Evercore Inc Q3 2024 Earnings Call Transcript

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

Question: Brendan O'Brien - Wolfe Research, LLC - Analyst : Good morning, and thanks for taking my question. I guess, I just wanted to touch on the comp ratio. I understand there's a lot of factors in forming the comp decision in any given year and that you're still dealing with elevated deferrals and recruiting expense from prior years. But looking at the year-to-date results, your revenues are up around 22% but your comp ratio versus the full year '23 levels is only down about 150 bps, implying an incremental comp ratio of a little under 60% year to date. So as we think about the trajectory of the comp ratio and the path to getting back below 60% from here, I was hoping you could help frame what the incremental comp margin should look like. Is that high 50%s level the right way to think about that gradual improvement? Or you have anything that you could help us think through that path would be great.

Question: Ryan Kenny - Morgan Stanley & Co. LLC - Analyst : Hi. Good morning. Thanks for taking my question. Can you give some color on the size of deals in the pipeline? Specifically, how willing are companies to look at large-cap M&A? Is there any uptick in appetite there? And are deal value is going to be naturally higher this cycle, given we've seen some substantial growth in global equity market cap and GDP over the last few years?

Question: James Yaro - Goldman Sachs Group, Inc - Analyst : Good morning, and thanks for taking my question. John, I was hoping you might be able to offer a bit of an update on the cadence of the advisory recovery. I ask in particular because at least [palogic] backlogs like your peers have come down a little bit in recent months. Do you -- what do you see this has driven by? And does this mean there is the potential for a less-than-normal fourth quarter uptick this year? And then maybe as a corollary, could you speak to election impacts if there are any right now?

Question: James Yaro - Goldman Sachs Group, Inc - Analyst : Thanks a lot.

Question: Ben Rubin - UBS Investment Bank - Analyst : Good morning and thank you for taking my question. This is Ben Rubin filling in for Brennan. In your prepared remarks, you sounded rather optimistic on restructuring momentum continuing into 2025. I was just hoping you could drill down on the restructuring performance during the third quarter and was activity last quarter in line with what you've been seeing here to date, and lastly, has the start of rate cuts in the US shifted client dialogues at all with respect to the need for say capitalizations or bespoke financing. 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. OCTOBER 23, 2024 / 12:00PM, EVR.N - Q3 2024 Evercore Inc Earnings Call

Question: Jim Mitchell - Seaport Research Partners - Analyst : Hey, good morning. Maybe just on the ECM business. There's been a lot of volatility in the environment, right? We had record levels in 2021. You had record revenues. It's been a challenge since then. Picked up this year. But you've invest -- underneath that, you've been investing pretty heavily to grow that business. So where do you think you are from a market share perspective and in the next up cycle where you think you can be, just trying to get a sense of the upside and growth as that business picks up, particularly on the IPO side? Thanks.

Question: Devin Ryan - JMP Securities LLC - Analyst : Thanks. Good morning, John. Good morning, Tim. Question on private capital advisory. Clearly been a great growth story for Evercore. You have a tremendous business there. And it seems like it's operating at a very high level right now, even with sluggish M&A. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2024 / 12:00PM, EVR.N - Q3 2024 Evercore Inc Earnings Call So let me just get a little bit of a sense around how you're thinking about the growth profile of this business from here and the capacity to do more with the current group versus needing to add more talent to drive revenue growth. Just something to trying to understand is this still an up into the right story or would you be pleased with holding the line on the level of contribution right now? Thanks.

Question: Aidan Hall - Keefe, Bruyette, & Woods, Inc. - Analyst : Great. Thanks for taking my question. John, I heard in your prepared remarks, comments about sponsor activity. At the same time, it feels like this is kind of another quarter where activity hasn't really come to fruition at the same velocity that was initially expected. So I'm just curious if you can provide us with the latest that you're hearing from your sponsor clients and what is really holding up this pent up demand that we continue to hear about.

Question: Mike Brown - Wells Fargo Securities LLC - Analyst : Hi, good morning. Wanted to dive into Europe a little bit here. So hires in the advisory business, this quarter, were focused on Europe with two ads in Paris. Can you just give us an update on how large that franchise is now by MD headcount? Are you still expecting to invest in and grow there? Where are you focused on investing next? And then, understanding that the recovery there, like we've lagged the US, I guess, what I would be interested to hear about though is how it could progress, where are you seeing some good activity near term and how could that trend over time?

Question: Aidan Hall - Keefe, Bruyette, & Woods, Inc. - Analyst : Great. Thanks for the follow-up. Tim, maybe just one on the comp ratio. If I just look at the recognized RSU and deferred cash comp year to date, it's down as a percent of revenue, it's down a couple of percentage points which would almost largely attribute all of the comp leverage year to date versus 2023. So I'm curious to hear how you're thinking about leverage in base salaries and bonuses in '24 versus '23 and the 66% for the year -- the best estimate for the year. What is kind of your expectation right now for the fourth quarter that's embedded in that? Thanks.