Evercore (EVR) Q3 2026 Earnings Call Transcript

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DATE

Wednesday, Oct. 28, 2026

CALL PARTICIPANTS

• Chairman and Chief Executive Officer - John Weinberg
• Chief Financial Officer - Tim LaLonde
• Head of Investor Relations - Katy Haber

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TAKEAWAYS

• Adjusted Net Revenue -- $1,178.2 million, representing a 13% increase from the prior year period and marking a sixth consecutive quarterly record.
• Adjusted Diluted EPS -- $4.28, a record for the third quarter and a 23% increase year over year.
• Adjusted Advisory Fees -- $1,011.1 million, growing 14% year over year due to market share gains and increased productivity per Senior Managing Director.
• Underwriting Fees -- $55.6 million, an increase of 27% versus the prior year period driven by healthy initial public offering activity.
• Assets Under Management -- $16.2 billion, a 5% increase versus the third quarter of 2025 primarily reflecting market appreciation.
• Adjusted Compensation Ratio -- 63.0%, a decrease of 200 basis points year over year driven by record revenue performance.
• Adjusted Non-Compensation Ratio -- 14.1%, a 340 basis point improvement compared to the second quarter of 2026.
• Investment Banking SMD Headcount -- 191 professionals, a base that has grown nearly 70% since 2021 following the addition of 14 hires year to date.
• Non-M&A Revenue Contribution -- Over 40% of total adjusted net revenues over the latest four quarters, providing platform diversification and resilience.
• Revenue Per Partner -- $27.3 million for the latest 12-month period, exceeding the five-year average of $22 million.
• Adjusted Operating Margin -- 22.7% for the first nine months of 2026, up 336 basis points versus the same period in 2025.
• Year-to-Date Capital Returns -- Over $1 billion, exceeding the amount returned in any prior full year in the history of the firm.
• Share Repurchases -- 0.5 million shares at an average price of $291.60 per share during the third quarter.
• Quarterly Dividend -- $0.89 per share, declared by the board of directors as part of the firm's commitment to returning capital.
• Cash and Investment Securities -- $2.8 billion as of Sept. 30, 2026, up from $2.4 billion one year earlier.
• Adjusted Diluted Share Count -- 43.5 million shares, representing a reduction of nearly 1.2 million shares year over year.
• Underwriting Transactions -- 12 total transactions in the third quarter, including 11 roles as an active bookrunner.
• Commissions and Related Revenue -- $60.5 million, a 4% decrease year over year reflecting lower trading volume and market volatility.
• Notes Payable -- $540.1 million as of Sept. 30, 2026, reflecting the current debt position on the balance sheet.
• Adjusted Operating Income -- $269.7 million, an 18% increase versus the third quarter of 2025.

SUMMARY

Evercore Inc. (NYSE:EVR) reported record adjusted net revenues and earnings per share for the third quarter of 2026. Management stated that the performance was broad-based across nearly all business segments, with non-M&A businesses contributing more than 40% of revenue over the last year. The company announced the appointment of Nigel Dawn and Naveen Nataraj as co-presidents to expand leadership capacity. The firm reported record backlogs and high levels of client engagement in strategic advisory and digital infrastructure financing. Capital returns reached a historical year-to-date peak, supported by a cash and securities balance of $2.8 billion.

• Leadership announced that Nigel Dawn and Naveen Nataraj will become co-presidents effective Jan. 1, 2027, to manage increased scale and global reach.
• Chairman and CEO Weinberg noted the growth potential from the current workforce: "We have more than 50 SMDs still ramping, representing meaningful opportunity for future growth."
• Management identified significant momentum in infrastructure financing, advising on the $15.6 billion construction financing for Nexus Data Centers and Broadcom's $63 billion AI capacity deployment.
• The firm's strategic advisory backlog is at record levels and continues to replenish at a healthy rate despite industry-wide variability in announced M&A activity.
• CFO LaLonde stated that non-compensation expenses rose due to investments in technology, including artificial intelligence initiatives to increase future productivity.
• The middle-market and financial sponsor segments are showing gradual improvement, with the firm reporting higher year-to-date pitch activity and a strengthening win rate.

INDUSTRY GLOSSARY

• SMD: Senior Managing Director, a senior executive rank in investment banking responsible for client relationships and transaction execution.
• RSU: Restricted Stock Unit, a form of equity-based compensation that vests over a specified period.
• AUM: Assets Under Management, the total market value of investments managed by the firm on behalf of clients.
• ECM: Equity Capital Markets, the segment of investment banking focused on helping companies raise capital through equity offerings.
• ISI: Evercore ISI, the firm’s institutional equities division providing research, sales, and trading services.
• Extel: A financial industry survey that ranks the quality of investment research analysts and firm performance.
• PCA: Private Capital Advisory, a group that advises on secondary market transactions for private fund interests.
• A&D: Aerospace and Defense, a specific industry coverage group within the investment banking practice.

