Moelis & Company

Good afternoon, and thank you for joining us for Moles & Company's third quarter 2025 financial results conference call. On the phone today are Navin Mahmudzadigan, CEO and co-founder, and Chris Colisano, 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 factor section of Moles & 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. 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 will now turn the call over to Navid. Thank you, Matt.

It's great to be with all of you for my first earnings call as CEO. The firm had a very strong third quarter. We achieved adjusted revenue of $376 million for the quarter and $1.05 billion for the first nine months of 2025, representing increases of 34% and 37% respectively versus prior year periods. Our level of client engagement and new business origination continue to be robust. and our pipeline remains near all-time highs. To give you a sense of the firm's momentum, in just the past week, we advised clients on several significant transactions, including essential utilities on one of the largest U.S. utility mergers in history, the Delaware Attorney General on OpenAI's recapitalization, and the New York Giants on the landmark sale of a minority stake in the historic NFL franchise. We remain active on the hiring front and finished the quarter with 170 managing directors. Year to date, we've hired 10 managing directors, including five MDs since our last earnings call. These MDs will enhance our expertise and global reach in key sectors and products, including technology, industrials, private capital advisory, capital markets, and M&A. Now let me discuss each of our businesses. Beginning with M&A, our business this quarter benefited from both an increase in larger strategic M&A and sponsor transactions, resulting in a meaningful increase in our average M&A fee. On the strategic side, we are seeing corporates lean into transformative deals to achieve scale and navigate rapid technological change. This activity is supported by improved clarity around trade policy and tariffs in our accommodative regulatory environment. On the sponsor side, the significant pent-up need for sponsors to return to capital to LPs and a robust financing environment have accelerated sponsor activity. These dynamics set the stage for what we believe will be a steadily improving multi-year M&A cycle. In capital structure advisory, our team continues to be engaged on a healthy level of liability management assignments. While ample liquidity and access to diverse pools of capital are resulting in fewer traditional restructurings, our team is a leader in delivering out-of-court solutions for clients. Additionally, our recent investments in enhanced credit-side coverage have diversified this business and positioned us well for future opportunities. Turning to capital markets, our capital markets business has been a standout performer, with year-to-date revenues more than double the same period last year. We're on pace for a record year as our enhanced capabilities in public and private capital markets have positioned us to take advantage of a risk-on environment to raise capital around growth companies and emerging technologies. We believe the massive expansion in private credit has also created a significant opportunity to help clients access this important asset class. And finally, as we look at private capital advisory, we expect this business to be a key engine of growth, becoming a meaningful fourth pillar of our business and complementing our leading sponsor franchise. On our Q2 earnings call, we highlighted three significant hires, including our new global head of PCA. Since their joining, we've had seamless integration with our sector and sponsor coverage teams, and seen substantial growth in active mandates focused on GP-led secondaries. We are very excited about our team's early momentum and expect PCA to become a significant contributor to our firm. We are continuing to hire talent at all levels and plan to build this business into a market leader. Looking ahead, we are optimistic about the continued improvement in the transaction environment. In the very near term, the US government shutdown, depending upon how long it goes, could slow the pace of regulatory reviews potentially affecting deal closing timelines. However, from where we sit today, this is not impacting our clients' appetite for strategic transactions, and we expect continued acceleration in deal activity. I'll now pass the call to Chris to discuss our financial results before I wrap up with a few closing remarks. Chris, over to you.

Thanks, Navid, and good afternoon, everyone. As Navid mentioned, we generated adjusted revenues of $376 million for the third quarter of 2025. an increase of 34% from the prior year period. For the first nine months of 2025, we generated adjusted revenues of $1.05 billion, representing an increase of 37% from the prior year period. The increase during the quarter and the first nine months of the year were driven by significant growth in our M&A and capital markets businesses, partially offset by a decline in capital structure advisory. Our business mix for the third quarter and first nine months of 2025 was approximately two-thirds M&A and one-third non-M&A. Turning to expenses, our adjusted compensation expense ratio for the third quarter was 66.2%, bringing our year-to-date ratio to 68%, down from 69% in the first half of 2025. Adjusted non-compensation expenses were $53 million for the third quarter, resulting in a 14% non-compensation expense ratio, Our adjusted non-compensation expenses for the first nine months of 2025 were $163 million, resulting in a non-compensation expense ratio of 15.6%. The main drivers of the expense growth during the first nine months of the year were increased deal-related T&E and client conferences, continued investments in technology and data, including AI, and higher occupancy costs as a result of headcount growth. Our adjusted pre-tax margin was 22.2% for the third quarter and bringing our adjusted pre-tax margin to 18.2% for the first nine months of the year, a significant improvement compared to the same three- and nine-month periods in the prior year. Our tax rate for the third quarter was 29.5%, consistent with the prior quarter. Turning to capital returns, the Board declared a regular quarterly dividend of $0.65 per share, consistent with the prior quarter, and during the third quarter, we purchased approximately 206,000 shares of our common stock on the open market for a total cost of $14.5 million. Finally, we continue to maintain a strong balance sheet with approximately $620 million of cash and liquid investments and no debt. I will now pass the call back to Navid.