LAZ

Lazard stock barely moved after its Q3 2026 report, slipping just 0.2% to about US$37. That muted reaction masks a more detailed story in the earnings. Advisory and asset management revenue combined reached about US$814.2m for the quarter, while basic earnings per share landed at roughly US$0.29. The central focus is profitability. Net income excluding one off items came in at about US$29.2m, which keeps the pressure on Lazard's margins after a challenging period for earnings quality. Short term price action looks calm. The longer term debate around earnings power and valuation remains active. Like the Lazard brand and deal franchise but uneasy about the margin pressure in these results? Benchmark those concerns against our list of solid balance sheet and fundamentals stocks (26 results). - Revenue (Q3 2026 vs. Q3 2025): US$814.2m vs. US$746.4m (up about 9.1%) - Net Income Excluding Extra Items (Q3 2026 vs. Q3 2025): US$29.2m vs. US$69.7m (down about 58.2%) - Basic EPS (Q3 2026 vs. Q3 2025): US$0.29 vs. US$0.71 (down about 59.4%) - Adjusted Compensation Ratio (Q3 2026): 69.9% of adjusted net revenue, with management flagging a possible increase of a few percentage points in 2026 if deferral changes are approved Prefer clean, interactive charts instead of wading through dense earnings tables and footnotes? See Lazard's full visual breakdown, including how the latest results feed into its valuation picture, in the company report for Lazard. The bullish story around Lazard depends on whether a richer advisory and asset mix is actually visible in the reported numbers yet. "Bullish analysts expect Lazard to compound the impact of its expanded senior bench, larger private capital footprint, and broader global reach into a more resilient, higher fee advisory and asset management mix as the current hiring and integration cycle matures." Q3 provides partial evidence. Record Financial Advisory revenue and record Asset Management management fees support the view that higher fee engines are starting to contribute more meaningfully. The refreshed MD cohort and Lazard CL buildout appear in a stronger weighted 2027 pipeline and higher conflict clearances. However, EPS missing consensus and a 69.9% comp ratio indicate that the mix shift is not yet translating into stronger profitability. The price and this Narrative do not agree. → Uncover what this Narrative says Lazard is actually worth. The bearish worry is that Lazard's richer fee mix cannot outrun its pay and retention burden. "The intentional turnover of more than 80 advisory MDs since 2022 and the addition of about 90 new MDs has created a cohort where roughly 40% of advisory MDs are still in their first three years on the platform." Q3 confirms that concern is not resolved. Record advisory revenue sits beside basic EPS of about US$0.29 and another 69.9% adjusted compensation ratio. Earnings once again fell short of consensus despite firm wide adjusted net revenue rising. Market returns over 90 days have also declined, which fits a market that is still questioning earnings power versus fixed compensation load. Lazard illustrates how earnings debates can persist even when quarterly revenue appears constructive. The real opportunity is focusing on stocks that could be undervalued before markets reassess their earnings power. - Company 1 - 35% below our estimate - turns an expanding AI infrastructure contract backlog and multicloud database adoption into heavier capital needs and potential long-term cash generation. - Company 2 - 43% below our estimate - extends a solar hardware footprint into storage, inverter and software offerings that rely on navigating grid connection delays and project timing uncertainties. - Company 3 - 41% below our estimate - leans on AI data center, networking and defense demand while funding capacity expansions and acquisitions that increase leverage and execution demands. Those are three of them. See the full list of 30 companies trading below our fair value estimates → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LAZ. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

- Lazard reported third quarter 2026 net income of US$29.16 million, down from US$71.25 million a year earlier, with diluted EPS from continuing operations of US$0.26 and an affirmed quarterly dividend of US$0.50 per share. - The firm coupled softer profitability and an earnings miss with plans to build out Lazard CL in private capital advisory and senior hiring in Europe, which indicates meaningful reinvestment while current earnings face pressure. - We will now examine how Lazard's weaker EPS versus expectations might reshape the investment narrative around its diversification strategy. Contrast Lazard's earnings miss and reinvestment push with other financial firms by scanning our hand picked 30 high quality undervalued stocks that currently combine stronger fundamentals with disciplined balance sheets. Lazard appeals to shareholders who believe its push into private capital advisory, AI tools and refreshed sector coverage can eventually support a more productive advisory and asset management platform. The Q3 2026 miss and softer net income put that thesis under short term strain, since earnings from continuing operations and profit margins are moving in the opposite direction of that story. The near term swing factor now is execution on Lazard CL and the broader advisory rebuild, while keeping compensation and other costs from crowding out that revenue progress. The biggest risk is that high firm wide compensation, weaker EPS and any pressure on assets under management linger, which would keep operating leverage and earnings recovery on hold. The dividend affirmation at US$0.50 per share alongside a quarter where diluted EPS from continuing operations was US$0.26 is the announcement that ties closest to the current debate. It puts a spotlight on cash returns to shareholders at a time when net income for the quarter is US$29.16 million and the trailing dividend track record is described as unstable. For you as an investor, that dividend decision feeds directly into the catalyst and risk mix. If Lazard keeps prioritising regular cash payouts while building Lazard CL, hiring senior bankers in Europe and absorbing a one off loss of US$69.0 million in the last 12 months, the execution bar on both cost control and fee growth stays high and any stumble would matter more to the equity story. Lazard's story in the analyst models focuses on the gap between where the business is today and where consensus expects it to be by the end of the decade. The projections link Lazard CL expansion, asset management repositioning and AI tools to higher revenue, wider margins and a different earnings profile than the one investors see in the latest quarter. Analysts are basing their view on an annual revenue growth assumption of 12.6% over the next three years. On the profit line, they are working from earnings today of US$219.0 million and a consensus forecast of US$501.8 million by 2029. That implies an earnings increase of about US$283 million from current levels. The same models point to revenue of US$4.6 billion and earnings of US$501.8 million in 2029. Lazard's narrative reflects forecast revenue of US$4.6 billion and forecast earnings of US$501.8 million by 2029. This is based on revenue growing 12.6% per year and an earnings increase of about US$283 million from current earnings of US$219.0 million. Uncover why Lazard's fair value indicates a 15% potential upside to its current price that could close more quickly than many investors expect. One alternative angle on Lazard focuses on dividend strain. The most pessimistic analysts already assumed revenue of about US$4.4b and earnings of US$528.3 million by 2029 before this Q3 miss and the US$0.50 dividend affirmation. You can treat that as a tighter story in which any earnings disappointment could push forecasts and opinions wider apart from here. Explore 4 other Lazard fair value estimates, including one that suggests as much as 20% downside from the current price. Don't just follow the ticker. Dig into the data and build a conviction that's truly your own. - A great starting point for your Lazard research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision. - See our latest analysis for Lazard. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate Lazard's overall financial health at a glance. Once you have formed a view on Lazard, it can help to widen the lens and compare it with other listed businesses that match the kind of balance between risk, quality and income you are looking for. The Simply Wall St Screener lets you filter for fundamentals that fit your approach instead of just chasing headlines. - If capital preservation is your first checkpoint, start with companies that currently screen as more resilient by reviewing 30 resilient stocks with low risk scores which may offer a steadier profile than broader market averages. - If income is the priority, focus on enterprises with higher yields and payout track records by scanning 6 dividend fortresses that are built around stronger distributions. - If you care most about balance sheets and underlying business quality, anchor your watchlist with the list of solid balance sheet and fundamentals (26 results) to keep your attention on companies where financial foundations are already in place. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LAZ. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - Chief Executive Officer and Chairman - Peter Orszag - Chief Financial Officer - Tracy Farr - Head of Strategy and Investor Relations - William Murdock - Chief Executive Officer of Asset Management - Chris Hogbin Operator: Good morning, and welcome to Lazard's third quarter and first nine months 2026 earnings conference call. This call is being recorded. Currently, all participants are in listen-only mode. Following the prepared remarks, we will conduct a question-and-answer session. Instructions will be provided at that time. If you should require assistance during the call, please press the star key followed by zero on your telephone keypad. At this time, I will turn the call over to William Murdock, Lazard's Head of Strategy and Investor Relations. Please go ahead. William Murdock: Thanks, Chelsea. Good morning, and welcome to Lazard's earning call for the third quarter and first nine months of 2026. I am William Murdock, Head of Strategy and Investor Relations. In addition to today's audio comments, we have posted our earnings release on our website. A replay of this call will also be available on our website later today. Before we begin, let me remind you that we may make forward-looking statements about our business and performance. There are important factors that could cause our actual results, level of activity, performance, achievements, or other events to differ materially from those expressed or implied by the forward-looking statements, including but not limited to those factors discussed in our company's SEC filings, which you can access on our website. Lazard assumes no responsibility for the accuracy or completeness of these forward-looking statements and assumes no duty to update them. Please also note that, unless we state otherwise, all financial measures we discuss today are non-GAAP adjusted financial measures. We believe these non-GAAP financial measures are meaningful when evaluating the company's performance. A reconciliation of these non-GAAP financial measures to the comparable GAAP measures is provided in our earnings release and investor presentation. Hosting our call today are Peter Orszag, Lazard's Chief Executive Officer and Chairman, and Tracy Farr, Lazard's Chief Financial Officer. After our prepared remarks, Chris Hogbin, Chief Executive Officer of Asset Management, will join as we open for questions. I will now turn the call over to Peter. Peter Orszag: Thank you, William, and thank you to everyone for joining our call today. Our Lazard 2030 strategy continues to progress as we planned, with strong underlying momentum across the firm, very encouraging forward indicators, and high internal morale and cultural alignment. Additionally, now that we have obtained the necessary regulatory approvals, we are planning to close our acquisition of Campbell Lutyens and launch our third global business, Lazard CL, in early November, creating the leading private capital advisory platform globally. Turning to our results, firm-wide adjusted net revenue in the third quarter increased 11% year over year, with increasing client activity across both businesses. In financial advisory, we achieved record third quarter revenue as our investments in the business are starting to translate into results. Over the past three years, we have hired or promoted 80 Managing Directors in North America across focused areas of opportunity, healthcare, industrials, consumer, media, entertainment, and sports, technology, and power, energy, and infrastructure. As we emerge from the J curve period we have previously described, our existing MDs in the U.S., along with these additions, produced record revenue in the Americas in both the third quarter and first nine months of this year. Our momentum continues to grow in financial advisory, which is reflected in an array of forward indicators. Globally, our announced league table position is the best that it has been in over a decade. Conflict clearances are up over 30% year-over-year on a dollar-weighted basis and up more than 85% for deals above $5 billion. Significantly, these conflict clearance trends continued to show strength in the third quarter, with year-over-year growth in the third quarter alone. Our weighted pipeline for 2027 is now two times our 2026 pipeline at this time last year. While the pace of adding new MDs in 2026 will be below the exceptional pace of 2025, we see ongoing opportunities to attract talent to our financial advisory platform. Since our last earnings call, we have announced 10 additional top-quality Managing Directors in areas of strategic importance, including a new head of defense and emerging technology, a senior banker returning with his team to Lazard in Paris, and the expansion of our advisory business with a new senior hire in Switzerland. In private capital advisory, we continue to anticipate Lazard CL will generate approximately $500 million of revenue and will be accretive to earnings in 2027, even before accounting for potential synergies. The Campbell Lutyens business is performing ahead of the assumptions that support of the acquisition, and we already see early signs of synergies with real estate, vendors, and IT. Our private capital advisory group, along with the team at Campbell Lutyens, together will comprise the leading global positions in primary fundraising and secondary advisory. Lazard CL will deliver dedicated fundraising, secondary advisory, and GP capital advisory for clients across all asset classes and all major markets, infrastructure, private credit, private equity, and real estate across the U.S., Europe, the Middle East, and Asia Pacific. The more time our teams spend together, the more excited we become about both the cultural fit and the strategic opportunity. With that foundation, we expect the broader connectivity between our M&A, restructuring, and capital solutions businesses to compound over time with clear potential for further upside. Conditions remain quite favorable for client activity despite the rise in interest rates and ongoing global uncertainty. In financial advisory, companies continue to pursue scale amid rapid technological change to gain or defend leading sector positions, and vertical integration is increasingly key to addressing supply chain shocks. A more constructive regulatory environment is supporting activity overall, and our forward indicators would be even more encouraging if private equity M&A were to become more active. The power of our renewed investment in our traditional large-cap strategic coverage, alongside our expanded private capital efforts over the past few years, is underscored on a year-to-date basis by our best league table standing in over a decade and our highest share of advisory revenue coming from private capital that we've ever had. We are confident that our ability to play to win for clients in both the largest strategic transactions and across private capital activity is promising for the future growth of our advisory businesses. Turning to asset management. Gross inflows reached a record $54 billion for the first nine months of this year, demonstrating progress from our focused sales and distribution efforts. Our won but not yet funded pipeline is robust, and we remain on track to deliver positive net flows for the year. The work we've done under our new leadership team to strengthen the platform is reflected in the continued improvement in our investment performance. As of quarter end, 70% of client AUM was outperforming stated benchmarks over one year and 67% over three years, which is our best performance in five years. Strong, consistent performance is the foundation of this business, and this progress positions us well to compete for new mandates in the future. In summary, we remain firmly on track to achieve the objectives of our long-term growth strategy. Our progress is underpinned by our commercial and collegial culture and by our adoption of AI to transform how we work and deliver for clients. Based on a recent survey that we conduct annually, colleagues' pride and happiness working at Lazard and willingness to recommend our firm to