What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-25 compared with 2025-05-01 · 215 added, 121 removed, 709 unchanged (32% of the section changed)

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The following discussion should be read in conjunction with Lazard’s condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”).

All references to “2025,” “2024,” “ first quarter” or “the period” refer to, as the context requires, the three month periods ended March 31, 2025 and 2024.

All references to “2025,” “2024,” “second quarter,” “first half” or “the period” refer to, as the context requires, the three month and six month periods ended June 30, 2025 and 2024.

Forward-Looking Statements and Certain Factors that May Affect Our Business

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We operate in a very competitive and global environment.

Recent changes to international trade policies and practices have resulted in a period of heightened uncertainty and market volatility.

For example, in April 2025, the U.S.

government introduced tariffs on trading partners globally, including China which responded with retaliatory tariffs.

Changes in the first half of 2025 to international trade policies and practices have resulted in a period of heightened uncertainty.

The potential for geopolitical impacts could further exacerbate market volatility and contribute to weakened economic conditions.

We believe our broad set of capabilities and diversified business model positions us well to meet evolving client needs in varying economic environments.

However, unpredictability due to rapidly changing international trade policies and market volatility could reduce our clients’ ability to finalize decision-making or execute on investment priorities.

We believe our broad set of capabilities and diversified business model position us well to meet evolving client needs in varying economic environments.

However, unpredictability, for example due to changing international trade policies, could reduce our clients’ ability to finalize decision-making or execute on investment priorities.

New risks and uncertainties emerge continuously, and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all potentially applicable factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

See Item 1A, “Risk Factors” in our Form 10-K.

Furthermore, net income and revenue in any period may not be

indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Furthermore, net income and revenue in any period may not be indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Overall, we continue to focus on the development of our business, including the generation of revenue growth, earnings growth and shareholder returns, the evaluation of potential growth opportunities, the investment in new technology to support the development of existing and new business opportunities, the evaluation of other strategic alternatives, the prudent management of our costs and expenses, the efficient use of our assets and the return of capital to our shareholders.

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Three Months Ended

June 30, Six Months Ended

Incr / (Decr) 2025 2024 %

Incr / (Decr)

($ in billions)

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____________________________________

Dealogic as of April 2, 2025.

Another measure of global restructuring activity is the number of corporate defaults, which decreased during the first quarter of 2025 as compared to the first quarter of 2024.

The number of defaulting issuers was 27 in the first quarter of 2025, according to Moody’s Investors Service, Inc., as compared to 38 in the first quarter of 2024.

Dealogic as of July 3, 2025.

Another measure of global restructuring activity is the number of corporate defaults, which decreased during the first half of 2025 as compared to the first half of 2024.

The number of defaulting issuers was 64 in the first half of 2025, according to Moody’s Investors Service, Inc., as compared to 80 in the first half of 2024.

Net revenue trends in Financial Advisory are generally correlated to the level of completed industry-wide M&A transactions and restructuring transactions occurring subsequent to corporate debt defaults.

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Asset Management

The percentage change in major equity market indices at March 31, 2025, as compared to such indices at December 31, 2024 and at March 31, 2024 is shown in the table below:

Percentage Changes March 31, 2025 vs.

December 31, 2024 March 31, 2024

The percentage change in major equity market indices at June 30, 2025, as compared to such indices at March 31, 2025, December 31, 2024 and at June 30, 2024 is shown in the table below:

Percentage Changes June 30, 2025 vs.

March 31, 2025 December 31, 2024 June 30, 2024

MSCI World Index 11 % 9 % 16 %

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In addition, Lazard Group LLC is subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.

On July 4, 2025, the U.S.

federal government enacted the One Big Beautiful Bill Act (the “OBBBA”), a broad tax and spending bill that includes provisions impacting corporate taxpayers.

The Company is evaluating the impact of the OBBBA, but currently does not expect a material impact to its effective tax rate as a result of the changes.

Additionally, the Organization for Economic Cooperation and Development (the “OECD”) reached agreement among various countries, including the EU member states, to establish a 15% minimum tax on certain multinational companies, commonly called “Pillar Two”.

Many countries continue to announce changes in their tax laws and regulations to implement the OECD Pillar Two proposals.

Lazard is continuing to evaluate the potential impact on future periods of the Pillar Two proposals, as new guidance becomes available.

We are continuing to monitor Pillar Two legislative developments and their impact on future periods.

See “Critical Accounting Policies and Estimates—Income Taxes” below and Notes 16 and 18 of Notes to Condensed Consolidated Financial Statements for additional information regarding income taxes, our deferred tax assets and the tax receivable agreement obligation.

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Dollars using exchange rates as of the respective balance sheet date, while revenue and expenses are translated at average exchange rates during the respective periods based on the daily closing exchange rates.

Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a component of stockholders’ equity.

Adjustments that result from translating amounts from a subsidiary’s functional currency are reported as a

component of stockholders’ equity.

Foreign currency remeasurement gains and losses on transactions in non-functional currencies are included in the condensed consolidated statements of operations.

