PJT Partners Inc.

Welcome to the PJT Partners First Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead.

Thanks very much, Jennifer. Good morning and welcome to the PJT Partners First Quarter 2021 Earnings Conference Call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners, and joining me today is Paul Taubman, our Chairman and Chief Executive Officer, and Helen Mates, our Chief Financial Officer. Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that these factors are described in the Risk Factors section contained in PJT Partners 2020 Form 10-K, which is available on our website at pjtpartners.com. I want to remind you that the company assumes no duty to update any forward-looking statements and that the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in the company's performance. For detailed disclosures on the non-GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning, also available on our website. And with that, I'll turn the call over to Paul.

Thank you, Sharon. Good morning and thank all of you for joining us today. We're pleased to report strong first quarter results with revenues of $207 million, adjusted pre-tax income of $50 million, and adjusted earnings per share of $0.89. Our strategic advisory and PJT Park Hill businesses both delivered their strongest first quarters ever. more than offsetting declines in restructuring. Compared to year-ago levels, adjusted pre-tax income and adjusted earnings per share grew 26 percent and 25 percent, respectively, far outpacing our growth in revenues as we benefited from the operating leverage inherent in our business. Now, turning to each of our businesses in more detail. beginning with restructuring. While 2020 was certainly a near-term high watermark for restructuring, the damage caused by COVID-19 is long-lasting, with many companies now irreparably broken, notwithstanding the fiscal and monetary stimulus that continues to be pumped into the economy. Against this macro backdrop, We currently expect our market-leading restructuring franchise to generate 2021 revenues, which are meaningfully above 2019 levels, but meaningfully below 2020 levels. Drilling down further, a number of restructuring assignments that might have been resolved this past quarter were either accelerated into 2020 or pushed out later into 2021. As a result, the first quarter of 2021 should be our weakest restructuring revenue quarter of the year. We expect our restructuring revenues to be greater in the second quarter than the first quarter, and to be greater in the second half of the year than in the first half of the year. Turning to PJT Park Hill. At PJT Park Hill, our roster of best-in-class managers, combined with our differentiated global distribution capabilities, is the backbone of our leading franchise. In the first quarter, stronger investor demand for alternatives drove significant revenue growth compared to year-ago levels. We had favorable comparisons in all verticals with private equity and secondaries showing the highest year over year gains. After a record first quarter, PJT Park Hill is on track to achieve record full year performance in 2021. Turning to strategic advisory. Strategic advisory revenues were also up year over year. As the breadth and depth of our practice has increased, so too has the number of discrete revenue events reflecting our expanded advisory capabilities and global footprint. While the dollar value of our completed transactions declined substantially from year-ago levels, our strong revenue performance was driven by a significant increase in the number of completed M&A transactions, record contributions from capital markets advisory, and continued strength in PJT Camberview. Three months ago, we talked about our record pipeline of pre-announced mandates. However, we also cautioned that we were unable to predict the timing of and success in turning many of these mandates into announced and ultimately completed transactions. Since then, Our number of active mandates has continued to grow, as has our confidence in our full year strategic advisory outlook. We now expect strategic advisory to be up meaningfully in 2021, with most of the growth weighted towards the back half of the year. While each of our businesses are demonstrably stronger today than they were five years ago, strategic advisory has been and will continue to be our biggest and most powerful growth engine. We see increasing opportunities to grow our market share given how well our model of integrated advice across mergers and acquisitions, capital markets, capital structure, fundraising, and shareholder engagement has resonated with clients. Reviewing our capital priorities. Our approach to capital investment and capital return remains unchanged. Investing in talent is still far and away our highest priority. The greatest return on investment continues to be the people we attract to our platform. In the last 12 months, against a backdrop of the pandemic, we grew our partner headcount by 13% and our total headcount by 10%. We remain keenly focused on offsetting the share issuances resulting from this investment, and we continue to view share repurchases as a compelling investment opportunity. Over the past four quarters, we have spent almost $230 million on repurchases, buying back nearly 3.5 million shares and share equivalents. These repurchases have entirely offset the two and a half million earn out units that vested during the second half of 2020. Our repurchases have continued in the second quarter and with our decision to cash settle the 221,000 partnership units presented for exchange, we will have entirely offset our 2020 year-end employee equity awards as well. Our first quarter cash balances stand at the highest levels ever at this point in the year, even with the accelerated pace of repurchases. Now over to Helen to review our financial results in more detail.