Evercore Inc.

be pretty proactive in augmenting our partner ranks and really strengthening that in a way that looks like it's earning positive returns for us. And we're continuing to attempt to do that. I think the key takeaways here is we are striving to make continued progress, although it might not be the same magnitude we've seen in the last couple of years. We remain optimistic about the outlook. But, yes, the market for talent remains competitive.

Got it. Thanks for that. I know it's one question. I can re-queue for sure, but do you mind if I ask a follow-up? I'm ready to just fold, so I'm guessing we're towards the end here.

Sure. Please. Great. Thank you. So it's sort of a related, it's actually a real follow-up, Tim. On that point, like, you know, you guys, clearly the revenue's been great. Your productivity number's been great. So the hiring is very effective like you know this is not a criticism it's just a just a question of like mind facts um is it is sort of the competition for talent has it like scaled to a level and is it that the talent you guys are hiring has also scaled to a level where you know maybe a return to the sub 60 percent comp ratio uh is going to be more challenging And therefore, like, you guys are driving the business and you want to make sure that you're not compromising on standards and whatnot. So that's just sort of like reality and a law of nature now? Or is that the way we should think about it? Yeah.

Brent, thanks again for the follow-up question. I think it's interesting. As you can imagine, we're always doing internal exercises that analyze our results and our returns and where we can do better and so forth. And I've just been through some exercises recently to look at the returns on our partner hiring. And I would say that the NPVs and the IRRs have been pretty good. And what we're focused on first and foremost is serving our clients with excellence. But secondarily, You know, building value for the firm. And I'm wanting to be careful that, you know, when we're doing what I would call positive NPV partner hiring and partner hiring that has pretty good, you know, IRRs associated with it, I don't suboptimize by focusing solely on the comp ratio and thereby, you know, foregoing certain hires or additions that are clearly adding value. And so that would be the first point. You know, look, and on the sub 60%, What I've been, I think, saying hopefully pretty consistently over these last quarters and even years is, You know, we're focused on making improvement next quarter and the quarter after and the quarter after that. And, you know, we're still a ways from sub-60. And so I'm just trying to do better than we did last year. And then at the end of next year, you can ask me, you know, how much improvement I think I can make in 27. But for now, we're just trying to improve from where we are.

Wonderful. the marketplace for talent. Your presumption, which is that it's more competitive and it's hard to get people, is absolutely true. The ante's been raised. Spending virtually every day in the market talking about it, I'm sure you know that a big piece of our strategy is bringing in A-plus players. And an A-plus player will, without doubt, create value for the firm. And so we're spending a lot of time on really bringing in the high quality people. And I think what's happening for our firm is that because we have really been able to create momentum for our franchise, that we are seeing more and more highly talented people who actually are interested in coming to us because we have a firm I think that people really think has momentum and really is going to provide them an opportunity to work with other talented people and to provide even better service for their clients. And so I think that as it's getting more competitive and as difficult as it is, I think it's not easier for us, but I think that we are actually finding real success with high-quality people continuing even as the market gets more competitive.

Yeah, that's clear in the numbers, too. Thanks for taking my question.

Thanks, Brian.

Thank you. Our next question comes from James Yarrow with Goldman Sachs. Your line is now open.

Good morning, and thanks for taking the question. So 2025 was a heavily large, strategic, M&A-driven market. I'd just love to get your thoughts on a few things as it relates to that particular part of the market. To what degree do you believe the large strategic deals could actually accelerate from here, which is already a fairly strong base? Maybe within the answer, could you speak to the ingredients that you hear in the boardroom that are driving a large-cap activity? And could you also comment on considerations around the antitrust backdrop in the U.S., perhaps ahead of and after the U.S. midterms?

