Lazard Reports First-Quarter 2024 Results

NEW YORK–(BUSINESS WIRE)–Lazard, Inc. (NYSE: LAZ) today reported net revenue of $765 million and adjusted net revenue¹ of $747 million for the quarter ended March 31, 2024. On a U.S. GAAP basis, first-quarter 2024 net income was $36 million or $0.35 per share, diluted. Adjusted net income² was $67 million, or $0.66 per share, diluted, for the quarter. 

“Lazard’s record first-quarter revenue reflects an improving M&A environment and reinforces our outlook for a productive year ahead, as we continue to make strides in executing our long-term strategic plan,” said Peter R. Orszag, Chief Executive Officer, Lazard. “This quarter’s strong results also reflect our ability to deliver diversified asset management solutions for our clients while evolving the business into newer areas of opportunity. With increasing momentum across the firm, we remain focused on serving clients, winning new business, and delivering long-term value for our shareholders.”

Note: Endnotes are on page 4 of this release. Reconciliations of U.S. GAAP to Adjusted results are shown on pages 10-12.

NET REVENUE

Financial Advisory

Financial Advisory net revenue and adjusted net revenue¹ were $454 million and $447 million, respectively, for the first quarter of 2024, both 63% higher than the first quarter of 2023.

During and since the first quarter of 2024, Lazard has been engaged in significant and complex M&A transactions globally, including the following (clients are in italics): Orange on the combination of its and Masmovil’s operations in Spain, with a combined enterprise value of €18.6 billion; ImmunoGen’s $10.1 billion acquisition by AbbVie; CymaBay Therapeutic’s $4.3 billion acquisition by Gilead; Vitesco Technologies’ €3.0 billion merger agreement with Schaeffler; Saint-Gobain’s AUD 4.5 billion agreement to acquire CSR Limited in Australia; LXi’s £1.8 billion merger with LondonMetric; Hotel Chocolat’s £570 million acquisition by a subsidiary of Mars, Inc.; Blue Stream Fiber’s investment from Sixth Street Partners; IBM’s sale of The Weather Company assets to Francisco Partners; Pagero on the company’s SEK 8.1 billion sale to Thomson Reuters; Officine Maccaferri’s sale to Ambienta SGR; QuattroR’s acquisition of a 50% controlling stake in Massimo Zanetti Beverage Group and Terra-Gen on the announced sale of a 50% stake in the company held by Energy Capital Partners to Masdar.

Lazard’s preeminent restructuring and liability management practices have been engaged in a broad range of complex restructuring and debt advisory assignments, including company roles involving Enviva, Inversiones Latin America Power and Tele Columbus and creditor and/or related party roles involving AFE, Avison Young, Endo Pharmaceuticals, Hilding Anders, JOANN, Loparex, Lumen Technologies, Orpea, Rite Aid and SVB Financial Group.

Our capital advisory and solutions practices remain active and engaged in assignments, including Wynnchurch Capital on the closing of its $3.5 billion Fund VI, Rubicon Founders on the closing of its ~$1.2 billion second healthcare fund, McCarthy Capital on the closing of its $870 million private equity fund and Sodexo in connection with the €3.8 billion listing of Pluxee on Euronext Paris following its spin-off from the company. Our sovereign advisory practice continues to be active in advising governments and sovereign entities across developed and emerging markets.

For a list of publicly announced transactions please visit our website.

Asset Management

Asset Management net revenue and adjusted net revenue¹ were $295 million and $276 million, respectively, for the first quarter of 2024, both 4% higher than the first quarter of 2023.

Management fees and other revenue, on an adjusted basis¹, were $268 million, 3% and 4% higher, respectively, than the first quarter of 2023 and fourth quarter of 2023.

Incentive fees, on an adjusted basis¹ during the period were $8 million, compared to $5 million for the first quarter of 2023.

Average assets under management (AUM) for the first quarter of 2024 were $247 billion, 9% higher than the first quarter of 2023, and 6% higher than the fourth quarter of 2023.

AUM as of March 31, 2024, was $250 billion, 2% higher than December 31, 2023 and 8% higher than March 31, 2023. The sequential change from December 31, 2023 was driven by market appreciation of $14.0 billion, foreign exchange depreciation of $3.6 billion and net outflows of $6.6 billion.

OPERATING EXPENSES

Compensation and Benefits

For the first quarter of 2024, compensation and benefits expense on a U.S. GAAP and adjusted basis¹ were $551 million and $493 million, respectively, compared to $450 million and $399 million, respectively, for the first quarter of 2023. The adjusted compensation ratio³ for the first quarter of 2024 was 66.0%, compared to the first-quarter 2023 ratio of 75.7%.

We focus on the adjusted compensation ratio to manage costs, balancing a view of current conditions in the market for talent alongside our objective to drive long-term shareholder value. Our goal remains to deliver an adjusted compensation ratio over the cycle in the mid- to high-50s percentage range, while targeting a consistent deferral policy.

Non-Compensation Expenses

For the first quarter of 2024, non-compensation expenses on a U.S. GAAP and adjusted basis¹ were $159 million and $134 million, both 6% lower than the first quarter of 2023, primarily reflecting lower professional services and other expenses.

The adjusted non-compensation ratio⁴ was 18.0% for the first quarter of 2024, compared to 27.0% for the first quarter of 2023.

Our goal remains to deliver an adjusted non-compensation ratio between 16% to 20% over the cycle.

TAXES

The provisions for income taxes, on a U.S. GAAP and adjusted basis¹ were $14 million and $32 million, respectively, for the first quarter of 2024. The effective tax rate on an adjusted basis¹ was 32.6% for the first quarter of 2024, compared to 32.1% for the first quarter of 2023.

CAPITAL MANAGEMENT AND BALANCE SHEET

In the first quarter of 2024, we issued $400 million of 6.0% Senior Notes due March 2031 to refinance the upcoming maturity of our 2025 Senior Notes.

In the first quarter of 2024, Lazard returned $121 million to shareholders, which included: $44 million in dividends; $22 million in share repurchases of our common stock; and $56 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

In the first quarter of 2024, we repurchased 0.6 million shares at an average price of $38.97. As of March 31, 2024, our remaining share repurchase authorization was $178 million.

On April 24, 2024, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on May 17, 2024, to stockholders of record on May 6, 2024.

Lazard’s financial position remains strong. As of March 31, 2024, our cash and cash equivalents were $923 million.

ENDNOTES

Beginning in the first quarter of 2024, Lazard has updated the names of certain non-U.S. GAAP (“non-GAAP”) measures and metrics. The nomenclature change did not result in any change to the components of our non-GAAP measures and metrics compared to prior periods. Reconciliations of U.S. GAAP to Adjusted results are shown on pages 10-12.

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. First-quarter 2024 adjusted results¹ exclude pre-tax charges of $48.7 million relating to expenses associated with cost-saving initiatives. Including the effect of taxes, these resulted in a net charge of $30.9 million, or $0.31, per share, diluted, for the first quarter of 2024.
3. The adjusted compensation ratio is based on a calculation where the numerator is adjusted compensation and benefits expense and the denominator is adjusted net revenue.
4. The adjusted non-compensation ratio is based on a calculation where the numerator is adjusted non-compensation expense and the denominator is adjusted net revenue.

ABOUT LAZARD

Founded in 1848, Lazard is one of the world’s preeminent financial advisory and asset management firms, 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. For more information, please visit www.lazard.com.