Perella Weinberg Partners (PWP) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Despite a decline in revenue and missing large deals in 2025, the company shows optimism for 2026 with a significant transaction already announced and a successful Devon Park acquisition. Strong cash position and no debt, alongside effective share repurchases, provide a stable financial outlook. However, missed revenue targets and unclear guidance on advisory revenue distribution create uncertainties. The overall sentiment balances between negative financial performance and positive future outlook, leading to a neutral rating.
Key Financial Performance
Full Year 2025 Revenue $751 million, down 14% year-over-year. The decline was attributed to falling short of revenue ambitions in M&A as several large transactions did not complete as expected.
Fourth Quarter 2025 Revenue $219 million, included $18.5 million related to closings that occurred within the first few days of 2026 but recorded in Q4 2025.
Adjusted Compensation Margin 68% for the full year 2025, compared to 67% in 2024. The increase was despite record talent investment, including the Devon Park acquisition.
Adjusted Non-Compensation Expense $159 million for the full year 2025, down 2% year-over-year. The decrease was attributed to strong expense management and certain nonrecurring items.
Capital Returned to Equity Holders $163 million in 2025 through dividends, RSU settlements, share repurchases, and unit exchanges. This included retiring 6.5 million shares during the year.
Cash and Debt $256 million in cash and no debt at year-end 2025.
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Operating Highlights
New Senior Bankers: Added 23 new senior bankers in 2025 and 2 more partners in 2026, focusing on healthcare services and U.S. software coverage.
European Market: Achieved record revenues in Europe, solidifying position as a leading adviser in active regions.
Restructuring Practice: Hit record revenues and gained market share in a growing market, especially in debtor-side mandates.
Revenue Performance: 2025 revenues were $751 million, down 14% from 2024 but the third highest in the firm's history.
Compensation Margin: Adjusted compensation margin was 68% for 2025, up from 67% in 2024, despite record talent investments.
Non-Compensation Expense: Adjusted non-compensation expense was $159 million, down 2% from 2024, with further decreases expected in 2026.
Capital Management: Returned $163 million to equity holders in 2025 and retired 6.5 million shares, ending the year with $256 million in cash and no debt.
Talent Strategy: Record year for recruiting and promoting senior bankers, creating a flywheel effect to attract top talent.
Growth Pipeline: Gross pipeline at record highs with strong announced and pending backlog, indicating positive client sentiment and momentum.
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Risk or Challenges
M&A Revenue Ambitions: Several large transactions advised on did not complete as expected, leading to a shortfall in revenue ambitions.
Revenue Decline: 2025 revenues were down 14% from 2024's record results, indicating challenges in maintaining growth.
Compensation Margin: Despite strong talent investments, maintaining a high adjusted compensation margin of 68% could pressure profitability.
Nonrecurring Items: Certain nonrecurring items impacted financials in 2025, though they are expected to decrease in 2026.
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Guidance & Outlook
Future revenue growth: The company expects its investments and client focus to deliver results in 2026 and beyond, with a strong gross pipeline and a building backlog of announced and pending deals.
European market performance: The company anticipates continued strong performance in Europe, leveraging its position as a leading adviser in active regions.
Restructuring practice: The restructuring practice is expected to maintain its growth trajectory, gaining market share in a growing market.
Talent acquisition and retention: The company foresees continued momentum in recruiting and promoting senior bankers, with a strong pipeline of future senior hires.
Non-compensation expenses: For 2026, the company projects a single-digit percent decrease in adjusted non-compensation expenses, following the resolution of certain nonrecurring items.
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Shareholder Return Plan
Dividends declared: A quarterly dividend of $0.07 per share was declared.
Total dividends returned: Over $163 million was returned to equity holders in 2025 through dividends, RSU settlements, share repurchases, and unit exchanges.
Share repurchases: 6.5 million shares were retired during 2025 as part of share repurchase efforts.
Share count management: Efforts were focused on managing the share count effectively, resulting in 67 million shares of Class A common stock and 22 million partnership units outstanding at year-end.
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Key Q&A
Q:What was the impact of large deals not coming together in 2025, and what is the outlook for 2026?
A:Andrew Bednar explained that in 2025, there were 70 transactions over $10 billion, but the company was not involved in any, compared to 4 such transactions in their record year. However, they are optimistic about 2026, having already announced a $15 billion transaction in January.
Q:How is the Devon Park addition performing and what is its potential impact?
A:Andrew Bednar stated that the Devon Park transaction has been culturally, financially, and strategically successful. It has led to new mandates and positive client conversations, with a strong pipeline, despite being only four months in.
Q:What is the outlook for compensation and the comp ratio in 2026?
