What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 213 added, 132 removed, 376 unchanged (48% of the section changed)

66 unchanged sentences

We record expense equal to the amount of these distributions in Employee Compensation and Benefits on the Unaudited Condensed Consolidated Statements of Operations and reflect accrued liabilities related to these distributions in Accrued Compensation and Benefits on the Unaudited Condensed Consolidated Statements of Financial Condition.

Our Long-term Incentive Plans provide for incentive compensation awards for Investment Banking Senior Managing Directors, excluding executive officers, who exceed defined benchmark results over a four-year performance period beginning January 1, 2021 (which ended on December 31, 2024), pursuant to the 2021 Long-term Incentive Plan.

In conjunction with this plan, we made a cash distribution in the first quarter of 2025.

Remaining amounts are due to be paid in cash or Class A Shares, at our discretion, in the first quarter of 2026 and 2027, subject to employment at the time of payment.

Our Long-term Incentive Plans provide for incentive compensation awards for Investment Banking Senior Managing Directors, excluding executive officers, who exceed defined benchmark results over four-year performance periods beginning January 1, 2021, pursuant to the 2021 Long-term Incentive Plan, and January 1, 2025, pursuant to the 2025 Long-term Incentive Plan (which was approved by our Board of Directors in April 2025).

The performance period for the 2021 Long-term Incentive Plan ended on December 31, 2024 and in conjunction with this plan, we made a cash distribution in the first quarter of 2025.

Remaining amounts due pursuant to these plans are due to be paid in cash or Class A Shares, at our discretion, in the first quarter of 2026 and 2027 (for the 2021 Long-term Incentive Plan), and in the first quarter of 2029, 2030 and 2031 (for the 2025 Long-term Incentive Plan), subject to employment at the time of payment.

We periodically assess the probability of the benchmarks being achieved and expense the probable payout over the requisite service period of the award.

In April 2025, our Board of Directors approved the issuance of the 2025 Long-term Incentive Plan.

Similar to the above arrangement, this plan provides for incentive compensation awards to Investment Banking Senior Managing Directors, excluding our executive officers, who exceed defined benchmark results over a four-year performance period beginning in 2025.

This plan is due to be paid in cash or Class A Shares, at our discretion, in three equal installments in the first quarter of 2029, 2030 and 2031, subject to employment at the time of payment.

From time to time, we also grant incentive awards to certain individuals which include both performance and service-based vesting requirements and, in certain awards, market-based requirements.

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Non-Compensation.

Our Non-Compensation expenses include costs for occupancy and equipment rental, professional fees, travel and related expenses, communications and information technology services, depreciation and amortization, execution, clearing and custody fees and other operating expenses.

Our Non-Compensation expenses include costs for occupancy and equipment rental, professional fees, travel and related expenses, technology and information services, depreciation and amortization, execution, clearing and custody fees, acquisition and transition costs and other operating expenses.

Income from Equity Method Investments

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See Note 8 to our unaudited condensed consolidated financial statements for further information.

Provision (Benefit) for Income Taxes

Provision for Income Taxes

We account for income taxes in accordance with ASC 740, "Income Taxes" , which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities.

Excess tax benefits and deficiencies associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price are recognized in our Provision (Benefit) for Income Taxes.

benefits and deficiencies associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price are recognized in our Provision for Income Taxes.

In addition, net deferred tax assets are impacted by changes to statutory tax rates in the period of enactment.

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Results of Operations

The following is a discussion of our results of operations for the three months ended March 31, 2025 and 2024.

The following is a discussion of our results of operations for the three and six months ended June 30, 2025 and 2024.

For a more detailed discussion of the factors that affected the revenue and operating expenses of our Investment Banking & Equities and Investment Management business segments in these periods, see the discussion in "Business Segments" below.

For the Three Months Ended March 31,

2025 2024 Change

For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

(dollars and share amounts in thousands, except per share data)

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Income Before Income Taxes 151,204 110,100 37 % 263,267 196,545 34 %

Provision (Benefit) for Income Taxes (41,727) (6,679) (525 %)

Provision for Income Taxes 44,265 28,367 56 % 2,538 21,688 (88 %)

Net Income 106,939 81,733 31 % 260,729 174,857 49 %

6 unchanged sentences

(1) Non-Compensation expenses are as follows:

For the Three Months Ended March 31,

2025 2024 Change

For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

(dollars in thousands)

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Occupancy and Equipment Rental $ 26,914 $ 21,801 23 % $ 52,645 $ 43,745 20 %

Professional Fees 32,613 31,219 4 %

Professional Fees (A)

23,133 24,437 (5 %) 45,523 46,647 (2 %)

Travel and Related Expenses 23,984 21,384 12 % 46,002 40,606 13 %

Communications and Information Services 23,144 19,167 21 %

Technology and Information Services (A)

36,587 29,437 24 % 69,954 57,613 21 %

Depreciation and Amortization 6,450 6,439 — % 12,426 12,732 (2 %)

Execution, Clearing and Custody Fees 3,180 3,051 4 % 6,526 6,392 2 %

Acquisition and Transition Costs 1,637 — NM 1,637 — NM

Other Operating Expenses 12,945 15,497 (16 %) 23,937 23,301 3 %

Total Non-Compensation $ 134,830 $ 122,046 10 % $ 258,650 $ 231,036 12 %

As of March 31, 2025 and 2024, we employed approximately 2,395 and 2,225 people, respectively.

Three Months Ended March 31, 2025 versus March 31, 2024

(A) Includes the reclassification of $9.9 million and $18.9 million of technology and related expenses from "Professional Fees" to "Technology and Information Services" for the three and six months ended June 30, 2024, respectively, to conform to the current presentation.

See Note 2 to our unaudited condensed consolidated financial statements for further information.

As of June 30, 2025 and 2024, we employed approximately 2,455 and 2,330 people, respectively.

Three Months Ended June 30, 2025 versus June 30, 2024

Net Income Attributable to Evercore Inc.

was $146.2 million for the three months ended March 31, 2025, an increase of $60.5 million, or 71%, compared to $85.7 million for the three months ended March 31, 2024.

was $97.2 million for the three months ended June 30, 2025, an increase of $23.4 million, or 32%, compared to $73.8 million for the three months ended June 30, 2024.

The changes in our operating results during these periods are described below.

Net Revenues were $694.8 million for the three months ended March 31, 2025, an increase of $114.0 million, or 20%, versus Net Revenues of $580.8 million for the three months ended March 31, 2024.

