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Evercore (EVR) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Jul 29, 2026

Source: earnings call transcript

Executive summary

Evercore Q2 FY26 — Record Revenues and Strong Backlog Drive Optimism

Evercore delivered record second-quarter and first-half results, driven by broad-based strength across its advisory, underwriting, and wealth management businesses. The firm's robust client engagement and near-record backlog suggest continued strong performance, despite ongoing market uncertainties in certain segments. Strategic investments in talent and technology are expected to yield future growth, though they contributed to higher non-compensation expenses this quarter.

Highlights

5

  • Record Q2 adjusted net revenues of $1 billion, up 19% YoY.

  • Record first half adjusted net revenues of $2.4 billion, up 56% YoY.

  • Adjusted diluted EPS of $2.91 in Q2, up 20% YoY.

  • Backlog currently sits near record levels, indicating strong future activity.

  • Strong talent acquisition with 19 new SMD additions year-to-date, including 11 external hires.

Concerns

3

  • Adjusted non-compensation expenses were $175 million, resulting in a 17.5% noncomp ratio for Q2, higher than prior periods due to investments and episodic costs.

  • Middle market and sponsor-related M&A deals continue to run below historical levels, despite some pickup.

  • Fundraising market for Private Funds Group remains subdued, though strong demand for high-quality funds persists.

Guidance & targets

CategoryTargetConfidence
Annual non-compensation ratio
approximately in line with what we achieved last year
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Wealth Management
Delivered its best revenue quarter, finishing with quarter-end AUM of $16.2 billion.
AUM: $16.2 billion
————

Deals & partnerships

Arcosa Sale of Arcosa to CRH $8.5 billion

Evercore advised on Arcosa's $8.5 billion sale to CRH.

Iridium Communications Sale of Iridium Communications to Rocket Lab

Evercore advised on Iridium Communications' sale to Rocket Lab.

National Grid Investment in Celent $1.75 billion

Evercore advised on National Grid's $1.75 billion investment in Celent.

Victoria's Secret Successful proxy fight against BBRC

Evercore advised Victoria's Secret in its successful proxy fight against BBRC.

Robey Warshaw Transaction to integrate with Evercore's EMEA business

Announced in 2025, the integration has been smooth and successful, contributing to strong EMEA Strategic Advisory performance.

Risks & headwinds

Middle market and sponsor-related M&A activity below historical levels current

continue to run below historical levels

Mitigation:Increased coverage effort with financial sponsors; continued investment in mid-market players; dialogues are healthy and expected to build strength.

Subdued fundraising market for Private Funds Group current

remains subdued

Mitigation:Continued strong demand for the highest quality funds; market-leading position in Private Capital Advisory.

Higher non-compensation expenses due to investments and episodic costs Q2 FY26

up significantly from last quarter and from the year ago quarter; hits into the double-digit millions for episodic items.

Mitigation:Investments intended to yield near-term and medium-to-longer-term results (client events, deal pitching, SMD hiring, technology/AI); episodic costs (bad debt, legal, search fees, seasonal items) are not expected to recur at the same magnitude in upcoming quarters; striving for full-year non-comp ratio in line with prior year (14.2%).

Potential stress on sponsor portfolio companies from substantially higher interest rates future

if rates go up substantially

Mitigation:Currently, financeability is not an issue in M&A; market is noncommittal on rate direction; Evercore's projection is for a neutral rate environment through year-end.

What to watch in Q3 FY26

Non-compensation ratio

Full-year FY26
Current 17.5% (Q2 FY26), 13.5% (H1 FY26)
Target Approximately 14.2% (FY25 level)

Why it matters

Management is striving to achieve a full-year non-comp ratio similar to last year, which is critical for operating leverage and profitability.

For the full year, we would expect to see a modestly higher growth rate in noncomps relative to what we have experienced over the last couple of years. We are striving to achieve an annual non-comp ratio that is approximately in line with what we achieved last year.

Find out whether EVR delivers this. Inve re-checks your case every morning.

Q&A highlights

Analyst questioned the higher non-comp expenses and lack of operating leverage compared to peers, despite investments, and asked about the second-half activity ramp.

Management reiterated that non-comp expenses should be evaluated over multiple quarters, noting the H1 ratio was 13.5%. They attributed increases to growth investments (client events, deal pitches), medium-term initiatives (SMD hiring, AI/technology), and episodic costs. They expect a full-year non-comp ratio similar to last year's 14.2%.

“The majority of this is investments in our company for growth. Some of that growth is realized in the very near term. That's related to things like conferences, client events, deal pitches, deal execution, which result in travel and professional fees.”

asked by Steven Chubak · answered by Timothy LaLonde

2 min read 6 chapters

Detailed narrative

Record Performance and Broad-Based Strength

Evercore achieved record second-quarter and first-half revenues, with adjusted net revenues reaching $1 billion in Q2 and $2.4 billion in H1. This performance was broad-based, with record Q2 revenues in North American Strategic Advisory, Private Funds Group, and Equities, alongside the best-ever quarter for underwriting and wealth management. The firm attributes this to its strong client franchise, diversified business model, and execution of its long-term strategy.

M&A Market Dynamics and Outlook

Global M&A activity remains healthy, tracking above last year's levels, primarily driven by large-cap strategic M&A. While middle market and sponsor-related deals are active, they remain below historical levels. Management is encouraged by the outlook, expecting continued activity in the latter half of the year and into next, supported by large-cap activity and increasing sponsor participation, partly fueled by technological transformation and AI.

Strategic Talent Investment

Evercore continues to invest heavily in talent, adding 19 new Senior Managing Directors (SMDs) year-to-date (11 external hires, 8 internal promotions), bringing the total to 188 SMDs in global investment banking, with over 50 currently ramping. These hires span key areas like healthcare, industrials, private capital advisory, restructuring, and equity capital markets, including expansion in European offices like Frankfurt.

European Expansion and Integration

The firm's EMEA Strategic Advisory business had a strong quarter and record first half, benefiting from the successful integration of Robey Warshaw and the establishment of local presences in new European markets. Investments in capabilities like Data Advisory and European restructuring have strengthened the regional offering, leading to increased activity and optimism for continued growth.

Non-Compensation Expense Management

Adjusted non-compensation expenses rose to $175 million in Q2, resulting in a 17.5% noncomp ratio for the quarter. This increase is attributed to investments in growth (conferences, client events, deal pitching), medium-term initiatives (SMD hiring, AI/technology, data management), and episodic/seasonal costs (intern arrivals, specific off-sites). Management aims for a full-year non-comp ratio similar to last year's 14.2%, emphasizing evaluation over multiple quarters.

Capital Allocation and Shareholder Returns

Evercore returned $150 million of capital in Q2 through share repurchases (330,000 shares) and dividends. For the first half, total capital returned was $823 million, with $734 million from share repurchases at an average price of $325 per share, already surpassing the prior full-year record for dollar amount. The adjusted diluted share count decreased by 730,000 shares QoQ to 43.7 million.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.