How does the competitive environment for senior talent affect hiring plans and required returns, and which areas are being targeted?

Navid acknowledged the competitive market for talent and retention. The focus is on best-in-class talent that fits the collaborative culture. Lateral hires (12 YTD) are balanced between sector (5 MDs) and product (7 MDs) bankers, complemented by 13 internal MD promotions. “What we're really looking for and what we're really focusing on is best-in-class talent that's consistent with the culture that's going to add to the culture and wants to be part of a collaborative culture and firm.”

Given the record backlog, can the typical 37% second-half revenue pickup materialize this year?

Navid refrained from specific predictions but expressed confidence due to the record overall pipeline and, more importantly, the announced pipeline being up 80% YoY. This, combined with new business origination and banker sentiment, suggests a strong second half. “the thing that's very encouraging about our back half and gives us a lot of visibility is the announced pipeline. And that announced pipeline sitting here today is up 80% versus where it was a year ago.”

What are Moelis's observations on how AI impacts software businesses (beneficiaries, unaffected, disrupted) and how sponsors are navigating this uncertainty?

Navid reiterated a three-bucket view: AI beneficiaries (raising capital, M&A), disrupted companies (liability management needs, especially for levered sponsor-backed firms), and those where it's too early to tell (potential for capital markets trades, continuation vehicles). He emphasized the collaborative model to address these varied needs. “On the other end of the spectrum, I do think there's going to be some companies who are disruptive and potentially materially disrupted by artificial intelligence and will have a real impact on their businesses.”

Moelis & Company (MC) Q2 FY26 earnings call: guidance and Q&A

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

Source: earnings call transcript

Executive summary

Moelis & Company Q2 FY26 — Record Revenues and Strong Pipeline

Moelis & Company delivered record revenues in Q2 and H1 FY26, driven by strong performance in capital markets and private capital advisory, and an improved adjusted compensation ratio. The firm entered the second half with a record total pipeline, including an 80% increase in the announced pipeline, supporting a strong outlook despite ongoing market volatility and modest industry-wide sponsor M&A activity. Strategic investments in talent and AI tools are expected to enhance future productivity and client solutions.

Highlights

Record revenues of $409 million in Q2 FY26, up 12% year-over-year.
Record first-half revenues of $729 million, up 9% year-over-year.
Non-M&A businesses (Capital Markets, Private Capital Advisory) generated record revenues in the first half.
Announced pipeline increased over 80% versus prior year, contributing to a record total pipeline.
Adjusted compensation ratio improved to 65.8% for Q2 and H1 FY26, down from 69% in prior year periods.

Concerns

Market volatility driven by the war in the Middle East, concerns about private credit redemptions, and the evolving impact of AI.
Sponsor M&A activity remained modest year-to-date industry-wide.
Capital Structure Advisory experienced declines in the first half, partially offsetting growth in other areas.

Guidance & targets

Category	Target	Timeline	Confidence
Quarterly non-compensation expenses	$60M-$69M medium materiality	Q3, Q4 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
M&A Market conditions improved, with increased activity in larger transactions and an emerging upswing in the $1B-$5B range. Sponsor M&A activity remained modest industry-wide, but the firm's sponsor business performed well with meaningful growth in announcement activity. Business mix: approximately 2/3 of total revenue (H1 FY26)	—	—	—	—
Non-M&A Generated record revenues in the first half, led by capital markets and private capital advisory. Business mix: approximately 1/3 of total revenue (H1 FY26)	—	—	—	—
Capital Markets Achieved record Q2 and H1 revenues, driven by constructive market conditions, strong demand for late-stage growth and pre-IPO financings, and healthy IPO activity. Expanded capabilities include debt capital markets, private credit, and new securitization capabilities. Record Q2 revenuesRecord H1 revenues	—	—	—	—
Private Capital Advisory Significant momentum in deal completions and new client mandates, particularly in GP-led secondaries. Expanded capabilities with seven dedicated MDs in GP-led secondaries, and new hires for LP-led secondaries and promoted co-investment expertise. Meaningful contributor to H1 revenue growth	—	—	—	—

Deals & partnerships

Taylor Morrison, Berkshire Hathaway Advised on sale $8.5 billion

Advised Taylor Morrison on its sale to Berkshire Hathaway.

Magnolia Oil & Gas, Wildfire Energy Advised on acquisition $4.1 billion

Advised Magnolia Oil & Gas on its acquisition of Wildfire Energy.

