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Item 7. Management’s Discussion and Analysis

2026-02-23 compared with 2025-02-24 · 116 added, 136 removed, 693 unchanged (27% of the section changed)

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Business Summary

Founded in 1848, Lazard is one of the world's preeminent financial advisory and asset management firms, with operations in North and South America, Europe, the Middle East, Asia, and Australia.

Founded in 1848, Lazard is a global financial advisory and asset management firm with operations in North and South America, Europe, the Middle East, Asia, and Australia.

Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals.

We aim to deliver independent, differentiated advice and solutions grounded in contextual alpha—the broad insight and judgment needed to navigate macroeconomic, geopolitical, and other factors that we believe help leaders see beyond what the world sees today.

Our mission is to provide trusted, independent financial advice and investment solutions to our clients, backed by the intellectual capital of our firm.

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Our principal sources of revenue are derived from activities in the following business segments:

• Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services including M&A advisory, capital markets advisory, shareholder advisory, sovereign advisory, geopolitical advisory, restructuring and liability management, capital raising and placement, and other strategic matters;

• Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services including M&A advisory, strategic capital solutions, shareholder advisory, sovereign advisory, geopolitical advisory, restructuring and liability management, capital raising and placement, and other strategic matters;

• Asset Management, which offers a broad range of global investment solutions and investment and wealth management services in equity and fixed income strategies, asset allocation strategies, alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries and private wealth clients.

In addition, we record selected other activities in our Corporate segment, including the management of cash, investments, deferred tax assets, outstanding indebtedness and certain contingent obligations.

In addition, we record selected other activities in our Corporate segment, including cash management, investments, deferred tax assets, outstanding indebtedness and certain contingent obligations.

We also invest our own capital from time to time, generally alongside capital of qualified institutional and individual investors in alternative investments or private equity investments, and make investments to seed our Asset Management strategies.

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Our Financial Advisory revenues are primarily dependent on the successful completion of merger, acquisition, sale, restructuring, capital raising or similar transactions, and our Asset Management revenues are primarily driven by the levels of AUM.

Weak global economic and financial market conditions can result in a challenging business environment for M&A and capital-raising activity as well as our Asset Management business, however, may provide opportunities for our restructuring business.

While geopolitical uncertainty remains a consideration, we believe there are ongoing economic and market improvements relevant to our Financial Advisory and Asset Management businesses.

The tailwinds for Financial Advisory continue to strengthen as technology and generative AI advances, the biotech revolution, global expansion in energy demand and efforts to derisk supply chains create opportunities for clients.

In the U.S., shifts in the antitrust and regulatory environments may positively influence M&A decisions, and while a further decline in interest rates would be beneficial, they are largely secondary to these other factors in driving activity, in our view.

In Asset Management, we see new vectors for growth in wealth management and active ETFs, along with the potential for renewed interest in diversification beyond a handful of very large U.S.

Our outlook with respect to our Financial Advisory and Asset Management businesses is described below.

• Financial Advisory —M&A announcements for deals greater than $500 million increased year-over-year and we remain actively engaged with our clients.

The global scale and breadth of our Financial Advisory business, with strength in both the U.S.

and Europe, as well as in public and private capital markets, enables us to advise on a wide range of strategic advisory and restructuring transactions across a variety of industries.

Throughout 2024, we continued to see increased M&A activity occurring alongside higher levels of private capital transactions and greater restructuring and liability management assignments resulting from upcoming debt maturities.

In addition, we continue to invest in our Financial Advisory business by selectively hiring talented senior professionals to enhance our capabilities and sector expertise in M&A, public and private capital markets, and restructuring.

• Asset Management —Given our diversified, actively managed investment platform and our ability to provide investment solutions for a global mix of clients, we believe we are positioned to benefit from opportunities across the asset management industry.

We are continually developing new investment strategies that extend our existing platforms and assessing potential product acquisitions or other inorganic growth opportunities.

We operate in a very competitive and rapidly changing environment.

Weak or uncertain global economic and financial market conditions can create a challenging

environment for M&A and capital-raising activity and may also pressure our Asset Management business.

However, these conditions may generate increased opportunities for our restructuring business.

Additionally, heightened equity market volatility can create compelling investment opportunities for Asset Management.

We operate in a competitive, global environment.

Ongoing developments in international trade policies and practices, along with shifting domestic governmental priorities, have increased uncertainty relative to prior years.

We believe our broad set of capabilities, diversified business model, and the competitive advantage provided by Lazard’s contextual alpha—our ability to incorporate geopolitical, regulatory, and macroeconomic insight into our advice—position us well to meet evolving client needs across varying economic environments.

