼
Third Quarter Operating Income of $122.0
million and $134.6 million on a U.S. GAAP and an Adjusted basis,
respectively, increased 59% and 63%, respectively versus 2023;
Third Quarter Operating Margins of 16.6% and 18.2% on a U.S. GAAP
basis and an Adjusted basis, respectively, increased 314 and 385
basis points, respectively, versus 2023
◼
In Advisory, Evercore advised on some
notable and complex transactions representative of areas in which
we have been investing, including financial services, energy
transition and sponsors. The transactions include:
◼
TIH on the $7.8 billion sale of its retail
insurance broking division, McGriff Insurance Services, to Marsh
McLennan
◼
Avenue Capital Group and Nuveen Asset
Management on their $3.4 billion sale of minority equity interest
in Vistra Vision to Vistra Corp
◼
CVC on its acquisition of a significant
ownership position in Epicor, from Clayton, Dubilier & Rice
◼
In Equity Capital Markets, Evercore was
lead-left bookrunner on Diamondback Energy’s $2.6 billion follow-on
offering, and year-to-date, Evercore has participated as a
bookrunner on 5 of the 8 Tech IPOs in the U.S.
◼
Evercore Wealth Management was again named
to the Barron’s annual ranking of the Top 100 Independent U.S.
Registered Investment Advisors for 2024 as well as ranked among the
leading Registered Investment Advisors for 2024 by Financial
Advisor
Talent
◼
Two Investment Banking Senior Managing
Directors and one Senior Advisor joined Evercore in September;
Andrea Bozzi, Charles Andrez and Charles-Henri Filippi, in our
Paris office
◼
In addition, three Investment Banking
Senior Managing Directors have committed, since our last earnings
call, to join Evercore focusing on structured finance, financial
institutions and sponsors
◼
One Equities Senior Managing Director
joined Evercore in the third quarter; Adam Frisch, to lead research
coverage of the financial technology and IT services sectors
Capital Return
◼
Quarterly dividend of $0.80 per share
◼
Returned $528.8 million to shareholders
during the first nine months of 2024 through dividends and
repurchases of 2.2 million shares at an average price of
$189.69
Evercore Inc. (NYSE: EVR) today announced its results for the
third quarter ended September 30, 2024.
LEADERSHIP COMMENTARY
John S. Weinberg, Chairman and Chief Executive Officer,
"We believe we are in the midst of a gradual recovery, with strong
activity levels across nearly all of our businesses, and that
Evercore is positioned for success as the market continues to
improve."
Roger C. Altman, Founder and Senior Chairman, "Our
continued, aggressive investments in both talent and in broadening
our platform are bearing fruit."
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-8 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.
In the third quarter of 2024, the Company sold its remaining
ownership interest in ABS. The gain on the sale has been excluded
from Adjusted Net Revenues.
In the third quarter of 2024, the Company agreed to the
redemption of its interest in Luminis, such that it will no longer
have an equity interest in Luminis following the redemption. The
Company will receive no consideration in respect of the redemption.
As a result, the Company incurred a loss in the third quarter of
2024 associated with the write-off of the remaining carrying value
of its investment, included within Special Charges, Including
Business Realignment Costs, as well as the release of cumulative
foreign exchange losses, included within Other Revenue, net. These
charges have been excluded from Adjusted Net Income Attributable to
Evercore Inc.
Evercore's Adjusted Diluted Shares Outstanding for the three and
nine months ended September 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 nine months ended September
30, 2023 are included in pages A-2 to A-8.
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-5 to A-7 for our business segment
results.