others remained at all-time highs. We are pleased that our employees identified the firm's AI tools training and pace of adoption as significant strengths that are improving productivity and reinforcing confidence in our opportunities ahead. I'd like to thank my colleagues for their commitment and hard work as we advance our Lazard 2030 strategy together. Let me now turn the call over to Tracy, who will cover our financial results and provide details on our operational efforts, and then we will take your questions. Tracy Farr: Thank you, Peter Orszag. Financial advisory adjusted net revenue was $465 million for the third quarter and $1.3 billion for the first nine months of 2026. This quarter's revenue includes pull forwards for transactions that closed just after September 30th, that are in line with our two-year average. Our record third quarter revenue was driven primarily by M&A, with record revenue for the third quarter and first nine months of the year in both the Americas and the U.K., reflecting investments we have made in lateral hiring, our exceptional existing talent, and the strength of our franchise across our transatlantic footprint. With sustained client engagement and momentum across the business, completed transactions include Corteva Agriscience on its $50 billion spin-off of Vylor, MasTec's $1.7 billion acquisition of Superior Group, and Geneta Health on its sale to R1. Recently announced transactions include Emera on its merger with Canadian Utilities for a combined enterprise value of approximately CAD 72 billion , OCS Group's proposed £3.1 billion acquisition, and Vanguard's acquisition. Liability management and restructuring assignments include Braskem SA, Victoria, and QVC. In private capital advisory, recent assignments include advising Blue Sea Capital, Exponent Private Equity, and M-One Capital on continuation, and Peninsula Capital Management on the closing of its seventh fund. Turning to asset management. Adjusted net revenue was $330 million for the third quarter, $970 million for the first nine months of the year. Management fees were a record $321 million for the quarter, up 18% year-over-year, and $927 million for the first nine months, up 22% compared to the same period last year. Management fees have increased in each quarter this year, and Q3 marks the sixth consecutive quarter of sequential growth. As of September 30th, we reported AUM of $284 billion, 7% higher than September 2025 and approximately even with the prior quarter. During the quarter, we had market appreciation of $1.9 billion, foreign exchange depreciation of $0.2 billion, and net outflows of $2.3 billion. During the quarter, we had market appreciation of $1.9 billion, foreign exchange depreciation of $0.2 billion, and net outflows of $2.3 billion. Average AUM for the quarter was $287 billion, 11% higher than the third quarter of 2025. Client demand is increasingly visible in the strategies we have prioritized. Lazard Advantage, our quantitative equity platform, continues to attract significant client interest, and we also have ongoing strong flows into our emerging markets and global listed infrastructure strategies. IDEQ, our international quant ETF, has grown to nearly $2 billion in AUM since launching last year, and we plan to expand our ETF platform with the launch of our first actively managed fixed income ETFs next month. Turning to firm-wide expenses. Our adjusted non-compensation expense was $156 million for the third quarter, resulting in non-compensation ratio of 19.3%. Our adjusted compensation expense was $562 million for the third quarter, resulting in a compensation ratio of 69.9%. Based on a constant deferral rate, we continued to take a conservative view to accruing compensation in the third quarter. Consistent with prior years, this quarter's accrual was unchanged from the first two quarters of this year. We continue to design our compensation programs to remain competitive and aligned with the long-term interests of our employees and our shareholders. Earlier this year, as we previously discussed, we updated our vesting structure, and we are currently reviewing our deferral practices to reflect evolution in the market for our professionals and to enhance transparency for investors around awarded and recognized compensation. As part of our year-end process, we are considering a potential reduction in our deferral rate. This would accelerate the timing of compensation expense recognition on an accounting basis without altering the total compensation awarded, raising the reported compensation ratio by a few percentage points this year and reducing it thereafter. Our growth investments are paired with efforts to improve productivity and operating leverage across the firm. Let me share more detail on two initiatives underway to simplify our corporate and support functions and further embed AI across our work. First, we launched a project earlier this year to modernize and simplify how the firm operates. Across our corporate and support groups globally, we've completed a broad survey of workflows and organizational structures. We are now reviewing vendors to advance implementation, which includes process automation and centralization of certain activities, shifting how work is delivered and staffed with a long-term objective to decouple expense from revenue growth. As we progress, we expect to provide specifics on how this effort will reduce expenses beginning in 2027. Next, we are increasingly embedding AI across the firm to augment our productivity and expand our market reach. In financial advisory, AI is helping us create more opportunities for junior bankers to take on expanded responsibilities. As we continue to increase our number of senior bankers over time, this higher productivity will be reflected in a decline in our total associate equivalent to MD ratios. In asset management, we have accelerated the implementation of agentic workflows in client servicing and reporting, with plans to increase the use of AI and automation across the business. We see ongoing opportunity firm-wide with AI to deliver better outcomes for our clients, see more opportunities for upward mobility for our people, and improve our margin over time. Turning now to taxes. Our adjusted effective tax rate for the third quarter was 38.1%. We expect the full-year effective tax rate to be in the high 20s percentage range. Regarding capital allocation in the third quarter of 2026, we returned $88 million to shareholders, including a quarterly dividend of $49 million and share repurchases of $33 million. We expect to continue buybacks throughout the remainder of the year, balancing investment and growth with further offsetting share issuances from compensation. In addition, yesterday, we declared a quarterly dividend of $0.50 per share. Overall, we are confident in our outlook for long-term growth, and we are encouraged by the strong levels of client activity and the progress we are seeing across the firm, as highlighted in this quarter's results. Now, we'll open the call for any questions. Operator: Thank you. If you would like to ask a question at this time, please press star one on your telephone keypad. We ask that you please limit yourself to one question and one follow-up. If your question has been answered, you may remove yourself from the queue by pressing star two. So that others may hear your questions clearly, we ask that you please pick up your handset for optimal sound quality. We'll take our first question from Jim Mitchell with Seaport. Please go ahead. Jim Mitchell: Good morning. Tracy, I can't help but ask about the comp ratio commentary. When you think about shortening some of the accruals, I think you mentioned that could affect this year's comp ratio, but should help next year. It seems like shorter deferrals would increase amortization even next year. I just want to understand how you're thinking about the comp ratio trajectory, both in the fourth quarter and how that impacts both fourth quarter and next year. Thanks. Tracy Farr: Yeah. I want to answer this with actually maybe three points. First, when we think about this, keep in mind that the huge incentive here is to align this from an employee retention and attraction perspective. I want to reiterate that first, that this is really what it is, it's using more cash in the year and lowering the amount of deferral that you are granting. That helps on a number of fronts. That helps. It's effectively similar to a share buyback. It helps from a share dilution perspective, and it also improves the quality of that ratio over time, as I think I've had some conversations with a host of the participants on this call. Regarding the impact year to year, in the year of, without changing your total compensation on an awarded basis, that can remain the same. But on an accounting basis, you're accelerating some of the recognition into the current year. Now, what you're probably noting is that if you maintain that same deferral level, the impact of that isn't necessarily seen immediately, but it happens over a period of time. But that acceleration does come from somewhere, and that reverses over a period of time. Our current deferral policies, it probably reverses fully over a period of three years. But what that really does is it allows your comp ratio to decline more naturally over time. And as I mentioned before, the real benefit is an improved quality of the ratio itself, a greater ability for management to manage the comp ratio within a particular year, and a more attractive compensation policy for your employees. Peter Orszag: That makes sense. Jim Mitchell: No, that's very helpful. Maybe just on a broader point, I think, Peter Orszag, you mentioned Campbell Lutyens deal is a little bit ahead of what you were expecting when you announced the deal. Still on track for $500 million next year. Can you just maybe dive into a little deeper on what you're seeing as the biggest synergy opportunities with Campbell Lutyens, whether revenue or expenses or both? Peter Orszag: Yeah. I think it is both. I mentioned some of the areas, vendors, IT, et cetera, in the script on the cost side with a little extra scale. On the revenue side, there is a significant amount of opportunity for, in one direction, M&A referrals, so from Lazard CL to our M&A bankers, then in the opposite direction from our private capital coverage efforts into the fundraising business. So there is a flywheel or circularity there that's very positive. Campbell Lutyens, in its prior instance, did have a JV with a different investment bank that produced a notable level of M&A referrals. We anticipate, even though we didn't assume that in underwriting the deal, that we will be able to at least match, and in all likelihood, significantly beat that level of M&A referrals, that would be a significant uplift to the business. Operator: Thank you. Our next question will come from Steven Chubak with Wolfe Research. Please go ahead. Steven Chubak: Hi, good morning, thanks for taking my questions. Maybe to start, just given the constructive public backlog and forward indicators you alluded to with the weighted pipeline being more than double year-ago levels, I was hoping you could clarify whether that backlog commentary is on a revenue or volume-adjusted baseline, speak to any impacts on mix and how that informs the revenue growth outlook for next year. Peter Orszag: Sure. Well, actually, they are both on a revenue basis. But the weighted pipeline being double what it is, slightly more than double what it is for next year, what it was for last year, for this year this time last year, sorry. Just to be precise, pipeline as of today, October 22nd, for 2027 is slightly more than double what the 2026 pipeline was, weighted pipeline as of October 22nd, 2025. Sorry about that. But hopefully that is perfectly clear. And that is a revenue basis weighted by the probability of each fee being collected. To give a hypothetical example, you have a deal that will pay, to make it up, $100, and we estimate the odds that it will close at various different points, that it will close during 2027 at 50%. Then for that metric, it would be counted as $50 on a probability weighted basis. So that is that indicator. And then we have also provided numbers on the fee-weighted conflict clearance trends, and those fee-weighted ones are revenue based. In other words, a new mandate comes in and it is $400, that would get counted at $100 as opposed to just counting new conflict clearance. On account basis, we are also seeing very significant increases in conflict clearances, especially in the larger transactions. But I think the more relevant thing is the weighted pipeline that I gave you and then the fee-weighted conflict clearances, because obviously, a conflict clearance at a $5 million fee is a much different thing than a conflict clearance at a $50 million fee. Steven Chubak: No, thanks for clarifying all that, Peter. Just for my follow-up, did want to ask on the impact of higher rates, both on conversations with sponsors and strategics. You noted that you are seeing good pipeline momentum, but to what extent is that impacting the willingness of some of those clients to initiate deal processes here? Peter Orszag: Yeah, look, I think let us just start with, obviously, in theory, higher rates should discourage deal flow. In practice, we are just not seeing that being a very significant factor right now. And I think the reason is that most of the imperative for transactions on the strategic side, especially, and then I will turn to private equity in a second, is coming from the need for scale in this rapidly changing technology space. The desire to secure your supply chain vertically when you are subject to this new supply side era that we have spoken about, and the desire to kind of reconfigure your geographic footprint in the wake of the fracturing of the global economy. Those are all such powerful forces that an increase of 20, 30, 40, whatever number of basis points on the long end of the yield curve doesn't really materially affect your desire to get those transactions done, especially when you realize that the regulatory environment, particularly in the U.S., may never be more auspicious to acting on what you've always wanted to do. We're continuing. I think that explains, along with the investments that we've been making and our emergence from the J curve period, why the forward indicators are so strong. Again, I've been reading some of the commentary about deal flow slowing. That is not what we're seeing, for whatever it's worth. On the private equity side, situation's a little bit different. We've all been waiting for M&A from private equity to pick up. I think that's just the interplay of two things, one of which is exacerbated by the rise in interest rates, which is a disconnect on valuation. The owners of the portfolio companies continue to await better valuations. Obviously, a rise in rates doesn't help on that front. Against that, you've got ongoing pressure from LPs, from investors to get some cash back and to have liquidity events. It's really the interplay of those two phenomenon that will drive when we see a significant uptick in private equity M&A. I would say that has to happen at some point, and that would only further accelerate the forward indicators that we've shared with you. I'd also note that in the meanwhile, while we're all waiting for Godot a little bit on that private equity M&A moment, it is helping to drive additional activity in our secondaries business. The Lazard CL leg of Lazard is further spurred during this moment in which the valuation disconnect component of the M&A seesaw is causing some degree of continued delay in significant private equity M&A activity. Operator: Thank you. Our next question will come from Alex Bond with KBW. Please go ahead. Alex Bond: Hey, good morning, everyone. Thanks for taking the questions. Wanted to follow up around the large cap strategic outlook and activity levels there. As you mentioned, Peter Orszag, it sounds like the industry expectation there is for volume to remain strong heading into 2027. But maybe if you could just expand upon what you view as driving your recent progress in this area. You spoke again to elevated conflict clearances for deals above $5 billion. But maybe how are you thinking about the opportunity to grow share here further in this area? And also how you think the ramping of the newer cohort of MDs can impact growth in this area specifically? Peter Orszag: Well, look, let me back up for a second. One of the things that we wanted to do over the past three years, we've already talked about the J curve, but the other component of that we needed to address is the business model, especially in the U.S., having a duality to it that often was not the case in the past. So in the past, the U.S. business was very geared to only the large cap public company M&A. And what we saw was an opportunity to be able to walk and chew gum, and not only continue that excellence in large cap work, but also really significantly expand our private capital coverage and be able to do both. And so what you're now seeing is that we're emerging from the J curve period, and you are seeing that duality of the excellence in large cap and our private capital coverage coexisting. So we're walking and chewing gum, which was always possible, but we had not been doing that as a strategic matter. I gave you some of the statistics, but I think it's underscored by best year-to-date league table positioning, which really speaks to the large cap side of things in over a decade. And also in the third quarter and year-to-date, but in the third quarter, our share of revenue coming from private capital is at an all-time high. So it shows that duality. What's driving the large cap side and league table positioning? It is, I think, a combination of renewed efforts at client networking and expansion of our network, so out with clients incessantly, and the additional talent that we've been bringing on to supplement the world-class MDs we already have. We said that this would take a little bit of time to ramp, but we can see it in our internal data in terms of new meetings then showing up in conflict clearances, then showing up in announced transactions and so on. And you're starting to see the progress that we had been anticipating manifest itself. The first stage really does show up in those league table results because those are the forward indicators of future revenue from the large cap side of things. And what we are pleased by, and why I think this is why I want to go into a little bit more detail is that is happening at the same moment that we have got a lot of muscle on the private capital side of things. So the league table progress is not at the expense of our private capital coverage effort. It is instead in conjunction with it. Alex Bond: Okay, great. All makes sense there. Then maybe just as a follow-up, I believe last quarter you all had spoken to the expectation for higher than normal favorable seasonality for advisory in the second half of the year. Is that still the expectation? Then also, I am not sure if I missed this earlier, but if you could just speak to what percentage of revenue is coming from the non-M&A side and advisory in 3Q, that would also be helpful. Thank you. Peter Orszag: Sure. So with regard to the first question, we continue to expect the second half to be stronger than the first half, and the ratio of the second half this year to the first half will be stronger than in 2025, which I think is what we said on the prior call. Then I will get the exact statistics, but I believe it is approximately 60% M&A and 40% non-M&A in this quarter. If that is a little bit off, but I believe that is right, we will get you that exact number. Operator: Thank you. Our next question will come from Peter Orszag: Hold on a second. I can do that precisely. I am sorry. I was a little bit off. That is approximately correct for year to date, but you asked about the third quarter alone, and in the third quarter alone, it was 61% and 39%, so it is still approximately correct. 