Perella Weinberg Partners Q3 FY2024 earnings call

• Reported quarterly record revenues with 100% YOY growth in Q3 and 50% YOY growth YTD.
• Business momentum reflects strategic positioning, business selection optimization, and deepening client relationships.
• Investing in growth with additions of partners in consumer health, wellness, beauty, personal care, transportation, leasing, and logistics, and at the managing director level.
• Recognizes corporate activity has accelerated, with sponsors showing increasing desire to transact, and restructuring/liability management and creative financing solutions in high demand across industries and geographies.
• Focused on client-centric approach, expanding service capabilities to capture more wallet and deepen client relationships.

In the third quarter, Perella Weinberg reported revenues of $278 million, a 100% year-over-year increase. Year-to-date revenues stood at $652 million, up 50% year-over-year, marking the highest first 9-months in the firm’s history. Top-line growth was driven by an increase in larger fee events across businesses, reflecting strategic positioning, business selection optimization, and deepening client relationships. The firm does not operate by distinct product/service line P&Ls but focuses on a client-centric model, with M&A driving much of the revenue increases but other service lines like restructuring and liability management also contributing.

• Fourth quarter revenues tracking similar to Q4 2023, on pace for strong full-year 2024.
• Anticipates continued growth in transaction markets, with corporate activity accelerating and sponsors showing increasing desire to transact.
• Believes in strong tailwinds for future M&A activity, with expectation of a multi-year growth cycle in transaction markets.

• Antitrust challenges have created longer timelines for M&A transactions, chilling some activity and affecting the risk-reward equation.
• Talent market slower than expected, with longer time to initiate, vet, and transition candidates.
• Rate environment may put pressure on sponsors, affecting their ability to transact due to less accommodative financing costs.

Q: How to attribute the significant outperformance in revenues against modest M&A growth?

A: Attributed to being a smaller, faster-growing participant weighted toward corporates, broadening service suite to capture more wallet and deepen client relationships.

Q: Contribution of non-M&A businesses like restructuring and liability management?

A: Both non-M&A businesses are growing, but the firm is client-centric, focusing on client coverage and integrated approach rather than product/service line P&Ls.

Q: Impact of antitrust regime on M&A?

A: Tougher antitrust has created longer timelines, chilling some transactions, but a lighter-touch regulator would accelerate M&A.

Q: Recruiting environment and partner growth?

A: Recruiting below trend due to longer vetting and transition times, but candidates are out there and proposition is compelling, with plans to pick up pace in 2025.

Q: Priorities for building out capabilities?

A: Focus on expanding client footprint in key industry groups in US and Europe with more client coverage bankers.

Q: Leverage, comp ratio, and growth for 2025?

A: Comp ratio estimated at 68% for full-year, below peer group, with investment in talent and alignment with shareholders.

Q: Election-related impacts on M&A and tariffs?

A: Rate environment may pressure sponsors, and tariffs could impact business, but corporate M&A still expected to drive markets.

Q: Revenue pull forward and election impact on Q4?

A: Pulled forward transactions over $25 million, with Q4 revenues tracking like Q4 2023, and election a minor speed bump.

Q: Share count?

A: End-of-period share count was 88.2 million, combining Class A common stock and partnership units.