Net Revenues
U.S. GAAP
Three Months Ended
Nine Months Ended
September 30,
2024
September 30,
2023
%
Change
September 30,
2024
September 30,
2023
%
Change
(dollars in thousands)
Investment Banking & Equities:
Advisory Fees
$
592,980
$
467,401
27
%
$
1,591,049
$
1,304,519
22
%
Underwriting Fees
44,132
30,814
43
%
130,666
91,897
42
%
Commissions and Related Revenue
54,559
48,697
12
%
155,996
146,810
6
%
Investment Management:
Asset Management and Administration
Fees
20,555
17,304
19
%
58,454
49,837
17
%
Other Revenue, net
21,996
6,004
266
%
68,096
48,719
40
%
Net Revenues
$
734,222
$
570,220
29
%
$
2,004,261
$
1,641,782
22
%
Three Months Ended
Nine Months Ended
September 30,
2024
September 30,
2023
%
Change
September 30,
2024
September 30,
2023
%
Change
Total Number of Fees from Advisory and
Underwriting Client Transactions(1)
259
225
15
%
544
484
12
%
Total Number of Fees of at Least $1
million from Advisory and Underwriting Client Transactions(1)
112
86
30
%
298
241
24
%
Total Number of Underwriting
Transactions(1)
17
11
55
%
53
40
33
%
Total Number of Underwriting Transactions
as a Bookrunner(1)
15
10
50
%
45
36
25
%
1. Includes Equity and Debt Underwriting
Transactions.
As of September 30,
2024
2023
%
Change
Assets Under Management ($ mm)(1)
$
13,887
$
11,273
23
%
1. Assets Under Management reflect end of
period amounts from our consolidated Wealth Management
business.
Advisory Fees – Third quarter Advisory Fees increased
$125.6 million, or 27%, year-over-year, and year-to-date Advisory
Fees increased $286.5 million, or 22%, 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 – Third quarter Underwriting Fees
increased $13.3 million, or 43%, year-over-year, and year-to-date
Underwriting Fees increased $38.8 million, or 42%, year-over-year,
reflecting an increase in the number of transactions we
participated in during 2024.
Commissions and Related Revenue – Third quarter
Commissions and Related Revenue increased $5.9 million, or 12%,
year-over-year, and year-to-date Commissions and Related Revenue
increased $9.2 million, or 6%, year-over-year, primarily reflecting
higher trading commissions and subscription fees.
Asset Management and Administration Fees – Third quarter
Asset Management and Administration Fees increased $3.3 million, or
19%, year-over-year, and year-to-date Asset Management and
Administration Fees increased $8.6 million, or 17%, year-over-year,
driven by an increase in fees from Wealth Management clients, as
associated AUM increased 23%, primarily from market
appreciation.
Other Revenue – Third quarter Other Revenue, net,
increased $16.0 million, or 266%, year-over-year, and year-to-date
Other Revenue, net, increased $19.4 million, or 40%,
year-over-year, primarily reflecting higher performance of our
investment funds portfolio, as well as higher interest income. The
investment funds portfolio is used as an economic hedge against our
deferred cash compensation program.
Expenses
U.S. GAAP
Three Months Ended
Nine Months Ended
September 30,
2024
September 30,
2023
%
Change
September 30,
2024
September 30,
2023
%
Change
(dollars in thousands)
Employee Compensation and Benefits
$
488,010
$
391,730
25
%
$
1,334,650
$
1,096,976
22
%
Compensation Ratio
66.5
%
68.7
%
66.6
%
66.8
%
Non-Compensation Costs
$
116,914
$
101,664
15
%
$
347,950
$
300,439
16
%
Non-Compensation Ratio
15.9
%
17.8
%
17.4
%
18.3
%
Special Charges, Including Business
Realignment Costs
$
7,305
$
—
NM
$
7,305
$
2,921
150
%
Employee Compensation and Benefits – Third quarter
Employee Compensation and Benefits increased $96.3 million, or 25%,
year-over-year, reflecting a compensation ratio of 66.5% for the
third quarter of 2024 versus 68.7% 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
amortization of prior period deferred compensation awards. The
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 Employee Compensation and Benefits
increased $237.7 million, or 22%, year-over-year, reflecting a
year-to-date compensation ratio of 66.6% versus 66.8% 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 also impacted by higher net revenues, as described above,
during the current year period compared to the prior year period.
See "Deferred Compensation" for more information.