Unpredictability and the potential for related impacts, however, could create or exacerbate market volatility, contribute to weakened economic and business conditions, and 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.

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The number of defaulting issuers was 125 in 2025, according to Moody’s Investors Service, Inc., as compared to 148 in 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, respectively.

However, deviations from this relationship can occur in any given year for a number of reasons.

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Significant fluctuations in Financial Advisory net revenue can occur over the course of any given year, because a significant portion of such net revenue is earned upon the successful completion of a transaction, restructuring or capital raising activity, the timing of which is uncertain and is not subject to Lazard’s control.

Lazard’s Asset Management segment principally includes LAM, LFG, LFB and Edgewater.

Lazard’s Asset Management segment principally includes LAM, LFG, LFB and the Edgewater Funds (“Edgewater”).

Asset Management net revenue is derived from fees for investment management and advisory services provided to clients.

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Our investment advisory contracts are generally terminable at any time or on notice of 30 days or less.

Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures for a number of

reasons, including investment performance, changes in prevailing interest rates and financial market performance.

structures for a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance.

Moreover, it is possible that awarded institutional mandates may not be funded in the amounts and at the times initially anticipated, or at all.

In addition, as Lazard’s AUM includes significant amounts of assets that are denominated in currencies other than U.S.

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We use “adjusted net revenue”, a non-GAAP measure, for comparison of revenues between periods.

For the reconciliations and calculations with respect to “adjusted net revenue” and related ratios to “adjusted net revenue,” see the table under “Consolidated Results of Operations” below.

Operating Expenses

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We focus on a ratio of adjusted compensation and benefits expense to adjusted net revenue to manage costs, balancing a view of current conditions in the market for talent alongside our objective to drive long-term shareholder value.

Our practice is to pay our employees competitively to foster retention and motivate performance and, in doing so, we look to the market for talent and other factors, which are typically correlated with industry revenues, but may vary year by year.

Our practice is to pay our

employees competitively to foster retention and motivate performance and, in doing so, we look to the market for talent and other factors, which are typically correlated with industry revenues, but may vary year by year.

At the same time, the amount of compensation we award in a particular year is, in part, deferred and amortized over the successive years.

Increased competition for professionals, changes in the macroeconomic environment or the financial markets generally,

lower adjusted net revenue resulting from, for example, a decrease in M&A activity, our share of the M&A market or our AUM levels, changes in the mix of revenues from our businesses, investments in our businesses or various other factors could prevent us from achieving this goal.

Increased competition for professionals, changes in the macroeconomic environment or the financial markets generally, lower adjusted net revenue resulting from, for example, a decrease in M&A activity, our share of the M&A market or our AUM levels, changes in the mix of revenues from our businesses, investments in our businesses or various other factors could prevent us from achieving this goal.

Our operating expenses also include “non-compensation expense”, which includes costs for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services, and other expenses.

Our occupancy costs represent a significant portion of our aggregate operating expenses and are subject to change from time to time, particularly as leases for real property expire and are renewed or replaced with new, long-term leases for the same or other real property.

Our operating expenses also include our “benefit pursuant to tax receivable agreement obligation”.

We believe that “adjusted non-compensation expense”, a non-GAAP measure, when presented in conjunction with measures prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

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For calculations with respect to “adjusted non-compensation expense”, see the table under “Consolidated Results of Operations” below.

Our operating expenses also include our “benefit pursuant to tax receivable agreement”.

Cost-Saving Initiatives

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Provision for Income Taxes

On January 1, 2024, we completed our Conversion from an exempted company incorporated under the laws of Bermuda, named Lazard Ltd, to a U.S.

C-Corporation named Lazard, Inc.

Following the Conversion, all of our operating income is subject to U.S.

federal corporate income taxes.

is subject to U.S.

federal income taxes on all of its income and, through its subsidiaries, is also subject to state and local taxes on its income apportioned to various state and local jurisdictions.

Lazard Group operates principally through subsidiary corporations, including through those domiciled outside the U.S., that are subject to local income taxes in foreign jurisdictions.

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

Lazard Group LLC operates principally through subsidiary corporations, including through those domiciled outside the U.S., that are subject to local income taxes in foreign jurisdictions.

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

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 19 and 21 of Notes to Consolidated Financial Statements for additional information regarding income taxes, our deferred tax assets and the tax receivable agreement obligation.

Net Income Attributable to Noncontrolling Interests

Noncontrolling interests primarily consist of (i) amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own, (ii) profits interest participation rights, (iii) consolidated VIE interests held by employees and (iv) Lazard Growth Acquisition Corp I (“LGAC”) interests through February 2023.