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in thousands)

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Operating Income 93,081 63,640 147,716 118,201

Provision (benefit) for income taxes (7,354) 14,337

Provision for income taxes 31,764 11,587 24,410 25,924

Net Income 61,317 52,053 123,306 92,277

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in thousands)

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Revenue related to noncontrolling interests and similar arrangements (a) (12,000) (4,920) (18,011) (12,023)

Gains related to LFI and other similar arrangements (b) (5,243) (9,373)

(Gains) losses related to LFI and other similar arrangements (b) (10,509) 1,201 (15,752) (8,172)

Distribution fees, reimbursable deal costs, provision for credit losses and other (c) (24,717) (19,588) (39,298) (42,537)

(14,581) (22,949)

Interest expense (d) 21,095 22,600 42,064 43,250

Losses associated with cost-saving initiatives (e) – – – 587

Adjusted net revenue (f) $ 643,185 $ 746,565

Total adjustments (f) (26,131) (707) (30,997) (18,895)

Adjusted net revenue (g) $ 769,866 $ 684,642 $ 1,413,051 $ 1,431,207

____________________________________

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(d) Interest expense (excluding interest expense incurred by LFB) is added back in determining adjusted net revenue because such expense relates to corporate financing activities and is not considered to be a cost directly related to the revenue of our business.

(e) Represents the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss in the three month period ended March 31, 2024.

(f) Adjusted net revenue is a non-GAAP measure.

(e) Represents the reclassification of currency translation adjustments to earnings from accumulated other comprehensive loss in the six month period ended June 30, 2024.

(f) Total adjustments equal the “other segment items” in Note 20 of Notes to Condensed Consolidated Financial Statements.

(g) Adjusted net revenue is a non-GAAP measure.

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in thousands)

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Compensation and benefits expense related to noncontrolling interests and similar arrangements (a) (4,436) (1,897) (8,177) (4,005)

Charges pertaining to LFI and other similar arrangements (b) (5,243) (9,373)

(Charges) credits pertaining to LFI and other similar arrangements (b) (10,509) 1,201 (15,752) (8,172)

Expenses associated with cost-saving initiatives – – – (46,610)

Adjusted compensation and benefits expense (c) $ 504,263 $ 451,864 $ 925,549 $ 944,597

Adjusted compensation and benefits expense, as a % of adjusted net revenue (c) 65.5 % 66.0 %

Adjusted compensation and benefits expense, as a %

of adjusted net revenue (c) 65.5 % 66.0 % 65.5 % 66.0 %

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in thousands)

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Total non-compensation expense $ 183,708 $ 169,149 $ 346,854 $ 328,517

Non-compensation expense related to noncontrolling

interests and similar arrangements (a) (657) (526)

Distribution fees, reimbursable deal costs, provision

for credit losses and other (b) (14,581) (22,949)

Non-compensation expense related to

noncontrolling interests and similar

arrangements (a) (1,594) (881) (2,251) (1,407)

Distribution fees, reimbursable deal costs,

provision for credit losses and other (b) (24,717) (19,588) (39,298) (42,537)

Amortization and other acquisition-related costs (26) (68) (52) (136)

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in thousands)

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Headcount information is set forth below:

March 31, 2025 December 31, 2024 March 31, 2024

June 30, 2025 December 31, 2024 June 30, 2024

Managing Directors:

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Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

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

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

The Company reported net income attributable to Lazard of $55 million, as compared to net income attributable to Lazard of $50 million in the 2024 period.

Net revenue decreased $117 million, or 15%, with adjusted net revenue decreasing $103 million, or 14%, as compared to the 2024 period.

Net revenue increased $111 million, or 16%, with adjusted net revenue increasing $85 million, or 12%, as compared to the 2024 period.

Fee revenue from investment banking and other advisory activities increased $84 million, or 21%, as compared to the 2024 period.

Asset management fees, including incentive fees, increased $8 million, or 3%, as compared to the 2024 period.

In the aggregate, interest income, other revenue and interest expense increased $19 million as compared to the 2024 period.

Compensation and benefits expense increased $67 million, or 15%, as compared to the 2024 period.

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $504 million, an increase of $52 million, or 12%, as compared to $452 million in the 2024 period.

The ratio of adjusted compensation and benefits expense to adjusted net revenue was 65.5% for the 2025 period, as compared to 66.0% for the 2024 period.

Non-compensation expense increased $15 million, or 9%, as compared to the 2024 period.

Adjusted non-compensation expense increased $9 million, or 6%, as compared to the 2024 period.

Such increases in non-compensation expense and adjusted non-compensation expense were primarily due to increased marketing and business development and technology and information services expenses.

The ratio of adjusted non-compensation expense to adjusted net revenue was 20.4% for the 2025 period, as compared to 21.7% for the 2024 period.

Operating income increased $29 million, or 46%, as compared to the 2024 period.

Adjusted operating income increased $24 million, or 29%, as compared to the 2024 period, and, as a percentage of adjusted net revenue, was 14.1% for the 2025 period, as compared to 12.3% in the 2024 period.

The provision for income taxes reflects an effective tax rate of 34.1%, as compared to 18.2% for the 2024 period.

The change in the effective tax rate principally relates to the impact of discrete benefits during the second quarter of 2024 primarily relating to a favorable court decision in a longstanding tax matter, and changes in the geographic mix of earnings.

Net income attributable to noncontrolling interests increased $4 million as compared to the 2024 period.

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

The Company reported net income attributable to Lazard of $116 million, as compared to net income attributable to Lazard of $86 million in the 2024 period.

Net revenue decreased $6 million, with adjusted net revenue decreasing $18 million, or 1%, as compared to the 2024 period.

Fee revenue from investment banking and other advisory activities decreased $8 million, or 1%, as compared to the 2024 period.

Asset management fees, including incentive fees, decreased $5 million, or 1%, as compared to the 2024 period.

In the aggregate, interest income, other revenue and interest expense decreased $12 million as compared to the 2024 period.

In the aggregate, interest income, other revenue and interest expense increased $7 million, as compared to the 2024 period.

Compensation and benefits expense decreased $54 million, or 5%, as compared to the 2024 period, which included $47 million associated with the cost-saving initiatives.

