Perella Weinberg Reports Third Quarter 2024 Results
Financial Overview - Third Quarter
Revenues of $278 Million, Up 100% From a Year Ago
Adjusted Pre-Tax Income of $52 Million, GAAP Pre-Tax Income of $36 Million
Adjusted EPS of $0.34; GAAP Diluted EPS of $0.24
Financial Overview - Nine Months
Revenues of $652 Million, Up 50% From a Year Ago
Adjusted Pre-Tax Income of $97 Million, GAAP Pre-Tax Loss of $(96) Million
Adjusted EPS of $0.69; GAAP Diluted EPS of $(1.61)
Talent Investment
Year-to-Date Added Five New Partners and Eleven New Managing Directors
Capital Management
Strong Balance Sheet with $335 Million of Cash, Cash Equivalents and Short-Term Investments and No Debt
Year-to-Date Retired Approximately 12.3 Million Shares and Share Equivalents through Purchase, Exchange and Net Settlement
Year-to-Date Returned $215 Million to Equity Holders
Declared Quarterly Dividend of $0.07 Per Share
"We delivered another record quarter and for the nine-month period produced the highest revenue in the Firm's history. Our performance demonstrates the strength of our franchise and the benefit of our increasing scale and broadening client coverage in an improving operating environment. Our priority remains providing best-in-class advice to our clients, and in turn, delivering more value for our shareholders," stated Andrew Bednar, Chief Executive Officer.
NEW YORK, Nov. 08, 2024 (GLOBE NEWSWIRE) -- Perella Weinberg Partners (the "Firm" or "PWP") (NASDAQ:PWP) today reported financial results for the third quarter ended September 30, 2024.
Revenues
For the third quarter of 2024, revenues were $278.2 million, an increase of 100% from $139.0 million for the third quarter of 2023. For the nine months ended September 30, 2024, revenues were $652.4 million, an increase of 50% from $436.0 million for the nine months ended September 30, 2023. The higher revenues in both current year periods was attributable to increased mergers and acquisition and financing and capital solutions activity, driven by larger transactions and related fee events across the business.
Expenses
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
GAAP
Adjusted
GAAP
Adjusted
GAAP
Adjusted
GAAP
Adjusted
Operating expenses
(Dollars in Millions)
(Dollars in Millions)
Total compensation and benefits
$
202.3
$
189.2
$
127.8
$
93.0
$
628.2
$
443.7
$
393.8
$
291.9
% of Revenues
73
%
68
%
92
%
67
%
96
%
68
%
90
%
67
%
Non-compensation expenses
$
40.0
$
37.9
$
37.9
$
34.3
$
124.1
$
116.1
$
113.3
$
105.2
% of Revenues
14
%
14
%
27
%
25
%
19
%
18
%
26
%
24
%
Three Months Ended
GAAP total compensation and benefits were $202.3 million for the third quarter of 2024, compared to $127.8 million for the third quarter of 2023. Adjusted total compensation and benefits were $189.2 million for the third quarter of 2024, compared to $93.0 million for the same period a year ago. The increase in total compensation and benefits was due to a larger bonus accrual on an absolute dollar basis associated with higher revenues along with a higher compensation margin.
GAAP non-compensation expenses were $40.0 million for the third quarter of 2024, compared to $37.9 million for the third quarter of 2023. Adjusted non-compensation expenses were $37.9 million for the third quarter of 2024, compared to $34.3 million for the same period a year ago. The increase in non-compensation expenses was largely driven by higher depreciation expense tied to office renovations and an increase in general, administrative and other expenses and technology related spend.
Nine Months Ended
GAAP total compensation and benefits were $628.2 million for the nine months ended September 30, 2024, compared to $393.8 million for the prior year period. The current period compensation expense includes the second quarter impact of the one-time accelerated vesting of certain partnership unit awards (the "Vesting Acceleration"). Adjusted total compensation and benefits were $443.7 million for the nine months ended September 30, 2024, compared to $291.9 million for the same period a year ago. The increase in total compensation and benefits was due to a larger bonus accrual on an absolute dollar basis associated with higher revenues along with a higher compensation margin.
