Lazard (LAZ) Q3 2024 earnings summary

Executive summary

• Firm-wide adjusted net revenue reached $2.1 billion for the first nine months of 2024, up 24% year-over-year, driven by strong Financial Advisory and Asset Management performance.

• Net income attributable to the company was $108 million for Q3 2024 and $194 million for the nine months, reflecting improved margins and a $114 million gain from a property sale.

• The company completed its conversion to a U.S. C-Corporation in January 2024, broadening investor eligibility and simplifying tax reporting.

• Investments in talent, technology, and new product offerings, including active ETFs and private market initiatives, are positioning the firm for future growth.

• Hired 16 new managing directors year-to-date, consistent with the long-term growth plan.

Financial highlights

• Q3 2024 net revenue was $785 million, up 50% year-over-year; adjusted net revenue was $646 million, up 21% year-over-year.

• Financial Advisory Q3 net revenue was $371 million, up 39% year-over-year; nine-month net revenue was $1.24 billion, up 38%.

• Asset Management Q3 net revenue was $294 million, up 3% year-over-year; nine-month net revenue was $875 million, up 2%.

• Q3 2024 adjusted compensation expense was $426 million (66% ratio); adjusted non-compensation expense was $138 million (21.4% ratio).

• Ending AUM reached $248 billion as of September 30, 2024, up 8% year-over-year.

Outlook and guidance

• The company targets an adjusted compensation ratio in the mid- to high-50s percentage range over the cycle, with a goal of at or below 60% in 2025.

• Anticipates further strengthening of M&A activity and constructive operating environment for both businesses.

• Asset Management gross inflows expected to remain subdued through year-end, with potential rebound as rates fall and allocations broaden in 2025.