Advisory Fees increased $127.5 million, or 30%, Commissions and Related Revenue increased $6.9 million, or 14%, and Underwriting Fees decreased $1.3 million, or 2%, compared to the three months ended March 31, 2024.

Asset Management and Administration Fees increased $2.3 million, or 12%, compared to the three months ended March 31, 2024.

Net Revenues were $833.8 million for the three months ended June 30, 2025, an increase of $144.6 million, or 21%, versus Net Revenues of $689.2 million for the three months ended June 30, 2024.

Advisory Fees increased $129.5 million, or 23%, Commissions and Related Revenue increased $5.1 million, or 10%, and Underwriting Fees increased $1.2 million, or 4%, compared to the three months ended June 30, 2024.

Asset Management and Administration Fees increased $1.5 million, or 8%, compared to the three months ended June 30, 2024.

See "Business Segments" and "Liquidity and Capital Resources" below for further information.

Ot her Revenue, Including Interest and Investments, was $11.3 million for the three months ended March 31, 2025, a decrease of $21.4 million, or 65%, versus $32.7 million for the three months ended March 31, 2024, primarily reflecting lower performance of our investment funds portfolio.

Ot her Revenue, Including Interest and Investments, was $29.1 million for the three months ended June 30, 2025, an increase of $7.4 million, or 34%, versus $21.8 million for the three months ended June 30, 2024, primarily reflecting higher performance of our investment funds portfolio, partially offset by lower returns on our fixed income investment portfolios, which primarily consist of U.S.

Treasury bills.

The investment funds portfolio is used as an economic hedge against our deferred cash compensation program.

Employee Compensation and Benefits Expense was $459.8 million for the three months ended March 31, 2025, an increase of $72.1 million, or 19%, versus $387.7 million for the three months ended March 31, 2024.

The increase in the amount of compensation recognized for the three months ended March 31, 2025 principally reflects a higher accrual for incentive compensation and higher base salaries.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 66.2% for the three months ended March 31, 2025, compared to 66.8% for the three months ended March 31, 2024.

Non-compensation expenses were $123.8 million for the three months ended March 31, 2025, an increase of $14.8 million, or 14%, versus $109.0 million for the three months ended March 31, 2024.

The increase was primarily driven by an increase in communications and information services, principally reflecting higher expenses associated with research services and license fees in the first quarter of 2025, an increase in occupancy and equipment rental expense, primarily related to an increase in office space, and an increase in travel and related expenses, largely due to higher levels of business activity and increased headcount.

Other Operating Expenses also increased, primarily related to an increase in bad debt expense.

Non-Compensation expenses per employee were approximately $51.9 thousand for the three months ended March 31, 2025, versus $49.3 thousand for the three months ended March 31, 2024, a 5% increase.

Income from Equity Method Investments was $0.9 million for the three months ended March 31, 2025, a decrease of $1.4 million, or 62%, versus $2.3 million for the three months ended March 31, 2024, primarily reflecting the sale of our interest in ABS and the redemption of our interest in Luminis during the third quarter of 2024.

This decrease was partially offset by higher earnings from Atalanta Sosnoff during the three months ended March 31, 2025.

Employee Compensation and Benefits Expense was $548.6 million for the three months ended June 30, 2025, an increase of $89.7 million, or 20%, versus $459.0 million for the three months ended June 30, 2024.

The increase in the amount of compensation recognized for the three months ended June 30, 2025 principally reflects a higher accrual for incentive compensation, higher base salaries and higher amortization of prior period deferred compensation awards.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 65.8% for the three months ended June 30, 2025, compared to 66.6% for the three months ended June 30, 2024.

Non-compensation expenses were $134.8 million for the three months ended June 30, 2025, an increase of $12.8 million, or 10%, versus $122.0 million for the three months ended June 30, 2024.

The increase was primarily driven by an increase in technology and information services, principally reflecting higher expenses associated with research services and license fees in the second quarter of 2025, an increase in occupancy and equipment rental expense, primarily related to an increase in office space, and an increase in travel and related expenses, largely due to higher levels of business activity and increased headcount.

Non-Compensation expenses per employee were approximately $55.6 thousand for the three months ended June 30, 2025, versus $53.6 thousand for the three months ended June 30, 2024, a 4% increase.

Income from Equity Method Investments was $0.8 million for the three months ended June 30, 2025, a decrease of $1.0 million, or 56%, versus $1.9 million for the three months ended June 30, 2024, primarily reflecting the sale of our interest in

ABS and the redemption of our interest in Luminis during the third quarter of 2024.

This decrease was partially offset by higher earnings from Atalanta Sosnoff during the three months ended June 30, 2025.

See Note 8 to our unaudited condensed consolidated financial statements for further information.

The provision (benefit) for income taxes for the three months ended March 31, 2025 was ($41.7) million, which reflected an effective tax rate of (37.2%).

The provision (benefit) for income taxes for the three months ended March 31, 2024 was ($6.7) million, which reflected an effective tax rate of (7.7%).

The provision (benefit) for income taxes for the three months ended March 31, 2025 and 2024 principally reflects the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price of $74.3 million and $29.5 million, respectively, which resulted in a reduction in the effective tax rate of 66.3 and 34.1 percentage points for the three months ended March 31, 2025 and 2024, respectively.

Net Income Attributable to Noncontrolling Interest was $7.6 million for the three months ended March 31, 2025, compared to $7.4 million for the three months ended March 31, 2024.

The increase in Net Income Attributable to Noncontrolling Interest reflects higher income at EWM during the three months ended March 31, 2025.

The provision for income taxes for the three months ended June 30, 2025 was $44.3 million, which reflected an effective tax rate of 29.3%.

The provision for income taxes for the three months ended June 30, 2024 was $28.4 million, which reflected an effective tax rate of 25.8%.

The increase in the provision for income taxes for the three months ended June 30, 2025 principally reflects an increase in non-deductible expenses and state and local apportionment adjustments.

Net Income Attributable to Noncontrolling Interest was $9.7 million for the three months ended June 30, 2025, compared to $8.0 million for the three months ended June 30, 2024.

The increase in Net Income Attributable to Noncontrolling Interest reflects higher income at Evercore LP during the three months ended June 30, 2025.

See Note 13 to our unaudited condensed consolidated financial statements for further information.

Six Months Ended June 30, 2025 versus June 30, 2024

Net Income Attributable to Evercore Inc.

was $243.4 million for the six months ended June 30, 2025, an increase of $83.9 million, or 53%, compared to $159.5 million for the six months ended June 30, 2024.

The changes in our operating results during these periods are described below.

Net Revenues were $1.53 billion for the six months ended June 30, 2025, an increase of $258.6 million, or 20%, versus Net Revenues of $1.27 billion for the six months ended June 30, 2024.

