Lazard (LAZ) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $60 million, up from $36 million in Q1 2024, despite a 15% decrease in net revenue year-over-year; adjusted net income was $60 million, down 9%.

• Adjusted operating income declined 38% to $74 million, with the margin dropping to 11.5% from 16.0% year-over-year.

• Financial Advisory and Asset Management segments both saw revenue declines, with Financial Advisory down 19% and Asset Management down 2% compared to Q1 2024.

• Asset Management launched three active ETFs in the US and announced a strategic alliance with Arini Capital Management.

• Financial Advisory MD headcount reached 210, meeting 2030 Strategic Plan goals.

Financial highlights

• Q1 2025 adjusted net revenue was $643 million, down 14% year-over-year; net revenue was $648 million.

• Financial Advisory adjusted net revenue was $370 million (down 17%); Asset Management adjusted net revenue was $264 million (down 4%).

• Management fees in Asset Management were $256 million (down 5% year-over-year); incentive fees totaled $9 million.

• Assets under management (AUM) as of March 31, 2025, were $227 billion, down 9% year-over-year but up $1 billion from year-end.

• Adjusted compensation ratio was 65.5%; adjusted non-compensation ratio was 23%.

Outlook and guidance

• Management remains focused on cost discipline, targeting an adjusted compensation ratio of 60% or below and a non-compensation ratio between 16% and 20%, timing dependent on market conditions.

• Backlog in financial advisory continues to grow, especially in Europe and restructuring, but future growth is dependent on tariff policy clarity.

• Substantial unpredictability remains due to shifting trade policies and global economic/geopolitical uncertainties.

• Asset management flows are expected to remain more balanced, with a strong pipeline of won-but-not-yet-funded mandates, especially from Europe.

• Effective tax rate for the full year 2025 is expected to be in the high 20% range.