Noncontrolling interests primarily consist of (i) amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own, (ii) profits interest participation rights and (iii) consolidated VIE interests held by employees.

See Notes 15 and 24 of Notes to Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs.

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Non-compensation 704,640 670,390 693,330

Benefit pursuant to tax receivable agreement (8,237) (43,894) (1,209)

Benefit pursuant to tax receivable agreement obligation (18,775) (8,237) (43,894)

Total operating expenses 2,771,249 2,665,365 2,595,446

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Revenue related to noncontrolling interests and similar arrangements (a) (45,847) (29,553) (30,190)

(Gains) losses related to Lazard Fund Interests ("LFI") and other similar arrangements (b) (16,176) (41,463) 44,261

Gains related to LFI and other similar arrangements (b) (24,324) (16,176) (41,463)

Distribution fees, reimbursable deal costs, provision for credit losses and other (c) (86,145) (90,665) (105,681)

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Gain on sale of property (f) – (114,271) –

Adjusted net revenue (g) $ 2,889,554 $ 2,439,619 $ 2,769,058

Total adjustments (g) (69,034) (162,283) (75,870)

Adjusted net revenue (h) $ 3,029,813 $ 2,889,554 $ 2,439,619

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(a) Revenue or loss related to the consolidation of noncontrolling interests and similar arrangements are excluded from adjusted net revenue because the Company has no economic interest in such amounts.

(a) Revenue related to the consolidation of noncontrolling interests and similar arrangements are excluded from adjusted net revenue because the Company has no economic interest in such amounts.

(b) Represents changes in the fair value of investments held in connection with LFI and other similar deferred compensation arrangements, for which a corresponding equal amount is excluded from compensation and benefits expense.

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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 losses associated with the closing of certain offices as part of the cost-saving initiatives, including the reclassification of currency translation adjustments to earnings from accumulated other comprehensive losses in the years ended December 31, 2024 and 2023 and transactions related to foreign currency exchange in the year ended December 31, 2023.

(e) Represents losses associated with the closing of certain offices as part of the cost-saving initiatives, primarily consisting of the reclassification of currency translation adjustments to earnings from accumulated other comprehensive losses in the years ended December 31, 2024 and 2023 and transactions related to foreign currency exchange in the year ended December 31, 2023.

(f) Represents gain on the sale of an owned office building.

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

(g) Total adjustments equal the “other segment items” in Note 23 of Notes to Consolidated Financial Statements.

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

Year Ended December 31,

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Compensation and benefits expense related to noncontrolling interests and similar arrangements (a) (26,081) (19,961) (9,233)

(Charges) credits pertaining to LFI and other similar arrangements (b) (16,176) (41,463) 44,261

Charges pertaining to LFI and other similar arrangements (b) (24,324) (16,176) (41,463)

Expenses associated with senior management transition (c) (50,124) – (10,674)

Expenses associated with cost-saving initiatives – (46,610) (182,103)

Expenses associated with sale of property (c) (17,002) – –

Expenses associated with senior management transition (d) – (10,674) (33,019)

Expenses associated with sale of property (d) – (17,002) –

Adjusted compensation and benefits expense (e) $ 1,984,855 $ 1,903,463 $ 1,702,537

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(b) Represents changes in the fair value of the compensation liability recorded in connection with LFI and other similar deferred incentive compensation awards, for which a corresponding equal amount is excluded from adjusted net revenue.

(d) Represents expenses associated with senior management transition reflecting the departure of certain executive officers.

(d) Represents estimated statutory profit-sharing expenses associated with the sale of an owned office building.

(e) Adjusted compensation and benefits expense and adjusted compensation and benefits expense, as a percentage of adjusted net revenue are non-GAAP measures.

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Expenses associated with cost-saving initiatives – (1,532) (13,023)

Expenses related to office space reorganization (c) – – (3,764)

Adjusted non-compensation expense (d) $ 575,146 $ 571,504 $ 518,173

Adjusted non-compensation expense, as a % of adjusted net revenue (d) 19.9 % 23.4 % 18.7 %

Adjusted non-compensation expense (c) $ 612,808 $ 575,146 $ 571,504

Adjusted non-compensation expense, as a % of adjusted net revenue (c) 20.2 % 19.9 % 23.4 %

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(b) Represents certain distribution, introducer and management fees paid to third parties, reimbursable deal costs and provision for credit losses relating to fees and other receivables that are deemed uncollectible, for which an equal amount is included for purposes of determining adjusted net revenue.

(d) Adjusted non-compensation expense and adjusted non-compensation expense, as a percentage of adjusted net revenue are non-GAAP measures.