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Adjusted non-compensation expense increased $22 million, or 8%, as compared to the 2024 period.

Such increases in non-compensation expense and adjusted non-compensation expense were primarily due to increased occupancy and equipment and marketing and business development expenses.

Such increases in non-compensation expense and adjusted non-compensation expense were primarily due to increased marketing and business development, occupancy and equipment and technology and information services expenses.

The ratio of adjusted non-compensation expense to adjusted net revenue was 21.6% for the 2025 period, as compared to 19.8% for the 2024 period.

Operating income remained substantially the same as compared to the 2024 period.

Operating income increased $30 million, or 25%, as compared to the 2024 period.

Adjusted operating income decreased $21 million, or 11%, as compared to the 2024 period, and, as a percentage of adjusted net revenue, was 12.9% for the 2025 period, as compared to 14.2% in the 2024 period.

The provision (benefit) for income taxes reflects an effective tax rate of (13.5)%, as compared to 26.3% for the 2024 period.

The provision for income taxes reflects an effective tax rate of 16.5%, as compared to 21.9% for the 2024 period.

The change in the effective tax rate principally relates to increases in discrete benefits for share-based incentive compensation and changes in the geographic mix of earnings.

Net income attributable to noncontrolling interests decreased $3 million as compared to the 2024 period.

Net income attributable to noncontrolling interests increased $1 million, or 15%, as compared to the 2024 period.

For additional discussion of the drivers of our adjusted operating results for the period, see “Business Segments” below.

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Adjusted compensation and benefits expense and adjusted non-compensation expense include costs directly incurred by each segment, with certain adjustments.

Adjusted net revenue, adjusted operating income, and adjusted operating income as a percentage of adjusted net revenue, are non-GAAP measures in the tables below.

Adjusted net revenue, adjusted operating income (loss), and adjusted operating income as a percentage of adjusted net revenue, are non-GAAP measures in the tables below.

The Company previously disclosed each segment’s operating results on a U.S.

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in thousands)

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GAAP basis $ 497,306 $ 411,308 $ 864,665 $ 864,815

Reimbursable deal costs, (provision) benefit for credit losses and other 2,181 (7,501)

Reimbursable deal costs, provision for credit losses and other (5,952) (3,372) (3,771) (10,873)

Interest expense 5 – 8 41

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Lazard Statistics:

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________________________________________

Dealogic as of April 2, 2025.

Dealogic as of July 3, 2025.

The geographical distribution of Financial Advisory adjusted net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory adjusted net revenue, which are located in the Americas (primarily in the U.S.), EMEA (primarily in the U.K., France, Germany, Italy and Spain) and the Asia Pacific region and therefore may not be reflective of the geography in which the clients are located.

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Americas 56 % 60 % 60 % 62 %

EMEA 43 40 39 38

Asia Pacific 1 – 1 –

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Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

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

Financial Advisory net revenue decreased $86 million, or 19%, as compared to the 2024 period.

Financial Advisory adjusted net revenue decreased $77 million, or 17%, as compared to the 2024 period.

The decrease in Financial Advisory net revenue and adjusted net revenue was primarily driven by a lower number of transactions with fees above $10 million compared to the same period in 2024 and a decreased number of completed M&A transactions with values greater than $500 million as compared to the 2024 period.

Adjusted compensation and benefits expense decreased $62 million, or 21%, as compared to the 2024 period, primarily driven by decreased adjusted net revenue.

Adjusted non-compensation and benefits expense increased $5 million, or 10%, as compared to the 2024 period, primarily due to increased occupancy and equipment and marketing and business development expenses.

Adjusted operating income was $77 million, a decrease of $20 million, or 20%, as compared to adjusted operating income of $97 million in the 2024 period and, as a percentage of adjusted net revenue, was 20.8%, as compared to 21.6% in the 2024 period.

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

Financial Advisory net revenue increased $86 million, or 21%, as compared to the 2024 period.

Financial Advisory adjusted net revenue increased $83 million, or 20%, as compared to the 2024 period.

The increase in Financial Advisory net revenue and adjusted net revenue was primarily driven by an increased number of completed M&A transactions with values greater than $500 million as compared to the 2024 period.

Adjusted compensation and benefits expense increased $42 million, or 15%, as compared to the 2024 period, primarily driven by increased adjusted net revenue.

Adjusted non-compensation expense increased $1 million, or 3%, as compared to the 2024 period.

Adjusted operating income was $122 million, an increase of $40 million, or 50%, as compared to adjusted operating income of $82 million in the 2024 period, and, as a percentage of adjusted net revenue, was 24.8%, as compared to 20.0% in the 2024 period.

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

Financial Advisory net revenue remained substantially the same as compared to the 2024 period .

Financial Advisory adjusted net revenue increased $6 million, or 1%, as compared to the 2024 period.

Adjusted compensation and benefits expense decreased $20 million, or 4%, as compared to the 2024 period.

Adjusted non-compensation expense increased $6 million, or 6%, as compared to the 2024 period primarily due to increased occupancy and equipment and marketing and business development expenses.

Adjusted operating income was $199 million, an increase of $21 million, or 12%, as compared to adjusted operating income of $178 million in the 2024 period, and, as a percentage of adjusted net revenue, was 23.1%, as compared to 20.9% in the 2024 period.

Asset Management

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The following table shows the composition of AUM for the Asset Management segment (see Item 1, “Business—Principal Business Lines—Asset Management—Investment Strategies”):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

($ in millions)

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Total AUM $ 248,360 $ 226,321

Total AUM at March 31, 2025 was $227 billion, an increase of $1 billion as compared to total AUM of $226 billion at December 31, 2024 due to market and foreign exchange appreciation, partially offset by net outflows.

