Full Year Overview
- Record Revenues of $1.15 billion, an increase of 12% from a
year ago
- GAAP Pretax Income of $178 million and Adjusted Pretax Income
of $183 million
- GAAP Diluted EPS of $3.12 and Adjusted EPS of $3.27
Fourth Quarter Overview
- Record Fourth Quarter Revenues of $329 million, an increase of
17% from a year ago
- GAAP Pretax Income of $52 million and Adjusted Pretax Income of
$53 million
- GAAP Diluted EPS of $0.87 and Adjusted EPS of $0.96
2023 Investments and Capital Management
- 1,012 Company-wide headcount, an increase of 12% from a year
ago
- 2.2 million share and share equivalents repurchased
- $437 million of cash, cash equivalents and short-term
investments at year end and no funded debt
- Board authorized a $500 million Class A common stock repurchase
program, replacing the existing repurchase authorization
Paul J. Taubman, Chairman and Chief Executive Officer, said, “We
reported revenues that were the highest in our firm’s history as
our balanced business model enabled us to outperform in a
challenging environment. 2023 was also a record year for senior
recruiting as we took advantage of dislocated market conditions to
accelerate our investment in senior talent, enabling us to expand
our capabilities across the firm with particular emphasis on
enhancing our Strategic Advisory industry footprint. Amidst
continued market uncertainty, we remain highly confident in our
future growth prospects.”
PJT Partners Inc. (the “Company” or “PJT Partners”) (NYSE: PJT)
today announced its financial results for the full year and quarter
ended December 31, 2023.
Revenues
The following table sets forth revenues for the three months and
year ended December 31, 2023 and 2022:
Three Months Ended December
31,
Year Ended December 31,
2023
2022
% Change
2023
2022
% Change
(Dollars in Millions)
Revenues
Advisory
$
290.6
$
230.8
26%
$
1,026.6
$
823.5
25%
Placement
28.3
43.4
(35%)
102.6
192.9
(47%)
Interest Income & Other
9.6
5.8
66%
23.9
9.1
162%
Total Revenues
$
328.6
$
280.0
17%
$
1,153.2
$
1,025.5
12%
Year Ended
Total Revenues of $1.15 billion for the year, up 12% from $1.03
billion in the prior year.
Advisory Revenues of $1.03 billion, up 25% from $823 million in
the prior year. The increase in Advisory Revenues was due to an
increase in restructuring revenues, which was partially offset by
decreases in strategic advisory and private capital solutions
revenues.
Placement Revenues of $103 million, down 47% from $193 million
in the prior year. The decrease in Placement Revenues was
principally due to a decrease in fund placement revenues.
Interest Income & Other of $24 million, up from $9 million
in the prior year. The increase in Interest Income & Other was
principally due to higher interest income.
Three Months Ended
Total Revenues of $329 million in the current quarter, up 17%
from $280 million in the prior year.
Advisory Revenues of $291 million, up 26% from $231 million in
the prior year. The increase in Advisory Revenues was due to
increases in restructuring and strategic advisory revenues.
Placement Revenues of $28 million, down 35% from $43 million in
the prior year. The decrease in Placement Revenues was principally
due to a decrease in fund placement revenues.
Interest Income & Other of $10 million, up from $6 million
in the prior year. The increase in Interest Income & Other was
principally due to higher interest income.
