What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-27 compared with 2024-02-23 · 83 added, 91 removed, 184 unchanged (49% of the section changed)

2 unchanged sentences

Executive Overview

We are a leading global independent advisory firm that provides strategic and financial advice to clients across the most active industry sectors and international markets.

We are a leading global independent advisory firm that provides strategic and financial advice to clients across some of the most active industry sectors and international markets.

Our wide range of global clients include large public multinational corporations, mid-sized public and private companies, individual entrepreneurs, private and institutional investors, creditor committees and government institutions.

4 unchanged sentences

Economic and global financial market conditions impact our financial performance.

The market environment for advisory services has begun to inflect, which has recently driven dialogue and activity levels across the traditional M&A markets.

The market environment for advisory services is improving, driving increased dialogue and activity levels across the traditional M&A markets.

Our core advisory services benefit from macroeconomic changes that impact our client base and lead them to consider business combinations, acquisitions and divestitures, capital raises and restructurings.

We continue to invest in our platform to achieve scale, accelerate growth, and deliver value in anticipation of a rebound in activity levels.

We continue to invest in our platform to achieve scale, accelerate growth, and deliver value.

See “ Part I — Item 1A.

17 unchanged sentences

Compensation and Benefits Expenses

Our compensation and benefits expenses consist of base salary, benefits, severance, payroll taxes, annual incentive compensation payable as cash bonus awards, deferred compensation awards, and the amortization of equity-based compensation awards that are subject to a service vesting condition, and in some cases, a market-based performance vesting condition.

Our compensation and benefits expenses consist of salaries, bonuses (discretionary awards and guaranteed amounts), severance, payroll and related taxes, benefits, and the amortization of equity-based compensation awards that are subject to a service-based vesting condition, and in some cases, a market-based performance vesting condition.

These expenses also include signing bonuses and compensation paid pursuant to guarantees for new hires.

1 unchanged sentence

Such factors can fluctuate, including headcount and revenues earned, and as a result, our compensation expenses may fluctuate materially in any particular period.

The amortization expense for certain equity-based awards granted by Professional Partners is allocated fully to non-controlling interests as these awards have no economic impact on, and do not dilute, PWP shareholders relative to Professional Partners.

Refer to Note 12—Equity-Based Compensation in the notes to the consolidated financial statements for additional information.

At the time of the Merger, the Company entered into vesting acceleration agreements with certain holders of Professional Partners Awards to accelerate vesting for all Professional Partners Awards during the second quarter of 2024 (the “Vesting Acceleration”).

Prior to the Merger, the amortization expense for the Professional Partners Awards was allocated fully to non-controlling interests.

As a result of the Merger, these awards are considered granted by PWP OpCo and PWP OpCo as a whole bore the cost of the cash settlement feature of the awards, which was added in conjunction with the Merger.

As a result, subsequent to the Merger, the Company allocated the costs associated with these awards between Perella Weinberg Partners and non-controlling interests in proportion to their ownership interests, which is consistent with the allocation of the other profit and loss activity of PWP OpCo.

Non-Compensation Expenses

3 unchanged sentences

Non-Operating Income (Expenses)

Non-operating income (expenses) includes the impact of income and expense items that we consider to be non-operational in nature, which typically includes related party income, interest income and expense, and other non-operating gains (losses), including the impact of foreign exchange rate fluctuations.

Non-operating income (expenses) also included the change in fair value of warrant liabilities prior to the completion of the exchange offer and solicitation relating to the Company’s then-outstanding warrants on August 23, 2022.

Non-operating income (expenses) includes the impact of income and expense items that we consider to be non-operational in nature, which typically includes interest income and expense and other non-operating gains (losses), including the impact of foreign exchange rate fluctuations.

Non-Controlling Interests

Non-controlling interests represent the ownership interests in PWP OpCo held by holders other than Perella Weinberg Partners, which are Professional Partners and the ILPs.

Such holders hold PWP OpCo Units that are exchangeable into PWP Class A common stock on a one-for-one basis.

Profits and losses of PWP OpCo are allocated to the non-controlling interests in proportion to their ownership interest regardless of their basis, with the exception of the amortization expense for certain equity-based awards granted by Professional Partners, which is allocated fully to non-controlling interests as these awards have no economic impact on, and do not dilute, PWP shareholders relative to Professional Partners.