Okay. Well, with respect to the M&A market generally and large cap, there is no question that large cap has been a major part of the market probably for the last 18 months or so, maybe even more. And part of that is that companies and managements are seeing that it is more and more acceptable and actually welcomed by shareholders. As you know, throughout the time that certainly I've been on Wall Street, there are times when the market is really excited about big strategic deals, and there are other times when the market really is looking for something else. And right now, amidst uncertainty and some instability, big deals are actually welcomed. And there is an opportunity in the current regulatory environment to get deals done, whereas there have been other regulatory environments that are not as friendly to larger deals. And I think there is a perception that if you're going to do a larger deal and you're in a management team and a board you better put it on the agenda and be looking at it and make a decision if you want to do it because this is a good time not every deal is going to be waived in but there is an there is a willingness to to consider these on the regulatory side that i think is quite promising and positive and so We see this continuing. We see that there is going to continue to be strength. You asked what the factors are. Well, clearly, there are some factors that really have existed before, but they're quite strong right now. Number one, CEO confidence is very sound and quite high. Number two, the economy, despite the fact that there is dislocation and there is some uncertainty geopolitically, the economy is quite resilient. Number three, the financing markets are not just open, but they're really abundant. And so there's real financing opportunity. And so there is a real can-do attitude. And I think finally, I think boards are very comfortable that scale is good right now for lots of different reasons, whether it has to do with how do you deal with AI? How do you deal with the world around you? How are you thinking about your supply chains and things? Scale is actually looked upon as a positive, not a negative. And so that's another reason. So I think all those factors are pointing to the fact that Not that everybody's going to do a big deal, but there's a lot of very large companies that are thinking about deals, and, you know, we're seeing those in the boardrooms that we're in.

That's a very helpful answer. Thanks a lot, John.

Thank you. Our next question comes from Mike Brown with UBS. Your line is now open.

Great. Good morning. Thanks for taking my question. Cash continues to really run at high levels here, and the buyback activity was accelerated in the quarter. How are you thinking about maybe that cash level? And can you just give us an update on capital allocation here as you think about share buybacks? And then is it possible that we could see more inorganic M&A here? You've got some quite good success here with Robbie Warshaw. Could we see more deals in the future? Thanks.

Yeah, sure. And so, look, we've always been committed to returning capital to our shareholders. And I think if you look back We're pretty proud of our track record, which includes, you know, 18 consecutive years of dividend increases, six consecutive years of repurchasing shares, at least equivalent to our RSU issuance as part of the bonus process, and, in fact, in many years, significantly more. And so, you know, we're very cognizant of the return of capital to shareholders and committed to it. And then, you know, with respect to acquisitions, look, we're always seeking to create value, whether it's through developing our people internally, hiring people externally. We certainly evaluate situations from time to time. But I would say, you know, we've not been a serial acquirer, and we're highly selective.

Yeah, and what I'd say about the strategic acquisition side is, Roby Warshaw was a unique opportunity for us, and we were really excited to do that. We're not looking to use our capital by doing acquisitions. In fact, to do an acquisition is a very high bar for us. So I would just say if you're thinking about how we're going to use our capital, it's going to be in terms of we're going to return capital. We're going to be looking at really high-quality talent to bring in and really drive our base businesses. We're going to look at new businesses and talent that can help us drive those and build those out. And I think probably last on the agenda is we are looking at the landscape, and I'm just strategically, but you can – I think what I'd like to make sure you understand is it's not a priority for us. We do it if something really came along that was really exciting for our franchise, but I think it's a very high bar.

Got it. Thank you both. Very clear.

Thank you. Our next question comes from Devin Ryan with Citizens Bank. Your line is now open.

Hi, guys. Neil Elophon here for Devon. Our questions on AI and the impact to the business model. There have been a lot of headlines suggesting that AI will eventually lead to some decompression. So we'd love to get your thoughts on the narrative and maybe the most that protects the sector. And then also if you guys could quickly touch on like AI implementation at the firm and what productivity gains you're already seeing.

Why don't I start and let Tim carry it through in terms of implementation at the firm? We think that AI provides tremendous opportunity, and we're spending a lot of time understanding both how it impacts us internally as well as how it's going to impact businesses in the longer term. There is no question that there is an investment theme that having AI as a part of business, there are going to be certain businesses that are going to do a lot better because they have AI and they're using AI. There are other businesses that are going to feel impaired by what AI can do to basically somehow undermine what they actually do and what they bring to the market. And both of those possibilities create value If you're looking at the strategic side and the M&A side. So we think that we have to be very cognizant of what's happening in the market, the impact AI has on different companies, and really how that's going to change the competitive landscape sector by sector, business by business. For us internally, I'll let Tim answer it, but we're spending a lot of time on it.