Expenses
The following tables set forth information relating to the
Company’s expenses for the three months and year ended December 31,
2023 and 2022:
Year Ended December 31,
2023
2022
GAAP
As Adjusted
GAAP
As Adjusted
(Dollars in Millions)
Expenses
Compensation and Benefits
$
805.4
$
805.4
$
669.1
$
657.4
% of Revenues
69.8
%
69.8
%
65.2
%
64.1
%
Non-Compensation
$
170.2
$
165.1
$
154.9
$
147.6
% of Revenues
14.8
%
14.3
%
15.1
%
14.4
%
Total Expenses
$
975.6
$
970.5
$
824.0
$
805.0
% of Revenues
84.6
%
84.2
%
80.4
%
78.5
%
Pretax Income
$
177.6
$
182.7
$
201.5
$
220.5
% of Revenues
15.4
%
15.8
%
19.6
%
21.5
%
Three Months Ended December
31,
2023
2022
GAAP
As Adjusted
GAAP
As Adjusted
(Dollars in Millions)
Expenses
Compensation and Benefits
$
232.3
$
232.3
$
180.2
$
180.2
% of Revenues
70.7
%
70.7
%
64.4
%
64.4
%
Non-Compensation
$
44.6
$
43.3
$
39.7
$
38.5
% of Revenues
13.6
%
13.2
%
14.2
%
13.7
%
Total Expenses
$
276.9
$
275.6
$
220.0
$
218.7
% of Revenues
84.3
%
83.9
%
78.6
%
78.1
%
Pretax Income
$
51.7
$
53.0
$
60.0
$
61.3
% of Revenues
15.7
%
16.1
%
21.4
%
21.9
%
Compensation and Benefits
Expense
Year Ended
GAAP Compensation and Benefits Expense was $805 million compared
with $669 million in the prior year. Adjusted Compensation and
Benefits Expense was $805 million compared with $657 million in the
prior year. The increase in Compensation and Benefits Expense was
driven by the combination of higher revenues and a higher accrual
rate compared with the prior year.
Three Months Ended
GAAP Compensation and Benefits Expense was $232 million compared
with $180 million in the prior year. Adjusted Compensation and
Benefits Expense was $232 million compared with $180 million in the
prior year. The increase in Compensation and Benefits Expense was
driven by the combination of higher revenues and a higher accrual
rate compared with the prior year quarter.
Non-Compensation Expense
Year Ended
GAAP Non-Compensation Expense was $170 million compared with
$155 million in the prior year. Adjusted Non-Compensation Expense
was $165 million compared with $148 million in the prior year.
The increase in GAAP and Adjusted Non-Compensation Expense
compared with the prior year was principally due to increases in
Professional Fees and Occupancy and Related expenses. Professional
Fees increased principally due to higher consulting and legal
expenses relating to the firm's business activities. Occupancy and
Related increased principally due to the further expansion of our
New York headquarters.
Three Months Ended
GAAP Non-Compensation Expense was $45 million compared with $40
million in the prior year. Adjusted Non-Compensation Expense was
$43 million compared with $38 million in the prior year.
The increase in GAAP and Adjusted Non-Compensation Expense
compared with the prior year was principally due to increases in
Professional Fees and Occupancy and Related expenses. Professional
Fees increased principally due to higher legal expenses relating to
the firm's business activities. Occupancy and Related increased
principally due to the further expansion of our New York
headquarters.
Provision for Taxes
As of December 31, 2023, PJT Partners Inc. owned 61.0% of PJT
Partners Holdings LP. PJT Partners Inc. is subject to corporate
U.S. federal and state income tax while PJT Partners Holdings LP is
subject to New York City unincorporated business tax and other
entity-level taxes imposed by certain state and foreign
jurisdictions. Please refer to Note 11. “Stockholders’ Equity” in
the “Notes to Consolidated Financial Statements” in “Part II. Item
8. Financial Statements and Supplementary Data” of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2022 for
further information about the corporate ownership structure. The
effective tax rate for GAAP Net Income for the three months ended
December 31, 2023 and 2022 was 12.0% and 23.2%, respectively. The
effective tax rate for GAAP Net Income for the years ended December
31, 2023 and 2022 was 18.0% and 18.2%, respectively.
In calculating Adjusted Net Income, If-Converted, the Company
has assumed that all outstanding Class A partnership units in PJT
Partners Holdings LP (“Partnership Units”) (excluding the unvested
partnership units that have yet to satisfy certain market
conditions) have been exchanged into shares of the Company’s Class
A common stock, subjecting all of the Company’s income to
corporate-level tax.
The effective tax rate for Adjusted Net Income, If-Converted for
the years ended December 31, 2023 and 2022 was 25.3% and 26.0%,
respectively.
Capital Management and Balance Sheet
As of December 31, 2023, the Company held cash, cash equivalents
and short-term investments of $437 million and had no funded
debt.