Full Conference Call Transcript

Operator: Good morning, and welcome to Evercore's Third Quarter 2026 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Evercore management and the question and answer session. In order to ask a question, please press the star key followed by the number one on your touch-tone phone at any time. I will now turn the call over to Katy Haber, Head of Investor Relations at Evercore. Please go ahead.

Katy Haber: Thank you, operator. Good morning, and thank you for joining us today for Evercore's third quarter 2026 financial results conference call. I'm Katy Haber, Evercore's Head of Investor Relations. Joining me on the call today is John Weinberg, our Chairman and CEO, and Tim LaLonde, our CFO. After our prepared remarks, we will open up the call for questions. Earlier today, we issued a press release announcing Evercore's third quarter 2026 financial results. Our discussion of our results today is complementary to the press release, which is available on our website at evercore.com.

This conference call is being webcast live in the For Investors section of our website, and an archive of it will be available for 30 days, beginning approximately one hour after the conclusion of this call. During the course of this conference call, we may make a number of forward-looking statements. Any forward-looking statements that we make are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. These factors include, but are not limited to, those discussed in Evercore's filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.

I want to remind you that the company assumes no duty to update any forward-looking statements. In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance. For detailed disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is posted on our website. We continue to believe that it is important to evaluate Evercore's performance on an annual basis. As we've noted previously, our results for any particular quarter are influenced by the timing of transaction closings. I will now turn the call over to John.

John Weinberg: Thank you, Katy, and good morning, everyone. Evercore delivered record third quarter adjusted net revenues and earnings per share, reflecting the strength, diversification, and further globalization of our business and the continued execution of our strategic priorities. Adjusted net revenues of nearly $1.2 billion marked our sixth consecutive quarterly revenue record. This is a 13% increase from the record third quarter we delivered last year. Adjusted diluted earnings per share were $4.28, also a record for the third quarter. Through the first nine months, we generated adjusted net revenues of $3.6 billion, which is up 38% versus the same time period a year ago.

Importantly, our performance continues to be broad-based, with all of our businesses operating at healthy levels and contributing to the strength of the firm. At the core of our performance is our focus on providing clients with the highest quality service, advice, and execution. We remain encouraged by the outlook of our business, supported by the breadth of activity across our platform, strength of our client relationships, and the significant investments we have made to expand our capabilities. As it relates to the market environment, industry-wide announced M&A activity continues to operate at healthy levels year to date, despite some quarter-to-quarter variability.

Looking longer term, global announced M&A activity relative to total market cap has improved, yet still remains below historical averages. Large cap strategic M&A has been a primary driver of activity in recent quarters, and we continue to see strong trends in this part of the market. Financial sponsor and middle market activity continues to run below historical levels, though we have seen gradual improvement. Further broadening of activity in these areas over time would provide an additional source of growth both for the broader market and for Evercore. While the market backdrop remains complex, including interest rates uncertainty, continued geopolitical tensions, and evolving implications of AI, we believe the underlying environment for investment banking activity remains constructive.

As it relates to Evercore, we continue to see high levels of activity across a broad range of sectors, products, and geographies. Client engagement is strong, and our backlog, which is at record levels, continues to replenish at a healthy rate. Turning to talent. As announced last week, the board appointed Nigel Dawn and Naveen Nataraj to become co-presidents of Evercore effective January 1, 2027. As we mentioned, this new leadership structure will enable the firm to continue to build on our strategy for growth. Since our last earnings call, six senior managing directors have joined our investment banking practice.

Five additions in the U.S., including two in aerospace and defense, one in healthcare, chemicals, and equity capital markets, as well as one in our Frankfurt office. Further, an additional SMD has committed to join our restructuring group and will be based in France. That brings the total number of SMDs added this year to 14, and the total number of SMDs in our global investment banking practice to 191. Now, let me turn to the businesses. In North American Strategic Advisory, the business remained active across nearly all sectors, consistent with trends throughout the year, contributing to a record third quarter for the business.

Our engagement with financial sponsors continues to strengthen, reflected in higher year-to-date pitch activity, coupled with a continuously improving win rate, resulting in increased revenues compared to last year. Our EMEA Strategic Advisory business delivered another strong quarter with our expanded presence in the region, resulting in record year-to-date revenues. Our strategic Defense and Shareholder Advisory Group continues to see strong activity supported by elevated levels of shareholder activism.

