Lazard Reports Second-Quarter and First-Half 2024 Results

Lazard, Inc. (NYSE: LAZ) today reported both net revenue and adjusted net revenue¹ of $685 million for the quarter ended June 30, 2024, and net revenue of $1,450 million and adjusted net revenue¹ of $1,431 million for the first half of 2024.

On a U.S. GAAP basis, second-quarter and first-half 2024 net income were $50 million or $0.49 per share, diluted, and $86 million or $0.84 per share, diluted, respectively. Adjusted net income¹ was $53 million or $0.52 per share, diluted, for the second quarter of 2024, and $119 million or $1.17 per share, diluted, for the first half of 2024.

"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. Overall, our performance reflects an unwavering focus on delivering excellence in advisory and investment solutions for our clients, our renewed ambition for growth, and our increasingly commercial and collegial culture.”

NET REVENUE

Financial Advisory

Financial Advisory net revenue and adjusted net revenue¹ were $411 million and $408 million for the second quarter of 2024, 17% and 19% higher than the second quarter of 2023, respectively.

Financial Advisory net revenue and adjusted net revenue¹ were $865 million and $855 million for the first half of 2024, 37% and 38% higher than the first half of 2023, respectively.

During and since the second quarter of 2024, Lazard has been engaged in significant and complex M&A transactions globally, including the following (clients are in italics): WestRock's $33.5 billion combination with Smurfit Kappa; Renault’s creation of HORSE Powertrain Limited with Geely and the sale of a 10% equity interest to Saudi Aramco, valuing the new company at €7.4 billion; Rivian’s $5 billion strategic investment from Volkswagen Group; Vertex Pharmaceuticals' $4.9 billion acquisition of Alpine Immune Sciences; Synlab's $4.3 billion acquisition by Cinven; KPS Capital Partners’ €3.5 acquisition of Innomotics from Siemens AG; Roquette Freres’ $2.9 billion agreement to acquire IFF Pharma Solutions; Neiman Marcus Group’s $2.7 billion sale to HBC, parent of Saks Fifth Avenue; Sanofi's $2.4 billion acquisition of Inhibrx; HASI's $2 billion strategic partnership with KKR to invest in sustainable infrastructure projects; Elecnor Group’s sale of its Spanish based renewables business Enerfin to Statkraft for €1.8 billion; Air Products & Chemicals' $1.8 billion sale of its LNG business to Honeywell International Inc.; Thales’ sale of its Ground Transportation Systems business to Hitachi Rail, for an enterprise value of €1.7 billion; Bpost’s $1.3 billion acquisition of Staci; CVC Capital Partners' €600 million acquisition of La Piadineria; Ultra Maritime's $550 million sale of its Signature Management & Power Business to ESCO Technologies, Inc.; EIG and West Burton Energy’s £450 million sale of is operational CCGT and BESS to TotalEnergies; Allen & Overy LLP's combination with Shearman & Sterling and CVC Capital Partners’ investment in Hempel.

Lazard's preeminent restructuring and liability management practice has been engaged in a broad range of complex restructuring and debt advisory assignments, including company roles involving Belk, Enviva and LivePerson and creditor and/or related party roles involving Endo Pharmaceuticals, Hilding Anders, JOANN, KLDiscovery, Rite Aid and SVB Financial Group.

Our capital advisory and solutions practices remain active and engaged in assignments, including Ceva Sante Animale’s €2.4 billion Term Loan B repricing and resizing; CVC Capital Partners on a single asset continuation fund; Eir Partners’ closing of $496 million Investment Program II; Exosens’ initial public offer on Euronext Paris valuing the company at $1.1 billion; Kingswood Capital's closing of $1.5 billion Kingswood Capital Opportunities Fund III; Morrisons, a portfolio company of CD&R, on its £1.1 billion debt reduction exercise; and UL Standards & Engagement on the IPO of UL Solutions. 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

For the second quarter of 2024, Asset Management net revenue and adjusted net revenue¹ were $285 million and $265 million, respectively, both 1% lower than the second quarter of 2023.

Management fees and other revenue, on an adjusted basis¹, were $263 million for the second quarter of 2024, 1% higher and 2% lower than the second quarter of 2023 and first quarter of 2024, respectively.

Incentive fees, on an adjusted basis¹, were $3 million for the second quarter of 2024, compared to $6 million for the second quarter of 2023.

Average assets under management (AUM) were $245 billion for the second quarter of 2024, 4% higher than the second quarter of 2023, and 1% lower than the first quarter of 2024, respectively.