Advisory Fees increased $257.0 million, or 26%, Commissions and Related Revenue increased $11.9 million, or 12%, and Underwriting Fees were flat compared to the six months ended June 30, 2024.

Asset Management and Administration Fees increased $3.8 million, or 10%, compared to the six months ended June 30, 2024.

See "Business Segments" and "Liquidity and Capital Resources" below for further information.

Ot her Revenue, Including Interest and Investments, was $40.5 million for the six months ended June 30, 2025, a decrease of $14.0 million, or 26%, versus $54.5 million for the six months ended June 30, 2024, primarily reflecting lower performance of our investment funds portfolio, as well as lower returns on our fixed income investment portfolios, which primarily consist of U.S.

Treasury bills.

The investment funds portfolio is used as an economic hedge against our deferred cash compensation program.

Employee Compensation and Benefits Expense was $1.01 billion for the six months ended June 30, 2025, an increase of $161.8 million, or 19%, versus $846.6 million for the six months ended June 30, 2024.

The increase in the amount of compensation recognized for the six months ended June 30, 2025 principally reflects a higher accrual for incentive compensation, higher base salaries and higher amortization of prior period deferred compensation awards.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 66.0% for the six months ended June 30, 2025, compared to 66.7% for the six months ended June 30, 2024.

Non-compensation expenses were $258.7 million for the six months ended June 30, 2025, an increase of $27.6 million, or 12%, versus $231.0 million for the six months ended June 30, 2024.

The increase was primarily driven by an increase in technology and information services, principally reflecting higher expenses associated with research services, consulting costs and license fees, an increase in occupancy and equipment rental expense, primarily related to an increase in office space, and an increase in travel and related expenses, largely due to higher levels of business activity and increased headcount.

Non-Compensation expenses per employee were approximately $107.4 thousand for the six months ended June 30, 2025, versus $102.7 thousand for the six months ended June 30, 2024, a 5% increase.

Income from Equity Method Investments was $1.7 million for the six months ended June 30, 2025, a decrease of $2.5 million, or 59%, versus $4.2 million for the six months ended June 30, 2024, primarily reflecting the sale of our interest in ABS and the redemption of our interest in Luminis during the third quarter of 2024.

This decrease was partially offset by higher earnings from Atalanta Sosnoff in 2025.

See Note 8 to our unaudited condensed consolidated financial statements for further information.

The provision for income taxes for the six months ended June 30, 2025 was $2.5 million, which reflected an effective tax rate of 1.0%.

The provision for income taxes for the six months ended June 30, 2024 was $21.7 million, which reflected an effective tax rate of 11.0%.

The provision for income taxes for the six months ended June 30, 2025 and 2024 principally reflects the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price of $75.0 million and $30.9 million, respectively, which resulted in a reduction in the effective tax rate of

28.5 and 15.7 percentage points for the six months ended June 30, 2025 and 2024, respectively, partially offset by an increase in non-deductible expenses and state and local apportionment adjustments.

Net Income Attributable to Noncontrolling Interest was $17.3 million for the six months ended June 30, 2025, compared to $15.4 million for the six months ended June 30, 2024.

The increase in Net Income Attributable to Noncontrolling Interest primarily reflects higher income at Evercore LP during the six months ended June 30, 2025.

See Note 13 to our unaudited condensed consolidated financial statements for further information.

Business Segments

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The following table summarizes the operating results of the Investment Banking & Equities segment.

For the Three Months Ended March 31,

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For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

(dollars in thousands)

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Income (Loss) from Equity Method Investments (2)

11 147 (93 %) (27) 835 NM

Pre-Tax Income $ 145,962 $ 103,789 41 % $ 252,653 $ 183,367 38 %

(1) Includes interest expense on Notes Payable and lines of credit of $4.2 million for each of the three months ended March 31, 2025 and 2024.

(1) Includes interest expense on Notes Payable and lines of credit of $4.2 million and $8.4 million for each of the three and six months ended June 30, 2025 and 2024, respectively.

(2) Equity in Seneca Evercore and Luminis (through September 2024) is classified within Income (Loss) from Equity Method Investments.

(3) Non-Compensation expenses are as follows:

For the Three Months Ended March 31,

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For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

(dollars in thousands)

1 unchanged sentence

Occupancy and Equipment Rental $ 26,261 $ 21,240 24 % $ 51,364 $ 42,643 20 %

Professional Fees 31,094 30,063 3 %

Professional Fees (A)

22,059 23,368 (6 %) 43,203 44,639 (3 %)

Travel and Related Expenses 23,729 21,171 12 % 45,540 40,144 13 %

Communications and Information Services 22,302 18,464 21 %

Technology and Information Services (A)

35,411 28,517 24 % 67,663 55,773 21 %

Depreciation and Amortization 6,342 6,342 — % 12,235 12,551 (3 %)

Execution, Clearing and Custody Fees 2,729 2,633 4 % 5,612 5,556 1 %

Acquisition and Transition Costs 1,637 — NM 1,637 — NM

Other Operating Expenses 12,605 15,033 (16 %) 23,293 22,549 3 %

Total Non-Compensation $ 130,773 $ 118,304 11 % $ 250,547 $ 223,855 12 %

The following table summarizes Evercore statistics for the three months ended March 31, 2025 and 2024.

For the Three Months Ended March 31,

2025 2024 Change

(A) Includes the reclassification of $9.6 million and $18.4 million of technology and related expenses from "Professional Fees" to "Technology and Information Services" in the Investment Banking & Equities segment for the three and six months ended June 30, 2024, respectively, to conform to the current presentation.

See Notes 2 and 19 to our unaudited condensed consolidated financial statements for further information.

The following table summarizes Evercore statistics for the three and six months ended June 30, 2025 and 2024.

For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

Evercore Statistics

Total Number of Fees From Advisory and Underwriting Client Transactions (1)

245 244 — % 386 381 1 %

Total Number of Fees of at Least $1 million from Advisory and Underwriting Client Transactions (1)

111 95 17 % 206 186 11 %

Total Number of Underwriting Transactions (1)

13 17 (24 %) 27 36 (25 %)

Total Number of Underwriting Transactions as a Bookrunner (1)

13 14 (7 %) 25 30 (17 %)

(1) Includes Equity and Debt Underwriting Transactions.

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Investment Banking & Equities Results of Operations

Three Months Ended March 31, 2025 versus March 31, 2024

Net Revenues were $674.5 million for the three months ended March 31, 2025, an increase of $112.8 million, or 20%, versus $561.7 million for the three months ended March 31, 2024 .