60/40. That was my memory. Sorry, it is a little off. Operator: All right. Thank you. Next, we have Devin Ryan with Citizens JMP. Please go ahead. Devin Ryan: Great. Thanks, and morning, Peter and Tracy. I want to start with a broader expense question. I appreciate some of the moving parts on areas like the deferred comp schedules you talked about. I know some of that is still evolving. Tracy, you talked about some of the incremental work you are doing on just broader kind of expense savings, and I expect we will hear more about that soon here. As we think about all the work you are doing, is all of this necessary just to get to the Lazard 2030 goals that you have laid out here, or does this create even more capacity? I know some are kind of like 60% or better comp, so it could be something better. Is this necessary just to reach those levels? Tracy Farr: Yeah, happy to address that. No, I think the answer directly is no. When we look at Lazard 2030, remember that the vast majority of what Lazard 2030 is about is growth. We are so focused on investing in high growth, high profitable areas of the business. You see that with the capital allocations, you see that with the inflection that you're seeing in asset management. You see this with the investment that's been made over the last three years in the financial advisory business that we talked a lot about last quarter with the J curve. The points that I'm making on the margin and these programs around comp expense and others is really a companion to that focus on growth. Here's where I want to go with this. The real theme is that when Peter and I looked at the business, we saw that there was more ability to drive operating leverage in the business. When you are focused on revenue growth, you have to be careful that your organization is ready to achieve that revenue growth while maintaining discipline around margin. That's what I'm really focused on, is trying to augment the way that we work, where we work, how we work in the back, so that as that revenue is delivered, we're not. I mentioned in my prepared remarks, this decoupling of expense from revenue growth. That's what those initiatives are focused on. To answer your question more broadly, no, it's not required to achieve 2030. I guess I would agree with you that as we decouple expense from revenue growth and that revenue growth is delivered, I actually think there's greater margin potential than what we've necessarily embedded into the 2030 expectations. 2030 remains a revenue growth story, but we're trying to prepare structurally the business to deliver enhanced margin as that growth materializes. Devin Ryan: Appreciate that, Tracy. Very helpful. Maybe bigger picture for Peter, just on the M&A backdrop and try to kind of connect the regulatory environment to what you're seeing with clients and obviously heading into midterms here. I think bigger kind of questions around what potentially could change in 2028. How much is that playing into conversations and an urgency to get deals into the market over the next year just because something may change? Clearly there's a window now, and that window may not be there on the other side of 2028, which I would think in theory may be kind of get people over the hurdle of some of the macro uncertainties just because they know if they don't move now, they may not be able to move. Is that playing in at all? If it is, where are you seeing that? Is that intensifying in any areas? Would love to just get some thoughts on that piece as well. Peter Orszag: I think that is a factor. I think even without that, the technology piece and the need for scale that I mentioned and the vertical integration and the geography would be driving a lot of transactions. But I think that is a factor, and I think it is one reason why you are seeing disproportionate activity in the largest deals, the big deals because this is a moment where you can plausibly get those through that may be more challenging in the future. Now with regard to hypothetical future environments that could come into place in early 2029, just two or three comments on that. The first is that obviously there is an election. You have to see what happens. So that is the obvious point. The second is that historically we have seen larger shifts from administration to administration in the Department of Justice wing of the antitrust regulatory environment than in the FTC. That is almost by design because the FTC commissioners are bipartisan, and there is sort of more stability that tends to come from that side of things. So it will partly, in that environment, depend on whether you are a DOJ filer or an FTC filer. Then finally, and perhaps most importantly, the world is changing. In Europe, you see a shift in the antitrust environment towards promoting European champions in this new world order. I think even in an administration shift in 2029, if that hypothetically happened, this new perspective that you need to weigh the traditional antitrust concerns using Herfindahl index or whatever against the desire to have frontier firms in each sector that are of a sufficient scale to be globally relevant might change things going forward. But in the meanwhile, people do see this window that is certain as opposed to the interplay of those various factors that I was just mentioning that are hypothetical till 2029. The seizing the moment factor, I guess, reinforces the underlying motivations that I think are primarily the ones that I mentioned. Operator: Thank you. Our next question will come from James Yaro with Goldman Sachs. Please go ahead. James Yaro: Good morning. Actually, I guess it's good afternoon for you. Could you just help us think through the restructuring outlook from here and whether there could be upside optionality to growth given the more challenging economic backdrop as well as higher interest rates globally, and perhaps also over what timeframe, if you do think this will happen, that could occur? Peter Orszag: Sure. I guess I could take that. Look, I do think we've seen on a year-to-date basis, growth in our restructuring practice. We think that will continue. When you look at the environment, I have said before, I think the risk of financial distress among the independent frontier labs and/or some of the neocloud providers in the AI ecosystem is elevated. That would have ripple effects in the need for restructuring throughout at least a significant part of that ecosystem. Even apart from that, higher rates does tend to induce additional financial distress at the lower-performing parts of the marketplace. What I'd say, so, yes, I'm not going to give you precise timing because that's a fool's errand in terms of trying to predict exactly when, and this is not a high-frequency business. We're kind of playing underlying trends. I would also say, I think one of the things that's different today than was maybe the case 20 years ago is everything I just said is true, but it will disproportionately affect, maybe outside of the AI world, disproportionately affect the sort of bottom 20% of firms in each sector. One of the things that's fascinating is you've just seen this massive explosion in the dispersion across firms in performance. So what's happening at the top of a sector, the frontier firms, is dramatically different than what's happening amongst the laggards in the sector. So I think what's new is that you may well see significant restructuring activity coincidental with significant M&A activity because those leading firms want to continue being at the frontier, and inorganic growth is one vector to do that. Yet down at the bottom of the distribution, there's a lot of distress and need for restructuring. So I would just highlight that I think that's a little bit different than prior cycles. James Yaro: That's very clear, Peter Orszag. I think you have a bit of a unique lens on Europe, so I hoped perhaps you could comment on the European backdrop for your business and how this is, or has evolved more recently, especially in light of the, again, increase in rate structures in countries in France as well as the geopolitical questions in near proximity to that continent. Peter Orszag: Sure. First, we are sitting in the U.K., so I would just note, since U.K. is part of Europe, even though it's not part of the EU, that we had a record third quarter and a record first nine months of the year in U.K. advisory, so that speaks to the strength of our franchise here where we sit right now doing this call. More broadly across Europe, obviously the macro backdrop is challenging. The political backdrop is super challenging with highly polarized electorates and frustration in the political system that you see not only in France, but across most of Europe. Yet, there is still significant M&A and other activity, and the reason for that is that you have to distinguish the macro and the micro. Macro backdrop, not so great. We could talk more about that if you wanted to, but it's not overwhelmingly auspicious. But most European companies that we are dealing with have the majority of their activity and the majority of their sales outside of Europe. So they happen to be headquartered in Europe, but they are global firms. I think that explains the disconnect between a lot of activity that we are seeing out of Europe and the macro backdrop in Europe that is less promising because the firms that we are dealing with are operating on a global basis. Operator: Thank you. Our next question will come from Mike Brown with UBS. Please go ahead. Mike Brown: Okay, great. Good morning. Thanks for taking my questions. So Peter Orszag, just looking at the industry data, we can see that the software M&A has been challenged this year, unsurprising given a lot of the AI uncertainty and disruption potential there. But we have seen a few deals coming through. So maybe can you just provide a pulse check on this sector specifically and maybe just if you could kind of dissect the large versus small end of the space, the strategic versus sponsor-backed deals, and maybe just talk a little bit about how you see that progressing now that we have been living in this kind of AI world for a while. Is it kind of a better outlook from here, say maybe where you would have thought last quarter? Thank you. Peter Orszag: In software specifically? Mike Brown: Yes, exactly. Thank you. Peter Orszag: Okay, good. I would say I kind of agree with your characterization, which is I think things are better than when the shock hit the software system. As you know, we have a leading franchise out of Boston with the Head of our Tech Group, Mark Dolins, in exactly this space. I think he would say there is more pockets of activity relative to the absolute bottom, but I would not characterize this as being an extremely active area. The Tech Group as a whole continues to cover that space, but is partially pivoting to other areas in the meanwhile. One of the benefits is we can skate to where the puck is or is going within our sectors. I would say with regard to private equity in the space, the same forces that I mentioned before are at play with the push and pull of challenging valuation causing a delay in liquidity events, coupled with the desire for LPs to see some cash on the back end. That is probably more severe in the software space than elsewhere because the valuation disconnects relative to what maybe had been expected a year ago are more severe. Admittedly, the rise in interest rates further exacerbates that. But it is not all dark. There is some activity in that space, and we continue to cover it actively. Mike Brown: Okay, great. Well said. If we just pivot over to the Asset Management side of the business. Fundamentals there continue to really progress in the right direction. It does seem like there has been increased strategic interest in scaled asset management platforms really across the industry. Can you just talk a little bit about how you think about the business continuing to create value for Lazard shareholders today? If these advantages are not really getting full market appreciation, maybe can you talk about how you think about the alternatives here to kind of unlock some of that value for shareholders? Peter Orszag: Sure. I'll take that, and then Chris can weigh in on some of the underlying trends and performance. On the structural question, I'm going to repeat what I've said before, but I think it is worth repeating, which is, we have a great new leadership team, including Chris, and also our Chief Operating Officer and our Chief Investment Officer. Very strong, by the way. That also came across in our internal survey appreciation for the quality of that leadership team. We believe we can add a lot of value as we continue to focus our products and strategy on where we think we have a right to win and where we can scale the strategy and get operating leverage out of that scaled strategy rather than having it a long tail of subscale products and strategies. Continuing to expand the number of active ETFs we have, where we've had very successful launches of roughly a half dozen, and there are more to come. Bottom line, the investment performance that I already mentioned on a one and three-year basis being the best in five years, which I think reflects this renewed rigor under our Chief Investment Officer and our excellent portfolio managers. But I've also said we're a public company, and there's no absolute blind insistence on the current structure. We will do what is in our shareholders' best interest. As a public company, that means being open to whatever the best or the most value-added approach would be on behalf of our shareholders. It's a question of value and math, and we believe that we can continue to improve the performance of this business, and that's what we're focused on doing for right now. Chris, anything you wanted to add? Chris Hogbin: Thanks, Peter. I might just add in, look, we're really focused on trying to strengthen this business. That is, you'll have seen a number of the changes we've made in the leadership team with a Chief Investment Officer, a new Chief Operating Officer, a Head of AI, a Head of Product, a Head of Corporate Development, new risk leadership. So really trying to strengthen the team. The bedrock and foundation has to be around our investment platform and delivering consistently strong performance. So it's good to see that coming through with the numbers Peter cited. And then if we can deliver that, and as we deliver that, you start to see that in client flows. For the first nine months of the year, we had record flows of $54 billion. To give you a bit of flavor around that, it is really in the areas where we are delivering strong, consistent performance. So that is our Advantage platform, the quantitative equities. It is our emerging markets platform. It is our Japanese equity capabilities, a number of our fixed income strategies, some of our alternative strategies like our convertible arbitrage strategy. So there is a real