Average AUM for the first quarter of 2025 decreased 7% as compared to the first quarter of 2024 and decreased 1% as compared to the fourth quarter of 2024.

As of both March 31, 2025 and December 31, 2024, approximately 82% of our AUM was managed on behalf of institutional and intermediary clients, including corporations, labor unions, pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors.

As of both March 31, 2025 and December 31, 2024, approximately 18% of our AUM was managed on behalf of individual client relationships.

As of both March 31, 2025 and December 31, 2024, AUM with foreign currency exposure represented approximately 62% of our total AUM.

Total AUM at June 30, 2025 was $248 billion, an increase of $22 billion, or 10%, as compared to total AUM of $226 billion at December 31, 2024 due to market and foreign exchange appreciation, partially offset by net outflows.

Average AUM for the second quarter of 2025 decreased 3% as compared to the three month period ended June 30, 2024 and decreased 5% as compared to the six month period ended June 30, 2024.

As of June 30, 2025, approximately 83% of our AUM was managed on behalf of institutional and intermediary clients, including corporations, labor unions, pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors, compared to approximately 82% as of December 31, 2024.

As of June 30, 2025, approximately 17% of our AUM was managed on behalf of individual client relationships, compared to approximately 18% as of December 31, 2024.

As of June 30, 2025, AUM with foreign currency exposure represented approximately 63% of our total AUM as compared to 62% at December 31, 2024.

AUM with foreign currency exposure generally declines in value with the strengthening of the U.S.

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Dollar weakens, with all other factors held constant.

The following is a summary of changes in AUM by asset class for the three month periods ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025

The following is a summary of changes in AUM by asset class for the three month and six month periods ended June 30, 2025 and 2024:

Three Months Ended June 30, 2025

Balance Inflows Outflows Net

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Total $ 227,427 $ 18,051 $ (17,374) $ 677 $ 11,886 $ 8,370 $ 248,360

Net flows were primarily driven by outflows in the Multi-Regional Equity platform and the Emerging Markets Fixed Income platform.

Three Months Ended March 31, 2024

For three months ended June 30, 2025, net flows were primarily driven by inflows into the Global Equity platform partially offset by outflows from the Multi-Regional Equity platform.

Six Months Ended June 30, 2025

Balance Inflows Outflows Net

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Total $ 226,321 $ 29,308 $ (32,290) $ (2,982) $ 12,711 $ 12,310 $ 248,360

Average AUM for the three month periods ended March 31, 2025 and 2024 for each significant asset class is set forth below.

For the six months ended June 30, 2025, net flows were primarily driven by outflows from the Multi-Regional Equity platform partially offset by inflows into the Global Equity platform.

Three Months Ended June 30, 2024

Balance Inflows Outflows Net

Flows Market Value

Appreciation/

(Depreciation) Foreign

Appreciation/

(Depreciation) AUM

($ in millions)

Equity $ 195,253 $ 6,549 $ (12,670) $ (6,121) $ 2,580 $ (1,286) $ 190,426

Fixed Income 47,220 2,094 (2,400) (306) (409) (394) 46,111

Other 7,959 320 (492) (172) 361 (15) 8,133

Total $ 250,432 $ 8,963 $ (15,562) $ (6,599) $ 2,532 $ (1,695) $ 244,670

Six Months Ended June 30, 2024

Balance Inflows Outflows Net

Flows Market Value

Appreciation/

(Depreciation) Foreign

Appreciation/

(Depreciation) AUM

($ in millions)

Equity $ 190,138 $ 10,576 $ (23,155) $ (12,579) $ 16,762 $ (3,895) $ 190,426

Fixed Income 48,107 3,876 (3,971) (95) (608) (1,293) 46,111

Other 8,406 595 (1,150) (555) 349 (67) 8,133

Total $ 246,651 $ 15,047 $ (28,276) $ (13,229) $ 16,503 $ (5,255) $ 244,670

Average AUM for the three month and six month periods ended June 30, 2025 and 2024 for each significant asset class is set forth below.

Average AUM generally represents the average of the monthly ending AUM balances for the period.

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in millions)

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in thousands)

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Americas 42 % 43 % 41 % 43 %

EMEA 44 45 45 44

Asia Pacific 14 12 14 13

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Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

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

Asset Management net revenue decreased $7 million, or 2%, as compared to the 2024 period.

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

Asset Management net revenue increased $7 million, or 2%, as compared to the 2024 period.

Asset Management adjusted net revenue increased $3 million, or 1%, as compared to the 2024 period.

Management fees and other revenue, on an adjusted basis, was $265 million, an increase of $2 million, or 1%, as compared to $263 million in the 2024 period.

Incentive fees, on an adjusted basis, were $4 million, an increase of $1 million as compared to $3 million in the 2024 period.

Adjusted compensation and benefits expense increased $5 million, or 4%, as compared to the 2024 period.

Adjusted non-compensation expense increased $8 million, or 14%, as compared to the 2024 period primarily due to increased technology and information services and marketing and business development expenses.

Asset Management adjusted operating income was $65 million, a decrease of $10 million, or 13%, as compared to adjusted operating income of $75 million in the 2024 period, and, as a percentage of adjusted net revenue, was 24.3%, as compared to 28.4% in the 2024 period.

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

Asset Management net revenue remained substantially the same as compared to the 2024 period.

Asset Management adjusted net revenue decreased $8 million, or 2%, as compared to the 2024 period.

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Adjusted compensation and benefits expense decreased $3 million, or 1%, as compared to the 2024 period.

Adjusted non-compensation expense increased $4 million, or 7%, as compared to the 2024 period.

