Moelis & Co 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 : Thanks. Hi Ken, hi Chris and hi Navid. First off, welcome and congratulations on the new role and to you as well, Ken. Always, enjoy the calls but looking forward to Navid being on as well. Navid Mahmoodzadegan - Moelis & Co - Co-President, Co-Founder, Managing Director Thank you.

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Yeah, okay, that's good to hear. And then just for my follow up, want to hit on the private capital advisory business and opportunity. I know you guys have made some senior editions there and you highlighted that in the script. Just love to get a sense of how big of an addressable market you think that specific business is. I know it's important for just the firm level, but just how you think about the addressable market. How big of a business could this be for Moelis? It's pretty big at some of your peers, but is this a couple $100 million dollar revenue opportunity and that just how many more resources do you need to put there to get this business to where you think the potential is, do you have now what you need, or should we expect to see a lot more additions kind of follow after some of these senior hires? Thanks.

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Yeah, I appreciate that. Yeah, it seems very complimentary, but thanks for taking my questions. 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 / 9:00PM, MC.N - Q2 2025 Moelis & Co Earnings Call

Question: Ken Worthington - JPMorgan - Analyst : Hi, good afternoon. Navid, thank you for your comments on your priorities. Ken mentioned that, you're here to kind of usher in the next phase of growth for Moelis. What is this next phase of growth look like? What would you see your focus really being? Where are you paying attention, most thoughtfully to, and what areas do you feel like you want to amplify as you think about this next phase of growth? Navid Mahmoodzadegan - Moelis & Co - Co-President, Co-Founder, Managing Director Sure. Well, look, I think the first comment is, the strategy that we've been playing for the last couple of years very much is, the strategy that we've all been developing together that I expect to continue to carry on. So what are the elements of that? First, let's make sure that our investments are made in the highest tams, the biggest tams, where we have the most opportunity to really drive revenue growth. That's why we did things like invest heavily in technology group, oil and gas, and now PCA and before that capital markets. So we're going to continue to look for those big opportunities. Second, we want to make sure that we're attracting when we do lateral hiring, what I call difference makers, elite players, who really move the needle with clients who bring franchises that we think are really creative to our firm and to our global network and, making sure we're doing that and executing that at the really highest levels is going to be critical to our success. And then third, which is a really important pillar that helped build this firm, is, making sure that we continue to have the best culture, one where everyone's collaborating and kind of bringing the best of themselves to our clients. And then making sure that this internal talent development engine that we're really proud of where 40% of our MDs are internally promoted MDs, including some of our highest producers, that engine continues to operate at a very high level.

Question: Ken Worthington - JPMorgan - Analyst : -- slow down.

Question: Ken Worthington - JPMorgan - Analyst : Great. Thank you.

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Thanks for taking the questions. I guess it's a question for both of you, but there's a lot of focus, I'd say on the market -- in the market around this -- I don't know what you want to call it, a big bang of M&A and IPO activity that could occur post Labor Day. What do you make of that of the post-Labor Day outlook, and do you really think things could come back that quickly in a big way?

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Ken, I will say that one of the reasons I know you're an excellent banker, is that even though there was that loud fire truck there, you're still able to fill in those comments. So we appreciate that and obviously we'll miss you on the call.

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Exactly. Undisturbed, unperturbed. Okay, great. Just one last follow up here. So look, you're investing a lot into the private capital advisory and that's growing fast right now. Maybe could you just help us think through the guardrails around the build out as we head towards the environment that's potentially, more characterized by regular way M&A and IPO, which I could imagine could at least slow the growth rate in secondaries.

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Great. All right, well thanks so much, Ken. It's been great working with you and thank you so much for the insights and Navid, looking forward to work with you. Navid Mahmoodzadegan - Moelis & Co - Co-President, Co-Founder, Managing Director Same here.

Question: Brendan O'Brien - Wolf Research - Analyst : Good afternoon and thanks for taking my question. Just to start, you mentioned, the strength in capital markets and advisory driving, the growth year-to-date. I just want to drill down a bit on restructuring activity and just give you a sense as to how that has trended since April 2 and what your expectations are for that part of the business from here.

Question: Brendan O'Brien - Wolf Research - Analyst : Helpful color and then I guess for my follow up, I just wanted to touch on the comp ratio. You've had a really strong first half and it sounds like momentum should build from here. However, as you mentioned, you've been aggressively and will continue to aggressively lean into recruiting

Question: Brendan O'Brien - Wolf Research - Analyst : That's helpful. Thank you for taking my questions and that's, Navid on the new role and Ken, congrats on the new role as well. You'll be missed. Navid Mahmoodzadegan - Moelis & Co - Co-President, Co-Founder, Managing Director Thanks.

Question: Ryan Kenny - Morgan Stanley - Analyst : Hi, good afternoon. Thanks for taking my question. Just a follow up there on the comp ratio, is there a formula we should think about for the rest of the year? I know last year we had a formula and it's unclear whether that still applies for this year. Any update there?

Question: Ryan Kenny - Morgan Stanley - Analyst : All right thank you.

Question: Alex Bond - KBW - Analyst : Hey, good afternoon, everyone. Thank you for taking my questions. Firstly, I know we've talked, or you've talked today on the call, extensively about the build out on the PCA team, but just curious if there are any other or, what other areas outside of there where you are particularly focused on hiring currently. Navid Mahmoodzadegan - Moelis & Co - Co-President, Co-Founder, Managing Director Look, we -- there are other spaces and sectors where I think we could add great talent. I don't know that I want to be super specific, on this call, but I would say we do have an active set of dialogues with candidates, that we think could be great on the platform and I do think, one of the things we want to do is continue to build those pipelines and that's a full year-round effort in making sure we're having the right dialogues with the right people around other spaces. There's still -- despite our growth and despite the investments we've made, there's still lots of areas and lots of companies we're not covering and lots of spaces where we have franchises that can be built and so they said we want to focus on the great people and we want to focus on the biggest opportunities and that's where we're constantly having dialogue with people who can potentially join the firm.

Question: Alex Bond - KBW - Analyst : Got it. Okay, great. Thank you for thank you for taking the questions.

Question: Jim Mitchell - Seaport Global - Analyst : Sorry, I was on mute. Hey, good afternoon. Can I find it hard to believe you're going to miss these conference calls, but, appreciate the sentiment, but, I just want to have -- I had a follow up on PCA. When you think about that business, the nature of the business, as well as Moelis historically strong relationships with sponsors, would you expect the new hires in that business to ramp up more quickly than your typical M&A banker just trying to think through the payback time on the PCA investment.

Question: Jim Mitchell - Seaport Global - Analyst : Right. Okay, yeah, that's very helpful. And then maybe pivot to balance sheet in cash, I don't want to put the cart before the [horse], but I think cash and liquid investments doubled from a year ago and the highest second quarter I think on record. So if the environment's getting better from here, are you getting any closer to starting to return any of that excess cash to shareholders and how do you think about deploying it if we are getting close? 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 / 9:00PM, MC.N - Q2 2025 Moelis & Co Earnings Call

Question: Jim Mitchell - Seaport Global - Analyst : Okay, great. Thank you.