• Revenue: $272 million for Q2 2024, up 64% year over year and more than doubled quarter over quarter.

• First Half Revenue: $374 million, up 26% versus a year ago.

• Adjusted Compensation Ratio: 60% for the first half of the year.

• Adjusted Non-Compensation Expense: $41 million for Q2 and $78 million for the first half, up 10% year over year.

• Adjusted Tax Rate: 32% for Q2 and 26% for the first half, with an anticipated full-year rate of approximately 30%.

• Shares Outstanding: 52.5 million Class A common stock and 33.3 million partnership units at the end of Q2.

• Cash and Debt: $185 million in cash and no debt at the end of Q2.

• Equity Holder Returns: $162 million returned in the first six months of the year.

• Dividend: Declared a quarterly dividend of $0.07 per share.

• Warning! GuruFocus has detected 4 Warning Signs with PWP.

Release Date: August 02, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Perella Weinberg Partners (NASDAQ:PWP) reported record second quarter revenues of $272 million, up 64% year over year.

• The firm experienced a significant increase in large transaction closings, contributing to the revenue boost.

• PWP added three advisory partners this year, with plans to add two more, enhancing client touchpoints and revenue potential.

• The company has returned over $400 million to equity holders and increased its publicly traded float by more than 20%.

• PWP ended the quarter with $185 million in cash and no debt, indicating strong financial health.

Negative Points

• The adjusted compensation ratio for the first half of the year was 60%, which is at the higher end of the target range.

• Non-compensation expenses grew by 10% in the first half compared to the same period last year.

• The firm is facing ongoing litigation costs, which are substantially higher relative to the prior period.

• Europe is lagging behind the US in terms of announced revenue, affecting the overall revenue mix.

• The recruiting timelines for new talent are elongated, potentially impacting the pace of growth.

Q & A Highlights

Q: Can you provide some color on where you feel like you're gaining market share, given the record quarter despite not being in a record M&A market? A: Andrew Bednar, CEO: We are focused on corporate clients, which have been leading the M&A recovery. Our weighting towards corporate clients has benefited us as they are recovering nicely from the trough. Sponsor activity is expected to return, and we are positioned to benefit from that as well. The timeline for transactions remains elongated, but this leads to healthier transactions.