GAAP non-compensation expenses were $124.1 million for the nine months ended September 30, 2024, compared to $113.3 million for the prior year period. Adjusted non-compensation expenses were $116.1 million for the nine months ended September 30, 2024, compared to $105.2 million for the same period a year ago. The increase in non-compensation expenses was largely driven by an increase in professional fees including consulting and legal, higher depreciation expense tied to office renovations and relocations, and bad debt write-offs, partially offset by lower rent and occupancy costs.
Provision for Income Taxes
Perella Weinberg Partners currently owns 64.6% of the operating partnership ("PWP OpCo") and is subject to U.S. federal and state corporate income tax on its allocable share of earnings. Income earned by the operating partnership is subject to certain state, local, and foreign income taxes.
For purposes of calculating adjusted if-converted net income, we have presented our results as if all partnership units had been converted to shares of Class A common stock, and as if all of our adjusted results for the period were subject to U.S. corporate income tax. For the nine months ended September 30, 2024, the effective tax rate for adjusted if-converted net income was 29%. This tax rate includes a $3.4 million benefit from the vesting of restricted stock units at a share price higher than the grant price.
Balance Sheet and Capital Management
As of September 30, 2024, PWP had $335.1 million of cash, cash equivalents and short-term investments in U.S. Treasury securities. The Firm has no outstanding indebtedness and has an undrawn revolving credit facility.
During the nine months ended September 30, 2024, PWP returned $215.1 million in aggregate to our equity holders through (i) the settlement of 6,149,211 PWP OpCo units in connection with the one-time Vesting Acceleration at a price of $14.07 per unit and the net settlement of 3,773,416 share equivalents at an average price per share of $16.28, (ii) the settlement of exchanges of 1,343,257 PWP OpCo units for cash at $15.17 per unit and the repurchase of 1,000,000 shares pursuant to a contractual repurchase right at $15.00 per share, (iii) the payment of $16.2 million in distributions to limited partners, and (iv) the payment of aggregate dividends of $15.6 million to Class A common stockholders. Certain tax withholding amounts related to the above activity were accrued and unpaid as of September 30, 2024 and are expected to be paid within one year.
At September 30, 2024, there were 57.0 million shares of Class A common stock and 31.2 million partnership units outstanding.
The Board of Directors has declared a quarterly dividend of $0.07 per share of Class A common stock. The dividend will be paid on December 18, 2024 to Class A common stockholders of record on December 4, 2024.
Conference Call and Webcast
Management will host a webcast and conference call on Friday, November 8, 2024 at 9:00 am ET to discuss Perella Weinberg's financial results for the third quarter ended September 30, 2024.
A webcast of the conference call will be made available in the Investors section of Perella Weinberg's website at https://investors.pwpartners.com/.
The conference call can also be accessed by the following dial-in information:
Domestic: (800) 579-2543
International: (785) 424-1789
Conference ID: PWPQ324
Replay
A replay of the call will also be available two hours after the live call through November 15, 2024. To access the replay, dial (800) 839-5687 (Domestic) or (402) 220-2569 (International). The replay can also be accessed on the Investors section of PWP's website at https://investors.pwpartners.com/.
For those who listen to the rebroadcast of the call, we remind you that the remarks made are as of November 8, 2024, and have not been updated subsequent to the initial earnings call.
About Perella Weinberg
Perella Weinberg is a leading global independent advisory firm, providing strategic and financial advice to a broad client base, including corporations, institutions, governments, sovereign wealth funds and the financial sponsor community. The Firm offers a wide range of advisory services to clients in some of the most active industry sectors and global markets. With approximately 700 employees, Perella Weinberg currently maintains offices in New York, London, Houston, San Francisco, Paris, Los Angeles, Chicago, Calgary, Denver, and Munich. The financial information of PWP herein refers to the business operations of PWP Holdings LP and Subsidiaries.