Asset Management adjusted operating income was $62 million, a decrease of $7 million, or 10%, as compared to adjusted operating income of $70 million in the 2024 period and as a percentage of adjusted net revenue, was 23.6%, as compared to 25.2% in the 2024 period.

Adjusted non-compensation expense increased $12 million, or 10%, as compared to the 2024 period primarily due to increased technology and information services and marketing and business development expenses.

Asset Management adjusted operating income was $128 million, a decrease of $17 million, or 12%, as compared to adjusted operating income of $145 million in the 2024 period, and, as a percentage of net revenue, was 24.0%, as compared to 26.8% in the 2024 period.

The following table summarizes the reported adjusted operating results attributable to the Corporate segment:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

($ in thousands)

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GAAP basis $ 6,213 $ (11,446) $ (1,195) $ 4,324

(Revenue) loss related to noncontrolling interests and similar arrangements 839 (3,006)

Gains related to LFI and other similar arrangements (5,243) (9,373)

Revenue related to noncontrolling interests and similar arrangements

(6,775) (866) (5,936) (3,872)

(Gains) losses related to LFI and other similar arrangements

(10,509) 1,201 (15,752) (8,172)

Interest expense 21,087 22,598 42,047 43,204

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Lazard management believes that annual results are the most meaningful basis for comparison among present, historical and future periods.

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

Corporate net revenue decreased $23 million as compared to the 2024 period, primarily due to lower investment gains in the 2025 period as compared to the 2024 period, including investments held in connection with LFI.

Corporate adjusted net revenue decreased $15 million, as compared to the 2024 period, primarily due to lower investment gains in the 2025 period as compared to the 2024 period.

Adjusted compensation and benefits expense, including centrally managed costs, decreased $1 million, or 4%, as compared to the 2024 period.

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

Corporate net revenue increased $18 million as compared to the 2024 period, primarily due to gains in the 2025 period as compared to losses in the 2024 period attributable to investments held in connection with LFI.

Corporate adjusted net revenue decreased $1 million, or 13%, as compared to the 2024 period.

Adjusted compensation and benefits expense, including centrally managed costs, increased $5 million, or 13%, as compared to the 2024 period.

Adjusted non-compensation expense, including centrally managed costs, remained substantially the same as compared to the 2024 period.

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

Corporate net revenue decreased $6 million as compared to the 2024 period.

Corporate adjusted net revenue decreased $16 million, or 46%, as compared to the 2024 period primarily due to lower investment gains in the 2025 period as compared to the 2024 period.

Adjusted compensation and benefits expense, including centrally managed costs, increased $4 million, or 5%, as compared to the 2024 period.

Adjusted non-compensation expense, including centrally managed costs, increased $5 million, or 7%, as compared to the 2024 period.

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Summary of Cash Flows:

Three Months Ended

Six Months Ended

($ in millions)

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Additionally, we made payments through 2024 relating to severance and other employee termination costs associated with cost-saving initiatives.

Also See “Senior Debt” below for senior debt refinancing in the first quarter of 2024.

Liquidity is also affected by the level of LFB customer-related demand deposits, primarily from clients and funds managed by LFG.

To the extent that such deposits rise or fall, and assuming unchanged asset allocation, this has a corresponding impact on liquidity held at LFB, with the majority of such amounts generally being recorded in “deposits

with banks and short-term investments”.

LFB is subject to, and in compliance with, regulatory liquidity coverage ratios and liquidity levels are monitored on a daily basis.

We regularly monitor our liquidity position, including cash levels, lease obligations, investments, credit lines, principal investment commitments, interest and principal payments on debt, capital expenditures, dividend payments, purchases of shares of common stock, compensation and matters relating to liquidity and to compliance with regulatory net capital requirements.

At March 31, 2025, Lazard had approximately $909 million of cash and cash equivalents, including approximately $494 million held at Lazard’s operations outside the U.S.

At June 30, 2025, Lazard had approximately $978 million of cash and cash equivalents, including approximately $512 million held at Lazard’s operations outside the U.S.

Lazard provides for income taxes on substantially all of its foreign earnings and we expect that no material amount of additional taxes would be recognized upon receipt of dividends or distributions of such earnings from our foreign operations.

In April 2025, we made additional investments of approximately $90 million to seed our Asset Management strategies in connection with the launch of actively managed ETFs.

As of March 31, 2025, the Company’s remaining lease obligations were $60 million for 2025 (April 1 through December 31), $145 million from 2026 through 2027, $141 million from 2028 through 2029 and $261 million from 2030 through 2039.

As of March 31, 2025, Lazard had approximately $209 million in unused lines of credit available to it, including a $200 million, five-year, senior revolving credit facility under the Second Amended and Restated Credit Agreement, among Lazard Group LLC, the Banks from time to time party thereto and Citibank, N.A., as Administrative Agent (as amended from time to time, the “Second Amended and Restated Credit Agreement”).

As of June 30, 2025, the Company’s remaining lease obligations were $40 million for 2025 (July 1 through December 31), $153 million from 2026 through 2027, $150 million from 2028 through 2029 and $277 million from 2030 through 2039.

As of June 30, 2025, Lazard had approximately $210 million in unused lines of credit available to it, including a $200 million, five-year, senior revolving credit facility under the Second Amended and Restated Credit Agreement, among Lazard Group LLC, the Banks from time to time party thereto and Citibank, N.A., as Administrative Agent (as amended from time to time, the “Second Amended and Restated Credit Agreement”).

The Second Amended and Restated Credit Agreement contains customary terms and conditions, including limitations on consolidations, mergers, indebtedness and certain payments, as well as financial condition covenants relating to leverage and interest coverage ratios.

