On July 25, 2024, Lazard Inc (LAZ, Financial) released its 8-K filing reporting robust financial results for the second quarter and first half of 2024. The company, which has a storied history dating back to 1848, operates in financial advisory and asset management, with a significant international presence.
Performance Overview
Lazard Inc (LAZ, Financial) reported net revenue of $685 million for Q2 2024, surpassing the analyst estimate of $638.74 million. The company's net income for the quarter was $50 million, or $0.49 per diluted share, exceeding the estimated earnings per share of $0.19. For the first half of 2024, Lazard achieved net revenue of $1,450 million and net income of $86 million, or $0.84 per diluted share.
Financial Advisory and Asset Management
The Financial Advisory segment reported record first-half adjusted net revenue of $855 million, a 38% increase from the same period in 2023. This growth was driven by significant M&A transactions, including WestRock's $33.5 billion combination with Smurfit Kappa and Renault’s creation of HORSE Powertrain Limited.
Asset Management, however, faced challenges with net revenue slightly declining by 1% to $285 million for Q2 2024. The segment's quarter-end assets under management (AUM) stood at $245 billion, reflecting a 2% increase from the previous year.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Revenue | $685 million | $643 million | 7% |
| Net Income | $50 million | ($124 million) | NM |
| EPS (Diluted) | $0.49 | ($1.41) | NM |
| Adjusted Net Revenue | $685 million | $620 million | 10% |
| Adjusted Net Income | $53 million | $23 million | 130% |
| Adjusted EPS (Diluted) | $0.52 | $0.24 | 117% |
Operational Highlights
Lazard's compensation and benefits expenses for Q2 2024 were $453 million, reflecting a strategic investment in talent to support long-term growth. The adjusted compensation ratio was 66.0%, down from 68.4% in Q2 2023. Non-compensation expenses were $169 million, a 7% decrease from the previous year, primarily due to cost-saving initiatives.
Capital Management
In Q2 2024, Lazard returned $70 million to shareholders through dividends and share repurchases. The company declared a quarterly dividend of $0.50 per share, payable on August 16, 2024. Lazard's financial position remains strong with cash and cash equivalents totaling $848 million as of June 30, 2024.
CEO Commentary
"Lazard’s record revenue in Financial Advisory for the first-half of 2024 demonstrates the ongoing, successful execution of our long-term growth strategy,” said Peter R. Orszag, Chief Executive Officer, Lazard. “Our Asset Management business continues to produce solid results as we effectively serve clients while evolving to meet their investment priorities."
Conclusion
Lazard Inc (LAZ, Financial) has demonstrated resilience and strategic growth in its financial advisory segment, significantly surpassing analyst estimates for Q2 2024. Despite challenges in asset management, the company's overall performance and strong capital management underscore its robust financial health and commitment to shareholder value.
Explore the complete 8-K earnings release (here) from Lazard Inc for further details.