Globally, in the third quarter and into October, we advised on a number of significant transactions, including PTC on its $24 billion sale to Schneider Electric, GE Aerospace on its $11.75 billion acquisition of Consolidated Precision Products, easyJet on its £5.6 billion sale to Apollo, SEGRO on its all-share combination with Prologis, Nexus Data Centers on the $15.6 billion construction financing of its inaugural data center and power development project, Broadcom on a transaction enabling the deployment of $63 billion of AI compute capacity to Anthropic, which announced earlier this week.

Consistent with trends in the first half, our liability management and restructuring business maintained strong activity levels as companies continue to address upcoming debt maturities, particularly in a higher interest rate environment. Our private capital markets and debt advisory business is seeing growing levels of activity in innovative financing solutions supporting the expansion of digital infra over the last year, as highlighted by several of the deals I just mentioned. Our market-leading Private Capital Advisory and fundraising businesses respectively saw positive trends in the quarter consistent with earlier in the year. Our Equity Capital Markets business had a strong quarter, supported by a more constructive IPO market earlier in the quarter, and our Equities business generated solid revenues.

Evercore ISI achieved the number one ranking on a weighted basis in Extel All-America Research Analyst Survey for the fifth consecutive year. Finally, our wealth management business ended the quarter with AUM of $16.2 billion and maintains a strong long-term performance. Before I turn it over to Tim, I want to take a moment to reiterate a few important points about Evercore's position and the opportunity ahead. Over the past decade, we've expanded and diversified our platform across products, sectors, geographies, and client segments, broadening the opportunities to serve clients while maintaining our strong focus on culture.

While advising on many of the world's largest and most transformative M&A transactions is core to our strategy, our franchise extends across the full spectrum of the market with respect to both size and transaction type. Specifically, we've made significant investments in expanding our financial sponsor coverage over the last several years. Today, across our financial sponsors coverage and private capital-related businesses, we have over 60 senior bankers specifically covering this important client segment, working closely with our sector bankers.

As we continue to build out the firm, we have similarly expanded our middle market coverage by investing in high quality bankers across sectors where we see significant opportunity, including recently in our aerospace and defense, logistics, healthcare, and services sectors. We believe we are now well-positioned to take advantage of this part of the market. We also remain focused on hiring additional product specialists, which is something we've been executing on over the last several years. At the same time, we've continued to diversify our revenue base beyond M&A, building successful businesses across a range of other areas.

Even with significant growth in M&A, non-M&A businesses have contributed more than 40% of firm-wide adjusted net revenues over the last four quarters, providing greater diversification and resilience across market cycles. This growth has been supported by significant investment in our people. Our investment banking SMD base has grown nearly 70% since 2021, while productivity remains at market leading levels. It is important to note that we have more than 50 SMDs still ramping, representing meaningful opportunity for future growth, and we continue to have a robust recruiting pipeline. Together, these investments have meaningfully expanded our addressable market, strengthened our competitive position, and contributed to significant market share gains.

Our results this quarter reflect the collective strength of our platform, our people, and the strong momentum across our businesses. We believe substantial opportunity lies ahead, and that Evercore is well positioned for the next phase of growth. With that, let me turn it over to Tim.

Tim LaLonde: Thank you, John. Evercore's third quarter results reflect strong performance across our diversified mix of businesses. For the third quarter of 2026, net revenues, operating income, and EPS on a GAAP basis were $1.2 billion, $243 million, and $3.93 per share, respectively. My comments from here will focus on non-GAAP metrics which we believe are useful when evaluating our results. Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our evercore.com. Our third quarter adjusted net revenues of nearly $1.2 billion increased 13% year-over-year. This marks Evercore's sixth consecutive quarterly revenue record.

Year to date, we have generated record adjusted net revenues of $3.6 billion, up 38% from the prior year period. Third quarter adjusted operating income of $270 million increased 18% versus the third quarter of 2025. Adjusted earnings per share of $4.28 was a record for the third quarter and increased 23% year-over-year. For the nine months, our adjusted EPS is up 57% compared to the prior year nine months. Turning to the businesses. Record third quarter adjusted advisory fees of $1 billion increased 14% versus last year's record third quarter. This performance reflects continued market share gains, increased productivity per SMD, and a higher number of fee events.

Based on our record backlogs and other early indicators, we expect activity levels to remain strong. Our third quarter underwriting revenues were $56 million, up 27% from a year ago, driven by healthy IPO activity. Commissions and related revenue of $61 million was down 4% year-over-year amid lower volatility and industry-wide trading volumes. Third quarter adjusted asset management and administration fees of $26 billion rose 9% year-over-year. Third quarter adjusted other revenue net was approximately $25 million, of which approximately $23 million was from interest income.

