Second Quarter Overview
- Record Quarterly Revenues of $360 million, an increase of 4%
from a year ago
- GAAP Pretax Income of $64 million and Adjusted Pretax Income of
$66 million, both increased 19% from a year ago
- GAAP Diluted EPS of $1.06 and Adjusted EPS of $1.19, increases
of 23% and 20%, respectively, from a year ago
Six Months Overview
- Record First Half and Six Months Revenues of $690 million, an
increase of 26% from a year ago
- GAAP Pretax Income of $118 million and Adjusted Pretax Income
of $121 million, increases of 42% and 41%, respectively, from a
year ago
- GAAP Diluted EPS of $2.29 and Adjusted EPS of $2.17, increases
of 50% and 43%, respectively, from a year ago
Capital Management and Balance Sheet
- Repurchased 2.2 million share and share equivalents through
June 30, 2024, with record open market repurchases of 1.7 million
shares
- Record Second Quarter cash, cash equivalents and short-term
investments of $351 million and no funded debt
- Entered into a new $100 million revolving credit facility on
July 29, 2024
Paul J. Taubman, Chairman and Chief Executive Officer, said,
“Our firm delivered record second quarter and six months results
with strong year-to-date performance in all our businesses. Our
focus continues to be on investing to build the strongest firm for
the long term as we continue to expand our industry expertise, our
product capabilities, and our global reach. As before, we remain
highly confident in our future growth prospects.”
PJT Partners Inc. (the “Company” or “PJT Partners”) (NYSE: PJT)
today announced its financial results for the second quarter and
six months ended June 30, 2024.
Revenues
The following table sets forth revenues for the three and six
months ended June 30, 2024 and 2023:
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
% Change
2024
2023
% Change
(Dollars in Millions)
Revenues
Advisory
$
307.1
$
323.8
(5%)
$
595.8
$
491.9
21%
Placement
46.9
20.0
134%
81.4
47.6
71%
Interest Income & Other
6.2
2.5
154%
12.4
6.8
84%
Total Revenues
$
360.2
$
346.3
4%
$
689.6
$
546.3
26%
Three Months Ended
The decrease in Advisory Revenues was due to a decrease in
restructuring revenues partially offset by an increase in strategic
advisory revenues.
The increase in Placement Revenues was due to a significant
increase in fund placement revenues.
The increase in Interest Income & Other was principally due
to higher interest income.
Six Months Ended
The increase in Advisory Revenues was due to increases in
restructuring, strategic advisory and private capital solutions
revenues.
The increase in Placement Revenues was due to a significant
increase in fund placement revenues.
The increase in Interest Income & Other was principally due
to higher interest income.
Expenses
The following tables set forth information relating to the
Company’s expenses for the three and six months ended June 30, 2024
and 2023:
Three Months Ended June 30,
2024
2023
GAAP
As Adjusted
GAAP
As Adjusted
(Dollars in Millions)
Expenses
Compensation and Benefits
$
250.3
$
250.3
$
246.6
$
246.6
% of Revenues
69.5
%
69.5
%
71.2
%
71.2
%
Non-Compensation
$
45.5
$
44.1
$
45.5
$
44.2
% of Revenues
12.6
%
12.3
%
13.1
%
12.8
%
Total Expenses
$
295.8
$
294.5
$
292.1
$
290.8
% of Revenues
82.1
%
81.8
%
84.4
%
84.0
%
Pretax Income
$
64.4
$
65.7
$
54.2
$
55.5
% of Revenues
17.9
%
18.2
%
15.6
%
16.0
%
Six Months Ended June 30,
2024
2023
GAAP
As Adjusted
GAAP
As Adjusted
(Dollars in Millions)
Expenses
Compensation and Benefits
$
479.3
$
479.3
$
379.7
$
379.7
% of Revenues
69.5
%
69.5
%
69.5
%
69.5
%
Non-Compensation
$
92.0
$
89.4
$
83.2
$
80.7
% of Revenues
13.3
%
13.0
%
15.2
%
14.8
%
Total Expenses
$
571.3
$
568.6
$
462.9
$
460.4
% of Revenues
82.8
%
82.5
%
84.7
%
84.3
%
Pretax Income
$
118.3
$
120.9
$
83.4
$
85.9
% of Revenues
17.2
%
17.5
%
15.3
%
15.7
%
Compensation and Benefits
Expense
Three Months Ended
Compensation and Benefits Expense was $250 million for the
current quarter compared with $247 million in the prior year,
reflecting higher revenues and a lower compensation accrual
rate.