On February 5, 2024, the Company's Board of Directors authorized
a $500 million repurchase program of the Company's Class A common
stock. This authorization replaces the existing repurchase program
authorized on April 25, 2022.
During the year ended December 31, 2023, the Company repurchased
1.6 million shares of Class A common stock in the open market,
exchanged 321 thousand Partnership Units for cash and net share
settled 246 thousand shares of Class A common stock to satisfy
employee tax obligations. During the fourth quarter 2023, the
Company repurchased 113 thousand shares of Class A common stock in
the open market, exchanged 33 thousand Partnership Units for cash
and net share settled 18 thousand shares of Class A common stock to
satisfy employee tax obligations.
In total during the year ended December 31, 2023, the Company
repurchased 2.2 million share equivalents at an average price of
$73.50 per share. During the fourth quarter 2023, the Company
repurchased 165 thousand share equivalents at an average price of
$90.49 per share.
The Company intends to repurchase 198 thousand Partnership Units
for cash on February 13, 2024 at a price to be determined by the
volume-weighted average price per share of the Company’s Class A
common stock on February 8, 2024.
Dividend
The Board of Directors of PJT Partners Inc. has declared a
quarterly dividend of $0.25 per share of Class A common stock. The
dividend will be paid on March 20, 2024 to Class A common
stockholders of record as of March 6, 2024.
Quarterly Investor Call Details
PJT Partners will host a conference call on February 6, 2024 at
8:30 a.m. ET to discuss its full year and fourth quarter 2023
results. The conference call can be accessed via the internet at
www.pjtpartners.com or by dialing +1 (800) 245-3047 (U.S. domestic)
or +1 (203) 518-9783 (international), passcode PJTP4Q23. For those
unable to listen to the live broadcast, a replay will be available
following the call at www.pjtpartners.com.
About PJT Partners
PJT Partners is a premier, global, advisory-focused investment
bank that was built from the ground up to be different. Our highly
experienced, collaborative teams provide independent advice coupled
with old-world, high-touch client service. This ethos has allowed
us to attract some of the very best talent in the markets in which
we operate. We deliver leading advice to many of the world's most
consequential companies, effect some of the most transformative
transactions and restructurings and raise billions of dollars of
capital around the globe to support startups and more established
companies. To learn more about PJT Partners, please visit our
website at www.pjtpartners.com.
Forward-Looking Statements
Certain material presented herein contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). Forward-looking
statements include certain information concerning future results of
operations, business strategies, acquisitions, financing plans,
competitive position, potential growth opportunities, potential
operating performance improvements, the effects of competition and
the effects of future legislation or regulations. Forward-looking
statements include all statements that are not historical facts and
can be identified by the use of forward-looking terminology such as
the words “believe,” “expect,” “opportunity,” “plan,” “intend,”
“anticipate,” “estimate,” “predict,” “potential,” “continue,”
“may,” “might,” “should,” “could” or the negative of these terms or
similar expressions.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations, and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy, and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks, and
changes in circumstances that are difficult to predict, many of
which are outside our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not place undue
reliance upon any of these forward-looking statements. Important
factors that could cause our actual results and financial condition
to differ materially from those indicated in the forward-looking
statements include, among others, the following: (a) changes in
governmental regulations and policies; (b) cyberattacks, security
vulnerabilities, and internet disruptions, including breaches of
data security and privacy leaks, data loss, and business
interruptions; (c) failures of our computer systems or
communication systems, including as a result of a catastrophic
event and the use of remote work environments and virtual
platforms; (d) the impact of catastrophic events, including
business disruptions, pandemics, reductions in employment and an
increase in business failures on (1) the U.S. and the global
economy, and (2) our employees and our ability to provide services
to our clients and respond to their needs; (e) the failure of
third-party service providers to perform their functions; and (f)
volatility in the political and economic environment, including as
a result of inflation, elevated interest rates, and geopolitical
conflict.