AtaiBeckley, Eli Lilly Advised on sale $3.8 billion

Advised AtaiBeckley on its sale to Eli Lilly.

Bridgepoint, Kayne Anderson Real Estate Advised on acquisition

Advised Bridgepoint on its acquisition of Kayne Anderson Real Estate.

Office Properties Income Trust Advised on restructuring $2.4 billion

Advised Office Properties Income Trust on its restructuring.

Carlyle Advised on continuation vehicle

Advised Carlyle on its continuation vehicle for content partners.

Doncasters Served as active bookrunner and lead placement agent for IPO and concurrent private placement $1.1 billion

Served as active bookrunner and lead placement agent on Doncasters' IPO and concurrent private placement.

Risks & headwinds

Market volatility Current

driven by the war in the Middle East, concerns about private credit redemptions and the evolving impact of AI

Mitigation:Client engagement and transaction activity has remained strong despite volatility.

Industry-wide sponsor M&A activity remained modest Year-to-date

modest year-to-date

Mitigation:Moelis's sponsor business performed well; broad capabilities including continuation vehicles and bespoke private capital raising support sponsor clients.

AI creating differentiation and potential disruption among software businesses Evolving

Some companies will be "materially disrupted"

Mitigation:Moelis's tech and CSA teams are working on balance sheet and liability management solutions for impacted companies; collaborative model to bring solutions to sponsor clients.

Increasing lender selectivity making refinancing more challenging for highly levered companies Current

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Mitigation:High levels of engagement in liability management; expanding CSA team to enhance sponsor and creditor coverage.

What to watch in Q3 FY26

Announced pipeline growth

Next quarter

Current up 80% versus the prior year period

Target Continued strong growth or conversion to closed deals

Why it matters

A strong announced pipeline provides visibility and confidence for future revenue generation, especially for the second half of the year.

At the end of the second quarter, our announced pipeline had increased over 80% versus the prior year period.

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

Q&A highlights

What are the drivers behind Moelis's increasing success in larger strategic transactions and how will they sustain it?

Navid attributed it to the market's focus on larger deals, the maturation of talent (lateral hires and internal promotions), critical mass in key areas, expanded product capabilities, and organizational focus on bigger fee opportunities. He also noted an emerging upswing in the $1B-$5B deal range.

“It's all of that coming together to really support larger cap, bigger fee opportunities.”

asked by Unknown Analyst · answered by Navid Mahmoodzadegan

2 min read 5 chapters

Detailed narrative

Strong Revenue Performance and Pipeline Growth

Moelis reported record revenues of $409 million in Q2 FY26, a 12% increase year-over-year, and $729 million for the first half, up 9%. This growth was significantly boosted by capital markets and private capital advisory, which achieved record revenues. The firm's announced pipeline surged over 80% compared to the prior year, contributing to a record total pipeline and a strong outlook for the second half of the year.

Strategic Talent Investment

The firm continues to prioritize talent acquisition and development, having hired 12 lateral Managing Directors year-to-date, including specialists in debt capital markets, private credit, securitization, LP-led secondaries, co-investment, and infrastructure. Additionally, 13 internal promotions were announced at the beginning of the year, balancing external expertise with internal growth and strengthening capabilities across various product and sector areas.

Evolution of M&A Market and Sponsor Activity

While the M&A market has seen an improvement, particularly in larger transactions ($5 billion-plus), there's an emerging upswing in the $1 billion to $5 billion range. Sponsor M&A activity remains modest industry-wide, but Moelis's sponsor business is performing well, with increased announcement activity and a strong pipeline. The firm is adapting to sponsor needs through bespoke capital raising and continuation vehicles.

AI Adoption and Productivity

Moelis is actively deploying AI tools across the firm, integrating them into workflows to enhance client engagement and efficiency. Management views AI as a means to improve productivity and enable bankers to provide better advice and generate more transactions, while also carefully managing risks related to data protection and competitive moats.

Capital Allocation Strategy

The firm maintains a conservative balance sheet with no debt and a strong cash position of $481 million. Capital allocation priorities include investing in long-term business growth, protecting the quarterly dividend of $0.65 per share, and aggressive share repurchases to mitigate dilution from employee compensation equity. The firm repurchased 2.3 million shares for $141 million in H1 FY26.

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