Non-controlling interests represent the ownership interests in PWP OpCo held by holders other than Perella Weinberg Partners, which are current and former working partners.

Profits and losses of PWP OpCo are allocated to the non-controlling interests in proportion to their ownership interest regardless of their basis, with an exception for certain equity-based compensation expense which was fully attributed to non-controlling interests prior to the Merger.

Results of Operations

15 unchanged sentences

Operating income (loss)

(115,100) (47,733) 66,584 (141) % NM

(78,532) (115,100) (47,733) 32 % (141) %

Non-operating income (expenses)

2 unchanged sentences

Other income (expense)

1,624 7,978 761 (80) % NM

10,277 1,348 7,702 662 % (82) %

Change in fair value of warrant liabilities

— 15,806 (4,897) NM NM

Loss on debt extinguishment

— — (39,408) — % NM

Interest expense

— — 15,806 — % (100) %

Total non-operating income (expenses)

2,280 26,313 (43,634) (91) % NM

10,277 2,280 26,313 351 % (91) %

Income (loss) before income taxes

(112,820) (21,420) 22,950 (427) % NM

(68,255) (112,820) (21,420) 40 % (427) %

Income tax expense (benefit)

(980) 10,327 18,927 NM (45) %

21,089 (980) 10,327 NM NM

Net income (loss)

$ (111,840) $ (31,747) $ 4,023 (252) % NM

$ (89,344) $ (111,840) $ (31,747) 20 % (252) %

Net income (loss) attributable to non-controlling interests

(94,617) (49,625) 13,444 (91) % NM

(24,616) (94,617) (49,625) 74 % (91) %

Net income (loss) attributable to Perella Weinberg Partners

$ (17,223) $ 17,878 $ (9,421) NM NM

$ (64,728) $ (17,223) $ 17,878 (276) % NM

NM = Not meaningful

2 unchanged sentences

2024 2023 2022 2024 vs.

2023 2023 vs.

Total Advisory Clients 221 202 200 19 2

1 unchanged sentence

Revenues were $878.0 million for the year ended December 31, 2024 as compared with $648.7 million for the year ended December 31, 2023, representing an increase of 35%.

Revenues attributed to mergers and acquisition activity were up year-over-year, while financing and capital solutions revenues were lower due to a few large financing fees in the prior year period, which offset positive performance in the restructuring business.

The increase was attributable to increased mergers and acquisition and financing and capital solutions activity, driven by larger transactions in size and number across the business.

Compensation and Benefits Expenses

For the year ended December 31, 2024, total compensation and benefits expenses were $784.2 million, an increase of 29% compared with $608.9 million for the year ended December 31, 2023.

The increase in total compensation and benefits expenses was a result of a higher compensation margin on a higher revenue base, additional equity-based compensation expense from awards granted during the first quarter of 2023, and $37.3 million of business realignment costs associated with headcount reductions in the current year (the “Business Realignment”).

The Business Realignment was undertaken to improve compensation alignment and to provide for greater flexibility to advance strategic opportunities, and related costs include separation and transition benefits and the acceleration of equity-based compensation amortization (net of forfeitures) for terminated employees.

The increase in total compensation and benefits expenses was primarily the result of a higher bonus accrual in the current year period due to a higher revenue base, despite a lower compensation margin.

The increase was also driven by higher equity-based compensation expense from the phase-in of our annual incentive award grants, as well as the Vesting Acceleration, which resulted in $144.2 million of equity-based compensation expense for the Professional Partners Awards in the current year period as compared to $68.5 million in the prior year period for the same awards.

The increase in total compensation and benefits was partially offset by higher costs incurred in the prior year related to headcount reductions associated with a business realignment.

Non-Compensation Expenses

For the year ended December 31, 2024, total non-compensation expenses were $172.3 million, an increase of 11% compared with $154.8 million for the year ended December 31, 2023.

The increase in non-compensation expenses was primarily the result of higher travel and related expenses due to increases in both volume of travel and headcount, increased legal spend, elevated technology and infrastructure expenses related to certain investments, and higher rent and depreciation expenses due to overlapping rent and new assets being placed in service related to the renovation of the New York office space and relocation of the London office space.