Turning to expenses, the adjusted compensation ratio for the third quarter is 63%, down 200 basis points from the prior year period and down 50 basis points from last quarter, marking significant improvement on both an annual and quarterly basis. We are striving to achieve further revenue growth and improvement in the compensation ratio over time. Though equity market sentiment can change quickly and somewhat frequently, we believe the building blocks for a constructive M&A market, such as CEO confidence levels, financing availability, industry disruptions, and compelling strategic rationale remain in place. Adjusted non-compensation expenses in the quarter were $166 million, representing an adjusted non-comp ratio of 14.1%, which is down 340 basis points from last quarter.

The second quarter's adjusted non-comp ratio was higher due to a combination of an investment in growth and some seasonal or episodic costs. The stronger adjusted net revenues this quarter also played a role in the improvement in the ratio. As discussed on our last quarter call, similar to revenues, non-comp expenses and ratios are best evaluated across multiple quarters. Our year-to-date adjusted non-comp ratio is 13.7%.

The increase in non-comp costs compared to the prior year was primarily driven by investments in technology, including AI initiatives, which we believe will result in increased future productivity and efficiencies, travel and related expenses, which are correlated with client activity and are an investment in our near-term results, and search and placement fees related to hiring, which is an investment in growth. The higher level of increase in non-comp expense seen in the last three years supported the doubling of our business as our adjusted net revenues have increased from $2.4 billion in 2023 to approximately $4.9 billion in the latest four quarters.

Over that same period of time, our non-comp expense ratio has declined from 16.6% to 13.7% year to date. We are striving to achieve a lower growth rate in non-comp expense over the next several years. Our adjusted tax rate for the quarter was 28.5%, down slightly from the third quarter of last year. Turning to our balance sheet. As of September 30, our cash and investment securities totaled approximately $2.8 billion, up from $2.4 billion a year ago. During the quarter, we returned $189 million of capital to shareholders through share repurchases and dividends, including the repurchase of approximately 520,000 shares at an average price of $291.60. This represented a record level of capital return for a third quarter.

Through the first nine months of the year, we returned over $1 billion to shareholders through share repurchases and dividends, exceeding the amount returned in any prior full year in the firm's history. We remain committed to returning capital to shareholders while maintaining a strong and durable balance sheet, allowing for financial flexibility to support continued investment in our business. Lastly, our third quarter adjusted diluted share count was 43.5 million shares, down nearly 1.2 million shares year-over-year. We are pleased with our record performance through the first nine months of this year. While we remain mindful of market uncertainty, we are optimistic about Evercore's medium and long-term growth prospects. With that, we will now open the line for questions.

Operator: Thank you. We will now conduct the question and answer portion of the conference. Please limit to one question only. You are welcome to rejoin the queue for additional questions, time permitting. Again, in order to ask a question, please press the star key followed by the one on your touchtone phone. Our first question today comes from Mike Brown with UBS. Your line is now open.

Katy Haber: Hey.

Mike Brown: Great. Good morning, guys. Thanks for taking my question.

Katy Haber: Mike, just before you hop on. Hey, Mike, just one second. First of all, we apologize. Our understanding is that there was an issue with the connection to the webcast. We very much apologize for that. The replay as well as the transcript should be posted live just right after this call. Again, we very much apologize for the inconvenience. Mike, I'll turn it back to you.

Mike Brown: Okay, great. Thanks, Katy. Good morning, John. Good morning, Tim. Just wanted to maybe start on the large cap strategic M&A. That's been a key area of strength this year, as you talked about in the prepared remarks. I guess intuitively there's maybe a finite number of transactions that can play out in that space. Just curious how you think about is it possible to continue to see growth from this cohort here? Because obviously the U.S. regulatory backdrop remains quite favorable. Maybe can you talk about your confidence that activity can continue to accelerate from here? Maybe just touch on what your view is in terms of the inning that we're in terms of large cap M&A cycle.

John Weinberg: Thanks, Mike. Well, it's always difficult to call a cycle. Having said that, what we can tell you is what we're seeing in our business, and what we see is that we have record backlogs. Our replenishment rates are very healthy, and client engagement is really at very high levels. We're feeling very, very good about really our client engagement and our breadth of engagement with respect to across all of the different sectors. We expect activity to remain healthy into next year. The building blocks are in place for really the continued strength in the merger market.

Those building blocks, as we've talked about many times in the past, are the CEO confidence level, access to capital, healthy equity markets, and really strategic impetus. From our perspective, we see that strength will continue, and we feel good about the prospects going forward.

Mike Brown: Great. Thank you.