Six Months Ended
Compensation and Benefits Expense was $479 million compared with
$380 million in the prior year. The increase in Compensation and
Benefits Expense was driven by higher revenues compared with the
prior year.
Non-Compensation Expense
Three Months Ended
GAAP Non-Compensation Expense was $45 million for the current
quarter compared with $45 million in the prior year. Adjusted
Non-Compensation Expense was $44 million for the current quarter
compared with $44 million in the prior year.
The GAAP and Adjusted Non-Compensation Expense were essentially
unchanged in the second quarter compared with the prior year.
Decreases in Professional Fees and Other Expenses were offset by
increases in Occupancy and Related and Communications and
Information Services. Professional Fees decreased due to lower
consulting expenses relating to the firm's business activities.
Other Expenses decreased principally due to insurance
reimbursements, which were partially offset by increases in market
data and higher bad debt expense. Occupancy and Related increased
principally due to the expansion and lease term extension of our
New York headquarters in the fourth quarter of 2023. Communications
and Information Services increased principally due to investments
in technology infrastructure.
Six Months Ended
GAAP Non-Compensation Expense was $92 million compared with $83
million in the prior year. Adjusted Non-Compensation Expense was
$89 million compared with $81 million in the prior year.
The increase in GAAP and Adjusted Non-Compensation Expense
compared with the prior year was principally due to increases in
Occupancy and Related, Travel and Related, and Communications and
Information Services, partially offset by a decrease in
Professional Fees. Occupancy and Related increased principally due
to the expansion and lease term extension of our New York
headquarters in the fourth quarter of 2023. Travel and Related
increased due to increased levels of business travel.
Communications and Information Services increased principally due
to investments in technology infrastructure. Professional Fees
decreased due to lower consulting expenses relating to the firm's
business activities.
Provision for Taxes
As of June 30, 2024, the Company owned 60.8% of PJT Partners
Holdings LP. The Company is subject to corporate U.S. federal and
state income tax while PJT Partners Holdings LP is subject to New
York City unincorporated business tax and other entity-level taxes
imposed by certain state and foreign jurisdictions. Please refer to
Note 11. “Stockholders’ Equity” in the “Notes to Consolidated
Financial Statements” in “Part II. Item 8. Financial Statements and
Supplementary Data” of the Company’s Annual Report on Form 10-K for
the year ended December 31, 2023 for further information about the
corporate ownership structure. The effective tax rate for GAAP Net
Income for the three months ended June 30, 2024 and 2023 was 17.7%
and 24.2%, respectively. The effective tax rate for GAAP Net Income
for the six months ended June 30, 2024 and 2023 was 10.1% and
17.2%, respectively.
In calculating Adjusted Net Income, If-Converted, the Company
has assumed that all outstanding partnership units in PJT Partners
Holdings LP (“Partnership Units”) (excluding partnership units that
have yet to satisfy certain market conditions) have been exchanged
into shares of the Company’s Class A common stock, subjecting all
of the Company’s income to corporate-level tax.
The effective tax rate for Adjusted Net Income, If-Converted for
the six months ended June 30, 2024 was 22.0% compared with 25.3%
for full year 2023.
Capital Management and Balance Sheet
As of June 30, 2024, the Company held cash, cash equivalents and
short-term investments of $351 million and had no funded debt.
During the second quarter 2024, the Company repurchased 585
thousand shares of Class A common stock in the open market,
exchanged 116 thousand Partnership Units for cash and net share
settled 9 thousand shares of Class A common stock to satisfy
employee tax obligations.
In total during the second quarter 2024, the Company repurchased
0.7 million share equivalents at an average price of $96.45 per
share. During the six months ended June 30, 2024, the Company
repurchased 2.2 million share equivalents at an average price of
$98.22 per share.
As of June 30, 2024, the Company's remaining repurchase
authorization was $350 million.
The Company intends to repurchase 103 thousand Partnership Units
for cash on August 6, 2024 at a price to be determined by the
volume-weighted average price per share of the Company’s Class A
common stock on August 1, 2024.
Dividend
The Board of Directors of the Company has declared a quarterly
dividend of $0.25 per share of Class A common stock. The dividend
will be paid on September 18, 2024 to Class A common stockholders
of record as of September 4, 2024.