(c) Adjusted non-compensation expense and adjusted non-compensation expense, as a percentage of adjusted net revenue are non-GAAP measures.

Year Ended December 31,

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Amortization and other acquisition-related costs 105 242 334

Expenses associated with senior management transition 50,124 – 10,674

Asset impairment charges – – 19,129

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Expenses associated with sale of property – 17,002 –

Expenses related to office space reorganization – – 3,764

Expenses associated with senior management transition – 10,674 33,019

Benefit pursuant to tax receivable agreement obligation ("TRA") (a) (8,237) (43,894) (1,209)

Benefit pursuant to tax receivable agreement obligation (a) (18,775) (8,237) (43,894)

Adjusted operating income (b) $ 432,150 $ 410,945 $ 165,578

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The Company reported net income attributable to Lazard, Inc.

of $280 million, as compared to net loss attributable to Lazard, Inc.

of $237 million, as compared to net income attributable to Lazard, Inc.

of $280 million in 2024.

Net revenue increased $47 million, or 2%, with adjusted net revenue increasing $140 million, or 5%, as compared to 2024.

Fee revenue from investment banking and other advisory activities increased $363 million, or 26%, as compared to 2023.

Investment banking and other advisory fees increased $73 million, or 4%, as compared to 2024.

Asset management fees, including incentive fees, increased $81 million, or 7%, as compared to 2024.

In the aggregate, interest income, other revenue and interest expense increased $136 million, as compared to 2023, primarily due to a gain on sale of property of $114 million in 2024 as compared to losses incurred from the impairment of equity method investments and the liquidation of LGAC in 2023.

This increase was partially offset by lower gains in 2024 as compared to 2023 attributable to investments held in connection with LFI.

Compensation and benefits expense, which included $47 million associated with the cost-saving initiatives in 2024, increased $57 million, or 3%, as compared to 2023, which included $182 million associated with the cost-saving initiatives.

In the aggregate, interest income, other revenue and interest expense decreased $107 million, or 56%, as compared to 2024, primarily due to a gain on the sale of an owned office building of $114 million in 2024.

Compensation and benefits expense increased $82 million, or 4%, as compared to 2024.

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $1,985 million, an increase of $81 million, or 4%, as compared to $1,903 million in 2024.

The ratio of adjusted compensation and benefits expense to adjusted net revenue was 65.5% for 2025, as compared to 65.9% for 2024.

Non-compensation expense decreased $23 million, or 3%, as compared to 2023, which included $13 million associated with the cost-saving initiatives.

Non-compensation expense increased $34 million, or 5%, as compared to 2024.

Adjusted non-compensation expense increased $38 million, or 7%, as compared to 2024.

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

The ratio of adjusted non-compensation expense to adjusted net revenue was 20.2% for 2025, as compared to 19.9% for 2024.

The Company reported operating income of $386 million, as compared to an operating loss of $80 million in 2023.

The benefit pursuant to tax receivable agreement obligation increased $11 million as compared to 2024 resulting from the periodic revaluation of the TRA liability.

Operating income decreased $59 million, or 15%, as compared to 2024.

Adjusted operating income increased $21 million, or 5%, as compared to 2024, and as a percentage of adjusted net revenue was 14.3%, as compared to 14.2% in 2024.

The provision (benefit) for income taxes reflects an effective tax rate of 25.8%, as compared to 28.3% in 2023.

See Note 19 of Notes to Consolidated Financial Statements.

Net income attributable to noncontrolling interests decreased $11 million as compared to 2023.

The provision for income taxes reflects an effective tax rate of 23.4%, as compared to 25.8% in 2024.

See Note 19 of Notes to Consolidated Financial Statements.

Net income attributable to noncontrolling interests increased $7 million as compared to 2024.

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.

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

In the applicable tables below, the comparable prior year information has been recast to reflect the updated measures used by management.

See Note 23 of Notes to Consolidated Financial Statements for further information regarding segments.

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.

Financial Advisory

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Reimbursable deal costs, provision for credit losses and other (9,433) (25,764) (30,565)

Interest expense 43 219 93

Interest expense (credit) (61) 43 219

Losses associated with cost-saving initiatives – 587 1,824

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Dealogic as of January 6, 2026.

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.

Year Ended December 31,

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Financial Advisory adjusted net revenue increased $94 million, or 5%, as compared to 2024.

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 2023.

Adjusted compensation and benefits expense increased $118 million, or 12% as compared to 2023, primarily associated with increased adjusted net revenue.

Adjusted non-compensation expense increased $8 million, or 4%, as compared to 2023, primarily due to increased professional services and occupancy and equipment expenses.