Operator: Thank you. Our next question comes from Jim Mitchell with Seaport. Your line is now open.

Jim Mitchell: Hey, good morning. SMD headcount's up 32% over the past two years. You've got more than 50 SMDs in ramp mode. Assuming the ramping SMDs can kind of match average productivity of the more seasoned bankers, how should we think about the amount of revenue productivity that remains to be generated out of that group? Is it sort of two-thirds, half? Just any kind of help in how much productivity you expect out of that 50 SMD cohort. Thanks.

Tim LaLonde: Yeah, sure, Jim. Happy to address this. As you think about the 50, you can get a sense probably from our press releases and so forth about when they started. The way we normally think about it is it's difficult to do, given when people arrive during the course of the year, difficult to do much revenue at all in that first, what I would call stub year. Second year, which is maybe their first full year, you can expect to see them at, let's call it 50% to two-thirds. Then by the second full year, they should be fully ramped.

If you look at our revenue per partner productivity statistics over the last five years, the average has been about $22 million. It's been particularly good so far in the last four quarters at about $27.3 million. By the way, just as a side note, what I might say is that's especially encouraging to me, given the rates at which we've grown our SMD headcount, to be able to do so and retain those high and actually growing levels of productivity while we're doing it.

Jim Mitchell: Okay. That's helpful. Thanks.

Operator: Thank you. We'll go next to Brennan Hawken with BMO. Your line is now open.

Brennan Hawken: Good morning. Thanks for taking my questions. Tim, what's the right way we should be thinking about comp ratio for the year? I know you've spoken about less comp leverage than the preceding years. When we look at the year-to-date, you're at 63.5, I believe, on an adjusted basis. Does that align with your expectation or should we be more centered or focused on what you just printed here in 3Q as an indicator? I know sometimes it can switch.

Tim LaLonde: Yeah, sure, Brennan, and thanks for the question. I just like to remind our investors. In 2023, the comp ratio was 67.6, then we brought it down to 65.7 in 2024 and 64.2 in 2025. And this year, as you correctly mentioned, year-to-date comp ratio is on an adjusted basis 65%, but what we booked for this quarter, or pardon me, 63.5%. But what we've booked for this quarter is 63%. And so we have made pretty substantial progress. From an accounting standpoint, if you looked at our year-to-date, that would reflect an accrual that's our best estimate of the full year.

Although, what I would note is we continue to strive hard to reduce that, and I'm encouraged by the progress I've seen recently and hopeful that we can make additional progress.

Brennan Hawken: Great. Thanks for taking my question.

Operator: Thank you. We'll go next to Steven Chubak with Wolfe Research. Your line is now open.

Steven Chubak: Hi. Good morning, John and Tim, and thanks for taking my question. Wanted to double-click into the digital infra opportunity. The Broadcom debt advisory mandate, certainly encouraging to see, just given the market perception that the M&A independents are not as well-positioned to participate in the digital infra capital markets fee pool, given the inability to extend balance sheets. Given the magnitude of financing activity that's anticipated to support the build and expectations for issuance activity to remain elevated at least for the next five-plus years, I was hoping you could speak to how the debt advisory backlog is trending, and how would you frame the size of the revenue TAM for which you can compete?

John Weinberg: Well, from our perspective, really our capability in terms of driving infrastructure finance and really thinking about the advisory on debt financing and liability has really been somewhat of a new muscle for us, and we've built it out extensively over the last two or three years. We're feeling really good about it. As you said, the Broadcom deal was something that really was a very strong deal. I think we were very happy with that result. We have driven Nexus Data Centers, a $15.6 billion financing of its inaugural data center to really finance their power. We see a number of these activities and these opportunities coming down the pike.

I wouldn't really give you a projection as to where we're going to be on that, other than to say the fact that we're able to do this and we are starting to really build momentum, it's clear that really people are looking to Evercore and our brand and really the way we do business, that you can assume that there is a significant buildup of possibilities and activities. We're in the middle of looking at a lot of those. You should just assume that area is going to grow, that we feel that we've really built that area well with very strong people. We think it's going to be a very high potential area for us going forward.

Steven Chubak: That's very helpful. Thanks for taking my question.

Operator: Thank you. We'll go next to Devin Ryan with Citizens Bank. Your line is now open.

Devin Ryan: Thanks. Good morning, John. Good morning, Tim. Question on the connection and financial sponsor investments in private capital coverage, and then also some of the commentary on the investments into the middle market coverage, which I know are active for sponsors. If you can unpack just a little bit more around two things. One, it sounds like you're seeing activity picking up with sponsors. Is that just a market comment or you think that's an Evercore specific comment from your initiatives?