For the first half of 2024, Asset Management net revenue and adjusted net revenue¹ were $581 million and $541 million, respectively, both 2% higher than the first half of 2023.

Management fees and other revenue, on an adjusted basis¹, were $531 million for the first half of 2024, 2% higher than the first half of 2023.

Incentive fees, on an adjusted basis¹, were $10 million for the first half of 2024, compared to $11 million for the first half of 2023.

Average AUM for the first half of 2024 was $246 billion, 6% higher than the first half of 2023. AUM as of June 30, 2024, was $245 billion, 2% lower than March 31, 2024, and 2% higher than June 30, 2023, respectively. The sequential change from March 31, 2024 was driven by market appreciation of $2.5 billion, foreign exchange depreciation of $1.7 billion and net outflows of $6.6 billion.

OPERATING EXPENSES

Compensation and Benefits Expense

For the second quarter of 2024, compensation and benefits expense on a U.S. GAAP and adjusted basis¹ were $453 million and $452 million, respectively, compared to $572 million and $424 million, respectively, for the second quarter of 2023. The adjusted compensation ratio² for the second quarter of 2024 was 66.0%, compared to the second-quarter 2023 ratio of 68.4%.

For the first half of 2024, compensation and benefits expense on a U.S. GAAP and adjusted basis¹ were $1,003 million and $945 million, respectively, compared to $1,022 million and $823 million, respectively, for the first half of 2023.

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 second quarter of 2024, non-compensation expenses on a U.S. GAAP basis were $169 million, 7% lower than the second quarter of 2023 which included charges associated with our cost-saving initiatives. On an adjusted basis¹, non-compensation expenses were $149 million, 3% higher than the second quarter of 2023, primarily reflecting higher professional services and technology spending.

The adjusted non-compensation ratio³ was 21.7% for the second quarter of 2024, compared to 23.2% for the second quarter of 2023.

For the first half of 2024, non-compensation expenses on a U.S. GAAP and adjusted basis¹ were $329 million and $283 million, respectively, 6% and 1% lower than the first half of 2023, respectively.

The adjusted non-compensation ratio³ was 19.8% for the first half of 2024, compared to 24.9% for the first half 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 $12 million and $9 million, respectively, for the second quarter of 2024. The effective tax rate on an adjusted basis¹ was 14.0% for the second quarter of 2024, compared to 31.2% for the second quarter of 2023.

The provisions for income taxes, on a U.S. GAAP and adjusted basis¹ were $26 million and $41 million, respectively, for the first half of 2024. The effective tax rate on an adjusted basis¹ was 25.5% for the first half of 2024, compared to 67.8% for the first half of 2023.

CAPITAL MANAGEMENT AND BALANCE SHEET

In the second quarter of 2024, Lazard returned $70 million to shareholders, which included: $45 million in dividends; $19 million in share 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 half of 2024, Lazard returned $192 million to shareholders, which included: $89 million in dividends; $41 million in share repurchases of our common stock; and $62 million in satisfaction of employee tax obligations in lieu of share issuances upon vesting of equity grants.

During the first half of 2024, we repurchased 1.1 million shares at an average price of $38.66. On July 24, 2024, our Board of Directors authorized additional share repurchase of $200 million, which expires as of December 31, 2026, bringing our total outstanding share repurchase authorization to approximately $360 million.

On July 24, 2024, Lazard declared a quarterly dividend of $0.50 per share on its outstanding common stock. The dividend is payable on August 16, 2024, to stockholders of record on August 5, 2024.

Lazard’s financial position remains strong. As of June 30, 2024, our cash and cash equivalents were $848 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 13-15.

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. ET on July 25, 2024, to discuss the company’s financial results for the second quarter and first-half of 2024. 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 1 800-343-4136 (toll-free, U.S. and Canada) or +1 203-518-9843 (outside of the U.S. and Canada), 15 minutes prior to the start of the call. Conference ID: LAZQ224.

A replay of the conference call will be available by 10:00 a.m. ET, July 25, 2024, via the Lazard Investor Relations website at www.lazard.com, or by dialing +1 800-839-5637 (toll-free, U.S. and Canada) or +1 402-220-2562 (outside of the U.S. and Canada).

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.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” 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 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 these 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 reports on Forms 10-Q and 8-K, including the following:

• Adverse general economic conditions or adverse conditions in global or regional financial markets;
• 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; and
• Competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels
• In the event of a change or adverse interpretation of relevant income tax law, regulation or treaty, or a failure to qualify for treaty benefits, or in the event tax authorities challenge our tax computations or classifications.

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. 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.

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LAZ-EPE

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