Evercore Inc (EVR) Q3 2025 Earnings Call Highlights: Record Revenues and Strategic Growth Amid ...

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Adjusted Net Revenues: Over $1 billion, up 42% year over year. GAAP Net Revenues: $1 billion. Adjusted Operating Income: $228 million, increased 69% year over year. GAAP Operating Income: $216 million. Adjusted Earnings Per Share (EPS): $3.48, increased 71% year over year. GAAP EPS: $3.41 per share. Adjusted Operating Margin: 21.8%, up from 18.2% in the prior year period. Adjusted Advisory Fees: $884 million, increased 49% year over year. Underwriting Revenues: $44 million, down 1% year over year but up 36% sequentially. Commissions and Related Revenue: $63 million, increased 15% year over year. Adjusted Asset Management and Administration Fees: $24 million, rose 10% year over year. Adjusted Other Revenue, Net: Approximately $33 million, compared to $26 million a year ago. Adjusted Compensation Ratio: 65%, down nearly 100 basis points from the prior year period. Adjusted Non-Compensation Expenses: $139 million, 13.2% of net revenue, up 18% from the prior year. Adjusted Tax Rate: 28.7%, down modestly from the third quarter of last year. Cash and Investment Securities: Over $2.4 billion as of September 30. Share Repurchase: Approximately 170,000 shares at an average price of $326.62 in the third quarter. Capital Returned to Shareholders: Approximately $624 million through share repurchases and dividends.

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Release Date: October 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Evercore Inc (NYSE:EVR) delivered record third-quarter results with over $1 billion in adjusted net revenues, marking a 42% year-over-year increase. The company experienced broad-based strength across its diversified platform, with approximately 45% of total revenues in the third quarter coming from non-M&A sources. Evercore's European Advisory business delivered its best quarter on record, showing strong performance across sectors, products, and geographies. The Private Capital (Trades, Portfolio) Markets and Debt Advisory team delivered a record third quarter, with PCA revenues exceeding the full year 2024, which was previously the best year on record. Evercore ISI achieved the number one ranking in Extel's All-America Research Survey for the fourth straight year, reflecting strong client engagement and market activity.

Negative Points

The seasonality typically seen in Evercore's fourth-quarter advisory revenues is expected to be less pronounced this year due to strong year-to-date results and market volatility earlier in the year. Despite strong revenue growth, the company has only been able to lower the compensation ratio by about 70 basis points, indicating challenges in achieving comp leverage. The government shutdown poses potential risks to transaction timelines, particularly affecting equity capital markets and M&A activities. The regulatory environment remains a concern, with scrutiny particularly high in sectors like Big Tech, potentially impacting deal closures. The company faces challenges in maintaining a low compensation ratio due to intense competition for talent and ongoing recruitment efforts.

Story Continues

Q & A Highlights

Q: Can you explain the current market activity and expectations as we exit the year? A: John Weinberg, CEO, noted that market activity is strengthening across all sectors, with both large and mid-sized deals gaining momentum. Engagement levels with boards and management teams are high, and backlogs are at record levels. The CEO confidence index is also high, and sponsor activity is increasing. This trend is expected to continue into 2026.

Q: How are you managing compensation leverage given the strong revenue growth? A: Timothy Lalonde, CFO, explained that while they have made progress in reducing the compensation ratio, the focus remains on optimizing long-term value creation rather than short-term comp ratio improvements. Despite adding significant talent, they have managed to lower the comp ratio and expect further gradual improvements over time.

Q: What is the impact of the government shutdown on your business? A: John Weinberg, CEO, stated that the impact of the government shutdown is uncertain but expected to be temporary if resolved soon. While it may slow down some deals, it is not expected to have a permanent impact. Both ECM and M&A activities are expected to recover quickly once the shutdown is resolved.

Q: How is the regulatory environment affecting deal closures? A: John Weinberg, CEO, mentioned that the regulatory environment is generally more benign, with expectations of a loosening regulatory overlay. While Big Tech faces scrutiny, deals are moving through the system well, and the environment is seen as conducive to deal-making.

Q: What is the outlook for the Debt Capital Markets (DCM) business in the fourth quarter? A: John Weinberg, CEO, expressed optimism about the strengthening pipeline and backlog in the DCM business. Despite potential slowdowns due to the government shutdown, there is a strong investor appetite for IPOs, and the market is expected to perform well once the shutdown is resolved.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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