These increases were partially offset by lower recruiting and consulting fees and reduced D&O insurance costs.

The increase in non-compensation expenses was primarily the result of an increase in professional fees, including consulting fees tied to revenue contribution, bad debt write-offs, and higher depreciation expense due to new assets being placed in service subsequent to the second quarter of 2023 related to the renovation of the New York office space and relocation of the London office space.

These increases were partially offset by reduced rent and occupancy costs.

Non-Operating Income (Expenses)

For the year ended December 31, 2024, non-operating income was $10.3 million compared with non-operating income of $2.3 million for the year ended December 31, 2023.

In the current year, non-operating income included interest income, which substantially increased from the prior year due to higher interest rates and additional investments in U.S.

Treasury securities.

Interest income was partially offset by a net loss from foreign exchange rate fluctuations, a non-operating loss on investment, and a charge related to a settlement reached with the staff of the SEC in connection with self-reporting relating to recordkeeping of business communications on “off-channel” messaging applications (the “Settlement”).

Pursuant to the Settlement, Perella Weinberg Partners LP, Tudor, Pickering, Holt & Co.

Securities LLC, and Perella Weinberg Partners Capital Management LP, collectively, agreed to pay $2.5 million in the aggregate to the SEC on a joint and several liability basis.

The Company recognized a charge of $1.25 million related to the Settlement, with the remainder recognized by Perella Weinberg Partners Capital Management LP (refer to Note 16—Related Party Transactions in the notes to the consolidated financial statements for information on the Company’s relationship to Perella Weinberg Partners Capital Management LP).

In the prior year period, non-operating income primarily included a gain from the change in fair value of warrant liabilities and a net gain from foreign exchange rate fluctuations.

In the current period, non-operating income primarily included interest income, which increased from the prior year due to higher interest rates and larger interest-bearing cash balances, and a net gain from foreign exchange rate fluctuations, compared to a net loss in the prior year.

For both periods, foreign exchange rate fluctuations largely related to U.S.

dollar-denominated cash and intercompany receivables held by our foreign subsidiaries.

dollar-denominated cash and intercompany balances held by our foreign subsidiaries, including the settlement of such balances.

The year ended December 31, 2023 also included a non-operating loss on investment that did not recur in the current year.

Income Tax Expense (Benefit)

The Company’s income tax benefit and effective tax rate were $1.0 million and 0.9%, respectively, for the year ended December 31, 2023 compared to income tax expense and an effective tax rate of $10.3 million and (48.2)%, respectively, for the year ended December 31, 2022.

The change in the effective tax rate was primarily due to the relative size of our permanent differences in relation to the pre-tax loss in the respective periods, as well as the recognition of a previously unrecognized tax benefit at one of the Company’s foreign subsidiaries during the year ended December 31, 2023.

The Company’s income tax expense and effective tax rate were $21.1 million and (30.9)%, respectively, for the year ended December 31, 2024 compared to an income tax benefit and an effective tax rate of $1.0 million and 0.9%, respectively, for the year ended December 31, 2023.

The change in the effective tax rate was primarily due to the relative size of our permanent differences in relation to the pre-tax loss in the respective periods, the Vesting Acceleration, and the recognition of tax benefits associated with the appreciation in our share price upon vesting of RSUs above the original grant price during the year ended December 31, 2024.

Liquidity and Capital Resources

We regularly monitor our liquidity position, including cash and cash equivalents, working capital assets and liabilities, commitments and other liquidity requirements.

Our primary sources of liquidity are our cash balances, investments in short-term marketable debt securities, the net cash generated from operations, and the available borrowing capacity under our Revolving Credit Facility.

Our primary cash needs are for working capital, operating expenses (including cash compensation for our employees), repurchasing shares of the Company’s Class A common stock, withholding tax payments for vested PWP Incentive Plan Awards, income taxes, dividends and distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments, and strategic investments.

Our primary sources of liquidity are generally our cash and cash equivalent balances, investments in short-term marketable debt securities, the net cash generated from operations, and the available borrowing capacity under our Revolving Credit Facility.

Our primary cash needs are for working capital, operating expenses (including cash compensation for our employees), repurchasing shares of the Company’s Class A common stock, withholding tax payments for vested incentive compensation awards, including restricted stock units and performance stock units (the “PWP Incentive Plan Awards”), cash-settled exchanges of PWP OpCo Units, income taxes, dividends and distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments, and strategic investments.