The increase in revenues for the three months ended March 31, 2025 was primarily driven by an increase of $127.5 million, or 30%, in Advisory Fees, reflecting an increase in revenue earned from large transactions and an increase in the number of advisory fees earned during the first quarter of 2025 across both M&A and non-M&A assignments.

Commissions and Related Revenue increased $6.9 million, or 14%, compared to the three months ended March 31, 2024, primarily reflecting higher trading commissions driven by increased trading volume during the first quarter of 2025.

Underwriting Fees decreased $1.3 million, or 2%, compared to the three months ended March 31, 2024, reflecting a decrease in the number of transactions we participated in during the first quarter of 2025.

Other Revenue, net, decreased $20.3 million, or 72%, compared to the three months ended March 31, 2024, primarily reflecting lower performance of our investment funds portfolio.

Three Months Ended June 30, 2025 versus June 30, 2024

Net Revenues were $812.2 million for the three months ended June 30, 2025, an increase of $142.2 million, or 21%, versus $670.0 million for the three months ended June 30, 2024 .

The increase in revenues for the three months ended June 30, 2025 was primarily driven by an increase of $129.5 million, or 23%, in Advisory Fees, reflecting an increase in revenue during the second quarter of 2025 across both M&A and non-M&A assignments, as well as an increase in revenue earned from large transactions during the second quarter of 2025.

Commissions and Related Revenue increased $5.1 million, or 10%, compared to the three months ended June 30, 2024, primarily reflecting higher trading commissions driven by increased trading volume during the second quarter of 2025.

Underwriting Fees increased $1.2 million, or 4%, compared to the three months ended June 30, 2024, reflecting an increase in the average fee size of the transactions we participated in during the second quarter of 2025.

Other Revenue, net, increased $6.4 million, or 36%, compared to the three months ended June 30, 2024, primarily reflecting higher performance of our investment funds portfolio, partially offset by lower returns on our fixed income investment portfolios, which primarily consist of U.S.

Treasury bills.

The investment funds portfolio is used as an economic hedge against our deferred cash compensation program.

Employee Compensation and Benefits Expense was $448.0 million for the three months ended March 31, 2025, an increase of $70.7 million, or 19%, versus $377.3 million for the three months ended March 31, 2024.

The increase in the amount of compensation recognized for the three months ended March 31, 2025 principally reflects a higher accrual for incentive compensation and higher base salaries.

Non-compensation expenses were $119.8 million for the three months ended March 31, 2025, an increase of $14.2 million, or 13%, versus $105.5 million for the three months ended March 31, 2024 .

Non-compensation expenses increased from the prior year period, primarily driven by an increase in communications and information services, principally reflecting higher expenses associated with research services and license fees in the first quarter of 2025, an increase in occupancy and equipment rental expense, primarily related to an increase in office space, and an increase in travel and related expenses, largely due to higher levels of business activity and increased headcount.

Other Operating Expenses also increased, primarily related to an increase in bad debt expense.

Employee Compensation and Benefits Expense was $535.4 million for the three months ended June 30, 2025, an increase of $87.4 million, or 20%, versus $448.1 million for the three months ended June 30, 2024.

Non-compensation expenses were $130.8 million for the three months ended June 30, 2025, an increase of $12.5 million, or 11%, versus $118.3 million for the three months ended June 30, 2024 .

Non-compensation expenses increased from the prior year period, primarily driven by an increase in technology and information services, principally reflecting higher expenses associated with research services and license fees in the second quarter of 2025, an increase in occupancy and equipment rental expense, primarily related to an increase in office space, and an increase in travel and related expenses, largely due to higher levels of business activity and increased headcount.

Six Months Ended June 30, 2025 versus June 30, 2024

Net Revenues were $1.49 billion for the six months ended June 30, 2025, an increase of $255.0 million, or 21%, versus $1.23 billion for the six months ended June 30, 2024 .

The increase in revenues for the six months ended June 30, 2025 was primarily driven by an increase of $257.0 million, or 26%, in Advisory Fees, reflecting an increase in revenue during 2025 across both M&A and non-M&A assignments, as well as an increase in revenue earned from large transactions during 2025.

Commissions and Related Revenue increased $11.9 million, or 12%, compared to the six months ended June 30, 2024, primarily reflecting higher trading commissions driven by increased trading volume during 2025.

Underwriting Fees were flat compared to the six months ended June 30, 2024.

Other Revenue, net, decreased $13.9 million, or 30%, compared to the six months ended June 30, 2024, primarily reflecting lower performance of our investment funds portfolio, as well as lower returns on our fixed income investment portfolios, which primarily consist of U.S.

Treasury bills.

The investment funds portfolio is used as an economic hedge against our deferred cash compensation program.

Employee Compensation and Benefits Expense was $983.5 million for the six months ended June 30, 2025, an increase of $158.1 million, or 19%, versus $825.4 million for the six months ended June 30, 2024.

Non-compensation expenses were $250.5 million for the six months ended June 30, 2025, an increase of $26.7 million, or 12%, versus $223.9 million for the six months ended June 30, 2024 .

Non-compensation expenses increased from the prior year period, primarily driven by an increase in technology and information services, principally reflecting higher expenses associated with research services, consulting costs and license fees, an increase in occupancy and equipment rental expense, primarily related to an increase in office space, and an increase in travel and related expenses, largely due to higher levels of business activity and increased headcount.

Investment Management

The following table summarizes the operating results of the Investment Management segment.

For the Three Months Ended March 31,

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For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

(dollars in thousands)

13 unchanged sentences

(2) Non-Compensation expenses are as follows:

For the Three Months Ended March 31,

2025 2024 Change

For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

(dollars in thousands)

1 unchanged sentence

Occupancy and Equipment Rental $ 653 $ 561 16 % $ 1,281 $ 1,102 16 %

Professional Fees 1,519 1,156 31 %

Professional Fees (A)

1,074 1,069 — % 2,320 2,008 16 %

Travel and Related Expenses 255 213 20 % 462 462 — %

Communications and Information Services 842 703 20 %

Technology and Information Services (A)

1,176 920 28 % 2,291 1,840 25 %

Depreciation and Amortization 108 97 11 % 191 181 6 %

2 unchanged sentences

Total Operating Expenses $ 4,057 $ 3,742 8 % $ 8,103 $ 7,181 13 %

(A) Includes the reclassification of $0.3 million and $0.5 million of technology and related expenses from "Professional Fees" to "Technology and Information Services" in the Investment Management segment for the three and six months ended June 30, 2024, respectively, to conform to the current presentation.