The increase in Financial Advisory net revenue and adjusted net revenue was primarily attributable to an increase in the average fee for completed non-M&A transactions as compared to 2024.

Adjusted compensation and benefits expense increased $40 million, or 3%, as compared to 2024, primarily driven by increased adjusted net revenue.

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

Adjusted operating income was $441 million, an increase of $44 million, or 11%, as compared to adjusted operating income of $397 million in 2024, and as a percentage of adjusted net revenue was 24.2%, as compared to 22.9% in 2024.

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AUM primarily consists of debt and equity instruments, which have a value that is readily available based on either prices quoted on a recognized exchange or prices provided by external pricing services.

Prices of equity and debt securities and other instruments that comprise our AUM are provided by well-recognized, independent, third-party vendors.

Such third-party vendors rely on prices provided by external pricing services which are obtained from recognized exchanges or markets, or, for certain fixed income securities, from evaluated bids or other similarly sourced price.

Prices of equity and debt securities and other instruments that comprise our AUM are provided by independent, third-party vendors.

Either directly, or through our third-party vendors, we perform a variety of regular due diligence procedures on our pricing service providers.

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Total AUM $ 254,300 $ 226,321 $ 246,651

Total AUM at December 31, 2024 was $226 billion, a decrease of $20 billion, or 8%, as compared to total AUM of $247 billion at December 31, 2023, due to net outflows and foreign exchange depreciation, partially offset by market appreciation.

Total AUM at December 31, 2025 was $254 billion, an increase of $28 billion, or 12%, 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 year ended December 31, 2025 increased $4 billion, or 2%, as compared to 2024.

As of December 31, 2025 and 2024, approximately $25 billion and $22 billion, respectively, were in products or portfolios considered multi-asset in nature.

Our top ten clients accounted for 24%, 32% and 29% of our total AUM at December 31, 2025, 2024 and 2023, respectively.

As of 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 compared to 85% as of December 31, 2023.

As of December 31, 2024, approximately 18% of our AUM was managed on behalf of individual client relationships compared to 15% as of December 31, 2023.

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

As of December 31, 2025, AUM with foreign currency exposure represented approximately 67% of our total AUM as compared to 62% at December 31, 2024.

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Total $ 226,321 $ 63,224 $ (81,344) $ (18,120) $ 35,002 $ 11,097 $ 254,300

Net flows were primarily driven by outflows in Global, Local and Multi-Regional Equity platforms and Emerging Markets Fixed Income platform.

Net flows were primarily driven by the Local, Multi-Regional and Global Equity platforms.

Year Ended December 31, 2024

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Total $ 246,651 $ 34,818 $ (70,494) $ (35,676) $ 23,456 $ (8,110) $ 226,321

Inflows include approximately $3.9 billion related to a wealth management acquisition.

Year Ended December 31, 2023

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See “Consolidated Results of Operations” above for further information on the adjustments.

(b) Adjusted net revenue, operating income, and adjusted operating income as a percentage of adjusted net revenue are non-GAAP measures.

(b) Adjusted net revenue, adjusted operating income, and adjusted operating income as a percentage of adjusted net revenue are non-GAAP measures.

No individual client constituted more than 10% of our Asset Management segment net revenue in the years ended December 31, 2025, 2024 and 2023.

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Incentive fees, on an adjusted basis, were $59 million , an increase of $16 million, as compared to $43 million in 2024.

Adjusted compensation and benefits expense increased $58 million, or 11%, as compared to 2023, primarily associated with increased adjusted net revenue.

Adjusted non-compensation expense increased $11 million, or 5%, as compared to 2023, primarily due to increased marketing and business development and technology and information services expenses.

Asset Management adjusted operating income was $267 million, a decrease of $37 million, or 12%, as compared to adjusted operating income of $303 million in 2023, and as a percentage of adjusted net revenue was 24.2%, as compared to 28.4% in 2023.

Adjusted compensation and benefits expense increased $37 million, or 6%, as compared to 2024, primarily driven by increased adjusted net revenue.

Adjusted non-compensation expense increased $26 million, or 11%, as compared to 2024, primarily due to continued investments in technology, higher mutual fund servicing fees, which were largely driven by an increase in AUM, and increased marketing and business development expenses.

Asset Management adjusted operating income was $269 million, an increase of $3 million, or 1%, as compared to adjusted operating income of $267 million in 2024, and as a percentage of adjusted net revenue was 23.1%, as compared to 24.2% in 2024.

On February 13, 2026, the Company completed the sale of a controlling stake in the Edgewater management vehicles and will no longer consolidate Edgewater into its financial results.

The Company’s total AUM of $254 billion as of December 31, 2025 included $1.5 billion related to Edgewater.