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The Second Amended and Restated Credit Agreement includes financial covenants that require that Lazard Group LLC not permit (i) its Consolidated Leverage Ratio (as defined in the Second Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be greater than 3.25 to 1.00, provided that the Consolidated Leverage Ratio may be greater than 3.25 to 1.00 for four (consecutive or nonconsecutive) quarters so long as it is not greater than 3.50 to 1.00 on the last day of any such quarter, or (ii) its Consolidated Interest Coverage Ratio (as defined in the Second Amended and Restated Credit Agreement) for the 12-month period ending on the last day of any fiscal quarter to be less than 3.00 to 1.00.

No amounts were outstanding under the Second Amended and Restated Credit Agreement as of March 31, 2025.

No amounts were outstanding under the Second Amended and Restated Credit Agreement as of June 30, 2025.

In addition, the Second Amended and Restated Credit Agreement contains certain other covenants (none of which relate to financial condition), events of default and other customary provisions.

At March 31, 2025, the Company was in compliance with all financial and nonfinancial provisions.

At June 30, 2025, the Company was in compliance with all financial and nonfinancial provisions.

Lazard’s annual cash flow generated from operations historically has been sufficient to enable it to meet its annual obligations.

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See also Notes 11, 13, 14, 16, 18 and 19 of Notes to Condensed Consolidated Financial Statements regarding information in connection with commitments, incentive plans, employee benefit plans, income taxes, tax receivable agreement obligations and regulatory requirements, respectively.

The table below sets forth our corporate indebtedness as of March 31, 2025 and December 31, 2024.

The table below sets forth our corporate indebtedness as of June 30, 2025 and December 31, 2024.

The agreements with respect to this indebtedness are discussed in more detail in our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Form 10-K.

Outstanding as of

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Senior Debt Annual Interest Rate Principal Unamortized

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The indenture and supplemental indentures relating to Lazard Group LLC’s senior notes contain certain covenants (none of which relate to financial condition), events of default and other customary provisions.

At March 31, 2025, the Company was in compliance with all of these provisions.

At June 30, 2025, the Company was in compliance with all of these provisions.

We may, to the extent required and subject to restrictions contained in our financing arrangements, use other financing sources, which may cause us to be subject to additional restrictions or covenants.

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As permitted under Rule 13-01 of Regulation S-X, Lazard, Inc.

has excluded summarized financial information for Lazard Group because the combined assets, liabilities and results of operations of Lazard Group for the period were not materially different than the corresponding amounts in Lazard, Inc.’s condensed consolidated financial statements presented herein and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.

has excluded summarized financial information for Lazard Group because the combined assets, liabilities and results of operations of Lazard, Inc.

and Lazard Group for the period were not materially different than the corresponding amounts in Lazard, Inc.’s condensed consolidated financial statements presented herein and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.

Stockholders’ Equity

At March 31, 2025, total stockholders’ equity was $649 million, as compared to $685 million at December 31, 2024, including $603 million and $636 million attributable to Lazard, Inc.

At June 30, 2025, total stockholders’ equity was $786 million, as compared to $685 million at December 31, 2024, including $742 million and $636 million attributable to Lazard, Inc.

on the respective dates.

The net activity in stockholders’ equity during the three month period ended March 31, 2025 is reflected in the table below (in millions of dollars):

The net activity in stockholders’ equity during the six month period ended June 30, 2025 is reflected in the table below (in millions of dollars):

Stockholders’ Equity - January 1, 2025 $ 685

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Other - net (13)

Stockholders’ Equity - March 31, 2025 $ 649

Stockholders’ Equity - June 30, 2025 $ 786

________________________________________

(a) Excludes net loss associated with redeemable noncontrolling interests of $1 million in 2025.

(a) Excludes net income associated with redeemable noncontrolling interests of $5 million in 2025.

(b) The tax withholding portion of share-based compensation is settled in cash, not shares.

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Purchases with respect to such program are set forth in the table below:

Three Months Ended March 31:

Six Months Ended June 30:

Shares Purchased Average

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2025 859,849 $ 46.44

As of March 31, 2025, a total of $164 million of share repurchase authorization remained available under Lazard, Inc.’s share repurchase program which will expire on December 31, 2026.

During the three month period ended March 31, 2025, Lazard, Inc.

As of June 30, 2025, a total of $160 million of share repurchase authorization remained available under Lazard, Inc.’s share repurchase program which will expire on December 31, 2026.

During the six month period ended June 30, 2025, Lazard, Inc.

had in place trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which it effected stock repurchases in the open market.

On April 24, 2025, the Board of Directors of Lazard declared a quarterly dividend of $0.50 per share on our common stock.

The dividend is payable on May 16, 2025 to stockholders of record on May 5, 2025.

On July 23, 2025, the Board of Directors of Lazard declared a quarterly dividend of $0.50 per share on our common stock.

The dividend is payable on August 15, 2025 to stockholders of record on August 4, 2025.

See Notes 12 and 13 of Notes to Condensed Consolidated Financial Statements for additional information regarding Lazard’s stockholders’ equity and incentive plans, respectively.

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We actively monitor our regulatory capital base.

Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure their general financial soundness and liquidity, which require, among other things,

that we comply with rules regarding certain minimum capital requirements.

These regulatory requirements may restrict the flow of funds to and from affiliates.

Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure their general financial soundness and liquidity, which require, among other things, that we comply with rules regarding certain minimum capital requirements.

These regulatory requirements may restrict the

flow of funds to and from affiliates.

See Note 19 of Notes to Condensed Consolidated Financial Statements for further information.

