Evercore Inc (EVR) Q3 2024 Earnings Call Highlights: Strong Revenue Growth and Strategic Talent ...

GuruFocus News
4 min read

In This Article:

  • Adjusted Net Revenues: $740 million, up 28% year-over-year.

  • Adjusted Operating Income: $135 million, increased 63% year-over-year.

  • Adjusted Earnings Per Share (EPS): $2.04, up 57% year-over-year.

  • Adjusted Operating Margin: 18.2%, an improvement of approximately 385 basis points from the previous year.

  • Adjusted Advisory Fees: $593 million, increased 27% year-over-year.

  • Underwriting Fees: $44 million, up 43% year-over-year.

  • Adjusted Asset Management and Administration Fees: $21 million, increased 14% year-over-year.

  • Adjusted Compensation Ratio: 66%, improved by 200 basis points from the previous year.

  • Non-Compensation Expenses: $117 million, up 15% year-over-year.

  • Cash and Investment Securities: $1.8 billion as of September 30, 2024.

  • Capital Returned to Shareholders: $529 million in the first nine months of 2024.

  • Adjusted Diluted Share Count: 44.5 million, up from 43.4 million in the prior quarter.

Release Date: October 23, 2024

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

Positive Points

  • Evercore Inc (NYSE:EVR) reported a strong quarter with adjusted net revenues of approximately $740 million, marking a 28% increase compared to the prior year.

  • The firm has successfully recruited eight investment banking Senior Managing Directors and one Senior Advisor in 2024, enhancing its talent pool.

  • Evercore's equities franchise experienced its strongest third quarter in nearly a decade, highlighting the success of its merger with ISI.

  • The underwriting business ended the quarter on a strong note, with Evercore acting as lead-left bookrunner on significant deals, including Diamondback Energy's $2.6 billion follow-on offering.

  • Evercore's private capital advisory business continues to perform strongly, supported by longstanding relationships with GPs and LPs and a robust pipeline as the year-end approaches.

Negative Points

  • Despite improvements, the European M&A market still lags behind the US, with uncertainty in the region persisting.

  • The compensation ratio remains high at 66%, reflecting the intense competition for bankers and the associated costs of hiring and retaining talent.

  • Non-compensation expenses increased by 15% year over year, driven by higher travel, professional fees, and technology expenses.

  • The upcoming US election and geopolitical tensions contribute to market uncertainty, potentially impacting transaction timing.

  • The regulatory environment remains uncertain, which could affect the execution of larger deals in the M&A market.

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