A:Andrew Bednar noted that the comp ratio increased in 2025 due to missed revenue targets and investments. For 2026, they aim to leverage comp flexibility as revenue scales, starting with a 67% accrual in Q1, and aim to balance investments with shareholder returns.
Q:What is the restructuring outlook for 2026 compared to 2025?
A:Andrew Bednar expressed optimism about the restructuring business, citing strong liability management engagements and proactive financial management by clients. He noted no slowdown in activity and highlighted opportunities in sectors like software.
Q:What is the recruiting outlook for 2026?
A:Andrew Bednar stated that recruiting will likely return to a more normal level after an above-average year in 2025. The pipeline for high-quality candidates remains strong, and they continue to focus on adding talent strategically.
Q:What drove the record year in Europe despite lagging Dealogic data?
A:Andrew Bednar attributed the record year in Europe to investments in talent and client relationships, as well as large-scale transactions in active markets like Germany and France. He noted increased dialogue around industries like defense, energy security, and infrastructure.
Q:What is the impact of geopolitical tensions and U.S. policy uncertainty on client dialogues?
A:Andrew Bednar stated that geopolitical tensions create anxiety but also opportunities for clients. He noted no significant impact from U.S. midterm elections yet and emphasized that clients see more opportunities than obstacles in the current environment.
Q:What is the mix of advisory revenue across M&A versus non-M&A businesses?
A:Andrew Bednar declined to provide a breakdown, stating that the company operates by sector rather than product. He highlighted strong performance in financing and capital solutions, particularly liability management.
Q:What are the capital return priorities beyond organic investment?
A:Andrew Bednar emphasized that the priority is investing in future revenue and clients. They also focus on share count management, dividends, and opportunistic buybacks, with no changes to their capital return priorities.
Q:What is the starting point for the comp ratio in 2026?
A:Andrew Bednar stated that the starting point for the comp ratio in 2026 will be 67% for Q1, with flexibility in Q4 to adjust based on investments and business needs.
Q:Review of Unclear Management Responses
A:Andrew Bednar avoided providing a specific breakdown of advisory revenue across M&A versus non-M&A businesses, stating that the company does not operate based on products but by sector. This response lacked clarity and detail, as it did not address the question directly.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Director
Europe opportunity
Europe record
Marketing discussion
Sentiment client
addition Europe
adviser region
ambition transaction
assignment debtor
banker hire
base corporates
build health
building Sentiment
building firm
chapter strength
client Europe
client profile
client return
condition coverage
confidence investment
continent restructuring
corporates sponsor
coverage expertise
coverage partner
debtor side
decade chapter
effect talent
expertise ambition
firm decade
firm position
hire banker
hire momentum
platform
record revenue
PWP Transcript
Perella Weinberg Partners (PWP) Q4 2025 Earnings Call Transcript
Unknown2-6
Despite a decline in revenue and missing large deals in 2025, the company shows optimism for 2026 with a significant transaction already announced and a successful Devon Park acquisition. Strong cash position and no debt, alongside effective share repurchases, provide a stable financial outlook. However, missed revenue targets and unclear guidance on advisory revenue distribution create uncertainties. The overall sentiment balances between negative financial performance and positive future outlook, leading to a neutral rating.
Perella Weinberg Partners (PWP) Q3 2025 Earnings Call Transcript
Positive11-7
The earnings call reveals strong European growth, proactive share management, and a strategic acquisition of Devon Park, which is expected to boost future revenue. The Q&A indicates positive momentum in M&A and restructuring activities. However, management's lack of specificity in some responses adds uncertainty. The overall sentiment is positive due to solid fundamentals, growth prospects, and strategic investments, despite not achieving record revenues.
Perella Weinberg Partners (PWP) Q2 2025 Earnings Call Transcript
Positive8-1
The earnings call reveals strong client engagement, strategic recruitment, and growth initiatives. Financials show stable revenues with a diversified revenue base, reduced non-compensation expenses, and no debt. The Q&A indicates positive market trends and strategic acquisitions, though management avoided specific guidance. Shareholder returns through dividends and repurchases add positivity. Given these factors, the stock is likely to experience a positive reaction in the coming weeks, despite the lack of specific revenue guidance.
Perella Weinberg Partners (NASDAQ:PWP) Q1 2025 Earnings Call Transcript
Positive5-3
The earnings call reveals strong financial performance with record revenues and a significant increase in client engagement. Despite regulatory and economic challenges, the firm remains optimistic about future growth and client-centric services. The Q&A section highlights management's confidence in overcoming current slowdowns and leveraging hiring opportunities. Shareholder returns through dividends and buybacks are robust. While litigation costs are a concern, they are not expected to recur. Overall, the positive financial metrics, strategic focus, and shareholder returns suggest a positive stock price movement.
PWP Report
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