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As part of the process of preparing our consolidated financial statements, we estimate our income taxes for each of our tax-paying entities in its respective jurisdiction.

In addition to estimating actual current tax liabilities for these jurisdictions, we also must account for the tax effects of differences between the financial reporting and tax reporting of

items, such as basis adjustments, compensation and benefits expense, and depreciation and amortization.

Differences which are temporary in nature result in deferred tax assets and liabilities.

In addition to estimating actual current tax liabilities for these jurisdictions, we also must account for the tax effects of differences between the financial reporting and tax reporting of items, such as basis adjustments, compensation and benefits expense, and depreciation and amortization.

Differences which

are temporary in nature result in deferred tax assets and liabilities.

Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, any valuation allowance recorded against our deferred tax assets and our unrecognized tax benefits.

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To the extent material, we consolidate seed and LFI investment entities in which we own a controlling financial interest, and we would deconsolidate any such entity when we no longer have a controlling financial interest in such entity.

Seed investments held in entities in which the Company maintained a controlling financial interest were $110 million in twelve entities as of March 31, 2025, as compared to $111 million in ten entities as of December 31, 2024.

LFI investments held in entities in which the Company maintained a controlling financial interest were $54 million in nine entities as of March 31, 2025, as compared to $93 million in nine entities as of December 31, 2024.

As of March 31, 2025 and December 31, 2024, the Company did not consolidate any seed investment entities or LFI investment entities, with the exception of the consolidation of certain LFI funds (see Note 21 of Notes to Condensed Consolidated Financial Statements).

Seed investments held in entities in which the Company maintained a controlling financial interest were $230 million in 17 entities as of June 30, 2025, as compared to $111 million in ten entities as of December 31, 2024.

LFI investments held in entities in which the Company maintained a controlling financial interest were $54 million in nine entities as of June 30, 2025, as compared to $93 million in nine entities as of December 31, 2024.

As of June 30, 2025 and December 31, 2024, the Company did not consolidate any seed investment entities or LFI investment entities, with the exception of the consolidation of certain LFI funds (see Note 21 of Notes to Condensed Consolidated Financial Statements).

As such, seed investments and substantially all of LFI investments included in “investments” on the condensed consolidated statements of financial condition represented the Company’s economic interest in the seed and LFI investments.

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Data relating to investments is set forth below:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

($ in thousands)

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_______________________

(a) At March 31, 2025 and December 31, 2024, seed investments in directly owned equity securities were invested as follows:

March 31, 2025 December 31, 2024

(a) At June 30, 2025 and December 31, 2024, seed investments in directly owned equity securities were invested as follows:

June 30, 2025 December 31, 2024

Percentage invested in:

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Risk exposures may change as a result of ongoing portfolio activities and changing market conditions, among other things.

Equity Market Price Risk—At March 31, 2025 and December 31, 2024, the Company’s exposure to equity market price risk in its investment portfolio, which primarily relates to investments in equity securities, equity funds and hedge funds, was approximately $148 million and $164 million, respectively.

Equity Market Price Risk—At June 30, 2025 and December 31, 2024, the Company’s exposure to equity market price risk in its investment portfolio, which primarily relates to investments in equity securities, equity funds and hedge funds, was approximately $270 million and $164 million, respectively.

The Company hedges market exposure arising from a significant portion of our equity investment portfolios by entering into total return swaps.

The Company estimates that a hypothetical 10% adverse change in market prices would result in a net decrease of approximately $1.7 million and $0.9 million as of March 31, 2025 and December 31, 2024, respectively, in the carrying value of such investments, including the effect of the hedging transactions.

Interest Rate and Credit Spread Risk—At March 31, 2025 and December 31, 2024, the Company’s exposure to interest rate and credit spread risk in its investment portfolio related to investments in debt securities or funds which invest primarily in debt securities was $23 million and $24 million, respectively.

The Company estimates that a hypothetical 10% adverse change in market prices would result in a net decrease of approximately $1.2 million and $0.9 million as of June 30, 2025 and December 31, 2024, respectively, in the carrying value of such investments, including the effect of the hedging transactions.

Interest Rate and Credit Spread Risk—At June 30, 2025 and December 31, 2024, the Company’s exposure to interest rate and credit spread risk in its investment portfolio related to investments in debt securities or funds which invest primarily in debt securities was $18 million and $24 million, respectively.

The Company hedges market exposure arising from a portion of our debt investment portfolios by entering into total return swaps.

The Company estimates that a hypothetical 100 basis point adverse change in interest rates or credit spreads would result in a net decrease of approximately $0.8 million as of March 31, 2025 and a net increase of approximately $0.6 million in the carrying value of such investments as of December 31, 2024, including the effect of the hedging transactions.

Foreign Exchange Rate Risk—At March 31, 2025 and December 31, 2024, the Company’s exposure to foreign exchange rate risk in its investment portfolio, which primarily relates to investments in foreign currency denominated equity and debt securities and private equity investments was $83 million and $65 million, respectively.

The Company estimates that a hypothetical 100 basis point adverse change in interest rates or credit spreads would result in a net decrease of approximately $0.7 million as of June 30, 2025 and a net increase of approximately $0.6 million in the carrying value of such investments as of December 31, 2024, including the effect of the hedging transactions.

Foreign Exchange Rate Risk—At June 30, 2025 and December 31, 2024, the Company’s exposure to foreign exchange rate risk in its investment portfolio, which primarily relates to investments in foreign currency denominated equity and debt securities and private equity investments was $63 million and $65 million, respectively.

A significant portion of the Company’s foreign currency exposure related to our equity and debt investment portfolios is hedged through the aforementioned total return swaps.