Non-Compensation Costs – Third quarter Non-Compensation
Costs increased $15.3 million, or 15%, year-over-year, primarily
driven by an increase in travel and related expenses, largely due
to higher levels of business activity and increased headcount, as
well as an increase in professional fees and communications and
information services, principally reflecting higher expenses
associated with license fees and research services. The third
quarter Non-Compensation ratio of 15.9% decreased from 17.8% 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 $47.5 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 expenses associated with license fees and
research services in 2024. The year-to-date Non-Compensation ratio
of 17.4% decreased from 18.3% 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 –
Third quarter and year-to-date 2024 Special Charges, Including
Business Realignment Costs, relate to the write-off of the
remaining carrying value of the Company's investment in Luminis in
connection with the redemption of the Company's interest. See page
3 for further information.
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 third quarter effective tax rate was 28.4% versus 25.1% for
the prior year period. The year-to-date effective tax rate was
17.7% versus 21.5% for the prior year period. The effective tax
rate is principally impacted by an increase in non-deductible
expenses, state and local apportionment adjustments and 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 $32.0 million versus
$14.1 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-8 for further
information and reconciliations of these metrics to our U.S. GAAP
results. See pages A-5 to A-7 for our business segment results.
Adjusted Net Revenues
Adjusted
Three Months Ended
Nine Months Ended
September 30,
2024
September 30,
2023
%
Change
September 30,
2024
September 30,
2023
%
Change
(dollars in thousands)
Investment Banking & Equities:
Advisory Fees(1)
$
593,187
$
467,581
27
%
$
1,592,091
$
1,304,913
22
%
Underwriting Fees
44,132
30,814
43
%
130,666
91,897
42
%
Commissions and Related Revenue
54,559
48,697
12
%
155,996
146,810
6
%
Investment Management:
Asset Management and Administration
Fees(2)
21,420
18,788
14
%
62,666
54,117
16
%
Other Revenue, net
26,237
10,188
158
%
80,714
61,255
32
%
Net Revenues
$
739,535
$
576,068
28
%
$
2,022,133
$
1,658,992
22
%
- Advisory Fees on an Adjusted basis reflect the reclassification
of earnings related to our equity method investments in Luminis and
Seneca Evercore of $0.2 million and $1.0 million for the three and
nine months ended September 30, 2024, respectively, and $0.2
million and $0.4 million for the three and nine months ended
September 30, 2023, respectively.
- 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 (through July 2024)
of $0.9 million and $4.2 million for the three and nine months
ended September 30, 2024, respectively, and $1.5 million and $4.3
million for the three and nine months ended September 30, 2023,
respectively.
See page 4 for additional business metrics.
Advisory Fees – Third quarter adjusted Advisory Fees
increased $125.6 million, or 27%, year-over-year, and year-to-date
adjusted Advisory Fees increased $287.2 million, or 22%,
year-over-year, reflecting an increase in revenue earned from large
transactions and an increase the number of advisory fees earned
during 2024.
Underwriting Fees – Third quarter Underwriting Fees
increased $13.3 million, or 43%, year-over-year, and year-to-date
Underwriting Fees increased $38.8 million, or 42%, year-over-year,
reflecting an increase in the number of transactions we
participated in during 2024.
Commissions and Related Revenue – Third quarter
Commissions and Related Revenue increased $5.9 million, or 12%,
year-over-year, and year-to-date Commissions and Related Revenue
increased $9.2 million, or 6%, year-over-year, primarily reflecting
higher trading commissions and subscription fees.
Asset Management and Administration Fees – Third quarter
adjusted Asset Management and Administration Fees increased $2.6
million, or 14%, year-over-year, driven by an increase in fees from
Wealth Management clients, as associated AUM increased 23%,
primarily from market appreciation. The increase was partially
offset by a 42% decrease in equity in earnings of affiliates,
reflecting the sale of the remaining portion of our interest in ABS
during the third quarter of 2024. Year-to-date adjusted Asset
Management and Administration Fees increased $8.5 million, or 16%,
year-over-year, driven by an increase in fees from Wealth
Management clients, as associated AUM increased 23%, primarily from
market appreciation. The increase was partially offset by a 2%
decrease in equity in earnings of affiliates.