We generally pay a significant portion of our annual cash incentive compensation during the first quarter of each calendar year with respect to the prior year’s results.

Therefore, levels of cash and/or investments in short-term marketable debt securities generally decline during the first quarter and build over the remainder of the year.

Our current assets are primarily composed of cash, investments in short-term marketable debt securities, receivables related to fees earned from providing advisory services, certain prepaid expenses and certain amounts due from related parties.

Therefore, levels of cash and cash equivalents and/or investments in short-term marketable debt securities generally decline during the first quarter and build over the remainder of the year.

Our current assets are primarily composed of cash and cash equivalents, investments in short-term marketable debt securities, receivables related to fees earned from providing advisory services, certain prepaid expenses and certain amounts due from related parties.

Our current liabilities are primarily composed of accrued employee compensation, accounts payable and other accrued expenses.

Cash includes cash held at banks, including interest-bearing money market accounts.

As of December 31, 2023 and 2022, the Company had cash balances of $247.2 million and $171.6 million, respectively, and investments in short-term marketable debt securities, consisting entirely of U.S.

Treasury securities, of $91.2 million and $140.1 million, respectively.

Cash and cash equivalents include cash held at banks, including interest-bearing money market accounts, and short-term highly liquid investments that have original maturities of three months or less from the date of purchase.

We had cash balances of $331.6 million and $247.2 million as of December 31, 2024 and 2023, respectively, and cash equivalents of $20.2 million as of December 31, 2024, which included investments in U.S.

Treasury securities.

As of December 31, 2023, we held no cash equivalents.

Additionally, as of December 31, 2024 and 2023, we held U.S.

Treasury securities of $75.8 million and $91.2 million, respectively, which are classified as Investments in short-term marketable debt securities within the consolidated financial statements.

Our liquidity is highly dependent upon cash receipts from clients, which generally require the successful completion of transactions.

Accounts receivable typically have net terms of 30 days.

Accounts receivable were $47.8 million, net of a $2.2 million allowance for credit losses balance as of December 31, 2023.

Accounts receivable were $67.9 million, net of a $1.1 million allowance for credit losses balance as of December 31, 2022.

The Company has a Revolving Credit Facility with Cadence Bank with an available line of credit of $50.0 million.

Accounts receivable, net of allowance for credit losses, were $73.3 million and $47.8 million as of December 31, 2024 and 2023, respectively.

We have a Revolving Credit Facility with Cadence Bank with an available line of credit of $50.0 million.

Additionally, up to $20.0 million of incremental revolving commitments above the $50.0 million commitment amount may be incurred under the Credit Agreement.

As of December 31, 2023 and 2022, the Company had no outstanding balance related to the Revolving Credit Facility and no incremental revolving commitments were incurred.

As of December 31, 2024 and 2023, we had no outstanding balance related to the Revolving Credit Facility and no incremental revolving commitments were incurred.

For further information on the Revolving Credit Facility, refer to Note 9—Debt in the notes to consolidated financial statements included elsewhere in this Form 10-K.

Based on current market conditions, we believe that our cash on hand, investments in short-term marketable debt securities, net cash generated from operations and the available borrowing capacity under our Revolving Credit Facility will be sufficient to meet our operating needs and commitments for the next twelve months;

On March 1, 2024, we issued and sold 5,750,000 shares of Class A common stock at a price of $12.00 per share for net proceeds of $66.0 million after deducting underwriting discounts and offering costs.

During the second quarter of 2024, we paid or accrued a combined $86.6 million in settlement of certain Professional Partners Awards in connection with the Vesting Acceleration.

Refer to Note 11—Equity-Based Compensation in the notes to the consolidated financial statements for further information regarding the Vesting Acceleration.

Also during the year ended December 31, 2024, we elected to settle exchanges of certain PWP OpCo Units and corresponding shares of Class B common stock for $63.4 million in cash.

During the year ended December 31, 2024, we made $70.4 million of withholding tax payments for vested PWP Incentive Plan Awards.

Withholding tax payments for vested equity-classified Professional Partners Awards are included in the above-disclosed amount paid or accrued in settlement of certain Professional Partners Awards in connection with the Vesting Acceleration.