Any of these factors, as well as such other factors discussed in
the “Risk Factors” section of the Company’s Annual Report on Form
10-K for the year ended December 31, 2022, filed with the United
States Securities and Exchange Commission (“SEC”), as such factors
may be updated from time to time in the Company’s periodic filings
with the SEC, accessible on the SEC’s website at www.sec.gov, could
cause the Company’s results to differ materially from those
expressed in forward-looking statements. There may be other risks
and uncertainties that the Company is unable to predict at this
time or that are not currently expected to have a material adverse
effect on its business. Any such risks could cause the Company’s
results to differ materially from those expressed in
forward-looking statements.
Non-GAAP Financial Measures
The following represent key performance measures that management
uses in making resource allocation and/or compensation decisions.
These measures should not be considered substitutes for, or
superior to, financial measures prepared in accordance with
GAAP.
Management believes the following non-GAAP measures, when
presented together with comparable GAAP measures, are useful to
investors in understanding the Company’s operating results:
Adjusted Pretax Income; Adjusted Net Income; Adjusted Net Income,
If-Converted, in total and on a per-share basis (referred to as
“Adjusted EPS”); Adjusted Compensation and Benefits Expense and
Adjusted Non-Compensation Expense. These non-GAAP measures,
presented and discussed in this earnings release, remove the
significant accounting impact of: (a) transaction-related
compensation expense, including expense related to Partnership
Units with both time-based vesting and market conditions as well as
equity-based and cash awards granted in connection with the
acquisition of CamberView Partners Holdings, LLC (“CamberView”);
(b) intangible asset amortization associated with Blackstone Inc.'s
("Blackstone") initial public offering ("IPO"), the acquisition of
PJT Capital LP, and the acquisition of CamberView; and (c) the net
change to the amount the Company has agreed to pay Blackstone
related to the net realized cash benefit from certain
compensation-related tax deductions. Reconciliations of the
non-GAAP measures to their most directly comparable GAAP measures
and further detail regarding the adjustments are provided in the
Appendix.
To help investors understand the effect of the Company’s
ownership structure on its Adjusted Net Income, the Company has
presented Adjusted Net Income, If-Converted. This measure
illustrates the impact of taxes on Adjusted Pretax Income, assuming
all Partnership Units (excluding the unvested Partnership Units
that have yet to satisfy certain market conditions) have been
exchanged for shares of the Company’s Class A common stock,
resulting in all of the Company’s income becoming subject to
corporate-level tax, considering both current and deferred income
tax effects. This tax rate excludes a number of adjustments,
including the tax benefits of the adjustments for
transaction-related compensation expense and amortization
expense.
Appendix
GAAP Condensed Consolidated Statements of Operations
(unaudited)
Reconciliations of GAAP to Non-GAAP Financial Data
(unaudited)
Summary of Shares Outstanding (unaudited)
Footnotes
Three Months Ended December
31,
Year Ended December 31,
2023
2022
2023
2022
Revenues
Advisory
$
290,633
$
230,784
$
1,026,646
$
823,496
Placement
28,338
43,405
102,611
192,890
Interest Income and Other
9,583
5,764
23,925
9,119
Total Revenues
328,554
279,953
1,153,182
1,025,505
Expenses
Compensation and Benefits
232,271
180,242
805,385
669,141
Occupancy and Related
10,721
9,422
40,420
35,253
Travel and Related(1)
8,727
9,481
31,190
30,404
Professional Fees
7,856
5,548
36,581
27,200
Communications and Information
Services
4,840
4,078
17,157
16,897
Depreciation and Amortization
3,460
3,319
14,047
15,475
Other Expenses(1)
8,986
7,870
30,793
29,664
Total Expenses
276,861
219,960
975,573
824,034
Income Before Provision for Taxes
51,693
59,993
177,609
201,471
Provision for Taxes
6,202
13,923
31,927
36,699
Net Income
45,491
46,070
145,682
164,772
Net Income Attributable to Non-Controlling
Interests
20,579
21,496
63,883
74,238
Net Income Attributable to PJT Partners
Inc.