See Notes 2 and 19 to our unaudited condensed consolidated financial statements for further information.

Investment Management Results of Operations

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We are also passive investors in Trilantic IV and Trilantic V.

In the event the private equity funds perform below certain thresholds, we may be obligated to repay certain carried interest previously distributed.

As of March 31, 2025, there was no previously distributed carried interest received from the funds subject to repayment.

In the event the private equity funds perform below certain thresholds, we may be obligated to repay certain carried

interest previously distributed.

As of June 30, 2025, there was no previously distributed carried interest received from the funds subject to repayment.

• We also hold an interest in Atalanta Sosnoff that is accounted for under the equity method of accounting and previously held an interest in ABS (through July 2024).

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Assets Under Management

AUM in our Wealth Management business of $13.7 billion at March 31, 2025 decreased $0.2 billion, or 1% , compared to $13.9 billion at December 31, 2024.

AUM in our Wealth Management business of $14.5 billion at June 30, 2025 increased $0.6 billion, or 4% , compared to $13.9 billion at December 31, 2024.

The amounts of AUM presented in the table below reflect the fair value of assets which we manage on behalf of Wealth Management clients.

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The inputs into the determination of fair value require significant management judgment or estimation.

Wealth Management maintained 75% and 77% of Level 1 investments, 20% and 19% of Level 2 investments and 5% and 4% of Level 3 investments as of March 31, 2025 and December 31, 2024, respectively.

Wealth Management maintained 77% of Level 1 investments, 19% of Level 2 investments and 4% of Level 3 investments as of June 30, 2025 and December 31, 2024.

The fees that we receive for providing investment advisory and management services are primarily driven by the level and composition of AUM.

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The fees we earn are also impacted by our investment performance, as the appreciation or depreciation in the value of the assets that we manage directly impacts our fees.

The following table summarizes AUM activity for Wealth Management for the three months ended March 31, 2025:

The following table summarizes AUM activity for Wealth Management for the six months ended June 30, 2025:

(dollars in millions)

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Outflows (625)

Market Appreciation (Depreciation) (268)

Balance at March 31, 2025 $ 13,700

Unconsolidated Affiliates - Balance at March 31, 2025

Market Appreciation 406

Balance at June 30, 2025 $ 14,478

Unconsolidated Affiliates - Balance at June 30, 2025

Atalanta Sosnoff $ 8,961

The following table represents the composition of AUM for Wealth Management as of March 31, 2025:

The following table represents the composition of AUM for Wealth Management as of June 30, 2025:

Equities 66 %

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Our Wealth Management business serves individuals, families and related institutions delivering customized investment management, financial planning, and trust and custody services.

Investment portfolios are tailored to meet the investment objectives of individual clients and reflect a blend of equity, fixed income and other products.

Investment portfolios are tailored to meet the investment

objectives of individual clients and reflect a blend of equity, fixed income and other products.

Fees charged to clients reflect the composition of the assets managed and the services provided.

Investment performance in the Wealth Management business is measured against appropriate indices based on the composition of AUM, most frequently the S&P 500 and a composite fixed income index principally reflecting BarCap and MSCI indices.

For the three months ended March 31, 2025, AUM for Wealth Management decreased 1% , reflecting a 2% decrease due to market depreciation, partially offset by a 1% increase due to flows .

Performance for the three months ended March 31, 2025 reflected:

For the six months ended June 30, 2025, AUM for Wealth Management increased 4% , reflecting a 3% increase due to market appreciation and a 1% increase due to net inflows .

Performance as of June 30, 2025 reflected:

• Wealth Management lagged the S&P 500 on a 1 and 3-year basis by approximately 7% and 5%, respectively

• Wealth Management outperformed the fixed income composite on a 1 and 3-year basis by approximately 0.4% and 0.1%, respectively

• The S&P 500 was down approximately 4% and the fixed income composite was up approximately 0.5%

AUM from our unconsolidated affiliate, Atalanta Sosnoff, decreased 4% compared to December 31, 2024.

Three Months Ended March 31, 2025 versus March 31, 2024

Net Revenues were $20.3 million for the three months ended March 31, 2025, an increase of $1.2 million, or 6%, versus $19.1 million for the three months ended March 31, 2024.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios increased $2.3 million, or 12%, compared to the three months ended March 31, 2024, as associated AUM increased 5%, primarily from market appreciation.

Employee Compensation and Benefits Expense was $11.8 million for the three months ended March 31, 2025, an increase of $1.4 million, or 13%, versus $10.5 million for the three months ended March 31, 2024, primarily reflecting a higher accrual for incentive compensation.

Non-Compensation expenses were $4.0 million for the three months ended March 31, 2025, an increase of $0.6 million, or 18%, versus $3.4 million for the three months ended March 31, 2024, primarily driven by an increase in professional fees and communications and information services.

Income from Equity Method Investments decreased $0.7 million, or 44%, compared to the three months ended March 31, 2024, driven by the sale of the remaining portion of our interest in ABS in the third quarter of 2024.

This decrease was partially offset by higher earnings from Atalanta Sosnoff in the first quarter of 2025.

◦ The S&P 500 was up approximately 15% and 20% on a 1 and 3-year basis, respectively

• Wealth Management lagged the fixed income composite on a 1-year basis by approximately 0.9% and outperformed the fixed income composite on a 3-year basis by approximately 0.01%

◦ The fixed income composite was up approximately 4% and 2% on a 1 and 3-year basis, respectively

• The S&P 500 and the fixed income composite were up approximately 6% and 2%, respectively, for the six months ended June 30, 2025

AUM from our unconsolidated affiliate, Atalanta Sosnoff, increased 5% compared to December 31, 2024.

Three Months Ended June 30, 2025 versus June 30, 2024

Net Revenues were $21.7 million for the three months ended June 30, 2025, an increase of $2.4 million, or 13%, versus $19.2 million for the three months ended June 30, 2024.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios increased $1.5 million, or 8%, compared to the three months ended June 30, 2024, as associated AUM increased 10%, primarily from market appreciation.

Employee Compensation and Benefits Expense was $13.2 million for the three months ended June 30, 2025, an increase of $2.3 million, or 21%, versus $10.9 million for the three months ended June 30, 2024, primarily reflecting a higher accrual for incentive compensation and higher base salaries.

Non-Compensation expenses were $4.1 million for the three months ended June 30, 2025, an increase of $0.3 million, or 8%, versus $3.7 million for the three months ended June 30, 2024, primarily driven by an increase in technology and information services.