Based on current market conditions, we believe that our cash on hand, cash equivalents, investments in short-term marketable debt securities, net cash generated from operations, and the available borrowing capacity under our Revolving Credit Facility will be sufficient to meet our operating needs and commitments for the next twelve months;

however, if these sources of liquidity are not sufficient, we may seek additional debt or equity financing.

25 unchanged sentences

Year Ended December 31, 2024

Operating activities resulted in a net cash inflow of $145.9 million primarily attributable to cash collected from clients, net of cash operating expense outflows, including discretionary bonuses paid during the first quarter of 2023 with respect to prior year compensation expense.

Investing activities resulted in a net cash outflow of $5.8 million largely attributable to the purchase of leasehold improvement fixed assets associated with the renovation of the New York office space and relocation of the London office space, partially offset by a net cash inflow from investments in U.S.

Operating activities resulted in a net cash inflow of $223.4 million primarily attributable to cash collections from clients, net of cash operating expense outflows, including the settlement of liability-classified Professional Partners Awards during the second quarter and discretionary bonuses paid during the first quarter of 2024 with respect to prior year compensation expense.

Investing activities resulted in a net cash outflow of $0.1 million attributable to the purchase of investments in U.S.

Treasury securities and payments for additional investments and capital expenditures related to office space renovations, which was almost fully offset by a cash inflow from the maturation of investments in U.S.

Treasury securities.

Financing activities resulted in a net cash outflow of $67.0 million primarily due to the repurchase of shares pursuant to the stock repurchase program, distributions to partners, withholding tax payments for vested PWP Incentive Plan Awards, and dividend payments.

Financing activities resulted in a net cash outflow of $137.3 million primarily due to withholding tax payments for vested PWP Incentive Plan Awards and equity-classified Professional Partners Awards, the cash settlement of exchanges of PWP OpCo Units, share repurchases, dividend payments, and distributions to partners, all of which was partially offset by the issuance of 5,750,000 shares of Class A common stock for net proceeds of $66.0 million.

Year Ended December 31, 2023

Operating activities resulted in a net cash outflow of $17.8 million primarily attributable to cash collected from clients, net of cash operating expense outflows, including discretionary bonuses paid during the first quarter of 2022 with respect to prior year compensation expense.

Investing activities resulted in a net cash outflow of $166.2 million largely attributable to the investment of excess cash in U.S.

Treasury securities as well as the purchase of leasehold improvement fixed assets associated with the renovation of the New York office space and relocation of the London office space.

Financing activities resulted in a net cash outflow of $136.8 million primarily related to the repurchase of shares pursuant to the stock repurchase program, distributions to partners, withholding tax payments for vested of PWP Incentive Plan Awards, and dividend payments.

Investing activities resulted in a net cash outflow of $5.8 million largely attributable to the purchase of investments in U.S.

Treasury securities and the purchase of leasehold improvement fixed assets associated with the renovation of the New York office space and relocation of the London office space, partially offset by a cash inflow from the maturation of investments in U.S.

Treasury securities.

Financing activities resulted in a net cash outflow of $67.0 million primarily related to withholding tax payments for vested PWP Incentive Plan Awards, the repurchase of shares pursuant to the stock repurchase program, dividend payments, and distributions to partners.

For a discussion of the year ended December 31, 2022, refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Cash Flows” in our Form 10-K for the year ended December 31, 2023.

Share Repurchase Program

The Company’s board of directors approved a stock repurchase program under which the Company is authorized to repurchase up to $200.0 million of the Company’s Class A common stock with no requirement to purchase any minimum number of shares.

During the year ended December 31, 2023, the Company purchased 2,376,683 shares, at a cost of $22.5 million in the aggregate.

As of December 31, 2023, $108.8 million remains of the combined $200.0 million share repurchase authorization.

Our board of directors approved a stock repurchase program under which we are authorized to repurchase up to $200.0 million of our Class A common stock with no requirement to purchase any minimum number of shares.

During the year ended December 31, 2024, we repurchased 1,000,000 founder shares at a purchase price of $15.00 per share.

As of December 31, 2024, $93.8 million remains of the $200.0 million authorized for share repurchases.

