Moelis & Company

from Mollis & Company's fourth quarter and full year 2024 financial results conference call. On the phone today are Ken Mollis, Chairman and CEO, and Joe Simon, Chief Financial Officer. Before we begin, I would like to note that the remarks made on this call may contain certain forward-looking statements which are subject to various risks and uncertainties, including those identified from time to time in the risk factors section of Mollis & Company's filings with the SEC. Actual results could differ materially from those currently anticipated. The firm undertakes no obligation to update any forward-looking statements. Our comments today include references to certain adjusted financial measures. We believe these measures, when presented together with comparable gap measures, are useful to investors to compare our results across several periods and to better understand our operating results. The reconciliation of these adjusted financial measures with the relevant gap financial information and other information required by Reg G is provided in the firm's earnings release, which can be found on our investor relations website at investors.mullis.com. I'll now turn the call over to Joe to discuss our results.

Thanks, Matt. Good afternoon, everyone. On today's call, I'll go through our financial results and then Ken will comment further on the business. We reported $439 million of revenues in the fourth quarter, an increase of 104% versus the prior year period. For the full year, our adjusted revenues increased 40% to $1.2 billion. Our revenue growth was powered by year-over-year increases across all products. Regarding expenses, our adjusted compensation expense ratio was 58.4% for the fourth quarter and 69% for the full year. Our non-comp expense ratio was 11.4% for the fourth quarter and 15.9% for the full year. Non-compensation expenses of $50 million in the fourth quarter include approximately $2 million of transaction-related expenses. In 2025, we anticipate non-compensation expenses to trend higher as a result of an expected increase in technology, occupancy, and T&E spend. We achieved a pre-tax margin of 31.4% for the fourth quarter and 16.4% for the full year. Regarding taxes, our normalized corporate tax rate for the year was 30.1%, and our effective tax rate was 23.5%. The difference in rates is primarily driven by the excess tax benefit related to the delivery of equity-based compensation in the first quarter of 2024. Consistent with prior years, the annual vesting of RSUs will occur later this month. For purposes of quantifying the excess tax benefit in Quarter 1, we expect the impact to EPS to be approximately $0.01 for each $1.25 difference between the vesting price and adjusted grant price of $41 a share. So as an example, if market price at time of vest were $76, the estimated impact on EPS would be $0.28. Regarding capital allocation, the Board declared a regular quarterly dividend of $0.65 per share, an 8% increase from the prior quarter. And lastly, we continue to maintain a strong balance sheet with $560 million of cash and no debt. I'll now turn the call over to Ken.

Thanks, Joe, and good afternoon, everyone. We're pleased with our strong year-over-year performance in 2024 across all products and sectors, all driven by the collaboration, commitment, and dedication of our global team and their relentless focus on executing for our clients. During the M&A slowdown, we made significant investments in key sectors and products while remaining deeply committed to developing internal talent, highlighted by the promotion of 12 new managing directors earlier this year. The performance resulting from the large investments we made in technology, industrials, and energy in 2023 have exceeded our expectations in 2024. In fact, technology was the largest sector contributor to our 2024 revenues. The industrials and energy sectors have also been quite active, and the capital markets group had a strong year and continues to be a strategic weapon as deal-making accelerates and private capital providers play an increasing role in the transaction financing markets. Looking ahead, I'm optimistic for 2025. The M&A market is poised to benefit from the new administration's pro-growth strategy, and at the same time, we're seeing early evidence of a pickup in sponsor activity. In capital structure advisory, elevated rates in our enhanced creditor coverage capabilities provide a constructive environment for our restructuring business. And earlier this week, we announced the hire of a market leading banker who will join the firm as global head of private funds advisory. This appointment underscores our commitment to expanding our capabilities in providing private capital solutions to sponsors and limited partners globally. We've never been better positioned to deliver innovative solutions for our clients, and results for our shareholders. And I've never been more energized about the future of the firm. With that, I'll open it up for questions.