Edgewater is not material to our ongoing business activities.

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

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Revenue related to noncontrolling interests and similar arrangements (13,575) (7,339) (13,858)

(Gains) losses related to Lazard Fund Interests (“LFI”) and other similar arrangements (16,176) (41,463) 44,261

Provision for credit losses and other – (7,500) (7)

Gains related to LFI and other similar arrangements (24,324) (16,176) (41,463)

Interest expense 87,322 87,740 77,227

Provision for credit losses and other – – (7,500)

Asset impairment charges – – 19,129

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Year Ended December 31, 2025 versus December 31, 2024

Corporate net revenue, which included a gain on sale of property of $114 million in 2024, as compared to losses incurred from the impairment of equity method investments and the liquidation of LGAC in 2023, increased $130 million as compared to 2023.

This increase was partially offset by lower gains in 2024 as compared to 2023 attributable to investments held in connection with LFI.

Corporate adjusted net revenue increased $43 million, as compared to 2023, primarily due to increased interest income in 2024 as compared to losses from the liquidation of LGAC in 2023.

Adjusted compensation and benefits expense, including centrally managed costs, increased $25 million, or 18%, as compared to 2023, primarily associated with increased total firm adjusted net revenue.

Adjusted non-compensation expense, including centrally managed costs, decreased $16 million, or 10%, as compared to 2023, primarily due to decreased professional services and occupancy and equipment expenses.

Corporate net revenue decreased $119 million as compared to 2024, primarily due to a gain on the sale of an owned office building of $114 million in 2024.

Corporate adjusted net revenue decreased $19 million as compared to 2024.

Both net revenue and adjusted net revenue reflect lower interest and dividend income and lower investment gains in 2025 as compared to 2024.

Adjusted compensation and benefits expense, including centrally managed costs, increased $4 million, or 3%, as compared to 2024.

Adjusted non-compensation expense, including centrally managed costs, increased $2 million, or 1%, as compared to 2024.

The Company’s cash flows are influenced primarily by the timing of the receipt of Financial Advisory and Asset Management fees, the timing of distributions to shareholders, payments of incentive compensation to managing directors and employees and purchases of common stock.

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Fees from our Private Capital Advisory activities are generally collected over a four-year period from billing and typically include an interest component.

The Company makes cash payments for a significant portion of its incentive compensation with respect to the prior year’s results during the first three months of each calendar year.

The Company makes cash payments for a significant portion of its compensation with respect to the prior year’s results during the first three months of each calendar year.

See the Consolidated Financial Statements—Consolidated Statements of Cash Flows for further detail.

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________________________

(a) Consists primarily of amortization of deferred expenses and share-based incentive compensation, noncash lease expenses, depreciation and amortization of property, gain on sale of owned office building and deferred tax provision (benefit).

(a) Consists primarily of amortization of deferred expenses and share-based incentive compensation, noncash lease expenses, depreciation and amortization of property, gain on sale of an owned office building in 2024 and deferred tax provision (benefit).

(b) Includes net changes in operating assets and liabilities.

(c) Consists primarily of purchases of shares of common stock, tax withholdings related to the settlement of vested RSUs and vested PRSUs, common stock dividends, changes in customer deposits, distributions to noncontrolling interest holders, activity related to borrowings (including in 2024, the issuance of the 2031 Notes and redemption of the 2025 Notes), distributions to redeemable noncontrolling interests associated with LGAC’s redemption of all its outstanding Class A ordinary shares in 2023.

(c) Consists primarily of purchases of shares of common stock, tax withholdings related to the settlement of vested RSUs and vested performance-based restricted stock units (“PRSUs”), common stock dividends, changes in customer deposits, activity related to borrowings (including in 2025 and 2024, the issuance of the 2035 Notes and 2031 Notes, respectively, and the redemption of the 2027 Notes and the 2025 Notes), distributions to redeemable noncontrolling interests associated with LGAC’s redemption of all its outstanding Class A ordinary shares in 2023.

(d) Consists of cash and cash equivalents, deposits with banks and short-term investments and restricted cash.

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Net revenue, operating income and cash receipts fluctuate significantly between periods and could be affected by various risks and uncertainties.

While cash flow from Asset Management activities is relatively stable, in the case of Financial Advisory, fee receipts are generally dependent upon the successful completion of client transactions, the occurrence and timing of which is irregular and not subject to Lazard’s control.

In the third quarter of 2024, the Company completed the sale of an owned office building for gross proceeds of approximately $194 million, subject to payment of taxes and other expenses.

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

Liquidity is significantly impacted by cash payments for incentive compensation, a significant portion of which are made during the first three months of the year.