Exchange Rights

In accordance with the PWP OpCo LPA, holders of PWP OpCo Units (other than the Company) may exchange these units for (i) shares of Class A common stock on a one-for-one basis or (ii) cash from an offering of shares of Class A common stock with the form of consideration determined by the Company.

See Note 11—Stockholders’ Equity in the notes to consolidated financial statements included elsewhere in this Form 10-K for further information.

In accordance with the limited partnership agreement of PWP OpCo, holders of PWP OpCo Units (other than the Company) may exchange these units for (i) shares of Class A common stock on a one-for-one basis or (ii) cash from an offering of shares of Class A common stock and (iii) subsequent to the Merger, cash from any other source.

Whether future exchanges are settled in cash or shares of Class A common stock is at our discretion and will depend on our liquidity and capital resources, market conditions, the timing and concentration of exchange elections and other factors.

See Note 10—Stockholders’ Equity and Redeemable Non-Controlling Interests in the notes to consolidated financial statements included elsewhere in the Form 10-K for further information.

Regulatory Capital

7 unchanged sentences

We believe that we provide each of our subsidiaries with sufficient capital and liquidity, consistent with their business and regulatory requirements to effectively operate in each jurisdiction.

Other Commitments and Contractual Obligations

Sponsor Share Surrender and Share Restriction Agreement

Concurrent with the Business Combination Agreement, the Company and certain other parties entered into the Sponsor Share Surrender and Share Restriction Agreement with the Sponsor, which was amended on May 4, 2021.

See Note 11—Stockholders’ Equity in the notes to consolidated financial statements included elsewhere in this Form 10-K for further information.

Tax Receivable Agreement

1 unchanged sentence

See Note 15—Related Party Transactions in the notes to consolidated financial statements included elsewhere in this Form 10-K for further information as well as the expected timing of payments.

Leases and Capital Expenditures

We have various non-cancelable operating leases in connection with the leases of our office spaces and equipment.

We have various non-cancelable operating leases for our office space and certain equipment.

As of December 31, 2024, we had $187.3 million of operating lease liabilities.

See Note 4—Leases in the notes to consolidated financial statements included elsewhere in this Form 10-K for further information as well as the expected timing of payments.

During the current year, the Company completed construction of new office space in New York and London.

As of December 31, 2023, the Company had $6 million of remaining cash payments, net of tenant improvement allowances, related to these projects.

Business Realignment

We currently estimate that approximately $15 million of cash payments remain outstanding related to the Business Realignment, substantially all of which are expected to be paid during the first half of 2024.

Market Risk and Credit Risk

8 unchanged sentences

We believe our cash and cash equivalents are not subject to any material interest rate risk, equity price risk, credit risk or other market risk.

We regularly review our accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality, age of the accounts receivable, and the current economic conditions that may affect a client’s ability to pay such amounts owed to the Company.

We maintain an allowance for credit losses that, in our opinion, provides for an adequate reserve to cover current expected credit losses.

Refer to Note 2—Summary of Significant Accounting Policies in the notes to consolidated financial statements included elsewhere in this Form 10-K for further information.

With respect to investments, we manage our credit risk exposure by holding investments primarily with investment grade credit quality.

When we invest our excess cash, we manage our credit risk exposure by holding investments primarily with investment grade credit quality.

As of December 31, 2024, the Company held investments of $96.0 million in U.S.

Treasury securities with maturities of less than 12 months.

Of this amount, $20.2 million is presented in Cash and cash equivalents and $75.8 million is presented in Investments in short-term marketable debt securities on the Consolidated Statements of Financial Condition.

Exchange Rate Risk

The Company is exposed to exchange rate risk as a result of having foreign subsidiaries with non-U.S.

We are exposed to exchange rate risk as a result of having foreign subsidiaries with non-U.S.

dollar functional currencies as well as from entering into transactions and holding monetary assets and liabilities that are not denominated in the functional currency of its operating subsidiaries.

Specifically, the reported amounts in our consolidated financial statements may be affected by movements in the rate of exchange between the pound sterling, euro, and Canadian dollar and our reporting currency, the U.S.

For the years ended December 31, 2023 and 2022, the net impact of non-functional currency-related transaction gains and losses recorded in Other income (expense) on our Consolidated Statements of Operations was a $3.3 million loss and a $6.8 million gain, respectively, primarily related to U.S.

dollar-denominated cash and intercompany receivables held by our foreign subsidiaries as the U.S.

dollar weakened and strengthened, respectively.

For the years ended December 31, 2023 and 2022, the net impact of the fluctuation of foreign currencies recorded in Foreign currency translation gain (loss) within our Consolidated Statements of Comprehensive Income (Loss) was a $4.1 million gain and a $9.7 million loss respectively.

For the years ended December 31, 2024 and 2023, the net impact of non-functional currency-related transaction gains and losses recorded in Other income (expense) on our Consolidated Statements of Operations was a $1.3 million gain and a $3.3 million loss, respectively, primarily related to U.S.

dollar-denominated cash and intercompany receivables held by our foreign subsidiaries as the strength of the U.S.

dollar fluctuated.

For the years ended December 31, 2024 and 2023, the net impact from the fluctuation of foreign currencies recorded in Foreign currency translation gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) was a $2.5 million loss and a $4.1 million gain, respectively.

We have not entered into any transactions to hedge our exposure to these foreign currency fluctuations using derivative instruments or other methods but may do so if we deem appropriate in the future.

As of December 31, 2023, we held cash balances of $42.0 million of non-U.S.

dollar currencies, composed of pound sterling, the Euro, and Canadian dollars.

As of December 31, 2024, we held cash balances of $37.7 million in non-U.S.

dollar currencies, composed of pound sterling, euros, and Canadian dollars.

Critical Accounting Estimates

The preparation of our consolidated financial statements and related disclosures in conformity with U.S.

GAAP requires management to make judgments, assumptions, and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities.

The following are our critical accounting estimates and judgments used in the preparation of our consolidated financial statements.

We believe that these critical accounting estimates represent those that are most important to the presentation of our financial condition and results of operations and require management's most difficult, subjective and complex judgment.

Due to their subjectivity, actual results could differ materially from the amounts reported.

Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period for which they are determined to be necessary.

Due to their subjectivity, actual results could differ from those estimates.

Estimates and the assumptions underlying these estimates are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary.

Revenue Recognition

1 unchanged sentence

The fee structures for the Company’s transaction-related advisory services often involve an “all or nothing” consideration amount and the associated fees are predominantly considered variable as they are often based on the ultimate transaction value or the outcome ultimately achieved and/or are susceptible to factors outside of the Company’s influence, such as third-party negotiations, regulatory approval, court approval, and shareholder votes.

Such determination of probability may require significant judgement, especially when assessed near the end of a reporting period.

Accordingly, a large portion of the fees associated with these services is constrained until substantially all services have been provided, specified conditions have been met and/or certain milestones have been achieved, and it is probable that a significant revenue reversal will not occur in a future period, the determination of which may require significant judgment, especially when assessed near the end of a reporting period, and/or involve material amounts.

Due to this constraint, a significant portion of revenue recognized for advisory services in any given period often relates to services performed in prior periods.

The Company records deferred revenue when it receives fees from clients that have not yet been earned or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g., when announcement fees are received but additional services are expected to be provided between transaction announcement and transaction close).

3 unchanged sentences

Estimating contract terms may require significant judgment and often change over the course of an engagement.

Our income tax expense, deferred tax assets and deferred tax liabilities, and liabilities for unrecognized tax benefits reflect management’s best estimate of current and future taxes to be paid.

We are subject to income taxes in the United States and certain foreign jurisdictions.

We make estimates and judgments in determining the provision for income taxes and certain tax assets and liabilities that arise from differences in the timing of recognition of revenue and expense for tax and financial reporting purposes.

Significant changes in these estimates may result in an increase or decrease to our tax provision in a subsequent period.

We regularly assess the likelihood that we will be able to recover our deferred tax assets.

10 unchanged sentences

Equity Compensation

A portion of the PWP Incentive Plan Awards granted to certain employees and non-employees vest upon the occurrence of both service and market conditions being achieved.

A portion of the PWP Incentive Plan Awards granted to certain employees vest upon the occurrence of both service and market conditions being achieved.

Compensation expense is recognized for these equity-based awards over the requisite vesting period in an amount equal to the fair value of the awards at the grant date, provided the requisite service period is completed, irrespective of whether the market condition is satisfied.

5 unchanged sentences

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