Other Revenue – Third quarter adjusted Other Revenue,
net, increased $16.0 million, or 158%, year-over-year, and
year-to-date adjusted Other Revenue, net, increased $19.5 million,
or 32%, year-over-year, primarily reflecting higher performance of
our investment funds portfolio, as well as higher interest income.
The investment funds portfolio is used as an economic hedge against
our deferred cash compensation program.
Adjusted Expenses
Adjusted
Three Months Ended
Nine Months Ended
September 30,
2024
September 30,
2023
%
Change
September 30,
2024
September 30,
2023
%
Change
(dollars in thousands)
Employee Compensation and Benefits
$
488,010
$
391,730
25
%
$
1,334,650
$
1,096,976
22
%
Compensation Ratio
66.0
%
68.0
%
66.0
%
66.1
%
Non-Compensation Costs
$
116,914
$
101,664
15
%
$
347,950
$
300,439
16
%
Non-Compensation Ratio
15.8
%
17.6
%
17.2
%
18.1
%
Employee Compensation and Benefits – Third quarter
adjusted Employee Compensation and Benefits increased $96.3
million, or 25%, year-over-year, reflecting an adjusted
compensation ratio of 66.0% for the third quarter of 2024 versus
68.0% 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 amortization of prior period
deferred compensation awards. The adjusted 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 Employee Compensation and Benefits increased
$237.7 million, or 22%, year-over-year, reflecting a year-to-date
adjusted compensation ratio of 66.0% versus 66.1% 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. The
adjusted Compensation Ratio was also impacted by higher net
revenues, as described above, during the current year period
compared to the prior year period. See "Deferred Compensation" for
more information.
Non-Compensation Costs – Third quarter adjusted
Non-Compensation Costs increased $15.3 million, or 15%,
year-over-year, primarily driven by an increase in travel and
related expenses, largely due to higher levels of business activity
and increased headcount, as well as an increase in professional
fees and communications and information services, principally
reflecting higher expenses associated with license fees and
research services. The third quarter adjusted Non-Compensation
ratio of 15.8% decreased from 17.6% 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 $47.5 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 expenses associated with license fees and
research services in 2024. The year-to-date adjusted
Non-Compensation ratio of 17.2% decreased from 18.1% 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 third quarter adjusted effective tax rate was 28.9% versus
27.6% for the prior year period. The year-to-date adjusted
effective tax rate was 18.2% versus 22.5% for the prior year
period. The adjusted effective tax rate is principally impacted by
an increase in non-deductible expenses, state and local
apportionment adjustments and 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 $34.3 million versus $15.0 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
September 30, 2024, cash and cash equivalents were $533.1 million,
investment securities and certificates of deposit were $1.3 billion
and current assets exceeded current liabilities by $1.6 billion.
Amounts due related to the Notes Payable were $375.9 million at
September 30, 2024.
Headcount
As of September 30, 2024 and 2023, the Company employed
approximately 2,395 and 2,230 people, respectively, worldwide.
As of September 30, 2024 and 2023, the Company employed 186(1)
and 175(2) total Investment Banking & Equities Senior Managing
Directors, respectively, of which 145(1) and 137(2), respectively,
were Investment Banking Senior Managing Directors.
(1)
Senior Managing Director
headcount as of September 30, 2024, adjusted to include four
additional Investment Banking Senior Managing Directors committed
to join in the fourth quarter of 2024 and in 2025.
(2)
Senior Managing Director
headcount as of September 30, 2023, adjusted to include two
additional Investment Banking Senior Managing Directors that joined
in the fourth quarter of 2023 and the first quarter of 2024 and to
exclude for known departures of three Investment Banking Senior
Managing Directors.