Liquidity is significantly impacted by cash payments for compensation, a significant portion of which are made during the first three months of the year.

As a consequence, cash on hand generally declines in the beginning of the year and gradually builds over the remainder of the year.

We also make payments during the year on behalf of certain managing directors for their estimated taxes, which serve to reduce their respective incentive compensation payments.

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

(See Note 18 of Notes to Consolidated Financial Statements).

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”.

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.

We regularly monitor our liquidity position, including cash levels, lease obligations, investments and related hedges, credit lines, principal investment commitments, interest and principal payments on debt, capital expenditures,

dividend payments, purchases of shares of common stock, compensation and other matters relating to liquidity and compliance with regulatory net capital requirements.

At December 31, 2025, Lazard had approximately $1,469 million of cash and cash equivalents, including approximately $745 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 the first half of 2025, we plan to make additional investments to seed our Asset Management strategies including in connection with the upcoming launch of actively managed ETFs.

As of December 31, 2025, the Company’s remaining lease obligations were $81 million for 2026, $157 million from 2027 through 2028, $140 million from 2029 through 2030 and $201 million from 2030 through 2039.

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Borrowings under the Second Amended and Restated Credit Agreement generally will bear interest at adjusted term SOFR plus an applicable margin for specific interest periods determined based on Lazard Group’s highest credit rating from an internationally recognized credit agency.

The Second Amended and Restated Credit Agreement includes financial covenants that require that Lazard Group 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.

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 December 31, 2025.

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We believe that the sources of liquidity described above should be sufficient for us to fund our current obligations for the next 12 months.

See also Notes 14, 16, 17, 19, 21 and 22 of Notes to Consolidated Financial Statements regarding information in connection with commitments, incentive plans, employee benefit plans, income taxes, tax receivable agreement obligations and regulatory requirements, respectively.

See also Notes 10, 14, 16, 17, 19, 21 and 22 of Notes to Consolidated Financial Statements regarding information in connection with leases, 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 December 31, 2025 and 2024.

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$ 1,700.0 $ 12.0 $ 1,688.0 $ 1,700.0 $ 13.0 $ 1,687.0

In the first quarter of 2024, Lazard Group issued $400 million of 6.0% senior notes due March 2031 to refinance the upcoming maturity of our 2025 Notes.

At that time we used part of the net proceeds to purchase in a tender offer $236 million of the 2025 Notes and on December 12, 2024, the remaining $164 million aggregate principal amount of the 2025 notes were redeemed or otherwise retired.

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

In the third quarter of 2025, Lazard Group LLC issued $300 million of 5.625% senior notes due in 2035.

Lazard Group LLC used the net proceeds from the 2035 Notes to repurchase or redeem all of the issued and outstanding 2027 Notes.

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

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Guarantor Information

On December 12, 2024, Lazard, Inc.

provided an unconditional and irrevocable guarantee for the repayment of the Lazard Group 2027 Notes, 2028 Notes, 2029 Notes and 2031 Notes (collectively, the “Lazard Group Senior Notes”), and on December 23, 2024, the Second Amended and Restated Credit Agreement was amended (such amendment, the “First Amendment to Second Amended and Restated Credit Agreement”), pursuant to which Lazard, Inc.

provided an unconditional and irrevocable guarantee for Lazard Group's obligations under the Second Amended and Restated Credit Agreement.

has provided an unconditional and irrevocable guarantee for the repayment of all the senior notes listed in the table above, and has amended the Second Amended and Restated Credit Agreement, to provide an unconditional and irrevocable guarantee for Lazard Group's obligations under the Second Amended and Restated Credit Agreement.

See Note 13 of Notes to Consolidated Financial Statements for additional information regarding senior debt.

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

has excluded summarized financial information for Lazard Group in this Form 10-K 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 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 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 December 31, 2024, total stockholders’ equity was $685 million, as compared to $482 million and $675 million at December 31, 2023 and 2022, respectively, including $636 million, $424 million and $556 million attributable to

At December 31, 2025, total stockholders’ equity was $911 million, as compared to $685 million and $482 million at December 31, 2024 and 2023, respectively, including $874 million, $636 million and $424 million attributable to Lazard, Inc.

on the respective dates.

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Increase (decrease) due to:

Net income (loss) (a) 281 (69)

Net income (a) 239 281

Other comprehensive income (loss) 55 (37)

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Common stock dividends (187) (179)

LFI Consolidated Funds – (74)

Other - net (21) (14)

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As of December 31, 2025, a total of $109 million of share repurchase authorization remained available under Lazard, Inc.’s share repurchase program which will expire on December 31, 2026.

As of January 24, 2025, our total outstanding share repurchase authorization was approximately $180 million.