Income from Equity Method Investments decreased $0.9 million, or 53%, compared to the three months ended June 30, 2024, driven by the sale of the remaining portion of our interest in ABS in the third quarter of 2024.

This decrease was partially offset by higher earnings from Atalanta Sosnoff in the second quarter of 2025.

See Note 8 to our unaudited condensed consolidated financial statements for further information.

Six Months Ended June 30, 2025 versus June 30, 2024

Net Revenues were $42.0 million for the six months ended June 30, 2025, an increase of $3.7 million, or 10%, versus $38.3 million for the six months ended June 30, 2024.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios increased $3.8 million, or 10%, compared to the six months ended June 30, 2024, as associated AUM increased 10%, primarily from market appreciation.

Employee Compensation and Benefits Expense was $25.0 million for the six months ended June 30, 2025, an increase of $3.7 million, or 17%, versus $21.3 million for the six months ended June 30, 2024, primarily reflecting a higher accrual for incentive compensation and higher base salaries.

Non-Compensation expenses were $8.1 million for the six months ended June 30, 2025, an increase of $0.9 million, or 13%, versus $7.2 million for the six months ended June 30, 2024, primarily driven by an increase in technology and information services and professional fees.

Income from Equity Method Investments decreased $1.6 million, or 49%, compared to the six months ended June 30, 2024, driven by the sale of the remaining portion of our interest in ABS in the third quarter of 2024.

This decrease was partially

offset by higher earnings from Atalanta Sosnoff in 2025.

See Note 8 to our unaudited condensed consolidated financial statements for further information.

Our operating cash flows are primarily influenced by the timing and receipt of fees and the payment of operating expenses, including incentive compensation to our employees and interest expense on our Notes Payable and lines of credit, and the payment of income taxes.

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A summary of our operating, investing and financing cash flows is as follows:

For the Three Months Ended March 31,

For the Six Months Ended June 30,

(dollars in thousands)

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End of Period $ 627,249 $ 640,458

Three Months Ended March 31, 2025.

Cash, Cash Equivalents and Restricted Cash were $562.7 million at March 31, 2025, a decrease of $319.4 million versus Cash, Cash Equivalents and Restricted Cash of $882.1 million at December 31, 2024.

Operating activities resulted in a net outflow of $549.7 million, primarily related to the payment of 2024 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2025, partially offset by earnings.

Cash of $679.8 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities and certificates of deposit, partially offset by purchases of equipment and leasehold improvements.

Financing activities during the period used cash of $460.9 million, primarily for purchases of treasury stock (including for the net settlement of RSUs) and the payment of dividends and distributions made to noncontrolling interest holders.

Six Months Ended June 30, 2025.

Cash, Cash Equivalents and Restricted Cash were $627.2 million at June 30, 2025, a decrease of $254.9 million versus Cash, Cash Equivalents and Restricted Cash of $882.1 million at December 31, 2024.

Operating activities resulted in a net outflow of $111.9 million, primarily related to the payment of 2024 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2025, partially offset by earnings.

Cash of $365.6 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities, partially offset by purchases of equipment and leasehold improvements and net purchases of certificates of deposit.

Financing activities during the period used cash of $541.8 million, primarily for purchases of treasury stock (including for the net settlement of RSUs) and noncontrolling interests, the payment of dividends and distributions made to noncontrolling interest holders.

Cash is also impacted due to the effect of foreign exchange rate fluctuation when translating non-U.S.

currencies to U.S.

Three Months Ended March 31, 2024.

Cash, Cash Equivalents and Restricted Cash were $578.4 million at March 31, 2024, a decrease of $27.1 million versus Cash, Cash Equivalents and Restricted Cash of $605.5 million at December 31, 2023.

Operating activities resulted in a net outflow of $281.2 million, primarily related to the payment of 2023 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2024, partially offset by earnings.

Cash of $576.5 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities and certificates of deposit.

Six Months Ended June 30, 2024.

Cash, Cash Equivalents and Restricted Cash were $640.5 million at June 30, 2024, an increase of $35.0 million versus Cash, Cash Equivalents and Restricted Cash of $605.5 million at December 31, 2023.

Operating activities resulted in a net inflow of $67.3 million, primarily related to earnings, partially offset by the payment of 2023 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2024.

Cash of $383.8 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities, partially offset by net purchases of certificates of deposit and purchases of equipment and leasehold improvements.

Financing activities during the period used cash of $411.0 million, primarily for purchases of treasury stock (including for the net settlement of RSUs) and noncontrolling interests, the payment of dividends and distributions made to noncontrolling interest holders.

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From time to time, advances and/or commitments may also be granted to new employees at or near the date they begin employment, or to existing employees for the purpose of incentive or retention.

Cash distributions related to partnership tax allocations are made to the partners of Evercore LP and certain other entities in accordance with our corporate estimated

payment calendar;

Cash distributions related to partnership tax allocations are made to the partners of Evercore LP and certain other entities in accordance with our corporate estimated payment calendar;

these payments are generally made quarterly.

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Restructuring activity generally is counter-cyclical to M&A activity.

In addition, during periods of unfavorable market conditions our Investment Management business may be impacted by reduced equity valuations and generate relatively lower revenue because fees we receive, either directly or through our affiliates, typically are in part based on the market value of underlying publicly-traded securities.

through our affiliates, typically are in part based on the market value of underlying publicly-traded securities.

Our profitability may also be adversely affected by our fixed costs and the possibility that we would be unable to scale back other costs within a time frame, and in an amount sufficient, to match any decreases in revenue relating to changes in market and economic conditions.

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These adverse conditions could also have an impact on our goodwill impairment assessment, which is done annually, as of November 30 th , or more frequently if circumstances indicate impairment may have occurred.

Recent actions taken by governments to levy tariffs on international trade have led to heightened geopolitical tensions, market volatility and uncertainty, including concerns over ongoing inflation, high interest rates and/or economic recession.

These conditions may impact the transaction environment in the near term and/or result in an elongation of the timing of transaction closings.

Recent actions on global trade policy have led to heightened geopolitical tensions, macroeconomic uncertainty and market volatility.

These evolving conditions may impact the transaction environment in the near to medium term and/or result in an elongation of the timing of transaction closings.

We will continue to assess the potential ongoing impacts of these factors, including the regular monitoring of our cash levels, liquidity, regulatory capital requirements, debt covenants and our other contractual obligations.

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On February 22, 2022, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $1.4 billion worth of Class A Shares and/or LP Units and 10.0 million Class A Shares and/or LP Units.

In addition, on April 29, 2025, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $1.6 billion worth of Class A Shares and/or LP Units and 8.0 million Class A Shares and/or LP Units.

Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately-negotiated transactions or otherwise.

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This program may be suspended or discontinued at any time and does not have a specified expiration date.

During the three months ended March 31, 2025, we repurchased 638,559 Class A Shares, at an average cost per share of $227.45, for $145.3 million, pursuant to our repurchase program.

On April 29, 2025, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $1.6 billion worth of Class A Shares and/or LP Units and 8.0 million Class A Shares and/or LP Units.

During the six months ended June 30, 2025, we repurchased 808,559 Class A Shares, at an average cost per share of $229.62, for $185.7 million, pursuant to our repurchase program.

In addition, we periodically buy shares into treasury from our employees in order to allow them to satisfy their minimum tax requirements for share deliveries under our share equity plan.

During the three months ended March 31, 2025, we repurchased 915,963 Class A Shares, at an average cost per share of $284.64, for $260.7 million, primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 1,554,522 Class A Shares repurchased during the three months ended March 31, 2025 were acquired for aggregate purchase consideration of $406.0 million, at an average cost per share of $261.15.

During the six months ended June 30, 2025, we repurchased 928,996 Class A Shares, at an average cost per share of $283.64, for $263.5 million, primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 1,737,555 Class A Shares repurchased during the six months ended June 30, 2025 were acquired for aggregate purchase consideration of $449.2 million, at an average cost per share of $258.50.

Noncontrolling Interest Purchases

During the second quarter of 2025, we purchased, at fair value, an additional 0.1% of the EWM Class A Units for $1.3 million.

This purchase resulted in a decrease to Noncontrolling Interest of $0.1 million and a decrease to Additional Paid-In Capital of $1.2 million on our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2025.

During the second quarter of 2024, we purchased, at fair value, an additional 0.3% of the EWM Class A Units for $1.0 million.

This purchase resulted in a decrease to Noncontrolling Interest of $0.1 million and a decrease to Additional Paid-In Capital of $1.0 million on our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2024.

Private Placement Notes

On March 30, 2016, we issued an aggregate $170.0 million of senior notes, including:

On March 30, 2016, we issued an aggregate of $170.0 million of senior notes, including:

$38.0 million aggregate principal amount of our 4.88% Series A Notes which were due March 30, 2021, $67.0 million aggregate principal amount of our 5.23% Series B Notes which were originally due March 30, 2023, $48.0 million aggregate principal amount of our 5.48% Series C Notes and $17.0 million aggregate principal amount of our 5.58% Series D Notes, pursuant to the 2016 Note Purchase Agreement, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

On August 1, 2019, we issued $175.0 million and £25.0 million of senior unsecured notes through private placement.

These notes reflect a weighted average life of 12 years and a weighted average stated interest rate of 4.26%.

These notes include:

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On March 29, 2 021, we issued $38.0 million aggregate principal amount of our 1.97% Series I Notes, pursuant to the 2021 Note Purchase Agreement, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

In August 2025, we repaid the $38.0 million aggregate principal amount of our Series I Notes.

On June 28, 2022, we issued $67.0 million aggregate principal amount of our 4.61% Series J Notes, pursuant to the 2022 Note Purchase Agreement, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

Interest on the above issuances is payable semi-annually and the notes are guaranteed by certain of our domestic subsidiaries.

We may, at our option, prepay all, or from time to time any part of, the notes (without regard to Series), in an

amount not less than 5% of the aggregate principal amount of each of the individual issuances then outstanding at 100% of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the notes will have the right to require us to prepay the entire unpaid principal amounts held by each holder of the notes plus accrued and unpaid interest to the prepayment date.

We may, at our option, prepay all, or from time to time any part of, the notes (without regard to Series), in an amount not less than 5% of the aggregate principal amount of each of the individual issuances then outstanding at 100% of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the notes will have the right to require us to prepay the entire unpaid principal amounts held by each holder of the notes plus accrued and unpaid interest to the prepayment date.

The respective Note Purchase Agreements contain customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum interest coverage ratio (for the 2016 Private Placement Notes only), and customary events of default.

As of March 31, 2025, we were in compliance with all of these covenants.

As of June 30, 2025, we were in compliance with all of these covenants.

On July 24, 2025, we issued an aggregate of $250.0 million of senior notes, including:

$125.0 million aggregate principal amount of our 5.17% Series K Notes and $125.0 million aggregate principal amount of our 5.47% Series L Notes, pursuant to the 2025 Note Purchase Agreement dated as of July 10, 2025, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

We intend to use a portion of the net proceeds from the issuance and sale of the 2025 Private Placement Notes to repay maturing notes in the next twelve months issued under prior note purchase agreements.

The remaining net proceeds will be used for general corporate purposes.

Interest on the 2025 Private Placement Notes is payable semi-annually and the 2025 Private Placement Notes are guaranteed by certain of our domestic subsidiaries.

We may, at our option, prepay all, or from time to time any part of, the 2025 Private Placement Notes (without regard to Series), in an amount not less than 5% of the aggregate principal amount of the 2025 Private Placement Notes then outstanding at 100% of the principal amount thereof plus an applicable "make-whole amount." The 2025 Private Placement Notes also allow for prepayment within six months of maturity without an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the 2025 Private Placement Notes will have

the right to require us to prepay the entire unpaid principal amounts held by each holder of the 2025 Private Placement Notes plus accrued and unpaid interest to the prepayment date.

The 2025 Private Placement Notes contain customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default.

Interest on the 2025 Private Placement Notes is subject to certain escalation provisions in the event that the leverage ratio exceeds certain thresholds.

In conjunction with this issuance, we also amended our existing notes to provide for the same covenants and interest escalation provisions as the 2025 Private Placement Notes.

Lines of Credit

East previously held $30.0 million secured and $55.0 million unsecured revolving credit facilities with PNC, which matured on October 27, 2024.

On October 28, 2024, upon maturity of our $30.0 million secured and $55.0 million unsecured credit facilities with PNC, we established a revolving credit facility with PNC, as amended on March 17, 2025, in an aggregate principal amount of up to $85.0 million to be used for working capital and other corporate activities.

On July 10, 2025, we amended our $85.0 million revolving credit facility East held with PNC such that the aggregate principal amount was increased to up to $225.0 million to be used for working capital and other corporate activities.

The facility is unsecured.

In addition, the agreement contains certain reporting covenants, as well as certain debt covenants, that prohibit East and us from incurring other indebtedness, subject to specified exceptions.

We and our consolidated subsidiaries were in compliance with these covenants as of March 31, 2025.