Deferred Compensation
Year-to-date, the Company granted to certain employees 1.8
million unvested restricted stock units ("RSUs") (which were
primarily granted in conjunction with the 2023 bonus awards) with a
grant date fair value of $323.0 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 $115.9 million and $362.3
million for the three and nine months ended September 30, 2024,
respectively, and $104.8 million and $335.5 million for the three
and nine months ended September 30, 2023, respectively.
As of September 30, 2024, the Company had 5.1 million unvested
RSUs with an aggregate grant date fair value of $753.9 million.
RSUs are expensed over the service period of the award, subject to
retirement eligibility, and generally vest over four years.
As of September 30, 2024, the Company expects to pay an
aggregate of $393.3 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.
In addition, from time to time, the Company also grants cash and
equity-based performance awards to certain employees, the
settlement of which is dependent on the performance criteria being
achieved.
Capital Return
Transactions
On October 22, 2024, the Board of Directors of Evercore declared
a quarterly dividend of $0.80 per share to be paid on December 13,
2024 to common stockholders of record on November 29, 2024.
During the third quarter, the Company repurchased 29 thousand
shares from employees for the net settlement of stock-based
compensation awards at an average price per share of $222.92, and
0.4 million shares at an average price per share of $236.91 in open
market transactions pursuant to the Company's share repurchase
program. The aggregate 0.4 million shares were acquired at an
average price per share of $235.96. 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 $178.02, and 1.2 million shares at an average price
per share of $199.11 in open market transactions pursuant to the
Company's share repurchase program. The aggregate 2.2 million
shares were acquired at an average price per share of $189.69.
Conference Call
Evercore will host a related conference call beginning at 8:00
a.m. Eastern Time, Wednesday, October 23, 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: EVRQ324.
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 NINE MONTHS ENDED
SEPTEMBER 30, 2024 AND 2023
(dollars in thousands, except per
share data)
(UNAUDITED)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues
Investment Banking & Equities:
Advisory Fees
$
592,980
$
467,401
$
1,591,049
$
1,304,519
Underwriting Fees
44,132
30,814
130,666
91,897
Commissions and Related Revenue
54,559
48,697
155,996
146,810
Asset Management and Administration
Fees
20,555
17,304
58,454
49,837
Other Revenue, Including Interest and
Investments
26,194
10,188
80,671
61,255
Total Revenues
738,420
574,404
2,016,836
1,654,318
Interest Expense(1)
4,198
4,184
12,575
12,536
Net Revenues
734,222
570,220
2,004,261
1,641,782
Expenses
Employee Compensation and Benefits
488,010
391,730
1,334,650
1,096,976
Occupancy and Equipment Rental
23,087
22,094
66,832
63,994
Professional Fees
32,313
28,390
97,820
79,992
Travel and Related Expenses
18,278
13,465
58,884
46,090
Communications and Information
Services
21,242
18,435
59,995
52,006
Depreciation and Amortization
5,896
5,848
18,628
18,373
Execution, Clearing and Custody Fees
3,346
3,115
9,738
8,845
Special Charges, Including Business
Realignment Costs
7,305
—
7,305
2,921
Other Operating Expenses
12,752
10,317
36,053
31,139
Total Expenses
612,229
493,394
1,689,905
1,400,336
Income Before Income from Equity Method
Investments and Income Taxes
121,993
76,826
314,356
241,446
Income from Equity Method Investments
1,072
1,664
5,254
4,674
Income Before Income Taxes
123,065
78,490
319,610
246,120
Provision for Income Taxes
34,971
19,717
56,659
52,945
Net Income
88,094
58,773
262,951
193,175
Net Income Attributable to Noncontrolling
Interest
9,701
6,625
25,107
20,444
Net Income Attributable to Evercore
Inc.
$
78,393
$
52,148
$
237,844
$
172,731
Net Income Attributable to Evercore
Inc. Common Shareholders
$
78,393
$
52,148
$
237,844
$
172,731
Weighted Average Shares of Class A
Common Stock Outstanding:
Basic
38,294
37,823
38,411
38,179
Diluted
42,038
40,000
41,325
39,907
Net Income Per Share Attributable to
Evercore Inc. Common Shareholders:
Basic
$
2.05
$
1.38
$
6.19
$
4.52
Diluted
$
1.86
$
1.30
$
5.76
$
4.33
(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.
- Adjustments Associated with Business
Combinations and Divestitures. The following charges
resulting from business combinations and divestitures have been
excluded from the Adjusted results because the Company's Management
believes that operating performance is more comparable across
periods excluding the effects of these acquisition-related charges:
- Foreign Exchange Gains / (Losses).
The release of cumulative foreign exchange losses in the third
quarter of 2024 resulting from the redemption of the Company's
interest in Luminis is excluded from the Adjusted
presentation.
- Gain on Sale of Interests in ABS.
The gain on the sale of the remaining portion of the Company's
interest in ABS in the third quarter of 2024 is excluded from the
Adjusted presentation.
- Special Charges, Including Business
Realignment Costs. Expenses during 2024 that are excluded
from the Adjusted presentation relate to the write-off of the
remaining carrying value of the Company's investment in Luminis in
connection with the redemption of the Company's interest. 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
Nine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Net Revenues - U.S. GAAP
$
734,222
$
570,220
$
2,004,261
$
1,641,782
Income from Equity Method Investments
(1)
1,072
1,664
5,254
4,674
Interest Expense on Debt (2)
4,198
4,184
12,575
12,536
Release of Foreign Exchange Losses from
Luminis Redemption (3)
658
—
658
—
Gain on Sale of Interests in ABS (4)
(615
)
—
(615
)
—
Net Revenues - Adjusted
$
739,535
$
576,068
$
2,022,133
$
1,658,992
Other Revenue, net - U.S. GAAP
$
21,996
$
6,004
$
68,096
$
48,719
Interest Expense on Debt (2)
4,198
4,184
12,575
12,536
Release of Foreign Exchange Losses from
Luminis Redemption (3)
658
—
658
—
Gain on Sale of Interests in ABS (4)
(615
)
—
(615
)
—
Other Revenue, net - Adjusted
$
26,237
$
10,188
$
80,714
$
61,255
Operating Income - U.S. GAAP
$
121,993
$
76,826
$
314,356
$
241,446
Income from Equity Method Investments
(1)
1,072
1,664
5,254
4,674
Pre-Tax Income - U.S. GAAP
123,065
78,490
319,610
246,120
Release of Foreign Exchange Losses from
Luminis Redemption (3)
658
—
658
—
Gain on Sale of Interests in ABS (4)
(615
)
—
(615
)
—
Special Charges, Including Business
Realignment Costs (5)
7,305
—
7,305
2,921
Pre-Tax Income - Adjusted
130,413
78,490
326,958
249,041
Interest Expense on Debt (2)
4,198
4,184
12,575
12,536
Operating Income - Adjusted
$
134,611
$
82,674
$
339,533
$
261,577
Provision for Income Taxes - U.S.
GAAP
$
34,971
$
19,717
$
56,659
$
52,945
Income Taxes (6)
2,771
1,915
2,702
3,115
Provision for Income Taxes -
Adjusted
$
37,742
$
21,632
$
59,361
$
56,060
Net Income Attributable to Evercore
Inc. - U.S. GAAP
$
78,393
$
52,148
$
237,844
$
172,731
Release of Foreign Exchange Losses from
Luminis Redemption (3)
658
—
658
—
Gain on Sale of Interests in ABS (4)
(615
)
—
(615
)
—
Special Charges, Including Business
Realignment Costs (5)
7,305
—
7,305
2,921
Income Taxes (6)
(2,771
)
(1,915
)
(2,702
)
(3,115
)
Noncontrolling Interest (7)
7,955
5,254
20,035
16,563
Net Income Attributable to Evercore
Inc. - Adjusted
$
90,925
$
55,487
$
262,525
$
189,100
Diluted Shares Outstanding - U.S.