sort of breadth around that. Then, look, we also see a lot of white space around our business, right? We are largely a public markets active manager, but there is a lot of white space. That is exactly why we hired in a head of product and head of corporate development for the business to really help us chart that course ahead. We see a lot of upside potential from here. Meanwhile, continuing to operate the business as effectively and efficiently as we can so that we can deliver better margin for our shareholders as well. Peter Orszag: Yeah, just to reinforce this, I am going to again repeat other things I have said. I think perhaps sometimes in the past, people had the perception that there was a dogmatic insistence about these two businesses being together. We believe that we can continue to create significant value, as Chris was suggesting, with these two legs and then with the third leg of Lazard. But it is not a dogmatic insistence. It is an empirical question of, as they put it, math, on where the value is the highest for our shareholders. But we are very excited about the pathway forward and all the things that Chris and team are doing. Then we are also very excited about the new third leg of Lazard that will come into existence in early November. Operator: Thank you. Our next question will come from Gabriel Angelini with Bank of America. Please go ahead. Gabriel Angelini: Hi, good afternoon. Peter, I think we're about three years into Lazard 2030 now, and when I look at the valuation, I don't think the stock is reflecting the progress and the optimism that we heard in your prepared remarks. When I speak to investors, we're hearing some skepticism around whether the turnaround is taking longer than maybe you'd expected or whether Lazard might have missed part of the current M&A cycle. How would you respond to that, and what would you say that view is missing? Peter Orszag: Well, I would agree with you that I don't think we're getting credit for the progress, but most CEOs would probably say that. I would say the following: I think the changes that we had to make, both in terms of our Managing Director bench, which was essential to improving the commercial and collegial duality that we talk about in the business strategy, especially in North America, to cover both large cap and private capital, was going to take time. Relative to our internal plans, relative to the Lazard 2030 plan that we laid out internally, we are, if anything, a little ahead of schedule, but definitely on track. This has not taken longer than at least we expected. Obviously, I can't speak to any outside expectations, but I think emerging from a J-curve where we had upgraded 40% of our Managing Directors over roughly a three-year period is actually pretty good. But I understand others may have different expectations about the timetable. We can't control that. All I can say is we are emerging from the J-curve period, seeing lots of very positive forward indicators, and relative to our internal planning, we are definitively on schedule, and we intend to remain so. With regard to missing the M&A market, I also just don't really see that. Again, our weighted pipeline for next year is twice what it was as of this time last year. That's not consistent with missing any window. Gabriel Angelini: Perfect. Maybe as a follow-up to that second point, I think when we look at industry-wide data, it does look like volumes are decelerating, but you've mentioned several times now that you're not seeing that same deceleration. Is it fair to think about this as Lazard getting back to your more natural market share as those MDs that you've brought on are ramping, or would you argue that the industry backdrop remains as constructive as it was, say, three to six months ago? Peter Orszag: I'd say it's probably the former, but I don't really know because obviously we have insight into our own deal flow and we're reading the same reports about the overall market that you are. So I don't have anything differentiated to say outside of our own experience, but I think our own experience is suggesting significant momentum, again, on schedule. And whether that shows up as a constant share of an expanding wallet or a larger share of a stagnating wallet overall, I don't know. But we're really focused on our internal operations and tracking and accountability and client coverage and all the things that go into continuing momentum, and that's what we're seeing. It may well be the hypothesis that you suggested, which is we take a larger share of a market that's not growing as rapidly as it was in the past. I don't know. Operator: Thank you. Our next question will come from Brennan Hawken with BMO Capital Markets. Please go ahead. Brennan Hawken: Good morning. Thanks for taking my questions. Tracy, you spoke to the shift to greater cash. It's consistent with some comments that we've heard you make more recently, so not surprising. But when we think about it from a framework perspective, and we think about those few percentage points that we'd be adding to the ratio, what should be our starting point? Do we take the year-to-date comp ratio as the starting point, or do we take last year's ratio and add a few percentage points to that? What's the best frame of reference? Tracy Farr: Yeah, it's a fair question, Brennan. Thank you. I think you understand the dynamic well, and I understand your question. Well, the way I would answer this is on a like-for-like, no change in the deferral policy to date. Our remarks throughout the year would be consistent that we would have expected a decline towards the end of the year on an adjusted GAAP comp ratio. I think that would have been modest, a few points, but that would have been modest. And then I would reiterate what we said before, which is that if we were to make a deferral change, and I'll come back to that in a minute just on magnitude, but it would accelerate. And again, I want to make sure this is really clear. I know you understand this, but for others on the call, this is purely an accounting recognition concept. I have mentioned before to you and to others that I am very focused on comp discipline on an awarded basis, on an actual economic basis. This is an accounting concept that would accelerate some of that today and would help us by managing, again, that share dilution concept. The impact of that would be a few points. You can think of that on kind of a year-to-date accrual basis. I think that is a good basis. I would just reiterate that were we not making that change or if we did not, you would still see that kind of contraction or decline in the fourth quarter on model space. Does that answer the question? The only other thing I would add to that is, this is one of those situations where we have talked about wanting to manage share dilution. We have talked about share buybacks and wanting to continue that into the end of the year. As far as the total magnitude, it is hard to comment now, so I will not. I will just flag that duality of focusing on both whether it is share buybacks or whether it is decreased deferrals, so increased cash. Economically, it is very similar. We are trying to solve more than one opportunity with this. We see it as a great opportunity and the right time to make that change. Does that answer the question, Brennan? Brennan Hawken: I think so. Why do I sort of re-paraphrase, and you can confirm that I am understanding. It sounds like what you said is, and totally get you, yes. When you increase cash, you are increasing the expense in the year in which it is earned as opposed to amortizing it later. So totally understand. It sounds like what you are saying is like-for-like basis, not changing the methodology, we would have seen, I think what you characterized it as modest improvement in the year-to-date ratio as we come into year-end. However, given the change that you guys are making, no change to award it, understood. On an adjusted comp ratio basis, there is going to be an offset to that improvement that you guys would see from the accounting change. Is that fair? Peter Orszag: I would just note, Peter, that we have not finally decided to do this. I think Tracy said we are considering it, so we will have more to say about that in the coming weeks and before year-end. Tracy Farr: Otherwise, directionally, Brennan, I think your comment is accurate with Peter's caveat. Brennan Hawken: Understood. Of course, you do not know the revenue that is going to come in the fourth quarter, so that is a to be determined also. Okay, thanks. I appreciate that. Thank you. One more, Tracy, because you had some interesting comments on efficiency efforts that we are going to learn more about, I think, in the coming months here, it sounds. Can you give us some texture on where you believe there is the most wood to chop? We discussed this since you have taken the reins. I know you are very excited about this opportunity to make the organization more sort of lean and mean. When you think about some of the areas where you think, low-hanging fruit is always a bad term, but maybe the most ripe opportunities would be for these efficiency efforts. Tracy Farr: It is a fair question. I would characterize it in a number of ways. Part of it is thinking about where and how we can serve. Part of that is around centralization. I think centralization and standardization of the workflow is probably one of the most, using your term, the lowest hanging fruit. Lazard has this amazing global presence. Not only is it global, but it is local. So where we operate, we have amazing connectivity to our clients. That said, historically, that geared itself in kind of the corporate functionality, and that is not necessary to superb client delivery. So I think some of the centralization and uniformity that we can deliver, delivers a lot of cost savings, and frankly, delivers better delivery to our front offices and frankly, to our clients. So I would say that is one. Another is vendor rationalization. We see a lot of opportunity in that area. That is partly, I think you are already seeing a little bit of that in our non-comp expense accrual relative to some of the expectations around inflation. So I would say those are probably two of the biggest areas. Technology remains a huge opportunity, but it probably lags some of the process and workflow redesign. Operator: Thank you. Our next question will come from Connell Schmitz with Morgan Stanley. Please go ahead. Connell Schmitz: Hey, thanks for taking my question. Peter, I know this was largely addressed, but for more clarity, I'd like to dig more into the potential for the upcoming U.S. midterms to catalyze M&A, given your expertise here. Can you speak to the credibility behind the notion that a Democratic sweep could ultimately act as a near-term propellant to large transformative deals ahead of a potential shift in the reg environment in 2028? Or is this just not much of an impact given you've already described a pretty robust deal-making environment and deals really aren't waiting for the midterms? Tracy, as a quick follow-up, can you help quantify the level of pull forward in the advisory this quarter versus last quarter? Peter Orszag: Sure. On my question, I'd say the following. I don't think that the midterms will have any effect on the existing regulatory environment, and I know this was not what you were suggesting. Some people, however, have thought that, so I just want to clarify that. I think your question is kind of one layer beyond that, which is, if a blue wave happens, does it further accentuate the need to get deals done before a potential presidential election in 2028? Maybe at the margin is the answer, because it would reinforce the odds as of now that the White House would switch parties in 2028. In other words, if this blue wave doesn't happen at all, which is an unlikely scenario at this point, it may take some of the timing off of when the White House may switch, and a massive blue wave would probably reinforce the odds or the perceived odds that the White House would switch. Then leading us to that next stage that I've already talked about with regard to the DOJ, FTC, et cetera. I would say, though, a couple factors make this why I said at the margin. One is the desire to get deals done now is pretty strong, and so a little bit of extra emphasis there, I think, is an accentuating factor, but doesn't materially change things all that much. Secondly, we are still pretty far out from a presidential election. While the midterm outcome may affect the perceived odds of the White House moving one way or another in 2028, it probably does not move it that much. That is why I think it is a great question and it is a subtle question, but I think it is probably pretty marginal. Tracy Farr: On your point around pull forwards, I would say pull forwards for the quarter, I would make a couple points. They were broad-based, not really as concentrated as I think people might expect. Frankly, I think it was not concentrated in any one transaction. I would reinforce this concept that sometimes fees associated with a particular transaction can be spread across multiple periods. I think that sometimes can be difficult to get a read through on. To help on the quantification, I would just say that Q3 pull forward, it was really right on. It was slightly below what it was year-over-year on a quarter basis, and very much in line with $2 million or $3 million of an average over the last year or two. Again, nothing exceptional. An average amount of pull forwards and frankly, less concentrated than what I think people might assume as far as any given transaction. Connell Schmitz: Awesome color. Thanks, guys. Operator: Thank you. We will take our last question from James Yaro with Goldman Sachs. Please go ahead. James Yaro: Thanks for the follow-up. Tracy, I think we are getting a couple of additional comp deferral questions. Just two more clarifying ones here. I know you have said that you have not made a final decision on changing the deferrals, but is this part of the explanation for the persistent 69.9% comp ratio each quarter of the year so far? Or is there something else? Then number two, could you just speak to the timing and magnitude if you decide to make the deferral impact in light of your three-year comment? In other words, would that potential change only impact 2026 or would there be impacts in 2027 and 2028 as well? Tracy Farr: Okay. I understand the follow-up question. The definitive answer is no on it factoring into the 69% accrual throughout the year. On that explanation, I would just guide you to, frankly, our last quarter's comments around J curve, revenue growth, the comp expense line, and the investment spend. That does not drive any of that. I would reinforce what Brennan's question was that on a like-for-like basis, we would have otherwise expected a modest increase in the fourth quarter. To your point around its timing, I cannot speak to magnitude for the reasons that Peter mentioned. We have not made that definitive decision. I will give you some framework to think about it, though. I cannot answer the timing question. Timing, we would naturally go through that in our normal compensation year-end process. That has yet to happen, which is why we cannot the exact. But over the next quarter, we will be able to give that color. On timing the impact should we do it, regardless of magnitude, when does it show up? It accelerates some of that. The amount of increased cash or the amount that you otherwise would have deferred that you are now paying in cash, that is an immediate recognition on a GAAP basis in the current year. It does not impact the total award comp for this that the way to think about that is each year when you eventually roll off of the prior amortization of prior deferral periods in the past, each year, you are recognizing a third of prior year's amortization. So it is this vintaging of amortization that happens. Where this will really benefit the firm in the future is one, the ratio itself, the quality improves. But two to three years from now, what will happen is your amortization build includes much lower deferrals from the current year, next year back. So it creates this kind of embedded improvement in your comp expense line over effectively the next two to three years. So that is when it manifests. The reversal of that effectively is as future periods require less amortization of current year deferrals, if it makes sense that way. The only framework I would give you around magnitude is, again, I go back to the purpose of this is to improve the quality of the ratio and to attract better talent and improve the overall quality of our compensation program for our employees. One of the metrics that we look at is just where are our deferrals relative to market. You can do a little bit of research on this, and I am happy to talk about it, but one estimate of magnitude is if we were to get our gross consolidated deferrals closer to average market participants, that would be a good target over a period of time to try to achieve. Operator: Thank you. Ladies and gentlemen, this now concludes Lazard's third quarter and first nine months 2026 earnings conference call. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Lazard (LAZ) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Lazard (LAZ) came out with quarterly earnings of $0.36 per share, missing the Zacks Consensus Estimate of $0.43 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -16.28%. A quarter ago, it was expected that this company would post earnings of $0.42 per share when it actually produced earnings of $0.12, delivering a surprise of -71.43%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Lazard, which belongs to the Zacks Financial - Miscellaneous Services industry, posted revenues of $804.62 million for the quarter ended September 2026, missing the Zacks Consensus Estimate by 3.86%. This compares to year-ago revenues of $724.65 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Lazard shares have lost about 23% since the beginning of the year versus the S&P 500's gain of 13.3%. While Lazard has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Lazard was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.95 on $989.91 million in revenues for the coming quarter and $1.93 on $3.3 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Miscellaneous Services is currently in the bottom 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Houlihan Lokey (HLI), is yet to report results for the quarter ended September 2026. The results are expected to be released on October 28. This investment banking company is expected to post quarterly earnings of $1.58 per share in its upcoming report, which represents a year-over-year change of -14.1%. The consensus EPS estimate for the quarter has been revised 0.6% lower over the last 30 days to the current level. Houlihan Lokey's revenues are expected to be $609.92 million, down 7.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lazard, Inc. (LAZ) : Free Stock Analysis Report Houlihan Lokey, Inc. (HLI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NEW YORK, Oct. 22, 2026 /PRNewswire/ -- Lazard, Inc. (NYSE: LAZ) today reported net revenue on a U.S. GAAP basis of $814 million and adjusted net revenue1 of $805 million for the quarter ended September 30, 2026. For the first nine months of 2026, Lazard reported net revenue on a U.S. GAAP basis of $2,378 million and adjusted net revenue1 of $2,264 million. On a U.S. GAAP basis, Lazard reported third-quarter 2026 net income of $29 million or $0.26 per share, diluted. For the first nine months of 2026, net income on a U.S. GAAP basis was $135 million or $1.20 per share, diluted. On an adjusted basis1, Lazard reported third-quarter 2026 net income of $40 million or $0.36 per share, diluted. For the first nine months of 2026, adjusted net income1 was $100 million or $0.90 per share, diluted. "Our Lazard 2030 strategy continues to progress as planned, with strong momentum firm-wide," said Peter R. Orszag, CEO and Chairman. "Financial Advisory delivered record third quarter revenue as the investments we have made in the business increasingly translate into results, while client activity and our forward indicators remain strong. In Asset Management, record year-to-date gross inflows reflect improving investment performance and focused distribution efforts. With our new private capital advisory business, Lazard CL, launching in early November, we are building a more productive, diversified firm positioned for long-term profitable growth." "Our third quarter results show increasing traction from efforts to reposition our businesses, with firm-wide adjusted net revenue up 11 percent year-over-year," said Tracy Farr, CFO. "We continue to advance initiatives to simplify and modernize our operating model and embed AI across the firm, with the goals of improving client outcomes, supporting a more effective way of working for our colleagues, and improving our margin over time." (Selected results, $ in millions, | Three Months Ended | | Nine Months Ended except per share data and AUM) | September 30, | | September 30, U.S. GAAP Financial Measures | 2026 | | 2025 | | % Change | | 2026 | | 2025 | | % Change Net Revenue | $814 | | $748 | | 9 % | | $2,378 | | $2,192 | | 8 % Financial Advisory | $470 | | $427 | | 10 % | | $1,279 | | $1,292 | | (1 %) Asset Management | $357 | | $327 | | 9 % | | $1,118 | | $908 | | 23 % | | | | | | | | | | | Net Income | $29 | | $71 | | (59 %) | | $135 | | $187 | | (28 %) Per share, diluted | $0.26 | | $0.65 | | (60 %) | | $1.20 | | $1.72 | | (30 %) | | | | | | | | | | | Adjusted Financial Measures1 | | | | | | | | | | | Net Revenue | $805 | | $725 | | 11 % | | $2,264 | | $2,138 | | 6 % Financial Advisory | $465 | | $422 | | 10 % | | $1,266 | | $1,283 | | (1 %) Asset Management | $330 | | $294 | | 12 % | | $970 | | $827 | | 17 % | | | | | | | | | | | Net Income | $40 | | $62 | | (35 %) | | $100 | | $178 | | (44 %) Per share, diluted | $0.36 | | $0.56 | | (36 %) | | $0.90 | | $1.64 | | (45 %) | | | | | | | | | | | Assets Under Management (AUM)($ in billions) | | | | | | | | | | | Ending AUM | $284 | | $265 | | 7 % | | | | | | Average AUM | $287 | | $257 | | 11 % | | $277 | | $242 | | 14 % Notes: Reconciliations of U.S. GAAP to Adjusted results are shown on pages 13-15. Endnotes are on page 5 of this release. NET REVENUE Financial Advisory For the third quarter of 2026, Financial Advisory reported net revenue on a U.S. GAAP basis and adjusted net revenue1 of $470 million and $465 million, respectively, both 10% higher than the third quarter of 2025. This quarter's revenue includes an amount pulled forward into the period for transactions that closed just after September 30th that is in line with Lazard's two-year average. For the first nine months of 2026, Financial Advisory reported net revenue on a U.S. GAAP basis and adjusted net revenue1 of $1,279 million and $1,266 million, respectively, both 1% lower than the first nine months of 2025. Lazard is one of the world's leading independent financial advisors, serving as a trusted partner to clients on significant and complex M&A transactions. During and since the third quarter of 2026, we advised on a number of marquee transactions including Emera on its announced merger with Canadian Utilities for a combined enterprise value of approximately C$72 billion and Corteva Agriscience's $50 billion spinoff of Vylor. In addition, we advised on the following transactions (clients are in italics): - Vega on its proposed acquisition of e&'s 16.2% stake in Vodafone Group, at a price implying an equity value for 100% of Vodafone of over €30 billion - OCS Group's proposed £3.1 billion acquisition of Mitie Group - MasTec's $1.7 billion acquisition of The Superior Group - Vanguard's acquisition of Altruist - Walmart's acquisition of Vibe.co - Humata Health on its sale to R1 - Rimac Group on the divestiture of Porsche's stake in Bugatti Rimac and Rimac Group to a consortium led by HOF Capital Lazard provides tailored advice, expertise and access to a broad universe of capital providers through our Private Capital Advisory and Capital Solutions practices. Private Capital Advisory assignments include advising Blue Sea Capital, Exponent Private Equity and M-One Capital on continuation funds and advising on the closing of Kingswood Capital Management's Fund IV and Small Cap Fund I, LLCP Lower Middle Market Fund IV, Princeton Equity Group's Fund III, and TruArc Fund V. In addition, Lazard advised on financing for Ashurst Perkins Coie and CVE. Lazard's restructuring and liability management practice has been engaged in a broad range of mandates including debtor roles involving Braskem Idesa, Braskem SA, Republic National Distributing Company, Searles Valley Minerals, and Victoria, and creditor roles involving Brightline, Cubic, Dish, Foundever, GoldenPeaks Capital, and QVC. In addition, our preeminent sovereign advisory practice continues to be active in advising governments and public sector entities across the world. For a list of publicly announced transactions please visit our website or follow Lazard on LinkedIn. Asset Management For the third quarter of 2026, Asset Management reported net revenue on a U.S. GAAP basis and adjusted net revenue1 of $357 million and $330 million, respectively, 9% and 12% higher than the third quarter of 2025, respectively. Management fees on an adjusted basis1 were $321 million for the third quarter of 2026, 18% higher than the third quarter of 2025, and 4% higher than the second quarter of 2026. Incentive fees on an adjusted basis1 were $1 million for the third quarter of 2026, compared to $9 million for the third quarter of 2025. Other revenue2 on an adjusted basis1 was $8 million for the third quarter of 2026, compared to $14 million for the third quarter of 2025. Average assets under management (AUM) was $287 billion for the third quarter of 2026, 11% higher than the third quarter of 2025, and 3% higher than the second quarter of 2026. For the first nine months of 2026, Asset Management net revenue on a U.S. GAAP basis and adjusted net revenue1 were $1,118 million and $970 million, 23% and 17% higher than the first nine months of 2025, respectively. On a U.S. GAAP basis, net revenue for the first nine months of 2026 included a non-cash gain on the sale and deconsolidation of the Edgewater management vehicles. Management fees on an adjusted basis1 were $927 million for the first nine months of 2026, 22% higher than the first nine months of 2025. Incentive fees on an adjusted basis1 were $18 million for the first nine months of 2026, compared to $21 million for the first nine months of 2025. Other revenue2 on an adjusted basis1 was $25 million for the first nine months of 2026, compared to $44 million for the first nine months of 2025. Average AUM for the first nine months of 2026 was $277 billion, 14% higher than the first nine months of 2025, with positive net flows for the first nine months of 2026 of $5.1 billion. AUM as of September 30, 2026 was $284 billion, 7% higher than September 30, 2025, approximately even with June 30, 2026. The sequential change from June 30, 2026 was driven by market appreciation of $1.9 billion, net outflows of $2.3 billion, and foreign exchange depreciation of $0.2 billion. OPERATING EXPENSES Compensation and Benefits Expense For the third quarter of 2026, compensation and benefits expense on a U.S. GAAP and an adjusted basis1 was $569 million and $562 million, respectively, compared to $498 million and $475 million, respectively, for the third quarter of 2025. The adjusted compensation ratio3 for the third quarter of 2026 was 69.9%, compared to the third-quarter 2025 ratio of 65.5%. For the first nine months of 2026, compensation and benefits expense on a U.S. GAAP and an adjusted basis1 was $1,623 million and $1,583 million, respectively, compared to $1,448 million and $1,400 million, respectively, for the first nine months of 2025. The adjusted compensation ratio3 for the first nine months of 2026 was 69.9%, compared to 65.5% for the first nine months of 2025. We focus on the adjusted compensation ratio3 to manage costs, balancing a view of current conditions in the market for talent alongside our objective to drive long-term shareholder value. As part of our Lazard 2030 vision and long-term growth strategy, we aim to deliver an adjusted compensation ratio3 of 60% or below, with timing dependent on market conditions. Non-Compensation Expenses For the third quarter of 2026, non-compensation expenses on a U.S. GAAP basis were $190 million, 9% higher than the third quarter of 2025. On an adjusted basis1, non-compensation expenses were $156 million, 5% higher than the third quarter of 2025. The adjusted non-compensation ratio4 was 19.3% for the third quarter of 2026, compared to 20.5% for the third quarter of 2025. For the first nine months of 2026, non-compensation expenses on a U.S. GAAP basis were $573 million, 10% higher than the first nine months of 2025. On an adjusted basis1, non-compensation expenses were $476 million, 5% higher than the first nine months of 2025. The adjusted non-compensation ratio4 was 21.0% for the first nine months of 2026, compared to 21.2% for the first nine months of 2025. As part of our Lazard 2030 vision and long-term growth strategy, we aim to deliver an adjusted non-compensation ratio4 between 16% and 20%, with timing dependent on market conditions. TAXES The provision for income taxes on both a U.S. GAAP and an adjusted basis1 was $25 million for the third quarter of 2026, which equates to an effective tax rate of 45.8% on a U.S. GAAP basis and 38.1% on an adjusted basis1. The provision for income taxes on a U.S. GAAP and an adjusted basis1 was $38 million and $39 million, respectively, for the first nine months of 2026, which equates to an effective tax rate of 20.9% on a U.S. GAAP basis and 28.0% on an adjusted basis1. CAPITAL MANAGEMENT AND BALANCE SHEET In the third quarter of 2026, Lazard returned $88 million to shareholders, which included: $49 million in dividends; $33 million in repurchases of our common stock; and $6 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants. In the first nine months of 2026, Lazard returned $366 million to shareholders, which included: $145 million in dividends; $85 million in repurchases of our common stock; and $136 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants. During the first nine months of 2026, we repurchased 1.9 million shares at an average price of $43.68. As of September 30, 2026, our total outstanding share repurchase authorization was approximately $224 million. On October 21, 2026, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on November 13, 2026, to stockholders of record on November 2, 2026. Lazard's financial position remains strong. As of September 30, 2026, our cash and cash equivalents were $1,264 million. ENDNOTES 1 A non-GAAP measure. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. See attached financial schedules and related notes for a detailed explanation of adjustments to corresponding U.S. GAAP results. We believe that presenting our results on an adjusted basis, in addition to the U.S. GAAP results, is a meaningful and useful way to compare our operating results across periods. 2 Beginning in the first quarter of 2026, the Company presents Other revenue separately from Management fees in order to improve the analysis of average annual fee rates. Prior period results have been recast to conform to this change. Other revenue generally consists of commission income, net interest income, and net investment gains/losses. 3 A non-GAAP measure which represents adjusted compensation and benefits expense as a percentage of adjusted net revenue. 4 A non-GAAP measure which represents adjusted non-compensation expenses as a percentage of adjusted net revenue. CONFERENCE CALL Lazard will host a conference call at 8:00 a.m. ET on October 22, 2026, to discuss the company's financial results for the third quarter of 2026. The conference call can be accessed via a live audio webcast available through Lazard's Investor Relations website at www.lazard.com, or by dialing +1 800-445-7795 (toll-free, U.S. and Canada) or +1 785-424-1699 (outside of the U.S. and Canada), 15 minutes prior to the start of the call. Conference ID: LAZQ326. A replay of the conference call will be available by 10:00 a.m. ET, October 22, 2026, via the Lazard Investor Relations website at www.lazard.com, or by dialing +1 800-753-9197 (toll-free, U.S. and Canada) or +1 402-220-0689 (outside of the U.S. and Canada). ABOUT LAZARD Founded in 1848, Lazard is the preeminent financial advisory and asset management firm, with operations in North and South America, Europe, the Middle East, Asia, and Australia. Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals. Lazard is listed on the New York Stock Exchange as Lazard, Inc. under the ticker LAZ. For more information, please visit Lazard.com and Lazard on LinkedIn. Media Contact: Shannon Houston +1 212-632-6880 [email protected] Investor Contact: William Murdock +1 212-632-1564 [email protected] Cautionary Note Regarding Forward-Looking Statements: This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "target," "goal," "pipeline," or "continue," and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies, business plans and initiatives and anticipated trends in our business. These forward-looking statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A "Risk Factors," and also discussed from time to time in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including the following: - Adverse general economic conditions or adverse conditions in global or regional financial markets; - Changes in international trade policies and practices including the implementation of tariffs, proposed further tariffs, and responses from other jurisdictions, the risk of potential government shutdowns, and the economic impacts, volatility and uncertainty resulting therefrom; - A decline in our revenues, for example due to a decline in overall mergers and acquisitions (M&A) activity, our share of the M&A market or our assets under management (AUM); - Losses caused by financial or other problems experienced by third parties; - Losses due to unidentified or unanticipated risks; - A lack of liquidity, i.e., ready access to funds, for use in our businesses; - Competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels; and - Changes in relevant tax laws, regulations or treaties or an adverse interpretation of those items These risks and uncertainties are not exhaustive. Our SEC reports describe additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. As a result, there can be no assurance that the forward-looking statements included in this release will prove to be accurate or correct. Although we believe the statements reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, achievements or events. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this release to conform our prior statements to actual results or revised expectations and we do not intend to do so. Lazard, Inc. is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, Lazard and its operating companies use their websites, and other social media sites to convey information about their businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of assets under management in various mutual funds, hedge funds and other investment products managed by Lazard Asset Management LLC and Lazard Frères Gestion SAS. Investors can link to Lazard and its operating company websites through www.lazard.com. *** CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (U.S. GAAP - unaudited) | Three Months Ended | | % Change From | September 30, | | June 30, | | September 30, | | June 30, | | September 30, ($ in thousands, except per share data) | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | REVENUE | | | | | | | | | Total revenue | $836,377 | | $830,200 | | $770,764 | | 1 % | | 9 % Interest expense | (22,206) | | (22,531) | | (22,686) | | | | Net revenue | 814,171 | | 807,669 | | 748,078 | | 1 % | | 9 % | | | | | | | | | OPERATING EXPENSES | | | | | | | | | Compensation and benefits | 568,983 | | 562,409 | | 498,212 | | 1 % | | 14 % | | | | | | | | | Occupancy and equipment | 33,921 | | 33,807 | | 31,908 | | | | Marketing and business development | 27,547 | | 34,408 | | 26,085 | | | | Technology and information services | 49,834 | | 52,633 | | 48,862 | | | | Professional services | 22,322 | | 32,879 | | 20,951 | | | | Fund administration and outsourced services | 41,291 | | 38,054 | | 32,390 | | | | Other | 15,521 | | 15,876 | | 14,886 | | | | Non-compensation expenses | 190,436 | | 207,657 | | 175,082 | | (8 %) | | 9 % Benefit pursuant to tax receivable agreement | – | | – | | (20,146) | | | | Operating expenses | 759,419 | | 770,066 | | 653,148 | | (1 %) | | 16 % | | | | | | | | | Operating income | 54,752 | | 37,603 | | 94,930 | | 46 % | | (42 %) | | | | | | | | | Provision for income taxes | 25,082 | | 23,871 | | 21,430 | | 5 % | | 17 % Net income | 29,670 | | 13,732 | | 73,500 | | 116 % | | (60 %) Net income attributable to noncontrolling interests | 510 | | 8,924 | | 2,253 | | | | Net income attributable to Lazard, Inc. | $29,160 | | $4,808 | | $71,247 | | NM | | (59 %) | | | | | | | | | Attributable to Lazard, Inc. Common Stockholders: | | | | | | | | | Weighted average shares outstanding: | | | | | | | | | Basic | 101,030,518 | | 101,357,540 | | 98,112,393 | | – % | | 3 % Diluted | 107,284,701 | | 107,341,353 | | 108,001,762 | | – % | | (1 %) | | | | | | | | | Net income per share: | | | | | | | | | Basic | $0.27 | | $0.03 | | $0.71 | | NM | | (62 %) Diluted | $0.26 | | $0.03 | | $0.65 | | NM | | (60 %) CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (U.S. GAAP - unaudited) | Nine Months Ended | September 30, | | September 30, | | ($ in thousands, except per share data) | 2026 | | 2025 | | % Change | | | | | REVENUE | | | | | Total revenue | $2,445,976 | | $2,257,088 | | 8 % Interest expense | (67,554) | | (64,962) | | Net revenue | 2,378,422 | | 2,192,126 | | 8 % | | | | | OPERATING EXPENSES | | | | | Compensation and benefits | 1,623,286 | | 1,447,690 | | 12 % | | | | | Occupancy and equipment | 99,148 | | 101,024 | | Marketing and business development | 90,617 | | 83,409 | | Technology and information services | 150,742 | | 144,350 | | Professional services | 75,879 | | 64,377 | | Fund administration and outsourced services | 112,861 | | 88,989 | | Other | 43,960 | | 39,787 | | Non-compensation expenses | 573,207 | | 521,936 | | 10 % Benefit pursuant to tax receivable agreement | – | | (20,146) | | Operating expenses | 2,196,493 | | 1,949,480 | | 13 % | | | | | Operating income | 181,929 | | 242,646 | | (25 %) | | | | | Provision for income taxes | 37,964 | | 45,840 | | (17 %) Net income | 143,965 | | 196,806 | | (27 %) Net income attributable to noncontrolling interests | 9,081 | | 9,838 | | Net income attributable to Lazard, Inc. | $134,884 | | $186,968 | | (28 %) | | | | | Attributable to Lazard, Inc. Common Stockholders: | | | | | Weighted average shares outstanding: | | | | | Basic | 100,616,105 | | 96,967,379 | | 4 % Diluted | 107,138,010 | | 105,914,050 | | 1 % | | | | | Net income per share: | | | | | Basic | $1.28 | | $1.88 | | (32 %) Diluted | $1.20 | | $1.72 | | (30 %) CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (U.S. GAAP - unaudited) | As of | September 30, | | December 31, ($ in thousands) | 2026 | | 2025 | | | ASSETS | | | Cash and cash equivalents | $1,263,956 | | $1,469,416 Deposits with banks and short-term investments | 182,451 | | 167,134 Restricted cash | 6,329 | | 34,021 Receivables | 843,007 | | 897,786 Investments | 520,773 | | 625,846 Property | 151,260 | | 168,005 Operating lease right-of-use assets | 398,151 | | 412,584 Goodwill and other intangible assets | 451,805 | | 395,262 Deferred tax assets | 453,721 | | 449,531 Other assets | 276,457 | | 316,687 | | | Total Assets | $4,547,910 | | $4,936,272 | | | LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY | | | Liabilities | | | | | | Deposits and other customer payables | $368,787 | | $330,852 Accrued compensation and benefits | 495,661 | | 794,754 Operating lease liabilities | 470,755 | | 485,149 Senior debt | 1,690,252 | | 1,688,086 Other liabilities | 472,763 | | 652,763 Total liabilities | 3,498,218 | | 3,951,604 | | | Commitments and contingencies | | | | | | Redeemable noncontrolling interests | 109,207 | | 78,379 | | | Stockholders' equity | | | | | | Preferred stock, par value $.01 per share | – | | – Common stock, par value $.01 per share | 1,098 | | 1,117 Additional paid-in capital | 219,424 | | 306,425 Retained earnings | 1,477,967 | | 1,517,571 Accumulated other comprehensive loss, net of tax | (275,422) | | (271,509) Subtotal | 1,423,067 | | 1,553,604 Common stock held in treasury, at cost | (474,281) | | (684,411) Total Lazard, Inc. stockholders' equity | 948,786 | | 869,193 Noncontrolling interests | (8,301) | | 37,096 Total stockholders' equity | 940,485 | | 906,289 | | | Total liabilities, redeemable noncontrolling interests and stockholders' equity | $4,547,910 | | $4,936,272 Note: In the first quarter of 2026, the Company changed its accounting principle for recognizing compensation expense for share-based incentive compensation awards and certain deferred compensation arrangements with only a service condition. As a result, the cumulative effect of applying the change to the prior period is reflected on the Company's Condensed Consolidated Statement of Financial Condition as of December 31, 2025. SELECTED SUMMARY FINANCIAL INFORMATION (Adjusted Basis - Non-GAAP - unaudited) | Three Months Ended | | % Change From | September 30, | | June 30, | | September 30, | | June 30, | | September 30, ($ in thousands, except per share data) | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | Net Revenue: | | | | | | | | | | | | | | | | | | Financial Advisory | $464,690 | | $445,319 | | $422,279 | | 4 % | | 10 % Asset Management | 330,242 | | 331,308 | | 294,189 | | – % | | 12 % Corporate | 9,689 | | 9,839 | | 8,185 | | (2 %) | | 18 % | | | | | | | | | Adjusted net revenue | $804,621 | | $786,466 | | $724,653 | | 2 % | | 11 % | | | | | | | | | Expenses: | | | | | | | | | | | | | | | | | | Adjusted compensation and benefits expense | $562,430 | | $549,571 | | $474,647 | | 2 % | | 18 % Adjusted compensation ratio (a) | 69.9 % | | 69.9 % | | 65.5 % | | | | | | | | | | | | | Adjusted non-compensation expenses | $155,523 | | $171,720 | | $148,665 | | (9 %) | | 5 % Adjusted non-compensation ratio (b) | 19.3 % | | 21.8 % | | 20.5 % | | | | | | | | | | | | | Earnings: | | | | | | | | | | | | | | | | | | Adjusted operating income | $86,668 | | $65,175 | | $101,341 | | 33 % | | (14 %) Adjusted operating margin (c) | 10.8 % | | 8.3 % | | 14.0 % | | | | | | | | | | | | | Adjusted net income | $39,968 | | $12,952 | | $61,872 | | NM | | (35 %) | | | | | | | | | Adjusted diluted net income per share | $0.36 | | $0.12 | | $0.56 | | NM | | (36 %) | | | | | | | | | Adjusted diluted weighted average shares (d) | 110,580,240 | | 110,458,354 | | 110,354,682 | | – % | | – % | | | | | | | | | Adjusted effective tax rate (e) | 38.1 % | | 69.7 % | | 21.4 % | | | | This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Adjusted Results and Notes to Financial Schedules. See Notes to Financial Schedules SELECTED SUMMARY FINANCIAL INFORMATION (Adjusted Basis - Non-GAAP - unaudited) | Nine Months Ended | September 30, | | September 30, | | ($ in thousands, except per share data) | 2026 | | 2025 | | % Change | | | | | Net Revenue: | | | | | | | | | | Financial Advisory | $1,266,178 | | $1,283,181 | | (1 %) Asset Management | 970,388 | | 827,174 | | 17 % Corporate | 27,504 | | 27,349 | | 1 % | | | | | Adjusted net revenue | $2,264,070 | | $2,137,704 | | 6 % | | | | | Expenses: | | | | | | | | | | Adjusted compensation and benefits expense | $1,582,585 | | $1,400,196 | | 13 % Adjusted compensation ratio (a) | 69.9 % | | 65.5 % | | | | | | | Adjusted non-compensation expenses | $475,918 | | $453,918 | | 5 % Adjusted non-compensation ratio (b) | 21.0 % | | 21.2 % | | | | | | | Earnings: | | | | | | | | | | Adjusted operating income | $205,567 | | $283,590 | | (28 %) Adjusted operating margin (c) | 9.1 % | | 13.3 % | | | | | | | Adjusted net income | $99,538 | | $177,593 | | (44 %) | | | | | Adjusted diluted net income per share | $0.90 | | $1.64 | | (45 %) | | | | | Adjusted diluted weighted average shares (d) | 110,467,531 | | 108,242,524 | | 2 % | | | | | Adjusted effective tax rate (e) | 28.0 % | | 18.8 % | | This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Reconciliation of U.S. GAAP to Adjusted Results and Notes to Financial Schedules. See Notes to Financial Schedules ASSETS UNDER MANAGEMENT (unaudited) | As of | | % Change From | September 30, | | June 30, | | September 30, | | June 30, | | September 30, ($ in millions) | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | AUM by Asset Class: | | | | | | | | | Equity: | | | | | | | | | Emerging Markets | $54,191 | | $51,153 | | $37,676 | | 5.9 % | | 43.8 % Global / International | 134,446 | | 136,748 | | 115,755 | | (1.7 %) | | 16.1 % U.S. | 26,691 | | 26,467 | | 41,635 | | 0.8 % | | (35.9 %) Total Equity | 215,328 | | 214,368 | | 195,066 | | 0.4 % | | 10.4 % Fixed Income | 33,751 | | 34,977 | | 35,246 | | (3.5 %) | | (4.2 %) Multi Asset | 24,052 | | 24,480 | | 24,765 | | (1.7 %) | | (2.9 %) Alternative Investments | 10,898 | | 10,825 | | 9,460 | | 0.7 % | | 15.2 % Total AUM | $284,029 | | $284,650 | | $264,537 | | (0.2 %) | | 7.4 % | | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | September 30, | | June 30, | | September 30, | | September 30, | | September 30, | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | AUM - Beginning of Period | $284,650 | | $259,187 | | $248,360 | | $254,300 | | $226,321 Net Flows | (2,325) | | (1,614) | | 4,575 | | 5,066 | | 1,593 Market Value Appreciation | 1,923 | | 27,111 | | 12,046 | | 29,388 | | 24,757 Foreign Exchange Appreciation / (Depreciation) | (219) | | (1,067) | | (444) | | (4,266) | | 11,866 Acquisitions / (Divestitures) | – | | 1,033 | | – | | (459) | | – AUM - End of Period | $284,029 | | $284,650 | | $264,537 | | $284,029 | | $264,537 | | | | | | | | | Average AUM | $286,590 | | $279,116 | | $257,358 | | $277,003 | | $242,142 | | | | | | | | | % Change in Average AUM | – % | | 2.7 % | | 11.4 % | | | | 14.4 % Note: Average AUM generally represents the average of the monthly ending AUM balances for the period. In 2026, AUM Asset Classes have been expanded to include a multi asset classification. The comparable prior period information has been recast to reflect the current presentation. | RECONCILIATION OF U.S. GAAP TO ADJUSTED RESULTS (unaudited) | | | Three Months Ended | | Nine Months Ended | | September 30, | | June 30, | | September 30, | | September 30, | | September 30, ($ in thousands) | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | | Net Revenue Financial Advisory net revenue - U.S. GAAP | $469,623 | | $450,167 | | $427,335 | | $1,279,358 | | $1,292,000 Adjustments: | | | | | | | | | | Reimbursable deal costs, provision for credit losses and other (f) | (4,933) | | (4,848) | | (5,061) | | (13,180) | | (8,832) | Interest expense (g) | – | | – | | 5 | | – | | 13 Adjusted Financial Advisory net revenue | $464,690 | | $445,319 | | $422,279 | | $1,266,178 | | $1,283,181 | | | | | | | | | | Asset Management net revenue - U.S. GAAP | $356,950 | | $351,031 | | $327,029 | | $1,117,744 | | $907,607 Adjustments: | | | | | | | | | | Noncontrolling interests and similar arrangements (h) | (1,913) | | (147) | | (12,765) | | (5,506) | | (24,840) | Distribution fees and other (f) | (24,810) | | (22,077) | | (20,083) | | (66,417) | | (55,610) | Interest expense (g) | 15 | | 19 | | 8 | | 75 | | 17 | Gain on sale and deconsolidation of Edgewater (i) | – | | 2,482 | | – | | (75,508) | | – Adjusted Asset Management net revenue | $330,242 | | $331,308 | | $294,189 | | $970,388 | | $827,174 | | | | | | | | | | Corporate net revenue - U.S. GAAP | ($12,402) | | $6,471 | | ($6,286) | | ($18,680) | | ($7,481) Adjustments: | | | | | | | | | | Noncontrolling interests and similar arrangements (h) | (985) | | (9,122) | | (3,327) | | (10,287) | | (9,263) | (Gains) losses related to Lazard Fund Interests ("LFI") and similar arrangements (j) | 1,066 | | (9,921) | | (4,823) | | (10,637) | | (20,575) | Interest expense (g) | 22,010 | | 22,411 | | 22,621 | | 67,108 | | 64,668 Adjusted Corporate net revenue | $9,689 | | $9,839 | | $8,185 | | $27,504 | | $27,349 | | | | | | | | | | Net revenue - U.S. GAAP | $814,171 | | $807,669 | | $748,078 | | $2,378,422 | | $2,192,126 Adjustments: | | | | | | | | | | Noncontrolling interests and similar arrangements (h) | (2,898) | | (9,269) | | (16,092) | | (15,793) | | (34,103) | (Gains) losses related to Lazard Fund Interests ("LFI") and similar arrangements (j) | 1,066 | | (9,921) | | (4,823) | | (10,637) | | (20,575) | Distribution fees, reimbursable deal costs, provision for credit losses and other (f) | (29,743) | | (26,925) | | (25,144) | | (79,597) | | (64,442) | Interest expense (g) | 22,025 | | 22,430 | | 22,634 | | 67,183 | | 64,698 | Gain on sale and deconsolidation of Edgewater (i) | – | | 2,482 | | – | | (75,508) | | – Adjusted net revenue | $804,621 | | $786,466 | | $724,653 | | $2,264,070 | | $2,137,704 This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules. See Notes to Financial Schedules | RECONCILIATION OF U.S. GAAP TO ADJUSTED RESULTS (unaudited) | | | Three Months Ended | | Nine Months Ended | | September 30, | | June 30, | | September 30, | | September 30, | | September 30, ($ in thousands, except per share data) | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | | Compensation and Benefits Expense Compensation and benefits expense - U.S. GAAP | $568,983 | | $562,409 | | $498,212 | | $1,623,286 | | $1,447,690 Adjustments: | | | | | | | | | | Noncontrolling interests and similar arrangements (h) | (2,069) | | (142) | | (12,594) | | (5,081) | | (20,771) | (Charges) credits pertaining to LFI and similar arrangements (j) | 1,066 | | (9,921) | | (4,823) | | (10,637) | | (20,575) | Expenses associated with senior management transition (k) | (5,550) | | (2,775) | | (6,148) | | (24,983) | | (6,148) Adjusted compensation and benefits expense | $562,430 | | $549,571 | | $474,647 | | $1,582,585 | | $1,400,196 | | | | | | | | | | Non-Compensation Expenses Non-compensation expenses - U.S. GAAP | $190,436 | | $207,657 | | $175,082 | | $573,207 | | $521,936 Adjustments: | | | | | | | | | | Noncontrolling interests and similar arrangements (h) | (415) | | (204) | | (1,246) | | (1,729) | | (3,497) | Distribution fees, reimbursable deal costs, provision for credit losses and other (f) | (29,743) | | (26,925) | | (25,144) | | (79,597) | | (64,442) | Expenses related to the pending acquisition of Campbell Lutyens (l) | (4,108) | | (8,808) | | – | | (15,316) | | – | Amortization of intangible assets (m) | (601) | | – | | – | | (601) | | – | Other | (46) | | – | | (27) | | (46) | | (79) Adjusted non-compensation expenses | $155,523 | | $171,720 | | $148,665 | | $475,918 | | $453,918 | | | | | | | | | | Operating Income Operating income - U.S. GAAP | $54,752 | | $37,603 | | $94,930 | | $181,929 | | $242,646 Adjustments: | | | | | | | | | | Noncontrolling interests and similar arrangements (h) | (414) | | (8,923) | | (2,252) | | (8,983) | | (9,835) | Interest expense (g) | 22,025 | | 22,430 | | 22,634 | | 67,183 | | 64,698 | Gain on sale and deconsolidation of Edgewater (i) | – | | 2,482 | | – | | (75,508) | | – | Expenses associated with senior management transition (k) | 5,550 | | 2,775 | | 6,148 | | 24,983 | | 6,148 | Expenses related to the pending acquisition of Campbell Lutyens (l) | 4,108 | | 8,808 | | – | | 15,316 | | – | Amortization of intangible assets (m) | 601 | | – | | – | | 601 | | – | Benefit pursuant to tax receivable agreement obligation ("TRA") (n) | – | | – | | (20,146) | | – | | (20,146) | Other | 46 | | – | | 27 | | 46 | | 79 Adjusted operating income | $86,668 | | $65,175 | | $101,341 | | $205,567 | | $283,590 | | | | | | | | | | Provision for Income Taxes Provision for income taxes - U.S. GAAP | $25,082 | | $23,871 | | $21,430 | | $37,964 | | $45,840 Adjustment: | | | | | | | | | | Benefit for income taxes related to noncontrolling interests and similar arrangements | 100 | | – | | – | | 100 | | – | (Provision) benefit for income taxes effect of other adjustments | (549) | | 5,921 | | (4,623) | | 738 | | (4,623) Adjusted provision for income taxes | $24,633 | | $29,792 | | $16,807 | | $38,802 | | $41,217 | | | | | | | | | | Net Income attributable to Lazard, Inc. Net income attributable to Lazard, Inc. - U.S. GAAP | $29,160 | | $4,808 | | $71,247 | | $134,884 | | $186,968 Adjustments: | | | | | | | | | | Gain on sale and deconsolidation of Edgewater (i) | – | | 2,482 | | – | | (75,508) | | – | Expenses associated with senior management transition (k) | 5,550 | | 2,775 | | 6,148 | | 24,983 | | 6,148 | Expenses related to the pending acquisition of Campbell Lutyens (l) | 4,108 | | 8,808 | | – | | 15,316 | | – | Amortization of intangible assets (m) | 601 | | – | | – | | 601 | | – | Benefit pursuant to tax receivable agreement obligation ("TRA") (n) | – | | – | | (20,146) | | – | | (20,146) | Provision (benefit) for income taxes effect of other adjustments | 549 | | (5,921) | | 4,623 | | (738) | | 4,623 Adjusted net income | $39,968 | | $12,952 | | $61,872 | | $99,538 | | $177,593 | | | | | | | | | | Diluted Weighted Average Shares Outstanding Diluted weighted average shares outstanding - U.S. GAAP | 107,284,701 | | 107,341,353 | | 108,001,762 | | 107,138,010 | | 105,914,050 | Participating securities including profits interest participation rights and other | 3,295,539 | | 3,117,001 | | 2,352,920 | | 3,329,521 | | 2,328,475 Adjusted diluted weighted average shares outstanding (d) | 110,580,240 | | 110,458,354 | | 110,354,682 | | 110,467,531 | | 108,242,524 | | | | | | | | | | Diluted Net Income per Share Diluted net income per share - U.S. GAAP | $0.26 | | $0.03 | | $0.65 | | $1.20 | | $1.72 Diluted net income effect of adjustments | 0.10 | | 0.09 | | (0.09) | | (0.30) | | (0.08) Adjusted net income per share | $0.36 | | $0.12 | | $0.56 | | $0.90 | | $1.64 This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules. See Notes to Financial Schedules RECONCILIATION OF NON-COMPENSATION EXPENSES U.S. GAAP TO ADJUSTED (unaudited) | Three Months Ended | | Nine Months Ended | September 30, | | June 30, | | September 30, | | September 30, | | September 30, ($ in thousands) | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | Non-compensation expenses - U.S. GAAP: | | | | | | | | | Occupancy and equipment | $33,921 | | $33,807 | | $31,908 | | $99,148 | | $101,024 Marketing and business development | 27,547 | | 34,408 | | 26,085 | | 90,617 | | 83,409 Technology and information services | 49,834 | | 52,633 | | 48,862 | | 150,742 | | 144,350 Professional services | 22,322 | | 32,879 | | 20,951 | | 75,879 | | 64,377 Fund administration and outsourced services | 41,291 | | 38,054 | | 32,390 | | 112,861 | | 88,989 Other | 15,521 | | 15,876 | | 14,886 | | 43,960 | | 39,787 Non-compensation expenses - U.S. GAAP | $190,436 | | $207,657 | | $175,082 | | $573,207 | | $521,936 | | | | | | | | | Non-compensation expenses - Adjustments: | | | | | | | | | Occupancy and equipment (h) | ($61) | | ($9) | | ($98) | | ($166) | | ($288) Marketing and business development (f) (h) | (3,304) | | (3,741) | | (3,989) | | (10,970) | | (10,678) Technology and information services (f) (h) | (55) | | (26) | | (39) | | (136) | | (102) Professional services (f) (h) (l) | (4,892) | | (9,407) | | (957) | | (18,150) | | (3,624) Fund administration and outsourced services (f) (h) | (23,911) | | (20,951) | | (18,814) | | (63,202) | | (52,401) Other (f) (h) (l) | (2,690) | | (1,803) | | (2,520) | | (4,665) | | (925) Non-compensation expenses - Adjustments | ($34,913) | | ($35,937) | | ($26,417) | | ($97,289) | | ($68,018) | | | | | | | | | Adjusted non-compensation expenses: | | | | | | | | | Occupancy and equipment | $33,860 | | $33,798 | | $31,810 | | $98,982 | | $100,736 Marketing and business development | 24,243 | | 30,667 | | 22,096 | | 79,647 | | 72,731 Technology and information services | 49,779 | | 52,607 | | 48,823 | | 150,606 | | 144,248 Professional services | 17,430 | | 23,472 | | 19,994 | | 57,729 | | 60,753 Fund administration and outsourced services | 17,380 | | 17,103 | | 13,576 | | 49,659 | | 36,588 Other | 12,831 | | 14,073 | | 12,366 | | 39,295 | | 38,862 Adjusted non-compensation expenses | $155,523 | | $171,720 | | $148,665 | | $475,918 | | $453,918 This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for the corresponding U.S. GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see Notes to Financial Schedules. See Notes to Financial Schedules Notes to Financial Schedules (a) | A non-GAAP measure which represents adjusted compensation and benefits expense as a percentage of adjusted net revenue. | | | | | | | | | | (b) | A non-GAAP measure which represents adjusted non-compensation expenses as a percentage of adjusted net revenue. | | | | | | | | | | (c) | A non-GAAP measure which represents adjusted operating income as a percentage of adjusted net revenue. | | | | | | | | | | (d) | A non-GAAP measure which includes incremental units of profits interest participation rights ("PIPRs"). PIPRs are equity incentive awards under our long-term incentive compensation program that, subject to certain conditions, may be exchanged for shares of our common stock. | | | | | | | | | | (e) | A non-GAAP measure which represents the adjusted provision for income taxes as a percentage of adjusted operating income less interest expense, amortization and other acquisition-related costs. | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | ($ in thousands) | September 30, | | June 30, | | September 30, | | September 30, | | September 30, | | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | Adjusted provision for income taxes | $24,633 | | $29,792 | | $16,807 | | $38,802 | | $41,217 | Adjusted operating income less interest expense, amortization and other acquisition-related costs | $64,597 | | $42,745 | | $78,680 | | $138,338 | | $218,813 | Adjusted effective tax rate | 38.1 % | | 69.7 % | | 21.4 % | | 28.0 % | | 18.8 % | | | | | | | | | | (f) | Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs, and provision for credit losses relating to fees and other receivables that are deemed uncollectible, for which an equal amount is excluded for purposes of determining adjusted non-compensation expenses and included for purposes of determining adjusted net revenue. | | | | | | | | | | (g) | Interest expense, excluding interest expense incurred by Lazard Frères Banque SA ("LFB"), is added back in determining adjusted net revenue because such expense relates to corporate financing activities and is not considered to be a cost directly related to the revenue of our business. | | | | | | | | | | (h) | (Revenue) loss and expenses related to the consolidation of noncontrolling interests and similar arrangements are excluded because the Company has no economic interest in such amounts. | | | | | | | | | | (i) | Represents a non-cash gain on the sale and deconsolidation of the Edgewater management vehicles. | | | | | | | | | | (j) | In connection with Lazard Fund Interests ("LFI") and other similar deferred compensation arrangements, represents changes in the fair value of investments held and the compensation liability recorded, both of which are excluded from adjusted net revenue and adjusted compensation and benefits expense, respectively. | | | | | | | | | | (k) | Represents expenses associated with the departure of certain executive officers. | | | | | | | | | | (l) | Represents expenses related to the pending acquisition of Campbell Lutyens. | | | | | | | | | | (m) | Represents intangible asset amortization expense associated with the acquisition of a business. | | | | | | | | | | (n) | Represents the effect of the periodic revaluation of the TRA liability. | | | | | | | | | | NM | Not meaningful View original content to download multimedia:https://www.prnewswire.com/news-releases/lazard-reports-third-quarter-and-nine-month-2026-results-302916068.html

This article first appeared on GuruFocus. - Firm-wide Adjusted Net Revenue: Increased 11% year-over-year in Q3 2026. - Financial Advisory Adjusted Net Revenue: $465 million in Q3 2026; $1.3 billion for first nine months of 2026; record third quarter revenue driven primarily by M&A. - Asset Management Adjusted Net Revenue: $330 million in Q3 2026; $970 million for first nine months of 2026. - Management Fees: Record $321 million in Q3, up 18% year-over-year; $927 million for first nine months, up 22% year-over-year; sixth consecutive quarter of sequential growth. - Assets Under Management (AUM): $284 billion as of September 30, 2026, up 7% year-over-year and roughly flat versus prior quarter; average AUM of $287 billion, up 11% year-over-year. - AUM Flows: Market appreciation of $1.9 billion, FX depreciation of $0.2 billion, and net outflows of $2.3 billion in the quarter. - Gross Inflows: Record $54 billion for the first nine months of 2026. - Adjusted Non-Compensation Expense: $156 million in Q3; non-compensation ratio of 19.3%. - Adjusted Compensation Expense: $562 million in Q3; compensation ratio of 69.9%. - Adjusted Effective Tax Rate: 38.1% for Q3; full-year rate expected in the high 20s percentage. - Capital Returns: $88 million returned to shareholders in Q3, including $49 million in dividends and $33 million in share repurchases; quarterly dividend of $0.50 per share declared. - Lazard CL (Campbell Lutyens Acquisition): Expected to generate approximately $500 million of revenue and be accretive to earnings in 2027; closing planned for early November. - Warning! GuruFocus has detected 6 Warning Signs with MOH. - Is LAZ fairly valued? Test your thesis with our free DCF calculator. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Lazard Inc (NYSE:LAZ) achieved record third-quarter financial advisory revenue, with record revenue in the Americas and UK for both Q3 and the first nine months, reflecting successful investments in talent and franchise strength. - The company's forward indicators are strong: announced league table position is the best in over a decade, conflict clearances are up over 30% year-over-year (and over 85% for deals above $5 billion), and the weighted pipeline for 2027 is more than double the 2026 pipeline at this time last year. - Lazard Inc (NYSE:LAZ) is on track to close the acquisition of Campbell Lutyens in early November, creating Lazard CL, a leading private capital advisory platform expected to generate approximately $500 million in revenue and be accretive to earnings in 2027, with synergies already emerging. - Asset Management gross inflows reached a record $54 billion for the first nine months, management fees hit a record $321 million (up 18% year-over-year), and investment performance improved with 70% of client AUM outperforming benchmarks over one year and 67% over three years, the best in five years. - Lazard Inc (NYSE:LAZ) is embedding AI across the firm to enhance productivity and expand margins, and is implementing initiatives to simplify corporate functions and decouple expenses from revenue growth, with expected expense reductions beginning in 2027. - Asset Management experienced net outflows of $2.3 billion in the third quarter, which partially offset record gross inflows and could pressure management fees if outflows persist. - The compensation ratio remained elevated at 69.9% in the third quarter, and a potential reduction in the deferral rate could accelerate compensation expense recognition, raising the reported ratio by a few percentage points this year. - Private equity M&A activity remains subdued due to valuation disconnects and higher interest rates, delaying a significant uptick that could further boost Lazard Inc (NYSE:LAZ)'s advisory pipeline. - The macroeconomic and political backdrop in Europe is challenging, with highly polarized electorates and frustration in the political system, which could weigh on client activity despite global operations of European firms. - Lazard Inc (NYSE:LAZ) stock valuation may not fully reflect the company's progress, and some investors are skeptical about the turnaround timeline and whether the firm has missed part of the current M&A cycle, according to management acknowledgment. Q: Jim Mitchell (Seaport) asked about the compensation commentary and how shortening deferrals could affect this year's comp ratio versus next year, and how to think about the comp ratio trajectory in Q4 and 2027. A: CFO Tracy Farr explained that the incentive is to align compensation from a retention and attraction perspective by using more cash in the year and lowering deferrals, which is effectively similar to a share buyback, helps share dilution, and improves the quality of the ratio over time. Without changing total compensation on an awardment basis, accelerating recognition into the current year raises the reported ratio by a few points this year and reverses over roughly three years, allowing the comp ratio to decline more naturally and giving management greater ability to manage the ratio within a year. Q: Jim Mitchell (Seaport) asked for deeper detail on the biggest synergy opportunities with the Campbell Lutzens acquisition, whether revenue or expenses, given the deal is performing ahead of expectations and the $500 million revenue target for next year. A: CEO Peter Orszag said it is both. On costs, there are opportunities in vendors, IT and scale. On revenue, there is significant opportunity for M&A referrals in both directions from Lazard CL to M&A bankers and from private capital coverage into fundraising creating a positive flywheel. Campbell Lutzens previously had a JV with another investment bank that produced notable M&A referrals, and Lazard expects to at least match and likely significantly beat that level, even though it was not assumed in underwriting. Q: Steven Chubak (Wolfe Research) asked whether the weighted pipeline being more than double year-ago levels is on a revenue or volume-adjusted basis, and how mix informs the 2027 revenue growth outlook. A: Orszag clarified that the weighted pipeline for 2027 is slightly more than double the 2026 pipeline as of this time last year, on a revenue basis weighted by the probability of each fee being collected. He also noted fee-weighted conflict clearance trends are revenue-based, and that conflict clearances are up significantly especially in larger transactions, with a $5 million fee clearance being very different from a $50 million one. Q: Steven Chubak (Wolfe Research) asked about the impact of higher rates on conversations with sponsors and strategics and clients' willingness to initiate deal processes. A: Orszag said that in theory higher rates should discourage deal flow, but in practice it is not a significant factor because strategic imperatives scale amid rapid technological change, vertical supply chain integration, and geographic footprint reconfiguration are powerful forces, especially with an auspicious U.S. regulatory environment. On private equity, a valuation disconnect exacerbated by higher rates is delaying M&A, but LP pressure for liquidity will eventually drive an uptick, and in the meantime it is spurring activity in the secondary business (Lazard CL). Q: Alexander Bond (KBW) asked what is driving recent progress in large-cap strategic advisory, how Lazard can grow share further, and how the newer MD cohort can impact growth in this area. A: Orszag explained that Lazard needed to address the U.S. business model's historical focus on only large-cap public company M&A, and it is now "walking and chewing gum" by combining large-cap excellence with expanded private capital coverage. Progress is driven by renewed client networking, an expanded network, and additional talent, visible in internal data from new meetings to conflict clearances to announced transactions. This is underscored by the best year-to-date league table position in over a decade alongside an all-time-high share of advisory revenue from private capital. Q: Alexander Bond (KBW) asked whether higher-than-normal favorable seasonality for advisory in the second half is still expected, and what percentage of advisory revenue came from non-M&A in Q3. A: Orszag confirmed the second half is still expected to be stronger than the first half, with a stronger second-half-to-first-half ratio than in 2025. He initially estimated roughly 60% M&A and 40% non-M&A, then corrected that for Q3 alone it was 61% M&A and 39% non-M&A. Q: Devin Ryan (Citizens JMP) asked whether the expense initiatives, including deferred comp changes and broader expense work, are necessary just to reach the Lazard 2030 goals or whether they create additional capacity beyond the 6%-or-better targets. A: Farr said the answer is directly no Lazard 2030 is overwhelmingly a growth story focused on investing in high-growth, high-profitability areas. The margin and expense programs are a companion to that growth focus, aimed at decoupling expense from revenue growth so the organization can deliver revenue growth while maintaining margin discipline. She added that as revenue growth is delivered, there is greater margin potential than embedded in the 2030 expectations. Q: Devin Ryan (Citizens JMP) asked how much the current regulatory window and potential changes after 2028 are creating urgency for clients to bring deals to market. A: Orszag said it is a factor, and one reason for disproportionate activity in the largest deals, since this is a moment when big deals can plausibly get through. He noted that historically larger antitrust shifts occur in the DOJ wing than the FTC, that outcomes may depend on whether a deal is a DOJ or FTC filer, and that Europe is shifting toward promoting European champions. Still, the primary motivations remain technology, scale, vertical integration and geography, with "seizing the moment" reinforcing