$
24,912
$
24,574
$
81,799
$
90,534
Net Income Per Share of Class A Common
Stock
Basic
$
0.98
$
0.97
$
3.24
$
3.61
Diluted
$
0.87
$
0.95
$
3.12
$
3.51
Weighted-Average Shares of Class A Common
Stock Outstanding
Basic
25,362,576
25,213,986
25,255,327
25,077,835
Diluted
43,472,884
26,974,129
41,882,034
26,616,640
Three Months Ended December
31,
Year Ended December 31,
2023
2022
2023
2022
GAAP Net Income
$
45,491
$
46,070
$
145,682
$
164,772
Less: GAAP Provision for Taxes
6,202
13,923
31,927
36,699
GAAP Pretax Income
51,693
59,993
177,609
201,471
Adjustments to GAAP Pretax
Income
Transaction-Related Compensation
Expense(2)
—
19
—
11,765
Amortization of Intangible Assets(3)
1,230
1,230
4,920
6,506
Spin-Off-Related Payable Due to
Blackstone(4)
36
33
136
804
Adjusted Pretax Income
52,959
61,275
182,665
220,546
Adjusted Taxes(5)
6,700
13,814
32,768
40,020
Adjusted Net Income
46,259
47,461
149,897
180,526
If-Converted Adjustments
Less: Adjusted Taxes(5)
(6,700
)
(13,814
)
(32,768
)
(40,020
)
Add: If-Converted Taxes(6)
11,666
16,121
46,297
57,264
Adjusted Net Income, If-Converted
$
41,293
$
45,154
$
136,368
$
163,282
GAAP Net Income Per Share of Class A
Common Stock
Basic
$
0.98
$
0.97
$
3.24
$
3.61
Diluted
$
0.87
$
0.95
$
3.12
$
3.51
GAAP Weighted-Average Shares of Class A
Common Stock Outstanding
Basic
25,362,576
25,213,986
25,255,327
25,077,835
Diluted
43,472,884
26,974,129
41,882,034
26,616,640
Adjusted Net Income, If-Converted Per
Share
$
0.96
$
1.08
$
3.27
$
3.92
Weighted-Average Shares Outstanding,
If-Converted
42,943,082
41,812,119
41,749,633
41,663,773
Three Months Ended December
31,
Year Ended December 31,
2023
2022
2023
2022
GAAP Compensation and Benefits Expense
$
232,271
$
180,242
$
805,385
$
669,141
Transaction-Related Compensation
Expense(2)
—
(19
)
—
(11,765
)
Adjusted Compensation and Benefits
Expense
$
232,271
$
180,223
$
805,385
$
657,376
Non-Compensation Expenses
Occupancy and Related
$
10,721
$
9,422
$
40,420
$
35,253
Travel and Related(1)
8,727
9,481
31,190
30,404
Professional Fees
7,856
5,548
36,581
27,200
Communications and Information
Services
4,840
4,078
17,157
16,897
Depreciation and Amortization
3,460
3,319
14,047
15,475
Other Expenses(1)
8,986
7,870
30,793
29,664
GAAP Non-Compensation Expense
44,590
39,718
170,188
154,893
Amortization of Intangible Assets(3)
(1,230
)
(1,230
)
(4,920
)
(6,506
)
Spin-Off-Related Payable Due to
Blackstone(4)
(36
)
(33
)
(136
)
(804
)
Adjusted Non-Compensation Expense
$
43,324
$
38,455
$
165,132
$
147,583
The following table provides a summary of weighted-average
shares outstanding for the three months and year ended December 31,
2023 and 2022 for both basic and diluted shares. The table also
provides a reconciliation to If-Converted Shares Outstanding
assuming that all Partnership Units and unvested PJT Partners Inc.