GAAP
42,038
40,000
41,325
39,907
LP Units (8)
2,476
2,790
2,549
2,787
Unvested Restricted Stock Units - Event
Based (8)
12
12
12
12
Diluted Shares Outstanding -
Adjusted
44,526
42,802
43,886
42,706
Key Metrics: (a)
Diluted Earnings Per Share - U.S. GAAP
$
1.86
$
1.30
$
5.76
$
4.33
Diluted Earnings Per Share - Adjusted
$
2.04
$
1.30
$
5.98
$
4.43
Operating Margin - U.S. GAAP
16.6
%
13.5
%
15.7
%
14.7
%
Operating Margin - Adjusted
18.2
%
14.4
%
16.8
%
15.8
%
Effective Tax Rate - U.S. GAAP
28.4
%
25.1
%
17.7
%
21.5
%
Effective Tax Rate - Adjusted
28.9
%
27.6
%
18.2
%
22.5
%
(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 NINE MONTHS
ENDED SEPTEMBER 30, 2024
(dollars in thousands)
(UNAUDITED)
Investment Banking &
Equities Segment
Three Months Ended September
30, 2024
Nine Months Ended September
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
$
592,980
$
207
(1)
$
593,187
$
1,591,049
$
1,042
(1)
$
1,592,091
Underwriting Fees
44,132
—
44,132
130,666
—
130,666
Commissions and Related Revenue
54,559
—
54,559
155,996
—
155,996
Other Revenue, net
21,104
4,856
(2)(3)
25,960
66,802
13,233
(2)(3)
80,035
Net Revenues
712,775
5,063
717,838
1,944,513
14,275
1,958,788
Expenses:
Employee Compensation and Benefits
475,990
—
475,990
1,301,341
—
1,301,341
Non-Compensation Costs
113,093
—
113,093
336,948
—
336,948
Special Charges, Including Business
Realignment Costs
7,305
(7,305
)
(5)
—
7,305
(7,305
)
(5)
—
Total Expenses
596,388
(7,305
)
589,083
1,645,594
(7,305
)
1,638,289
Operating Income (a)
$
116,387
$
12,368
$
128,755
$
298,919
$
21,580
$
320,499
Compensation Ratio (b)
66.8
%
66.3
%
66.9
%
66.4
%
Operating Margin (b)
16.3
%
17.9
%
15.4
%
16.4
%
Investment Management
Segment
Three Months Ended September
30, 2024
Nine Months Ended September
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
$
20,555
$
865
(1)
$
21,420
$
58,454
$
4,212
(1)
$
62,666
Other Revenue, net
892
(615
)
(4)
277
1,294
(615
)
(4)
679
Net Revenues
21,447
250
21,697
59,748
3,597
63,345
Expenses:
Employee Compensation and Benefits
12,020
—
12,020
33,309
—
33,309
Non-Compensation Costs
3,821
—
3,821
11,002
—
11,002
Total Expenses
15,841
—
15,841
44,311
—
44,311
Operating Income (a)
$
5,606
$
250
$
5,856
$
15,437
$
3,597
$
19,034
Compensation Ratio (b)
56.0
%
55.4
%
55.7
%
52.6
%
Operating Margin (b)
26.1
%
27.0
%
25.8
%
30.0
%
(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 NINE MONTHS
ENDED SEPTEMBER 30, 2023
(dollars in thousands)
(UNAUDITED)
Investment Banking &
Equities Segment
Three Months Ended September
30, 2023
Nine Months Ended September
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
$
467,401
$
180
(1)
$
467,581
$
1,304,519
$
394
(1)
$
1,304,913
Underwriting Fees
30,814
—
30,814
91,897
—
91,897
Commissions and Related Revenue
48,697
—
48,697
146,810
—
146,810
Other Revenue, net
5,729
4,184
(2)
9,913
46,472
12,536
(2)
59,008
Net Revenues
552,641
4,364
557,005
1,589,698
12,930
1,602,628
Expenses:
Employee Compensation and Benefits
381,117
—
381,117
1,066,686
—
1,066,686
Non-Compensation Costs
98,312
—
98,312
290,167
—
290,167
Special Charges, Including Business
Realignment Costs
—
—
—
2,921
(2,921
)
(5)
—
Total Expenses
479,429
—
479,429
1,359,774
(2,921
)
1,356,853
Operating Income (a)
$
73,212
$
4,364
$
77,576
$
229,924
$
15,851
$
245,775
Compensation Ratio (b)
69.0
%
68.4
%
67.1
%
66.6
%
Operating Margin (b)
13.2
%
13.9
%
14.5
%
15.3
%
Investment Management
Segment
Three Months Ended September