During the year ended December 31, 2025, Lazard, Inc.

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Tax Receivable Agreement

The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “TRA”), between Lazard and LTBP Trust (the “Trust”) provides for payments by our subsidiaries to the owners of the Trust, who include certain of our executive officers.

The amount of the TRA liability is an undiscounted amount based upon current tax laws and the structure of the Company and various assumptions regarding potential future operating profitability.

The assumptions reflected in the estimate involve significant judgment, and if our structure or actual income are different than our assumptions, we could be required to accelerate payments under the TRA.

As such, the actual amount and timing of payments under the TRA could differ materially from our estimates.

The assumptions reflected in the estimate involve significant judgment, and as such, the actual amount and timing of payments under the TRA could differ materially from our estimates.

See Note 21 of Notes to Consolidated Financial Statements for additional information regarding the TRA.

The Company currently does not expect a payment will be made against the TRA obligation within the next 12 months.

Goodwill has an indefinite life and is tested for impairment annually or more frequently if circumstances indicate impairment may have occurred.

In 2024, the Company changed its goodwill impairment testing date from November 1 to October 1 to align impairment testing procedures with its quarter-end financial reporting.

The change was applied prospectively and was not material to the Company’s consolidated financial statements as it did not delay, accelerate or avoid an impairment charge.The Company performs a qualitative assessment about whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount in lieu of actually calculating the fair value of the reporting unit.

The Company currently expects that approximately $10 million of such obligation will be paid within the next 12 months.

Goodwill has an indefinite life and is tested for impairment annually, as of October 1, or more frequently if circumstances indicate impairment may have occurred.

The Company performs a qualitative assessment about whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount in lieu of actually calculating the fair value of the reporting unit.

The qualitative assessment includes significant judgment on the business outlook assumptions of each reporting unit based on historical data, current economic conditions, stock performance and industry trends.

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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 $111 million in ten entities as of December 31, 2024, as compared to $114 million in eleven entities as of December 31, 2023.

Seed investments held in entities in which the Company maintained a controlling financial interest were $183 million in thirteen entities as of December 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 $63 million in nine entities as of December 31, 2025, as compared to $93 million in nine entities as of December 31, 2024.

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Private equity 7,468 7,570

Fixed income and other 2,266 2,119

Other 1,653 2,266

Total other investments owned 9,121 9,836

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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 $0.9 million as of December 31, 2024 and a net increase of approximately $0.2 million as of December 31, 2023 in the carrying value of such investments, including the effect of the hedging transactions.

The Company estimates that a hypothetical 10% adverse change in market prices would result in a net decrease of approximately $1.0 million and $0.9 million as of December 31, 2025 and 2024, respectively, in the carrying value of such investments, including the effect of the hedging transactions.

Interest Rate and Credit Spread Risk—At December 31, 2025 and 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 $22 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 increase of approximately $0.6 million as of December 31, 2024 and would not result in a net change in the carrying value of such investments as of December 31, 2023, including the effect of the hedging transactions.

Foreign Exchange Rate Risk—At December 31, 2024 and 2023, 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, at December 31, 2023, private equity investments, was $65 million and $69 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 December 31, 2025 and a net increase of approximately $0.6 million as of December 31, 2024, in the carrying value of such investments, including the effect of the hedging transactions.

Foreign Exchange Rate Risk—At December 31, 2025 and 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 $114 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.

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

At December 31, 2024 and 2023, customers and other receivables included $83 million and $86 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 December 31, 2025 and 2024, customers and other receivables included $142 million and $83 million, respectively.

Such LFB loans 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 $4 million and $3 million at December 31, 2024 and 2023, 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 $3 million at both December 31, 2024 and 2023.

Net derivative assets amounted to $0.5 million and $4 million at December 31, 2025 and 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 $30 million and $3 million at December 31, 2025 and 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.

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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 generally have market interest rates.

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 December 31, 2025, Lazard estimates that its annual operating income relating to cash and cash equivalents would increase by approximately $15 million in the event interest rates were to increase by 1% and decrease by approximately $15 million if rates were to decrease by 1%.

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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.

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, (iii) overnight reverse repurchase agreements and (iv) in short-term certificates of deposit from such banks.

Cash and cash equivalents are continuously monitored.

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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

We purchase insurance policies designed to help protect the Company against accidental loss and other 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” above for more information regarding operational risk in our business and Item 1C, “Cybersecurity” above for more information on the Company’s processes to identify, assess and manage cybersecurity risks.

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

Quantitative and Qualitative Disclosures About Market Risk

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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-K

Item 7. Management’s Discussion and Analysis