Evercore Inc.

Good morning and welcome to the Evercore first quarter 2023 earnings conference call. Today's call is scheduled to last about one hour, including remarks by Evercore management and a question and answer session. In order to ask a question, please press the star key followed by the number one on your touchtone phone at any time. I will now turn the call over to Katie Haber, Managing Director of Investor Relations and ESG at Evercore. Please go ahead.

Thank you, Chelsea. Good morning and thank you for joining us today for Evercore's first quarter 2023 financial results conference call. I'm Katie Haber, Evercore's head of investor relations and ESG. Joining me on the call today is John Weinberg, our chairman and CEO, and Tim Milland, our CFO. After our prepared remarks, we will open up the call for questions. Earlier today, we issued a press release announcing Evercore's first quarter 2023 financial results. Our discussion of our results today is complementary to the press release, which is available on our website at evercore.com. This conference call is being webcast live in the For Investors section of our website, and an archive of it will be available for 30 days, beginning approximately one hour after the conclusion of this conference call. During the course of this call, we may make a number of forward-looking statements. Any forward-looking statements that we make are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ maturely from those indicated in these statements. These factors include but are not limited to those discussed in Evercourse filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. I want to remind you that the company assumes no duty to update any forward-looking statements. In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance. For detailed disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is posted on our website. We continue to believe it is important to evaluate Evercore's performance on an annual basis. As we have noted previously, our results for any particular quarter are influenced by the timing of transaction closings. I will now turn the call over to John.

Thank you, Katie, and good morning, everyone. Before I review the core, I want to start off by addressing the environment. I've been in this business for many years, and it is clear it will always be cyclical. Historically, Evercore has embraced all cycles and used each part of the cycle to build and strengthen our firm by expanding our client connectivity and product and sector capabilities. And we will aspire to do so again in this environment. In this current cycle, we also see great opportunity to add extraordinary talent to our firm, which will further enhance our franchise. We believe we are well positioned regardless of the macroeconomic landscape and have maintained an all weather balance sheet. We believe we will emerge from this downturn in a stronger position as we have done in every other cycle. Continued volatility and uncertainty in the markets have resulted in a challenging first quarter for both the market and for Evercore. That said, our bankers and teams are increasingly active as promising client dialogues continue to build momentum and CEO confidence levels have begun to rise off of recent lows. In the quarter, Evercore achieved $578 million in adjusted net revenues, $93 million in adjusted net income and $2.16 in adjusted earnings per share. Our adjusted net revenues and EPS were down 21% and 43% respectively compared to last year's record first quarter. In the first part of the quarter, green shoots had begun to emerge. However, in early March, with the banking system disruption, volatility returned and confidence levels shifted lower. As challenging macro and geopolitical risks remain in force, coupled with diminished access to the M&A market, global announced M&A transactions greater than 100 in the first quarter were down 43% and 44% on a dollar and number of transactions basis reflected respectively versus a year ago. Our backlogs remain strong. We continue to note that execution risk remains as transaction processes and closing timelines continue to be elongated. And while the outlook for global economies and market conditions will continue to influence the timing of deal activity, our teams continue to be fully engaged in consequential discussions with management teams and boards as companies continue to prepare for a turn in the market. A recovery in the market will be led by macroeconomic clarity, increasing confidence levels, and an improvement in the financing markets. As I mentioned, we are seeing significant opportunities to recruit high-quality talent in many areas of our strategic focus. So far in 2023, we have welcomed two new SMDs, one in our private capital advisory business and another in our technology practice. Furthermore, another advisory SMD is joining the firm later this week and in our European equity capital markets business, and one other is committed to join our technology group later this year. Additionally, our newly promoted SMDs are off to a strong start. Importantly, as we move forward, we will continue to focus on actively managing our expense base while executing on our future growth plans. Let me give a brief rundown of our businesses. In global advisory, M&A activity levels were slower than a year ago and represented the weakest first quarter for industry-wide M&A volumes since 2014. That said, we continue to be involved in take private activity, particularly with the tech sector, as sponsors are slowly starting to become more active. We are making real progress with this client base, as we have significantly increased our efforts in traditional sponsor coverage over the last year, as well as continuing to invest in our private capital businesses. Our advisory team in Europe had another strong quarter, and we continue to build our pipeline in the region. Our leading strategic defense and shareholder advisory business continues to be strong as I activist campaigns remain at an elevated pace. In restructuring, where we have one of the most active groups in the industry, our activity levels are high and gaining momentum. We are starting to see the implications of rising interest rates and default rates, which began a year ago. In addition, the tightening of credit markets has led to an uptick in traditional restructuring and liability management activities. Significant near-term maturity walls in 2024 and 2026 may serve as catalysts for continued activity in the coming months. Our private capital advisory and fundraising businesses saw strong client dialogue and activity in the quarter, albeit at lower levels from peaks in 2021. The fundraising environment across all fund sizes has started to see marginal improvements relative to 2022. The underwriting business continues to be impacted by broad market and macroeconomic uncertainty. However, we acted as a book runner in 11 of our 12 equity and equity-related offerings in the quarter, highlighting our progress in equity capital markets. In fact, we were involved as a book runner in the two largest follow-ons of the quarter. In our equities business, we continue to be a thought leader across both macro and fundamental research. helping our clients navigate recent market uncertainty. Lastly, in wealth management, our long-term performance and client retention have remained strong. Before I turn the call over to Tim to review our financial results and other financial matters, I want to briefly discuss our capital return strategy. We remain committed to our goal of returning excess cash not invested in the business to shareholders in the form of dividends and share repurchases over time. Our board declared a dividend of 76 cents a share, an increase of 6% from the prior dividend declared. Looking ahead, while uncertainty continues to be a constant and to have an impact on the business environment, we remain excited for the opportunities that lie ahead, and we have a clear path for the firm going forward. As I detailed in our fourth quarter earnings, our consistent roadmap for growth, including investing in talent, and broadening and deepening our products and capabilities will allow us to continuously serve our clients and address their needs. With that, let me turn it over to Tim.