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    MC
    Earnings call· Jun 2026(Q2 FY26)

    Moelis & Q2 FY26 earnings call MC

    Jul 29, 2026 Source

    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

    5

    • 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

    3

    • 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

    1
    CategoryTargetConfidence
    Quarterly non-compensation expenses
    $60M-$69M
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    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
    		————

    Operational metrics

    20
    Revenue
    $409Mup 12% year-over-year
    Q2 FY26

    Record revenues for the quarter.

    Revenue
    $729Mup 9% from the prior year period
    H1 FY26

    Record revenues for the first half.

    Adjusted compensation ratio
    65.8%compared with 69% in both prior year periods
    Q2 FY26

    Improvement in compensation ratio.

    Adjusted compensation ratio
    65.8%compared with 69% in both prior year periods
    H1 FY26

    Improvement in compensation ratio.

    Adjusted non-compensation expenses
    $66.5M
    Q2 FY26

    Main drivers include increased business and client activity, deal-related T&E, client conferences, and underwriting syndication costs.

    Adjusted non-compensation expenses
    $134M
    H1 FY26

    Main drivers include increased business and client activity, deal-related T&E, client conferences, and underwriting syndication costs.

    Non-compensation expense ratio
    16.2%
    Q2 FY26
    Non-compensation expense ratio
    18.3%
    H1 FY26
    Adjusted pretax margin
    18.6%an improvement compared with 17.6% in the prior year period
    Q2 FY26
    Adjusted pretax margin
    17%an improvement compared with 16% in the prior year period
    H1 FY26
    Effective tax rate
    29.1%roughly in line with the second quarter of 2025
    Q2 FY26
    Quarterly dividend per share
    $0.65consistent with the prior period
    Q2 FY26

    Declared by the Board.

    Shares repurchased
    337,000
    Q2 FY26

    Repurchased on the open market.

    Shares repurchased
    2.3M
    H1 FY26

    Through open market repurchases and net share settlements.

    Total capital returned to shareholders
    $246M
    H1 FY26

    Includes dividend declared and share repurchases.

    Cash position
    $481M
    Q2 FY26

    Ended the quarter with a strong cash position and no debt.

    Lateral Managing Director hires
    4
    Q2 FY26

    Includes two PCA hires, one CSA MD, and one MD in Europe focused on infrastructure.

    Lateral Managing Director hires
    12
    YTD FY26

    Total lateral MD hires year-to-date.

    Internal Managing Director promotions
    13
    YTD FY26
    Private Capital Advisory dedicated MDs
    7
    Q2 FY26

    Achieved critical mass in GP-led secondaries.

    Deals & partnerships

    7
    Taylor Morrison, Berkshire HathawayAdvised on sale$8.5 billion

    Advised Taylor Morrison on its sale to Berkshire Hathaway.

    Magnolia Oil & Gas, Wildfire EnergyAdvised on acquisition$4.1 billion

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

    AtaiBeckley, Eli LillyAdvised on sale$3.8 billion

    Advised AtaiBeckley on its sale to Eli Lilly.

    Bridgepoint, Kayne Anderson Real EstateAdvised on acquisition

    Advised Bridgepoint on its acquisition of Kayne Anderson Real Estate.

    Office Properties Income TrustAdvised on restructuring$2.4 billion

    Advised Office Properties Income Trust on its restructuring.

    CarlyleAdvised on continuation vehicle

    Advised Carlyle on its continuation vehicle for content partners.

    DoncastersServed 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

    4
    Market volatilityCurrent

    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 modestYear-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 businessesEvolving

    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 companiesCurrent

    null

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

    What to watch in Q3 FY26

    4

    Announced pipeline growth

    Next quarter
    Currentup 80% versus the prior year period
    TargetContinued 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.

    Q&A highlights

    6

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.