The bigger picture question is just around the middle market initiatives and how that can expand the opportunity for Evercore, the connection to doing more with sponsors, and really just what the objective is in moving more into the middle markets. Thanks.

John Weinberg: Thanks, Devin. Well, clearly sponsors is picking up slowly in the general market. There is a trend upward, but it is slow. We feel like we're seeing above-market volume build because we've spent a tremendous amount of effort and time really thinking about how do we cover sponsors, how do we leverage off of all the capabilities we have, how do we make sure that we are in effect driving our connectivity with relationships. I think probably we're ahead of that. Going forward, as we said, what's really happened is we cover sponsors better. We're really, in effect, able to satisfy more of their needs. Having said that, your question was also about the middle market and our build there.

Really that's been a pretty comprehensive effort over a number of years now for us. Just recently, we've added two very senior people in A&D who are very, very facile with respect to middle market area and covering. We've really added in the business services, we've added in logistics, and we continue to see people who are in these areas who want to come over because our platform is strong and they're able to do a lot of things. I think that one of the things I think we've really been able to build as a firm is we have such strong product capability that access to more clients is really going to drive more revenues. We're seeing that.

We see middle market being a very strong area of growth for us going forward. I think that you're going to see more investment. As you've seen from us, what we do is we find areas which we think are good and solid growth areas, and we invest in those. That's what we're going to do with middle market. So you're going to see that area grow.

Tim LaLonde: Yeah. The only thing I would add to that is just to reiterate a point that John made in his prepared remarks, which is that in the financial sponsor area, we now have over 60 senior bankers across both our financial sponsor coverage and our Private Capital Advisory business covering this, which I think is probably a lot more than what people might assume that we've seen. Our pitch activity has increased, and our win rate has strengthened. So we are pleased with the progress we've seen in that area.

As John said we certainly have made an intentional and concerted effort to broaden our reach in the middle market as well and feel like we're much better positioned in that area than we would have been just a few years ago.

John Weinberg: Yeah. It's certainly an area of focus and investment for us.

Devin Ryan: Great. Thank you.

Operator: Thank you. Once again, if you would like to ask a question, please press star and one on your keypad now. We will go next to James Yaro with Goldman Sachs. Your line is now open.

James Yaro: Good morning. Thanks for taking the question. I wanted to touch on a little bit of a higher level question here. Could you just speak to the impact of whether currently more financing heavy capital markets activity is impacting independent advisor firm market share temporarily? More broadly, have the structural market share gain story among independent advisory firms changed more recently versus, let us say, the prior roughly 15 years or so?

John Weinberg: Well, let me answer that question a little bit more narrowly because I am going to really answer it from Evercore's perspective and then maybe you can extend it beyond. Which is from our perspective, we do see that there is more activity and much larger activity going forward, and the financing is a big part. As you have seen, we have really built out our capabilities there. The way we think about the extent of our business or the limits of our business is it really has to do with the clients we are covering and the way we are able to really access the opportunities with those clients. We are seeing multiple opportunities going forward.

We have built a significant financing effort and expertise. So what we are seeing is real opportunity. So we actually are looking at the landscape right now and saying it is wide open for us. I think that maybe it is because we do cover larger clients than some of the other independents. We certainly have a larger M&A business than many. I think what we are looking at is really driving that and also using the financing capabilities that we have generated to really take advantage of the opportunities there. James, from our perspective, we are seeing multiple opportunities and we feel like we are in a very good position.

In terms of the broader landscape, I could not really say. Certainly, we have competitors out there who are very capable, so I anticipate that a lot of them are going to see some of the benefit of this growth also.

Tim LaLonde: Right. Just to put a little bit of detail on some of what John said. We do track what we consider to be a form of market share, which is just the advisory revenues of all the publicly traded investment banking firms that report advisory revenues. Based on that, I feel like Evercore has perhaps outperformed on that measure and in fact would rank right in the mix, if not above the market share gains you have seen by the bulge bracket firms.

James Yaro: Thanks a lot. That is very clear.

Operator: Thank you. Our next question comes from Alex Bond with KBW. Your line is now open.

Alex Bond: Hey, good morning, everyone. Thanks for taking the question. Just wanted to follow up on some of the commentary around the non-comp side. I think last quarter, you had spoken to your expectation that the year-over-year increase there on the non-comp expense side would be up modestly relative to last year. Is that still the case? Then maybe just a quick one on 3Q revenues. I think you had also mentioned that over the trailing 12 months, the non-M&A contribution was roughly 40% in the advisory line. Was that the case in 3Q specifically or was that a little bit higher? Thank you.