Yeah, sure. Look, I echo John's comments about the landscape, which is... We're excited about AI in two ways, and one is what John just described, because we think it may change the very structure of certain industries or types of businesses, and that type of structural change is good for a firm like ours, which advises on situations like that. We do think that over time, AI, with respect to our market, will create opportunities. And we're, of course, in the middle of that and doing what we can to assist our clients in evaluating all of that. Internally, we're also excited. By the way, in the past year, we have a new chief information officer who has joined us, and then we've also continued to augment that team at the top levels. And it's an area in which we're investing. And we think that in the shorter run, you know, what one is likely to see is productivity enhancements. And those could be both with our banking team and possibly with the way we run our business inside of corporate. And then in the longer term, I think you could see opportunities for continued deal efficiencies, and I'm talking about processing now, and potentially idea generation. And so, you know, we're working hard at this, as I'm sure many firms are, and we think there's some real opportunity, but I think I'll leave it at that. Yeah.

Great. Thanks for answering the question.

Thank you. And we'll take a follow-up from Alex Bond with KBW. Your line is now open.

Hey, thanks for taking the follow-up. Just wanted to ask around the ECM outlook for the remainder of the year. It does seem like there's a decent amount of pre-IPO activity at the moment, especially with some of the larger deals rumored to launch later this year. So could you just share how you're thinking about the ECM opportunity through year end and also maybe help us size up the potential there maybe relative to last year's full year results? Thank you.

Well, we see that the ECM business looks quite healthy. There's some very high-quality, large companies that would like to get to market, and we don't see any reason why that's not going to happen. As you all know, if geopolitical gets really difficult, that could interrupt some of the equity market opportunities. But we don't really see that right now. And we think that it's very possible that this could sustain itself. We do a lot in the biotech side, and we see real opportunities there throughout the year. So I think our point of view is that equities is going to continue to be strong that the the ecm opportunities will actually play out quite nicely and that some of these big deals will be successful and they will fuel the market and create excitement so we think that um that for the most part unless there's a real interruption we could easily see you know a healthy ECM market that compares quite well to last year. Got it. That's helpful. Thank you.

Thank you. And our final question is a follow-up from James Yarrow with Goldman Sachs. Your line is now open.

Thanks for taking the follow-up. I just wanted to clarify one of your comments and then thinking about the run rate further afield. So I just want to confirm that you expect the second quarter revenues of this year to be closer to 2Q25 levels. And then is that in part because of your comments around certain larger deals closing faster in the first quarter? So then if I sort of run that out further, that would mean that So maybe a more normal cadence of deal closings not impacted by deals closing faster would be sort of the back half of the year. Is that a fair way to think about it?

Yeah, I think, you know, the first part of your question, I think you characterized things appropriately. We did talk about some deals that looked like they would close in 4Q being a bit prolonged and closing in 1Q, and then other deals that were significant that looked like they were going to close in 2Q accelerating and therefore ended up um, with a, a quite large one cube. We, and then we're, you know, we would encourage people to look at our business and evaluate it across a multi-quarter, uh, timeframe. And, and, you know, that's kind of always our business. The nature of our business has been that it's a little bit lumpy and, and, um, that's been, that's been true for years. And, uh, And so we're encouraging a multi-quarter outlook. And then secondly, I think, and you heard it quite strongly from John, and I have exactly the same view, which is we think business is good. We are coming off a record year last year, a record quarter this quarter. Activity levels remain strong across essentially all of our businesses. And so we're enthusiastic about the outlook. And that's probably, I think, if you take all those comments in totality, that's a fair representation of what we think.

Yeah, I agree with that. And one thing that I'm sure that you're aware of and seeing as we are, the fee environment, there are more large fees and big deals that are in and around than really I can remember. And I think what that does is it does create lumpiness. So, you know, I don't think that's going to be something that we're going to be rid of in the near future, and maybe I hope we don't. You know, I think that we are seeing really high-quality, big things inside the firm right now. We anticipate that some of those will not happen, but we believe that some will happen. And I think that, you know, it's a very healthy market right now. And I think we feel really good about the fact that we're participating. in a very tangible way. How that translates into quarter by quarter by quarter, I think we've always said, you know, it's going to actually play out and there will be lumpiness. But I'm sure that you're used to that and you've seen it, and maybe there's even more lumpiness if the fees are big.

That's very helpful. Thanks a lot.

Thank you. This does conclude today's question and answer session. as well as the Evercore first quarter 2026 earnings conference call. You may now disconnect.