30, 2023
Nine Months Ended September
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
$
17,304
$
1,484
(1)
$
18,788
$
49,837
$
4,280
(1)
$
54,117
Other Revenue, net
275
—
275
2,247
—
2,247
Net Revenues
17,579
1,484
19,063
52,084
4,280
56,364
Expenses:
Employee Compensation and Benefits
10,613
—
10,613
30,290
—
30,290
Non-Compensation Costs
3,352
—
3,352
10,272
—
10,272
Total Expenses
13,965
—
13,965
40,562
—
40,562
Operating Income (a)
$
3,614
$
1,484
$
5,098
$
11,522
$
4,280
$
15,802
Compensation Ratio (b)
60.4
%
55.7
%
58.2
%
53.7
%
Operating Margin (b)
20.6
%
26.7
%
22.1
%
28.0
%
(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
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Investment Banking &
Equities
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
592,980
$
467,401
$
1,591,049
$
1,304,519
Underwriting Fees
44,132
30,814
130,666
91,897
Commissions and Related Revenue
54,559
48,697
155,996
146,810
Other Revenue, net
21,104
5,729
66,802
46,472
Net Revenues
712,775
552,641
1,944,513
1,589,698
Expenses:
Employee Compensation and Benefits
475,990
381,117
1,301,341
1,066,686
Non-Compensation Costs
113,093
98,312
336,948
290,167
Special Charges, Including Business
Realignment Costs
7,305
—
7,305
2,921
Total Expenses
596,388
479,429
1,645,594
1,359,774
Operating Income (a)
$
116,387
$
73,212
$
298,919
$
229,924
Investment Management
Net Revenues:
Asset Management and Administration
Fees
$
20,555
$
17,304
$
58,454
$
49,837
Other Revenue, net
892
275
1,294
2,247
Net Revenues
21,447
17,579
59,748
52,084
Expenses:
Employee Compensation and Benefits
12,020
10,613
33,309
30,290
Non-Compensation Costs
3,821
3,352
11,002
10,272
Total Expenses
15,841
13,965
44,311
40,562
Operating Income (a)
$
5,606
$
3,614
$
15,437
$
11,522
Total
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
592,980
$
467,401
$
1,591,049
$
1,304,519
Underwriting Fees
44,132
30,814
130,666
91,897
Commissions and Related Revenue
54,559
48,697
155,996
146,810
Asset Management and Administration
Fees
20,555
17,304
58,454
49,837
Other Revenue, net
21,996
6,004
68,096
48,719
Net Revenues
734,222
570,220
2,004,261
1,641,782
Expenses:
Employee Compensation and Benefits
488,010
391,730
1,334,650
1,096,976
Non-Compensation Costs
116,914
101,664
347,950
300,439
Special Charges, Including Business
Realignment Costs
7,305
—
7,305
2,921
Total Expenses
612,229
493,394
1,689,905
1,400,336
Operating Income (a)
$
121,993
$
76,826
$
314,356
$
241,446
(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)
The release of cumulative foreign
exchange losses in the third quarter of 2024 resulting from the
redemption of the Company's interest in Luminis is excluded from
the Adjusted presentation.
(4)
The gain on the sale of the
remaining portion of the Company's interest in ABS in the third
quarter of 2024 is excluded from the Adjusted presentation.
(5)
Expenses during 2024 that are
excluded from the Adjusted presentation relate to the write-off of
the remaining carrying value of the Company's investment in Luminis
in connection with the redemption of the Company's interest.
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.
(6)
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.
(7)
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.
(8)
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/20241022941067/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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