Lazard Ltd. ((LAZ)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Lazard’s recent earnings call conveyed a generally positive sentiment, highlighting strong revenue growth and robust performance in financial advisory services. This optimism was tempered by challenges such as a decrease in assets under management and significant outflows. Nonetheless, the company’s strategic growth and improved financial performance underpin the positive outlook.
Record Revenue Growth
Firm-wide adjusted net revenue reached $812 million for the fourth quarter, marking a 7% increase from the prior year, and $2.9 billion for the year, reflecting an 18% growth from 2023. This impressive revenue trajectory underscores Lazard’s ability to capitalize on its strategic initiatives and market opportunities.
Financial Advisory Performance
The Financial Advisory segment reported an adjusted net revenue of $508 million for the fourth quarter, up 6% year-over-year, and $1.7 billion for the full year, representing a significant 28% increase from 2023. This strong performance highlights the firm’s expertise and leadership in providing financial advisory services.
Strong Asset Management Results
Asset Management adjusted net revenue was $287 million for the fourth quarter, a 5% increase compared to the previous year, and $1.1 billion for the full year, up 3% from 2023. These results demonstrate the firm’s resilience and adaptability in a challenging market environment.
Increased Mandates
Lazard entered 2025 with $10 billion in unfunded mandates, a substantial increase compared to recent years. This promising pipeline indicates potential future growth and reflects the firm’s strong market position.
Compensation Ratio Improvement
The firm achieved a 390 basis point improvement in its full-year compensation ratio from 2023, with a target of reaching a 60% ratio in 2025. This reflects the company’s commitment to improving operational efficiency and profitability.
Decline in Assets Under Management
Assets under management stood at $226 billion as of December 31st, 2024, down 8% from December 2023 and 9% from September 2024. This decline highlights the challenges faced by Lazard in maintaining asset levels amidst market volatility.
Market Depreciation and Outflows
During the quarter, Lazard experienced $2 billion in market depreciation, $9 billion in foreign exchange depreciation, and $10 billion in net outflows. These factors contributed to the decrease in assets under management and present ongoing challenges for the firm.
Higher Effective Tax Rate
The adjusted effective tax rate for 2024 was 24.4%, up from 16% in the prior year. This increase reflects changes in the regulatory environment and underscores the need for strategic financial planning.
Forward-Looking Guidance
Looking ahead, Lazard anticipates continued growth in both its Financial Advisory and Asset Management segments. Supported by a robust pipeline of $10 billion in unfunded mandates, the firm is poised for sustained advancement. With strategic initiatives aimed toward 2030, Lazard is positioning itself for long-term success in a dynamic market landscape.
In summary, Lazard’s earnings call reflected a positive sentiment, driven by strong revenue growth and financial advisory performance. Despite challenges with asset management and market fluctuations, the company’s strategic focus and improved financial metrics set a promising foundation for future growth.