Tim LaLonde: Yeah. Let me start with the non-comp question. Just for all the listeners, just remind people that the non-comp ratio for the quarter is 14.1%. For the year to date, it is 13.7%. Of course, that is down substantially from last quarter, about 340 basis points. For the year to date, it actually is lower than what we experienced last year as well. I know I had talked about, on previous calls, trying to target a non-comp ratio that was in the vicinity of last year's. Last year, just to remind people, was 14.2%. It looks like we are striving to achieve that, maybe something a little better. We will see.

I think what we feel good about is we feel good about the fact that we have made the necessary investments in our business, both on the technology side and on the general infrastructure side, to support the growth we have been experiencing. As I mentioned on the call, our revenues over the last three years have doubled, while our non-comp ratio has declined from 16.6% in 2023 to the 14.1% you see this quarter and 13.7% year to date. So we are feeling better, I would say, about our positioning on the non-comp ratio side. Then, pardon me, your other question on non-M&A revenues.

We look at it because the results bounce around from quarter-to-quarter, so we look at it on a trailing four-quarter basis. On the trailing four-quarter basis, we are still a little above 40%. What is particularly pleasing to me about that is that we are doing that in the context of an M&A market which has improved quite a bit. So you would have expected to see that come down quite significantly. But due to the success of our non-M&A businesses, they have been able to kind of keep pace so far during this part of the cycle.

Alex Bond: Very helpful. Thanks, Doug.

Operator: Thank you. We'll go next to Ryan Kenny with Morgan Stanley. Your line is now open.

Ryan Kenny: Hi. Good morning. Wanted to dig in a bit on the movement in interest rates that we've seen over the last quarter. Are you seeing any impact in client conversations, particularly on the sponsor side from higher rates? Is this time more manageable than what we saw in 2022 to 2023 because that cycle was a much faster pace off of zero, and this one feels a little more manageable?

John Weinberg: What we're seeing is that dialogues and opportunities are not changing given interest rates at this time. Clearly, if interest rates accelerate up or if there are more radical situations or volatility, that may change. But right now we're seeing it to be consistent. It really remains that the really high-quality assets are very able to move, and the ones that are kind of less high quality are not. One of the things that will impact sponsors, as we all know, is that there's a maturity wall coming up at 2028 and 2029. If rates are high, we can see that there will be more activity in areas like restructuring.

But at this time, what we are seeing is that things are actually pretty consistent and activity levels are really going as they were.

Ryan Kenny: Thank you.

Operator: Thank you. Our next question comes from Nathan Stein with Deutsche Bank. Your line is now open.

Nathan Stein: Hey, everyone. Good morning. Intra-quarter, there was some talk surrounding a potential merger of two of your competitors. With that in mind, my question is, generally speaking, how are you all thinking about M&A right now as we are about a year post the Robey Warshaw deal close?

John Weinberg: At this time, we do not see any opportunities for us. We clearly will always look at the landscape, but really our custom and what we do is we hire people one by one. We are not looking for another deal to do. Honestly, we are staying very focused on what we actually think we do well, which is really day-to-day business with clients. Robey Warshaw was a really outstanding opportunity for us. They were an extraordinary group of people who we have a great deal of respect for and had known a long time, and it was a really good fit for us, and that opportunity has gone very well.

But I think you should really, if you are thinking about us, I think you should really assume that we are not going to be doing something.

Nathan Stein: Thank you.

Operator: Thank you. Our next question comes from Gabriel Angelini with Bank of America. Your line is now open.

Gabriel Angelini: Hi. Good morning. On the topic that was just raised, I think there's been a fair amount of disruption across the industry recently, including the merger that was mentioned. Can you speak to how you've positioned Evercore to navigate uncertainty, whether that be taking advantage of strategic disruption at peers or navigating dislocation from a macro perspective? Thank you.

John Weinberg: Well, actually, we're just going to stick with what we do, which is we have a strategy. The strategy is to cover more clients, expand our client base. It's to add products so that we can really service those clients better, and to really be focused on what are the areas of growth throughout the economy and make sure that we are actually participating in those areas of growth. We're going to stick with that. I think we feel like really no matter what the environment would be, that's going to afford us real opportunities and allow us to grow appropriately and to create value for shareholders.

I think you're going to see us really stay very disciplined with what we think we do well.

Operator: Thank you. As a reminder, if you would like to ask a question, you may do so by pressing star and one on your keypad now. We will take a follow-up from Brennan Hawken with BMO. Your line is now open.

Brennan Hawken: Good morning again. Thanks for taking the follow-up. The revenues were rather substantially stronger than the public data suggested. Could you speak to either the level of non-M&A activity that you saw or whether or not there was a substantial or notable level of pull forwards that impacted this quarter, just as we think about tactically how to frame fourth quarter and finishing up the year. Thanks.