Contacts
For Perella Weinberg Investor Relations: Perella Weinberg Media:
Non-GAAP Financial Measures
In addition to financial measures presented in accordance with GAAP, we monitor certain non-GAAP financial measures to manage our business, make planning decisions, evaluate our performance and allocate resources. We believe that these non-GAAP financial measures are key financial indicators of our business performance over the long term and provide useful information regarding whether cash provided by operating activities is sufficient to maintain and grow our business. We believe that the methodology for determining these non-GAAP financial measures can provide useful supplemental information to help investors better understand the economics of our platform.
These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures. These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently. Additionally, these non-GAAP financial measures are not measurements of financial performance or liquidity under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-GAAP financial measures in conjunction with our historical consolidated financial statements and notes thereto included elsewhere in this press release.
Management compensates for the inherent limitations associated with using these non-GAAP financial measures through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures. See "Non-GAAP Financial Measures" and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.
Cautionary Statement Regarding Forward Looking Statements
Certain statements made in this press release, and oral statements made from time to time by representatives of PWP are "forward-looking statements" within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements regarding the expectations regarding the combined business are "forward looking statements." In addition, words such as "estimates," "projected," "expects," "estimated," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "would," "future," "propose," "target," "goal," "objective," "outlook" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of the parties, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results or outcomes include (but are not limited to): global economic, business and market conditions; the Company's dependence on and ability to retain employees; the Company's ability to successfully identify, recruit and develop talent; conditions impacting the corporate advisory industry; the Firm's dependence on its fee-paying clients and fluctuating revenues from its non-exclusive, engagement-by-engagement business model; the high volatility of the Company's revenues as a result of its reliance on advisory fees that are largely contingent on the completion of events which may be out of its control; the Company's ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to the Company's business, including actual, potential or perceived conflicts of interest and other factors that may damage its business and reputation; the Company's successful formulation and execution of its business and growth strategies; substantial litigation risks in the financial services industry; cybersecurity and other operational risks; assumptions relating to the Company's operations, financial results, financial condition, business prospects, growth strategy and liquidity; extensive regulation of the corporate advisory industry and U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy and laws (including the treatment of carried interest); and other risks and uncertainties described under "Part I—Item 1A. Risk Factors" in our Annual Report on Form 10-K.
The forward-looking statements in this press release and oral statements made from time to time by representatives of PWP are based on current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. These risks and uncertainties include, but are not limited to, those factors described in the section entitled "Risk Factors" in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") on February 23, 2024 and the other documents filed by the Firm from time to time with the SEC. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Consolidated Statements of Operations (Unaudited)(Dollars in Thousands, Except Per Share Amounts)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
Revenues
$
278,242
$
139,003
$
652,367
$
435,974
Expenses
Compensation and benefits
174,080
84,872
392,643
261,051
Equity-based compensation
28,225
42,892
235,530
132,775
Total compensation and benefits
202,305
127,764
628,173
393,826
Professional fees
9,367
10,256
32,170
26,546
Technology and infrastructure
8,852
8,045
26,749
25,850
Rent and occupancy
6,170
6,766
18,307
20,858
Travel and related expenses
4,497
4,134
13,782
13,634
General, administrative and other expenses
6,027
5,036
17,769
16,226
Depreciation and amortization
5,130
3,694
15,318
10,168
Total expenses
242,348
165,695
752,268
507,108
Operating income (loss)
35,894
(26,692
)
(99,901
)
(71,134
)
Non-operating income (expenses)
Related party income
—
221
—
770
Other income (expense)
457
2,542
3,859
1,488
Total non-operating income (expenses)
457
2,763
3,859
2,258
Income (loss) before income taxes
36,351
(23,929
)
(96,042
)
(68,876
)
Income tax expense (benefit)
7,508
(191
)
25,960
552
Net income (loss)
28,843
(23,738
)
(122,002
)
(69,428
)
Less: Net income (loss) attributable to non-controlling interests
12,473
(21,689
)
(36,500
)
(62,615
)
Net income (loss) attributable to Perella Weinberg Partners
$
16,370
$
(2,049
)
$