Quarterly Investor Call Details
PJT Partners will host a conference call on July 30, 2024 at
8:30 a.m. ET to discuss its second quarter and six months 2024
results. The conference call can be accessed via the internet at
www.pjtpartners.com or by dialing +1 (800) 343-5419 (U.S. domestic)
or +1 (203) 518-9731 (international), passcode PJTP2Q24. For those
unable to listen to the live broadcast, a replay will be available
following the call at www.pjtpartners.com.
About PJT Partners
PJT Partners is a premier, global, advisory-focused investment
bank that was built from the ground up to be different. Our highly
experienced, collaborative teams provide independent advice coupled
with old-world, high-touch client service. This ethos has allowed
us to attract some of the very best talent in the markets in which
we operate. We deliver leading advice to many of the world's most
consequential companies, effect some of the most transformative
transactions and restructurings and raise billions of dollars of
capital around the globe to support startups and more established
companies. To learn more about PJT Partners, please visit our
website at www.pjtpartners.com.
Forward-Looking Statements
Certain material presented herein contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). Forward-looking
statements include certain information concerning future results of
operations, business strategies, acquisitions, financing plans,
competitive position, potential growth opportunities, potential
operating performance improvements, the effects of competition and
the effects of future legislation or regulations. Forward-looking
statements include all statements that are not historical facts and
can be identified by the use of forward-looking terminology such as
the words “believe,” “expect,” “opportunity,” “plan,” “intend,”
“anticipate,” “estimate,” “predict,” “potential,” “continue,”
“may,” “might,” “should,” “could” or the negative of these terms or
similar expressions.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict, many of
which are outside our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not place undue
reliance upon any of these forward-looking statements. Important
factors that could cause our actual results and financial condition
to differ materially from those indicated in the forward-looking
statements include, among others, the following: (a) changes in
governmental regulations and policies; (b) cyber attacks, security
vulnerabilities and internet disruptions, including breaches of
data security and privacy leaks, data loss and business
interruptions; (c) failures of our computer systems or
communication systems, including as a result of a catastrophic
event and the use of remote work environments and virtual
platforms; (d) the impact of catastrophic events, including
business disruptions, pandemics, reductions in employment and an
increase in business failures on (1) the U.S. and the global
economy and (2) our employees and our ability to provide services
to our clients and respond to their needs; (e) the failure of
third-party service providers to perform their functions; and (f)
volatility in the political and economic environment, including as
a result of inflation, elevated interest rates and geopolitical and
military conflicts.
Any of these factors, as well as such other factors discussed in
the “Risk Factors” section of the Company’s Annual Report on Form
10-K for the year ended December 31, 2023, filed with the United
States Securities and Exchange Commission (“SEC”), as such factors
may be updated from time to time in the Company’s periodic filings
with the SEC, accessible on the SEC’s website at www.sec.gov, could
cause the Company’s results to differ materially from those
expressed in forward-looking statements. There may be other risks
and uncertainties that the Company is unable to predict at this
time or that are not currently expected to have a material adverse
effect on its business. Any such risks could cause the Company’s
results to differ materially from those expressed in
forward-looking statements.
Non-GAAP Financial Measures
The following represent key performance measures that management
uses in making resource allocation and/or compensation decisions.
These measures should not be considered substitutes for, or
superior to, financial measures prepared in accordance with
GAAP.
Management believes the following non-GAAP measures, when
presented together with comparable GAAP measures, are useful to
investors in understanding the Company’s operating results:
Adjusted Pretax Income; Adjusted Net Income; Adjusted Net Income,
If-Converted, in total and on a per-share basis (referred to as
“Adjusted EPS”); and Adjusted Non-Compensation Expense. These
non-GAAP measures, presented and discussed in this earnings
release, remove the significant accounting impact of: (a)
intangible asset amortization associated with the acquisition of
PJT Capital LP and the acquisition of CamberView; and (b) the net
change to the amount the Company has agreed to pay Blackstone Inc.
("Blackstone") related to the net realized cash benefit from
certain compensation-related tax deductions. Reconciliations of the
non-GAAP measures to their most directly comparable GAAP measures
and further detail regarding the adjustments are provided in the
Appendix.
To help investors understand the effect of the Company’s
ownership structure on its Adjusted Net Income, the Company has
presented Adjusted Net Income, If-Converted. This measure
illustrates the impact of taxes on Adjusted Pretax Income, assuming
all Partnership Units (excluding Partnership Units that have yet to
satisfy certain market conditions) have been exchanged for shares
of the Company’s Class A common stock, resulting in all of the
Company’s income becoming subject to corporate-level tax,
considering both current and deferred income tax effects. This tax
rate excludes a number of adjustments, including the tax benefits
of the adjustments for transaction-related amortization
expense.