Tim LaLonde: Yeah, sure. Thanks for the question, Brennan. With respect to the non-M&A activity, I think I would characterize it as follows. Restructuring remains strong. The equity capital markets business had experienced a nice increase this year and a nice year-over-year increase for the quarter. John talked at some length about our debt advisory business, which is also working quite well right now. Of course, there is our equity sales and commission and our wealth management and PCA. All of those businesses are performing well, and we are pleased with that. In a nutshell, I think the non-M&A businesses are just almost across the board performing at strong levels.

With respect to the pull forwards, the pull forwards this quarter were actually lower than normal. One notable transaction which was, of course, Warner Bros. Discovery, closed on October 6. That would fall in our fourth quarter revenues, not third quarter.

Brennan Hawken: Great. Thanks for that. Is it okay if I ask one more, or do you want me to queue?

Tim LaLonde: Go ahead.

Brennan Hawken: Great. You guys also announced a leadership change, which I thought was really interesting. I don't recall any precedent around this. Nigel is obviously someone who runs a really important business. Would love to and so great to see that. Could you maybe help us contextualize what the right way we should think about this new role for Evercore and what this means in your progression as an organization? Thank you.

John Weinberg: Sure. Absolutely. So really, as we look out at the landscape and really our growth in that landscape, we see that there is so much more scale, complexity, and global reach that is really required for us to do what our aspiration is for our firm. As a result, one of the things that really we concluded is that a leadership structure which allowed us to give additional management capacity and leadership to the opportunities at hand would actually be good for us. Frankly, from my perspective, having real support in terms of looking globally at all the things that we can accomplish is going to help immensely.

Our leadership has always, and will always be very much grounded in the client business. You can assume that Nigel and Naveen will both spend significant amounts of their time out with clients and driving the businesses. Nigel's going to continue to be Chairman of PCA, and Naveen's going to be very closely involved with investment banking and continue to be one of our leading deal people in investment banking. I obviously will continue what I do, which is to get involved with clients and really try to get involved with our people, with those clients. You're going to see a lot of that.

Frankly, it was the right time for us to add some senior leadership because we really felt like we could do with the capacity. It allows us to give even more focus to collaboration and bringing our businesses together. From our perspective, this was the right time, and I think we got the right people to be addressing the issues of really helping us expand our business.

Brennan Hawken: That's great. Thanks for that. Congratulations to them both. Appreciate the color.

Operator: Thank you. We'll go next to Jim Mitchell with Seaport. Your line is now open.

Jim Mitchell: Hey, sorry to prolong this, but just maybe a quick question on seasonality. Typically, you do have quite a bit the fourth quarter from PCA, PFG, and M&A and other drivers. You did have a very strong third quarter. Should we sort of temper that sort of seasonal expectation? Or how should we think about the typical seasonal move?

Tim LaLonde: Yeah. Look, what I would do is refer back to John's commentary and some of what I would call our joint consistent commentary for the last several quarters, which is the backlogs are strong. In fact, this quarter, we noted that they are record backlogs. Activity levels are very healthy. And we believe that all of that will give us momentum into next year. But I want to stay away from predicting timing of when that backlog will be realized.

Jim Mitchell: No, perfectly fair. Thanks.

Operator: Thank you. And we'll go next to James Yaro with Goldman Sachs. Your line is now open.

James Yaro: Thank you for taking the follow-up. I was hoping that you might be able to update us on your equity capital markets outlook, in light of your comments around strong ECM earlier in the quarter. I think that was in your prepared remarks. Within that answer, could you also perhaps comment on the ECM backdrop within healthcare specifically?

John Weinberg: Healthcare in the earlier part of the quarter was very strong for us, and we continue to look upon that as being an area of strength in our equity capital markets business. We think there's been a slowdown in some of the IPO activity going into the fourth quarter, but we really wouldn't predict that. We would say, though, that we continue to spend a lot of time and have a very strong focus on really all the sectors that we cover in equity capital markets. We feel like that's a real area of growth for us.

We actually feel like we are really very well-positioned to add and create value for clients, and so we're going to continue to attack those areas. I think you can assume that we will participate healthily, if that's a word, in that area as it goes forward. We think the market may begin to pick up again, given some of the very recent success. But I think that for us, it's going to be a little bit of a wait-and-see to see how that goes forward.

James Yaro: Very clear. Thank you so much.

Operator: Thank you. This does conclude today's question and answer session, as well as the Evercore Third Quarter 2026 Earnings Conference Call. You may now disconnect.

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