restricted stock units (“RSUs”) were converted to shares of the
Company’s Class A common stock:
Three Months Ended December
31,
Year Ended December 31,
2023
2022
2023
2022
Weighted-Average Shares Outstanding -
GAAP
Basic Shares Outstanding, GAAP
25,362,576
25,213,986
25,255,327
25,077,835
Dilutive Impact of Unvested RSUs(7)
2,614,537
1,760,143
1,711,829
1,538,805
Dilutive Impact of Partnership
Units(8)
15,495,771
—
14,914,878
—
Diluted Shares Outstanding, GAAP
43,472,884
26,974,129
41,882,034
26,616,640
Weighted-Average Shares Outstanding -
If-Converted
Basic Shares Outstanding, GAAP
25,362,576
25,213,986
25,255,327
25,077,835
Unvested RSUs(9)
2,614,537
1,760,143
1,711,829
1,540,744
Partnership Units(10)
14,965,969
14,837,990
14,782,477
15,045,194
If-Converted Shares Outstanding
42,943,082
41,812,119
41,749,633
41,663,773
As of December 31,
2023
2022
Fully-Diluted Shares Outstanding(11)
46,046,461
43,599,438
As of December 31, 2023, in relation to awards granted
containing both service and market conditions, the Company achieved
a dividend adjusted 20-day volume-weighted average share price in
excess of $100. As a result, 1.3 million share equivalents were
included in the Company's fully-diluted share count, of which 0.3
million had satisfied both service and market conditions, with the
remaining 1.0 million vesting pursuant to ongoing service
conditions. In addition, 1.4 million share equivalents had not yet
satisfied certain market conditions and were therefore excluded
from any share count calculations.
Footnotes
(1)
Certain balances in the prior period have been reclassified to
conform to their current presentation. For the three months and
year ended December 31, 2022, this resulted in a reclassification
of $1.8 million and $5.2 million, respectively, from Other Expenses
to Travel and Related. There was no impact on either U.S. GAAP EPS
or Adjusted EPS as a result of the reclassification.
(2)
This adjustment adds back to GAAP Pretax Income transaction-related
compensation expense for Partnership Units with both time-based
vesting and market conditions as well as equity-based and cash
awards granted in connection with the acquisition of CamberView.
(3)
This adjustment adds back to GAAP Pretax Income amounts for the
amortization of intangible assets that are associated with
Blackstone's IPO, the acquisition of PJT Capital LP on October 1,
2015 and the acquisition of CamberView on October 1, 2018.
(4)
This adjustment adds back to GAAP Pretax Income the net change to
the amount the Company has agreed to pay Blackstone related to the
net realized cash benefit from certain compensation-related tax
deductions. Such amounts are reflected in Other Expenses in the
Condensed Consolidated Statements of Operations.
(5)
Represents taxes on Adjusted Pretax Income, considering both
current and deferred income tax effects for the current ownership
structure.
(6)
Represents taxes on Adjusted Pretax Income, assuming all
Partnership Units (excluding the unvested Partnership Units that
have yet to satisfy market conditions) have been exchanged for
shares of the Company’s Class A common stock, resulting in all of
the Company’s income becoming subject to corporate-level tax,
considering both current and deferred income tax effects. This tax
rate excludes a number of adjustments, including the tax benefits
of the adjustments for transaction-related compensation expense and
amortization expense.
(7)
Represents the dilutive impact under the treasury method of
unvested, non-participating RSUs that have a remaining service
requirement.
(8)
Represents the number of shares assuming the conversion of vested
Partnership Units, the dilutive impact of unvested Partnership
Units with a remaining service requirement, and the dilutive impact
of Partnership Units that achieved certain market conditions as if
those conditions were achieved as of the beginning of the reporting
period.
(9)
Represents the dilutive impact of unvested RSUs that have a
remaining service requirement.
(10)
Represents the number of shares assuming the conversion of all
Partnership Units, including Partnership Units that achieved
certain market conditions as of the date those conditions were
achieved, and excludes Partnership Units that have yet to satisfy
certain market conditions.
(11)
Assumes all Partnership Units and unvested RSUs have been converted
to shares of the Company’s Class A common stock. As of December 31,
2023, 1.4 million share equivalents that had yet to satisfy certain
market conditions were excluded from any share count calculations.
Note:
Amounts presented in tables above may not add or recalculate due to
rounding.
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version on businesswire.com: https://www.businesswire.com/news/home/20240205436389/en/
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Investor Relations: Sharon Pearson PJT Partners Inc. Tel: +1
212.364.7120 pearson@pjtpartners.com
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