Appendix
GAAP Condensed Consolidated Statements of Operations
(unaudited)
Reconciliations of GAAP to Non-GAAP Financial Data
(unaudited)
Summary of Shares Outstanding (unaudited)
Footnotes
PJT Partners Inc.
GAAP Condensed Consolidated Statements
of Operations (unaudited)
(Dollars in Thousands, Except Share and
Per Share Data)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Revenues
Advisory
$
307,082
$
323,794
$
595,763
$
491,884
Placement
46,873
20,028
81,362
47,613
Interest Income and Other
6,226
2,455
12,449
6,768
Total Revenues
360,181
346,277
689,574
546,265
Expenses
Compensation and Benefits
250,326
246,614
479,254
379,657
Occupancy and Related
12,107
9,920
24,268
19,931
Travel and Related
9,055
8,314
18,156
15,286
Professional Fees
8,780
11,454
17,129
18,381
Communications and Information
Services
5,296
3,761
10,074
7,838
Depreciation and Amortization
3,112
3,597
6,610
7,040
Other Expenses
7,106
8,448
15,781
14,770
Total Expenses
295,782
292,108
571,272
462,903
Income Before Provision for Taxes
64,399
54,169
118,302
83,362
Provision for Taxes
11,368
13,117
11,899
14,324
Net Income
53,031
41,052
106,403
69,038
Net Income Attributable to Non-Controlling
Interests
24,715
18,911
45,464
29,561
Net Income Attributable to PJT Partners
Inc.
$
28,316
$
22,141
$
60,939
$
39,477
Net Income Per Share of Class A Common
Stock
Basic
$
1.12
$
0.88
$
2.39
$
1.56
Diluted
$
1.06
$
0.86
$
2.29
$
1.53
Weighted-Average Shares of Class A
Common
Stock Outstanding
Basic
25,376,186
25,238,144
25,533,358
25,234,983
Diluted
43,091,718
26,333,261
43,427,605
26,625,890
PJT Partners Inc.
Reconciliations of GAAP to Non-GAAP
Financial Data (unaudited)
(Dollars in Thousands, Except Share and
Per Share Data)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
GAAP Net Income
$
53,031
$
41,052
$
106,403
$
69,038
Less: GAAP Provision for Taxes
11,368
13,117
11,899
14,324
GAAP Pretax Income
64,399
54,169
118,302
83,362
Adjustments to GAAP Pretax
Income
Amortization of Intangible Assets(1)
1,230
1,230
2,460
2,460
Spin-Off-Related Payable Due to
Blackstone(2)
90
54
181
79
Adjusted Pretax Income
65,719
55,453
120,943
85,901
Adjusted Taxes(3)
11,624
13,475
12,419
14,906
Adjusted Net Income
54,095
41,978
108,524
70,995
If-Converted Adjustments
Less: Adjusted Taxes(3)
(11,624
)
(13,475
)
(12,419
)
(14,906
)
Add: If-Converted Taxes(4)
14,458
15,031
26,607
22,940
Adjusted Net Income, If-Converted
$
51,261
$
40,422
$
94,336
$
62,961
GAAP Net Income Per Share of Class A
Common Stock
Basic
$
1.12
$
0.88
$
2.39
$
1.56
Diluted
$
1.06
$
0.86
$
2.29
$
1.53
GAAP Weighted-Average Shares of Class
A
Common Stock Outstanding
Basic
25,376,186
25,238,144
25,533,358
25,234,983
Diluted
43,091,718
26,333,261
43,427,605
26,625,890
Adjusted Net Income, If-Converted Per
Share
$
1.19
$
0.99
$
2.17
$
1.52
Weighted-Average Shares Outstanding,
If-Converted
43,037,141
40,964,125
43,387,129
41,323,832
PJT Partners Inc.