Drawings under this facility bear interest at Daily SOFR plus 155 basis points and the maturity date is October 27, 2026.

There were no drawings under this facility at March 31, 2025.

Drawings bear interest at Daily SOFR plus 130 basis points and the maturity date was extended to July 10, 2028.

There were no drawings under this facility at June 30, 2025.

EGL maintains a subordinated revolving credit facility with PNC, as amended on October 25, 2024, in an aggregate principal amount of up to $75.0 million, to be used as needed in support of capital requirements from time to time of EGL.

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The interest rate provisions are Daily SOFR plus 145 basis points and the maturity date is October 28, 2026.

There were no drawings under this facility at March 31, 2025.

There were no drawings under this facility at June 30, 2025.

In addition, EGL's clearing broker provides temporary funding for the settlement of securities transactions.

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For further information see Note 17 to our unaudited condensed consolidated financial statements.

We had total commitments (not reflected on our Unaudited Condensed Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $2.6 million as of March 31, 2025 and December 31, 2024.

We may be required to fund these commitments at any time through June 2028, depending on the timing and level of investments by the private equity funds.

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We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any leasing activities that expose us to any liability that is not reflected in our unaudited condensed consolidated financial statements.

As of March 31, 2025, our current and former Senior Managing Directors owned an aggregate of approximately 1.4 million vested Class A LP Units, 0.3 million vested Class E LP Units, 0.4 million vested Class I LP Units and 0.2 million vested Class K LP Units.

In addition, 1.1 million unvested Class K-P Units, which convert into a number of Class K LP Units based on the achievement of certain market and service conditions and defined benchmark results, were outstanding as of March 31, 2025.

As of June 30, 2025, our current and former Senior Managing Directors owned an aggregate of approximately 1.4 million vested Class A LP Units, 0.3 million vested Class E LP Units, 0.4 million vested Class I LP Units and 0.2 million vested Class K LP Units.

We have an obligation to exchange vested Class A, E, I and K LP Units to Class A Common Stock upon the request of the holder.

Our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2025 included $553.0 million of Cash and Cash Equivalents and $811.5 million of Investment Securities and Certificates of Deposit, which are generally comprised of highly-liquid investments.

Our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2025 included $617.3 million of Cash and Cash Equivalents and $1.12 billion of Investment Securities and Certificates of Deposit, which are generally comprised of highly-liquid investments.

For further information regarding other cash commitments and the timing of payments, refer to "General" above.

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We hold equity securities and invest in exchange-traded funds principally as an economic hedge against our deferred cash compensation program.

As of March 31, 2025, the fair value of our investments with these products, based on closing prices, was $143.4 million.

We had net realized and unrealized losses of ($5.9) million for the three months ended March 31, 2025, from our exchange-traded funds portfolio.

As of June 30, 2025, the fair value of our investments with these products, based on closing prices, was $158.5 million.

We had net realized and unrealized gains of $15.1 million and $9.2 million for the three and six months ended June 30, 2025, respectively, from our exchange-traded funds portfolio.

See Note 7 to our unaudited condensed consolidated financial statements for further information.

We estimate that a hypothetical 10%, 20% and 30% adverse change in the market value of the investments would have resulted in a decrease in pre-tax income of approximately $14.3 million, $28.7 million and $43.0 million, respectively, for the three months ended March 31, 2025.

We estimate that a hypothetical 10%, 20% and 30% adverse change in the market value of the investments would have resulted in a decrease in pre-tax income of approximately $15.9 million, $31.7 million and $47.6 million, respectively, for the three months ended June 30, 2025.

Private Equity Funds

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See Note 8 to our unaudited condensed consolidated financial statements for further information.

We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $0.3 million for the three months ended March 31, 2025.

We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $0.5 million for the three months ended June 30, 2025.

Exchange Rate Risk

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Historically, the value of these foreign currencies has fluctuated relative to the U.S.

For the three months ended March 31, 2025, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Unaudited Condensed Consolidated Statement of Comprehensive Income was a gain of $8.7 million, net of tax.

For the six months ended June 30, 2025, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Unaudited Condensed Consolidated Statement of Comprehensive Income was a gain of $27.4 million, net of tax.

It is generally not our intention to hedge our foreign currency exposure in these subsidiaries, and we will reevaluate this policy from time to time.

Periodically, we enter into foreign currency exchange forward contracts as an economic hedge against exchange rate risk for foreign currency denominated accounts receivable or other commitments.

We entered into a foreign currency exchange forward contract during the third quarter of 2023 to buy 30.0 million British Pounds sterling for $36.7 million, which settled during the first quarter of 2024, and resulted in a loss of $0.3 million for the three months ended March 31, 2024.

We maintain cash and cash equivalents, as well as certificates of deposit, with financial institutions with high credit ratings.

At times, we may maintain deposits in federally insured financial institutions in excess of federally insured ("FDIC") limits or enter into sweep arrangements where banks will periodically transfer a portion of our excess cash position to a money market fund.

However, we believe that we are not exposed to significant credit risk due to the financial position of the depository institutions or investment vehicles in which those deposits are held.

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The collection period for liability management and restructuring transaction receivables may exceed 90 days.

We recorded bad debt expense of $2.6 million for the three months ended March 31, 2025 and reversed bad debt expense of $0.6 million for the three months ended March 31, 2024.

As of March 31, 2025 and December 31, 2024, total receivables recorded in Accounts Receivable amounted to $469.1 million and $421.5 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $113.5 million and $101.3 million, respectively.

We recorded bad debt expense of $3.5 million and $1.0 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025 and December 31, 2024, total receivables recorded in Accounts Receivable amounted to $484.0 million and $421.5 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $113.0 million and $101.3 million, respectively.

Other Current Assets and Other Assets include arrangements in which an estimate of variable consideration has been included in the transaction price and thereby recognized as revenue that precedes the contractual due date (contract assets).

As of March 31, 2025, total contract assets recorded in Other Current Assets and Other Assets amounted to $32.7 million and $15.5 million, respectively.

As of June 30, 2025, total contract assets recorded in Other Current Assets and Other Assets amounted to $77.3 million and $16.2 million, respectively.

As of December 31, 2024, total contract assets recorded in Other Current Assets and Other Assets amounted to $62.4 million and $14.5 million, respectively.

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Treasury securities, exchange-traded funds and securities investments, we manage our credit risk exposure by limiting concentration risk and maintaining investment grade credit quality.

As of March 31, 2025, we had Investment Securities of $794.6 million, of which 82% were U.S.

As of June 30, 2025, we had Investment Securities of $1.03 billion, of which 85% were U.S.

Treasury securities.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis