Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| I think we've done a great job of expanding the expertise we have |
| I think we have a better let's just say I think we've improved our our M.D |
| We're seeing early signs of an improvement in sentiment as expressed in our pipeline, which is near record levels at the beginning of the year |
| But we felt very good about the group and their and their ability to produce |
| Barring unforeseen events, I'm confident that we have seen the bottom of this M&A cycle and that we have positioned the firm well for the coming uplift |
| I just say that, though, it's been a -- we think it's been very successful |
| And lastly, we continue to maintain a strong balance sheet with $349 million of cash and no debt |
| We're very happy about that team, which is a place we have not played much |
| While 2023 was a challenging year, we played strong offense and aggressively expanded our business |
| And so obviously 2023 had pockets of strength, but it felt like the mandates were building, and so therefore there should be some acceleration in revenues in 2024 |
| We reported $215 million of revenues in the fourth quarter, an increase of 6% versus the prior year period |
| However, the Fed's messaging has eliminated the tail risk of future rate hikes and brought into view a high probability of rate cuts in the coming year, which I believe will give rise to an increase in M&A activity |
| Look, that's why we built up capital markets so strongly |
| One hire enhances the firm's coverage of credit funds, and two managing directors we'll join in the coming weeks are focused on upstream energy |
| So the I think the best way to think about it is, I'd say for every $100 million increase in revenue from the $860 million starting point, we're looking at kind of four to five points of comp leverage |
| OK, great |
| We've done it aggressively in the past |
| And I think the actual event of a rate cut and the beginning of that will provide a tailwind |
| Brennan Hawking Good evening |
| New business review has been quality and busy quality deals feels like much realer |
| Have a great day |
| While we expanded our new MD population by approximately 20% during the year, our total employee headcount grew just under 5% as we actively managed our headcount |
| Ken Worthington OK, great |
| I just felt like that's a statement that is very valuable to anybody in the deal business that you can eliminate the tail risk of a raise |
| I think we should be above that |
| So I think we'll be more productive per M.D |
| And I do think that will promote deal activity very rapidly |
| productivity normalization |
| Stephen Chubak Thanks so much |
| But I can guarantee you we'll return it to the shareholders as soon as we're comfortable that it's excess |
| Statement |
|---|
| For the full year, our adjusted revenues of $860 million were down 11% |
| Clearly, a very challenging market in 2023 |
| I think your net MDs were actually down by four sequentially |
| I still think it would be, there's a fundamental amount of companies that are under pressure, interest rate pressure |
| I think, again, this calendar year is very difficult because you have a tale of two markets |
| I assume it'll be substantially slower than in 2023? Ken Moelis I thought I'm surprised that our net MDs are down |
| The revenue declines were driven by a decrease in fees earned from M&A, partially offset by an increase in restructuring and capital markets fees |
| And '23 was well below optimal |
| It's a possibility |
| It's difficult to predict when the M&A environment will fully rebound |
| I think we've addressed some markets that we had a difficult time, like technology, finding the right moment and the right method to build our expertise |
| Again, it was not a great year and the fourth quarter wasn't the you don't want to hold people to the fourth quarter |
| Stephen Chubak You can get there with a lower revenue level |
| And so, again, I just look at the -- I kind of look at the last three years and say, if you kind of average and we had an incredible spike in 2021 and then we had I'd say '22 was less than optimal |
| And the fact that it was a group, the fact that there wasn't a lot of downtime, they weren't on the beach for a long time |
| So I think you're in the ballpark, but I thought you were a little high myself, too |
| I just wanted to try to drill down a little bit on the MD count because there's a few numbers around and it's a little confusing |
| But it feels like everybody's not everybody |
| We might have levers, so we might have to respond to that |
| I think sponsors had their slowest year of announcements since 2013 |
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