Lazard Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Great. Good morning. How's everyone?

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Good. Peter, I want to come back to some of the commentary just on the advisory outlook, and good to hear about the growth in mandates from the beginning of the year. Just want to get maybe a little bit more texture around the trajectory of recovering that you're seeing in the business and just whether we're back to maybe the same level of enthusiasm as where the year started. It seems like we maybe lost a month or two of the actual year, but are we kind of back on track here? Or is there still some lingering uncertainty on topics like tariffs are still weighing on sentiment in pockets and so you would characterize it as maybe not quite as robust as you were hoping coming into the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 12:00PM, LAZ.N - Q2 2025 Lazard Inc Earnings Call

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Thanks, Peter. Excellent color. Appreciate it. And maybe just to switch gears to the Asset Management business and touch on the net inflows, which we're going to see. It sounds like a combination of both product and distribution, and you've made some good moves on establishing right products. But on distribution specifically, can you just talk a little bit more functionally some of the things you've put in place to accelerate distribution momentum? What's working there? What changes have been made? And then just an interconnected question, just how that unfunded mandate backlog has trended just after the really nice June there, if there's any order of magnitude you can give there on how that's backfilling. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 12:00PM, LAZ.N - Q2 2025 Lazard Inc Earnings Call

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Great. Really helpful. Thanks so much.

Question: Ryan Kenny - Morgan Stanley - Analyst : Hi. Good morning. I just want to square the comments on significantly improving advisory outlook. There's been some upbeat commentary. And the comp ratio is flat sequentially at 65.5%. So any thoughts around timing to hit your goal comp ratio of 60% or below? And with deal conditions quickly improving, can you get there sooner rather than later? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 12:00PM, LAZ.N - Q2 2025 Lazard Inc Earnings Call

Question: Ryan Kenny - Morgan Stanley - Analyst : And on the non-MD piece, how do you think about associate headcount? Are you rightsized to handle the volume coming your way? Or do you see yourself doing more hiring there?

Question: Ryan Kenny - Morgan Stanley - Analyst : Great. Thank you.

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Hey. Good morning. Maybe, Peter, you -- just getting back to the flow picture in Asset Management, record gross flows, great to eke out some net inflows, but still obviously implying some pretty high gross outflows. You talked a little bit about not seeing the benefits of the shift in the environment. What is holding people back? Why is there still relatively high attrition if the environment for non-US equities is getting better and likely to continue to do so? It just seems like at least attrition should slow.

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Okay, thanks. That's great color, and I apologize for the what question. Maybe just a follow-up on AI. Peter, you've been, I think, more vocal than your peers on the potential for AI in your business. Can you kind of talk about what you see as the benefits and what progress you may already be seeing in terms of efficiency?

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Great. Thanks.

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Thanks for taking the questions. Good morning. So you mentioned, Peter, that private equity will comprise an increasing portion of M&A. But recently, strategic M&A has outperformed sponsor M&A again this year. Could you just help us think through when the frequently and much-hyped sponsor recovery will take off?

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Okay, excellent. That's very, very clear. Just two quick Asset Management questions here. Firstly, to clarify a previous point you made, are you now committing to net zero flows? And I guess how should we think about this over an annual basis or some other period? Secondly, could you just speak to the impact of recent inflows on the Asset Management fee rate and the mixed shift away from sub-advised mandates? Should we expect the fee rate to potentially take down from this quarter's level and just how to think about the cadence? I know there's a lot there.

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Excellent. Very clear. Just a quick last one on the non-comp -- good non-comp discipline in the quarter. Could you just speak to the non-comp growth trajectory from here?

Question: James Yaro - Goldman Sachs Group Inc - Analyst : That's very clear. Thank you so much.

Question: Brendan O'Brien - Wolfe Research LLC - Analyst : Good morning, and thanks for taking my questions. I guess to start, the commentary on the mix of the advisory line was helpful and insightful, so thank you for providing that. But I just wanted to get a sense as to how that mix compares today relative to last year. And within those non-M&A businesses, how has the contribution from those different line items evolved?

Question: Brendan O'Brien - Wolfe Research LLC - Analyst : That's helpful color. And just drilling down on the restructuring part of the business, in your comments around the M&A outlook, you indicated that you were looking at the M&A outlook. You indicated that conditions are improving, corporate balance sheets are strong, but obviously at the same time, it sounds like your liability management practice continues to see strong momentum. Just trying to square those two, like the push-pull between those two businesses and how you expect restructuring and liability management activity to project throughout the rest of this year and into next.

Question: Brendan O'Brien - Wolfe Research LLC - Analyst : Great color. Thank you for taking my questions.