Reconciliations of GAAP to Non-GAAP
Financial Data – continued (unaudited)
(Dollars in Thousands)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Non-Compensation Expenses
Occupancy and Related
$
12,107
$
9,920
$
24,268
$
19,931
Travel and Related
9,055
8,314
18,156
15,286
Professional Fees
8,780
11,454
17,129
18,381
Communications and Information
Services
5,296
3,761
10,074
7,838
Depreciation and Amortization
3,112
3,597
6,610
7,040
Other Expenses
7,106
8,448
15,781
14,770
GAAP Non-Compensation Expense
45,456
45,494
92,018
83,246
Amortization of Intangible Assets(1)
(1,230
)
(1,230
)
(2,460
)
(2,460
)
Spin-Off-Related Payable Due to
Blackstone(2)
(90
)
(54
)
(181
)
(79
)
Adjusted Non-Compensation Expense
$
44,136
$
44,210
$
89,377
$
80,707
PJT Partners Inc. Summary of Shares Outstanding
(unaudited)
The following table provides a summary of weighted-average
shares outstanding for the three and six months ended June 30, 2024
and 2023 for both basic and diluted shares. The table also provides
a reconciliation to If-Converted Shares Outstanding assuming that
all Partnership Units and unvested PJT Partners Inc. restricted
stock units (“RSUs”) were converted to shares of the Company’s
Class A common stock:
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Weighted-Average Shares Outstanding -
GAAP
Basic Shares Outstanding, GAAP
25,376,186
25,238,144
25,533,358
25,234,983
Dilutive Impact of Unvested RSUs(5)
2,191,919
1,095,117
2,334,946
1,390,907
Dilutive Impact of Partnership
Units(6)
15,523,613
—
15,559,301
—
Diluted Shares Outstanding, GAAP
43,091,718
26,333,261
43,427,605
26,625,890
Weighted-Average Shares Outstanding -
If-Converted
Basic Shares Outstanding, GAAP
25,376,186
25,238,144
25,533,358
25,234,983
Unvested RSUs(5)
2,191,919
1,095,117
2,334,946
1,390,907
Partnership Units(7)
15,469,036
14,630,864
15,518,825
14,697,942
If-Converted Shares Outstanding
43,037,141
40,964,125
43,387,129
41,323,832
As of June 30,
2024
2023
Fully-Diluted Shares Outstanding(8)
46,084,911
43,966,461
As of June 30, 2024, in relation to awards granted containing
both service and market conditions, the Company had achieved a
dividend adjusted 20-day volume-weighted average share price of the
Company's Class A common stock in excess of $107. Cumulatively, 1.6
million share equivalents were included in the Company's
fully-diluted share count, of which 0.6 million had satisfied both
service and market conditions, with the remaining 1.0 million
vesting pursuant to ongoing service conditions.
As of June 30, 2024, 1.0 million share equivalents that had yet
to satisfy certain market conditions were excluded from our share
counts.
Footnotes
(1)
This adjustment adds back to GAAP
Pretax Income amounts for the amortization of intangible assets
that are associated with the acquisition of PJT Capital LP on
October 1, 2015 and the acquisition of CamberView on October 1,
2018.
(2)
This adjustment adds back to GAAP
Pretax Income the net change to the amount the Company has agreed
to pay Blackstone related to the net realized cash benefit from
certain compensation-related tax deductions. Such amounts are
reflected in Other Expenses in the Condensed Consolidated
Statements of Operations.
(3)
Represents taxes on Adjusted
Pretax Income, considering both current and deferred income tax
effects for the current ownership structure.
(4)
Represents taxes on Adjusted
Pretax Income, assuming all Partnership Units (excluding
Partnership Units that have yet to satisfy market conditions) have
been exchanged for shares of the Company’s Class A common stock,
resulting in all of the Company’s income becoming subject to
corporate-level tax, considering both current and deferred income
tax effects. This tax rate excludes a number of adjustments,
including the tax benefits of the adjustments for amortization
expense.
(5)
Represents the dilutive impact
under the treasury method of unvested RSUs that have a remaining
service requirement.
(6)
Represents the number of shares
assuming the conversion of vested Partnership Units, the dilutive
impact of unvested Partnership Units with a remaining service
requirement, and the dilutive impact of Partnership Units that
achieved certain market conditions as if those conditions were
achieved as of the beginning of the reporting period.
(7)
Represents the number of shares
assuming the conversion of all Partnership Units, including
Partnership Units that achieved certain market conditions as of the
date those conditions were achieved.
(8)
Assumes all Partnership Units and
unvested RSUs have been converted to shares of the Company’s Class
A common stock.
Note:
Amounts presented in tables above may not
add or recalculate due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240729005525/en/
Media Relations: Jon Keehner Joele Frank, Wilkinson
Brimmer Katcher Tel: +1 212.355.4449 PJT-JF@joelefrank.com
Investor Relations: Sharon Pearson PJT Partners Inc. Tel:
+1 212.364.7120 pearson@pjtpartners.com
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