In This Article:
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Revenue: $307 million in the first quarter, a 41% increase over the prior year period.
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Compensation Expense Ratio: 69% for the first quarter.
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Non-Compensation Expense Ratio: 19% for the first quarter.
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Corporate Tax Rate: 29.5% before discrete tax benefit; resulted in an overall net tax benefit for the quarter.
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Dividend: Regular quarterly dividend of $0.65 per share declared.
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Debt: No funded debt maintained.
Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Moelis & Co (NYSE:MC) achieved a 41% increase in revenues for the first quarter, reaching $307 million, driven by growth in M&A and capital markets.
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The company declared a regular quarterly dividend of $0.65 per share, indicating a commitment to returning value to shareholders.
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Moelis & Co (NYSE:MC) maintains a strong balance sheet with no funded debt, providing financial stability.
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The firm has a record pipeline and strong new business origination, particularly in tech and energy sectors.
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Moelis & Co (NYSE:MC) is actively investing in the growth of its private funds advisory business, with plans to add senior talent and expand its market leadership.
Negative Points
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The new wave of volatility in capital markets has slowed M&A transaction activity, creating uncertainty in deal closures.
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The company's backlog has decreased since the end of the quarter, with some transactions being delayed or canceled.
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The compensation expense ratio for the first quarter was high at 69%, which could impact profitability if revenue growth does not meet expectations.
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There is uncertainty regarding the impact of tariffs and market volatility on future business activities, particularly in supply chain-affected sectors.
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The restructuring business has seen increased conversations but not a significant rise in mandates, indicating potential challenges in converting discussions into revenue.
Q & A Highlights
Q: With the current backlog, at what point do they get canceled versus just pushed out, considering the pressure on sponsors and volatile asset prices? A: Kenneth Moelis, CEO, explained that the situation is temporary and largely in the control of the administration. Some transactions have been shelved, but the majority are delayed due to market volatility and policy dynamics. The backlog has decreased from 331, but most are expected to resume once conditions stabilize.
Q: How has the restructuring business been affected by recent market uncertainties, and what is the trajectory for new mandates? A: Kenneth Moelis noted that restructuring was flat in Q1, with conversations increasing post-April 2 due to market uncertainties. The focus has been more on financing options rather than immediate restructuring, as companies assess their working capital needs amid tariff-related challenges.