Lincoln International (LCLN) Q2 FY26 earnings call: guidance and Q&A

Inquired about the performance and outlook for the MarshBerry business post-acquisition, given its substantial contribution to revenue.

Management stated MarshBerry is on track for its forecast, with its backlog at a record high for the back half of the year. They highlighted the strategic success of combining MarshBerry's insurance/wealth expertise with Lincoln's private equity relationships.

“That business is on track for its forecast. Our business as a whole, our Investment Banking business as a whole, I think as most people know, tends to be a back-end loaded business with the fourth quarter being the most important quarter. That's more pronounced in their business historically. One piece of data is that their backlog at this point in the year is the largest it's ever been relative to what they need to achieve in the back half of the year.”

asked by James Yaro · answered by Robert Brown

Asked about expectations for normal positive seasonality in the second half of the year, given divergent trends among peers.

Management expects normal seasonality and a pickup in H2, with Q4 typically contributing 30-40% of full-year revenue. This is supported by an 'ice dam melting' market recovery and strong business performance through Q2, as observed in their Valuation and Opinions business.

“We do. We do expect that. I think if -- as I look at some of the positive trends in our markets, and we mentioned this before, we don't think this is a dam breaking. We think this is an ice dam that's melting that really probably started to melt the second half of last year and given some of the events in Q1 took a bit of a pause and it seems to be starting again.”

asked by James Yaro · answered by Robert Brown

Inquired if the M&A recovery is broadening beyond ultra-high-quality assets and motivated sellers, or if it remains selective.

Management indicated the recovery is broader, with conviction to sell and acquire even for businesses that haven't performed to their investment thesis. They noted increased activity among sponsors, including addressing underperforming assets and foreclosures, driven by a focus on long-term strategic priorities.

“But even on the businesses that maybe haven't performed in their investment thesis, we're seeing conviction to sell those, and we're seeing conviction on buyers to acquire those and work through diligence issues.”

asked by Devin Ryan · answered by Robert Brown

Sought to understand the contribution of new clients, additional assets from existing clients, or higher valuation frequency to the 35% YoY growth in the Valuation and Opinions business.

The growth is driven by an increasing count of portfolio company activity (up 19% YoY to 7,400 companies), fueled by the 'retailization' of private capital markets. This leads to more frequent (monthly/daily) valuation requirements and increased demand for third-party valuations across diverse asset classes and geographies.

“We're now evaluating about 7,400 portfolio companies, which is up 19% from a year ago. I think the drivers of this really stand behind the retailization of the private capital markets.”

asked by Devin Ryan · answered by Brian Garfield

Asked about opportunities to attract talent from middle market sponsor bankers and potential inorganic expansion given the firm's momentum.

Management confirmed continued success in lateral MD hiring (7 in H1 2026, more slated), noting the IPO has increased interest. They have a strategic list of sectors for lateral hires. On M&A, they have 'never had more opportunities' and are in discussions, but nothing imminent, emphasizing the IPO provided a more permanent capital base for industry consolidation.

“I do think the IPO and people may be understanding the size and depth and breadth of our firm has actually helped us on that front with more people reaching out to us... So there are lots of opportunities in front of us. We are down the path in a few discussions, but nothing really imminent at this time.”

asked by Steven Chubak · answered by Robert Brown

Inquired about the implications of trends like daily pricing (e.g., Marc Rowan's comments) and retailization for Lincoln's Valuation business and the long-term outlook for liquidity in private markets.

Management sees daily pricing and retailization as tailwinds, increasing demand for frequent third-party valuations and transparency. They noted that increased redemption/subscription activity in funds drives more frequent marks, leading to incremental fee opportunities. While episodic liquidity increases are observed, the primary impact is on valuation frequency.

“As I mentioned earlier, the retailization of the private markets is real and the democratization and moving downstream to the retail investor is happening. What we are hearing from GPs and LPs is really a need to increase transparency across the private capital markets and having third-party valuation firms like Lincoln and our Portfolio Valuation business provide valuations of those assets on a more frequent basis is only going to help lead to that transparency.”

asked by Brennan Hawken · answered by Brian Garfield

Asked for a walk-through of how the integration of employee stock into compensation will impact the compensation ratio over the next three years.

The firm is replacing deferred cash with equity (RSUs) to instill an ownership mentality. This provides a temporary benefit to the adjusted compensation ratio over the next three years due to longer amortization of stock comp. This benefit is expected to be offset by continued productivity improvements, aiming for no meaningful long-term effect on the comp ratio.

“We do expect a temporary benefit just as the stock comp amortizes a little bit longer, one more year than the deferred cash. So it'll be this a temporary benefit for the next 3 years as the program matures and we get that -- until we have comparable results also, again, as the business continues to grow, you'll see a little bit of a benefit there.”

asked by Ryan Kenny · answered by Theodore Heidloff