Lazard Inc

Firm-wide adjusted net revenue was $786 million in Q2 2026 and $1.5 billion in the first half. Financial Advisory adjusted net revenue was $445 million in Q2 and $801 million in the first half; Asset Management adjusted net revenue was $331 million in Q2 and $640 million in the first half. Asset management management fees were $310 million in Q2, up 23% year over year and 5% sequentially. AUM ended the quarter at $285 billion, up 15% versus June 2025 and 10% versus the prior quarter; average AUM was $279 billion, up 17% year over year. Adjusted bond compensation expense was $172 million, the compensation ratio was 69.9%, and the non-compensation ratio was 21.8%. Adjusted effective tax rate was 69.7%, which management called anomalous because of a catch-up adjustment tied to Vitesco equity. Management said full-year GAAP tax rate is still expected in the high 20%s. For capital allocation, Lazard returned $103 million to shareholders in Q2 via a $49 million quarterly dividend and $59 million of share repurchases, and it declared a $0.50 per share quarterly dividend. Management said the second half is usually stronger than the first, and that this year the pattern should be somewhat more pronounced, led by Financial Advisory.

Peter Orszag framed the quarter as evidence that Lazard 2030 is working, citing progress in relevance, revenue and returns. He pointed to Financial Advisory’s strongest announced lead-table position since 2014, Asset Management’s best first-half net inflows in nearly 20 years, and record AUM as signs that the firm is gaining traction with clients. His tone was confident and explanatory, emphasizing that the advisory business is emerging from a deliberate MD turnover phase and should increasingly convert into revenue and earnings growth.

Tracy Farr focused on the quarter’s mix, with Financial Advisory driven mainly by North American M&A completions and Asset Management supported by market appreciation, management fees and net inflows. She highlighted the 69.9% compensation ratio and 21.8% non-comp ratio, noting that the elevated tax rate was one-time and not indicative of the full year. On capital allocation, she said Lazard returned $103 million to shareholders in Q2, restarted buybacks after pausing for Campbell Lutyens, and still expects non-comp growth to run in the mid- to high-single digits, with some noise from Campbell Lutyens-related costs.

Analysts pressed on the gap between strategic and sponsor M&A, and Peter said the core issue is valuation pressure from higher rates, which has slowed sponsor exits despite rising LP demand for distributions. He said continuation funds and secondaries are a key outlet, and Lazard believes it is well positioned through both its existing PCA business and the upcoming Lazard CL platform. Questions also focused on asset management execution and KPIs; Chris Hogbin said the main metrics to watch are investment performance and flows, noting 68% of AUM is outperforming stated benchmarks over five years and first-half net inflows were about $7.5 billion. Several questions probed comp leverage and buybacks, and management said the comp ratio should improve as revenue ramps and the J-curve unwinds, while buybacks do not rule out ongoing inorganic options.