The Company estimates that a 10% adverse change in foreign exchange rates versus the U.S.

Dollar would result in a net decrease of approximately $4.1 million and $2.0 million in the carrying value of such investments as of March 31, 2025 and December 31, 2024, respectively, including the effect of the hedging transactions.

Dollar would result in a net decrease of approximately $2.1 million and $2.0 million in the carrying value of such investments as of June 30, 2025 and December 31, 2024, respectively, including the effect of the hedging transactions.

Private Equity—The Company invests in private equity primarily as a part of its co-investment activities and in connection with certain legacy businesses.

At both March 31, 2025 and December 31, 2024, the Company’s exposure to changes in fair value of such investments was approximately $24 million.

The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $2.4 million in the carrying value of such investments as of both March 31, 2025 and December 31, 2024.

At June 30, 2025 and December 31, 2024, the Company’s exposure to changes in fair value of such investments was approximately $27 million and $24 million, respectively.

The Company estimates that a hypothetical 10% adverse change in fair value would result in a decrease of approximately $2.7 million and $2.4 million, respectively, in the carrying value of such investments as of June 30, 2025 and December 31, 2024.

For additional information regarding risks associated with our investments, see Item 1A, “Risk Factors—Other Business Risks—Our results of operations may be affected by fluctuations in the fair value of positions held in our investment portfolios” in our Form 10-K.

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We maintain an allowance for credit losses to provide coverage for expected losses from our receivables.

At March 31, 2025, total receivables amounted to $683 million, net of an allowance for credit losses of $26 million.

At June 30, 2025, total receivables amounted to $755 million, net of an allowance for credit losses of $27 million.

As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 77% and 23% of total receivables, respectively.

At December 31, 2024, total receivables amounted to $754 million, net of an allowance for credit losses of $32 million.

At December 31, 2024, total receivables amounted to $754 million, net of an allowance for

credit losses of $32 million.

As of that date, Financial Advisory and Asset Management fees, and customers and other receivables comprised 85% and 15% of total receivables, respectively.

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LFG and LFB offer wealth management and banking services to high net worth individuals and families.

At March 31, 2025 and December 31, 2024, customers and other receivables included $96 million and $83 million, respectively, of such LFB loans which are fully collateralized and monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans.

At June 30, 2025 and December 31, 2024, customers and other receivables included $117 million and $83 million, respectively, of such LFB loans which are fully collateralized and monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans.

Therefore, there was no allowance for credit losses required at those dates related to such receivables.

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In entering into derivative agreements, the Company is subject to counterparty risk.

Net derivative assets amounted to $1 million and $4 million at March 31, 2025 and December 31, 2024, respectively, and net derivative liabilities, excluding the derivative liability arising from the Company’s obligation pertaining to LFI and other similar deferred compensation arrangements amounted to $0.4 million and $3 million at March 31, 2025 and December 31, 2024, respectively.

Net derivative assets amounted to $0.1 million and $4 million at June 30, 2025 and December 31, 2024, respectively, and net derivative liabilities, excluding the derivative liability arising from the Company’s obligation pertaining to LFI and other similar deferred compensation arrangements, amounted to $32 million and $3 million at June 30, 2025 and December 31, 2024, respectively.

The Company also records derivative liabilities relating to its obligations pertaining to LFI awards and other similar deferred compensation arrangements, the fair value of which is based on the value of the underlying investments, adjusted for estimated forfeitures.

Changes in the fair value of the derivative liabilities are equally offset by the changes in the fair value of investments which are expected to be delivered upon settlement of LFI awards.

Derivative liabilities relating to LFI amounted to $172 million and $271 million at March 31, 2025 and December 31, 2024, respectively.

Derivative liabilities relating to LFI amounted to $183 million and $271 million at June 30, 2025 and December 31, 2024, respectively.

Risks Related to Cash and Cash Equivalents and Corporate Indebtedness

A significant portion of the Company’s indebtedness has fixed interest rates, while its cash and cash equivalents typically bear interest at market interest rates.

Based on account balances as of March 31, 2025, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $9 million in the event interest rates were to increase by 1% and decrease by approximately $9 million if rates were to decrease by 1%.

As of March 31, 2025, the Company’s cash and cash equivalents totaled approximately $909 million.

Substantially all of the Company’s cash and cash equivalents were invested in (i) highly liquid institutional money market

funds (a significant majority of which were invested solely in U.S.

Based on account balances as of June 30, 2025, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $10 million in the event interest rates were to increase by 1% and decrease by approximately $10 million if rates were to decrease by 1%.

As of June 30, 2025, the Company’s cash and cash equivalents totaled approximately $978 million.

Substantially all of the Company’s cash and cash equivalents were invested in (i) highly liquid institutional money market funds (a significant majority of which were invested solely in U.S.

Government or agency money market funds), (ii) in short-term interest bearing and non-interest bearing accounts at a number of leading banks throughout the world and (iii) in short-term certificates of deposit from such banks.

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The Company has in place business continuity and disaster recovery programs that manage its capabilities to provide services in the case of a disruption.

We purchase insurance policies designed to help protect the Company against accidental loss and losses that may significantly affect our financial objectives, personnel, property or our ability to continue to meet our responsibilities to our various stakeholder groups.

We purchase insurance policies designed to help protect the Company against accidental loss and losses that may significantly affect our financial

objectives, personnel, property or our ability to continue to meet our responsibilities to our various stakeholder groups.

See Item 1A, “Risk Factors” in our Form 10-K for more information regarding operational risk in our business and Item 1C, “Cybersecurity” in our Form 10-K for more information on the Company’s processes to identify, assess and manage cybersecurity risks.

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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