them. Q: James Yaro (Goldman Sachs) asked about the restructuring outlook and whether there could be upside optionality from a more challenging economic backdrop and higher global rates, and over what timeframe. A: Orszag said restructuring has grown year-to-date and should continue, with elevated risk of financial distress among independent frontier AI labs and/or neo cloud providers that could ripple through the ecosystem, and higher rates tending to induce distress among lower performers. He declined to give precise timing but highlighted that today's cycle may feature significant restructuring coinciding with significant M&A, because performance dispersion is so wide frontier firms pursue inorganic growth while laggards at the bottom of each sector face distress. Q: James Yaro (Goldman Sachs) asked for Lazard's view on the European backdrop, including higher rates in countries like France and nearby geopolitical questions. A: Orszag noted the UK had a record third quarter and record first nine months in advisory. Across Europe, the For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Financial advisory firm Lazard (NYSE:LAZ) fell short of the market's revenue expectations in Q3 2026, but sales rose 12.4% year on year to $814.2 million. Its non-GAAP profit of $0.36 per share was 13% below analysts' consensus estimates. Is now the time to buy Lazard? Find out in our full research report. - Assets Under Management: $284 billion vs analyst estimates of $286.3 billion (7.4% year-on-year growth, 0.8% miss) - Revenue: $814.2 million vs analyst estimates of $852.5 million (12.4% year-on-year growth, 4.5% miss) - Pre-tax Profit: $54.75 million (6.7% margin) - Adjusted EPS: $0.36 vs analyst expectations of $0.41 (13% miss) - Market Capitalization: $3.64 billion "Our Lazard 2030 strategy continues to progress as planned, with strong momentum firm-wide," said Peter R. Orszag, CEO and Chairman. "Financial Advisory delivered record third quarter revenue as the investments we have made in the business increasingly translate into results, while client activity and our forward indicators remain strong. In Asset Management, record year-to-date gross inflows reflect improving investment performance and focused distribution efforts. With our new private capital advisory business, Lazard CL, launching in early November, we are building a more productive, diversified firm positioned for long-term profitable growth." Tracing its roots back to 1848 when it began as a dry goods merchant in New Orleans, Lazard (NYSE:LAZ) is a global financial advisory and asset management firm that provides strategic advice to corporations, governments, institutions, and wealthy individuals. A company's long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Lazard struggled to consistently increase demand as its $3.17 billion of revenue for the trailing 12 months was close to its revenue five years ago. This was below our standards and is a sign of poor business quality. Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Lazard's annualized revenue growth of 5.6% over the last two years is above its five-year trend, which is encouraging. This quarter, Lazard's revenue grew by 12.4% year on year to $814.2 million but fell short of Wall Street's estimates. ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who's building AI, one company is already using it to print money. And nobody's paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won't last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice. Assets Under Management (AUM) represents the total value of investments that a financial institution manages for its clients. These assets generate steady income through management fees, creating predictable revenue streams that remain stable so long as clients remain invested with the firm. Lazard's AUM was flat over the last five years, much worse than the broader financials industry and worse than its total revenue. When analyzing Lazard's AUM over the last two years, we can see that growth accelerated to 4.6% annually. Fundraising or short-term investment performance was a net detractor to the company over this shorter period since assets grew slower than total revenue. Keep in mind that asset growth can be erratic and seasonal, so we don't rely on it too heavily for our business quality analysis. Lazard's AUM punched in at $284 billion this quarter, falling 0.8% short of analysts' expectations. This print was 7.4% higher than the same quarter last year. We struggled to find many positives in these results. Its revenue missed and its EPS fell short of Wall Street's estimates. Overall, this was a weaker quarter. The stock remained flat at $37.66 immediately following the results. So should you invest in Lazard right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

- Interested in Lazard, Inc.? Here are five stocks we like better. - Q3 adjusted net revenue rose 11% year over year, driven by record financial-advisory revenue of $465 million and continued asset-management growth. Advisory benefited primarily from M&A activity, while Lazard's weighted 2027 pipeline was more than twice the comparable 2026 level. - Lazard expects to complete its Campbell Lutyens acquisition and launch Lazard CL in early November. Management projects the private-capital advisory business will generate about $500 million in revenue and be earnings-accretive in 2027, excluding potential synergies. - Asset-management fees rose 18% to a record $321 million, with record gross inflows of $54 billion through the first nine months and improved investment performance. Lazard returned $88 million to shareholders in Q3 and plans to continue share repurchases through year-end. - Citi and Lazard just got bullish upgrades Lazard (NYSE:LAZ) reported that adjusted net revenue rose 11% year over year in the third quarter of 2026, supported by record quarterly financial advisory revenue and continued growth in asset-management management fees. Chief Executive Officer and Chairman Peter Orszag said the firm's Lazard 2030 strategy was progressing as planned, citing stronger client activity, forward indicators in advisory and record gross inflows in asset management. Orszag also said Lazard expects to close its acquisition of Campbell Lutyens and launch Lazard CL, its third global business focused on private capital advisory, in early November after receiving regulatory approvals. The firm continues to expect Lazard CL to generate approximately $500 million in revenue and be accretive to earnings in 2027, excluding potential synergies. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over - 3 Emerging Market Stocks To Cushion FED Hikes Financial advisory adjusted net revenue totaled $465 million in the third quarter and $1.3 billion in the first nine months of 2026. Chief Financial Officer Tracy Farr said the quarterly result included transaction-fee pull-forwards from deals that closed shortly after Sept. 30, though the amount was in line with the company's two-year average. The record quarterly result was driven primarily by mergers and acquisitions, with record third-quarter and nine-month revenue in both the Americas and the United Kingdom. Orszag said Lazard's investments in talent were beginning to translate into results. Over the last three years, the firm has hired or promoted 80 managing directors in North America in sectors including healthcare, industrials, consumer, media and entertainment, technology, and power and infrastructure. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? Lazard's announced league-table position is its strongest in more than a decade, according to Orszag. Dollar-weighted conflict clearances rose more than 30% year over year, while conflict clearances for transactions above $5 billion increased more than 85%. The company's weighted pipeline for 2027 was slightly more than twice the level of its 2026 pipeline at the same point last year, measured on a revenue basis and weighted by the estimated probability of collecting fees. For the third quarter, Lazard said approximately 61% of advisory revenue came from M&A and 39% from non-M&A businesses. The company continues to expect the second half of 2026 to be stronger than the first half, with a stronger second-half-to-first-half revenue relationship than in 2025. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Completed advisory assignments included Corteva Agriscience's $50 billion spin-off of Vylor, MasTec's $1.7 billion acquisition of Superior Group, and Geneta Health's sale to R1. Recently announced assignments included Emera's merger with Canadian Utilities, with a combined enterprise value of approximately CAD 72 billion, and OCS Group's proposed £3.1 billion acquisition. Orszag said the Campbell Lutyens business was performing ahead of assumptions underlying the acquisition. Lazard sees early cost-synergy opportunities involving real estate, vendors and information technology, along with revenue opportunities from referrals between Lazard CL's fundraising and secondary-advisory operations and Lazard's M&A bankers. "We anticipate, even though we didn't assume that in underwriting the deal, that we will be able to at least match, and in all likelihood, significantly beat" the M&A referral levels generated under Campbell Lutyens' former joint venture with another investment bank, Orszag said. Management said higher interest rates have not materially reduced strategic clients' willingness to pursue transactions. Orszag cited the need for scale amid technological change, greater vertical integration to address supply-chain disruptions, and efforts to reconfigure geographic footprints as major drivers of activity. He also pointed to a more constructive U.S. regulatory environment, particularly for large transactions. Private-equity M&A has yet to fully recover, management said, as portfolio-company owners await better valuations while limited partners seek liquidity. Orszag said that environment is also supporting demand for secondaries advisory. Lazard expects restructuring activity to continue growing, with higher rates contributing to distress among weaker-performing companies and potential stress in parts of the AI ecosystem. Asset management adjusted net revenue was $330 million in the third quarter and $970 million in the first nine months. Management fees reached a record $321 million for the quarter, up 18% year over year, and $927 million for the nine-month period, up 22%. The third quarter marked Lazard's sixth consecutive quarter of sequential management-fee growth. Assets under management stood at $284 billion at Sept. 30, up 7% from a year earlier and roughly unchanged from the prior quarter. During the quarter, market appreciation added $1.9 billion, foreign-exchange movements reduced assets by $0.2 billion, and net outflows were $2.3 billion. Average AUM was $287 billion, 11% above the prior-year quarter. Gross inflows reached a record $54 billion in the first nine months, and the company said it remains on track for positive net flows for the full year. As of quarter-end, 70% of client AUM outperformed stated benchmarks over one year and 67% outperformed over three years, Lazard's best investment-performance results in five years. Chris Hogbin, CEO of Asset Management, said client demand was strongest in areas delivering consistent performance, including Lazard Advantage quantitative equity strategies, emerging markets, Japanese equities, fixed income and convertible arbitrage. Lazard's international quantitative ETF, IDEQ, had grown to nearly $2 billion in AUM since launching last year. The firm plans to introduce its first actively managed fixed-income ETFs next month. Lazard reported adjusted non-compensation expense of $156 million in the third quarter, representing a 19.3% non-compensation ratio. Adjusted compensation expense was $562 million, or a 69.9% compensation ratio. Farr said the company continued to take a conservative approach to compensation accruals, with the quarterly accrual unchanged from the first two quarters. The company is considering reducing its compensation deferral rate as part of the year-end process. Farr said such a change would accelerate compensation-expense recognition in the current year without changing total compensation awarded, raising the reported compensation ratio by a few percentage points this year while reducing it in later years. Management has not made a final decision. Lazard is also pursuing operational-efficiency initiatives, including centralizing and automating certain corporate and support functions, rationalizing vendors and expanding the use of artificial intelligence. Farr said the company expects to provide specifics on expense reductions beginning in 2027. During the third quarter, Lazard returned $88 million to shareholders, including $49 million in dividends and $33 million in share repurchases. The company declared a quarterly dividend of $0.50 per share and said it expects to continue repurchases through the remainder of the year while balancing buybacks with investment and compensation-related share issuance. Lazard, Ltd. is a global financial advisory and asset management firm that serves corporations, financial institutions, governments, sovereign entities and individuals. Its Financial Advisory business provides advice on mergers and acquisitions, strategic matters, capital structure, restructuring, capital raising and other complex financial transactions. Through its Asset Management business, Lazard offers investment strategies across equities, fixed income, private markets, alternatives and multi-asset portfolios. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Lazard (LAZ) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Financial Advisory achieved record third-quarter revenue, signaling the firm is emerging from the 'J-curve' investment period following the hiring or promotion of 80 Managing Directors in North America over three years. - Market positioning has reached a decade-high in announced league tables, driven by a strategic pivot to balance large-cap strategic coverage with expanded private capital efforts. - Management attributes the robust M&A environment to corporate needs for scale amid technological shifts, supply chain vertical integration, and a constructive regulatory backdrop. - Asset Management performance reached a five-year high, with 70% of AUM outperforming benchmarks over one year, validating recent leadership and platform changes. - The firm is transitioning to a 'three-legged' business model with the launch of Lazard CL in November 2026, aimed at creating a global leader in private capital advisory. - AI adoption is being utilized as a structural lever to increase junior banker productivity, with the long-term goal of reducing associate-to-MD ratios and improving margins. - The weighted pipeline for 2027 is currently double the 2026 pipeline at the same point last year, suggesting sustained momentum into the next fiscal year. - Lazard CL is projected to generate approximately $500 million in revenue by 2027 and is expected to be earnings-accretive before accounting for synergies. - Management anticipates a potential reduction in deferral rates for year-end compensation, which would accelerate expense recognition in 2026 to lower the comp ratio in subsequent years. - A new modernization project aims to decouple expense growth from revenue growth starting in 2027 through process automation and centralization of corporate functions. - Asset Management is on track to deliver positive net flows for the full year, supported by a robust 'won but not yet funded' pipeline. - The acquisition of Campbell Lutyens is scheduled to close in early November 2026, marking the formal launch of the Lazard CL business segment. - Management flagged a 'valuation disconnect' in private equity as a headwind for sponsor-backed M&A, though this is partially offset by increased activity in secondary advisory. - The firm noted that while higher interest rates theoretically discourage deals, strategic imperatives like AI adoption and supply chain security are currently overriding rate concerns. - A potential accounting shift in compensation deferrals may raise the reported 2026 compensation ratio by a few percentage points as a one-time structural adjustment. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management clarified that reducing deferrals is an accounting acceleration that increases current-year cash expense but reduces future amortization and share dilution. - The change is intended to align Lazard's compensation structure with market averages to improve talent retention and long-term margin quality. - Revenue synergies are expected through a 'flywheel' of M&A referrals between the new private capital arm and the existing advisory business. - Campbell Lutyens is currently performing ahead of the original acquisition assumptions, with early cost synergies identified in IT and vendor management. - Management suggested that while the current window for large-cap deals is auspicious, the impact of the 2028 election on deal timing is likely marginal at this stage. - There is a noted global shift toward allowing 'European champions' to form, which may influence future antitrust dynamics regardless of U.S. political changes. - Lazard expects continued growth in restructuring, particularly among 'laggard' firms and potentially within the independent AI lab ecosystem. - Management highlighted a unique trend where significant restructuring and M&A activity are occurring simultaneously due to performance dispersion within sectors.