James Yaro

James Yaro inquired about the typical ramp-up period for new originating partners to reach full scale on Figure's platform and the composition of year-on-year growth in origination volume, distinguishing between contributions from new versus existing partners.

Answer

CEO Michael Tannenbaum stated that the core ramp-up for first and second lien HELOCs is roughly three months, though it varies by partner type and product expansion. CFO Macrina Kgil added that both new and existing partners contribute significantly, with newer partners joining in the second half of the year already taking a substantial share of Q4 volume.

James Yaro asked about the ramp-up period for new originating partners, seeking a rule of thumb for how long it takes them to scale up, and the composition of year-on-year origination volume growth between new and existing partners. He also inquired about Q1 seasonality.

Answer

CEO Michael Tannenbaum stated that the typical ramp-up period for core first and second lien HELOC partners is roughly three months, though it can vary based on partner diversity (licensed/non-licensed, API usage, size) and the introduction of new products. CFO Macrina Kgil clarified that while new partners are joining, existing partners continue to grow within the ecosystem, and newer partners from the second half of the year are already contributing significantly to Q4 volumes. Regarding seasonality, Macrina Kgil noted that November to February are typically seasonally low months for home-based lending, with anticipation of higher growth resuming in March, consistent with historical trends.

James Yarrow inquired about Figure's product roadmap prioritization, the Total Addressable Market (TAM), and the profitability of top new products expected to be meaningful over the next two to three years. He also asked for the outlook on Figure Connect, specifically its potential volume composition and timeframe, given it comprised 46% of volume this quarter.

Answer

Michael Tannenbaum (CEO) stated Figure addresses a $185 billion+ market opportunity across consumer credit and other asset classes, with significant runway in HELOCs and strong traction in FirstLean. He also highlighted progress in blockchain ecosystem pillars like Democratized Prime and Yields. Mike Cagney (Executive Chairman and Co-founder) reiterated investment in Democratized Prime and the extension of existing infrastructure to equity native chain. Macrina Kgil (CFO) noted Figure Connect, launched in June 2024, reached nearly 50% of total consumer loan marketplace volume in Q3 2025 and aims for 60% in the mid to near term.

James Yarrow inquired about Figure Technology Solutions' product roadmap prioritization, the Total Addressable Market (TAM) and profitability of key products, and which new products are expected to significantly impact results over the next 2-3 years. He also followed up on the Figure Connect outlook, specifically its current volume composition and future potential.

Answer

CEO Michael Tannenbaum stated a huge $185 billion+ market opportunity, with all consumer credit and asset classes beyond consumer credit being addressable. He emphasized the $35 trillion home equity runway for HELOCs and strong traction in first-lien lending. Executive Chairman and Co-founder Mike Cagney noted continued investment in Democratized Prime and the equity native chain as extensions of existing infrastructure. CFO Macrina Kgil reported Figure Connect reached nearly 50% of total consumer loan marketplace volume this quarter and is expected to reach 60% in the mid to near term.

James Yaro asked about the competitive landscape for CopyTrader and eToro's strategy to maintain its lead against scaled competitors. He also inquired about the prediction markets opportunity for non-U.S. customers.

Answer

CEO Yoni Assia highlighted eToro's significant moat in CopyTrader, built on long-standing popular investors with solid track records and substantial assets under copy. He emphasized the time-based nature of this moat and the unique community aspect. For prediction markets, Assia noted that regulated off-chain markets are primarily a U.S.-led business, while globally, on-chain prediction market activity is more prevalent among crypto-native customers using non-custodial wallets.

James Yaro asked about the competitive landscape for CopyTrader, given that competitors are developing similar products, and what strategies eToro employs to maintain its leadership. He also inquired about the prediction markets opportunity for eToro's non-U.S. customers.

Answer

Yoni Assia, CEO of eToro, emphasized eToro's significant time-based moat, citing long-standing popular investors with solid track records and substantial assets under copy. He highlighted new tools for pro investors, such as app building and monetization, and strong community engagement as key differentiators. For non-U.S. prediction markets, Yoni Assia noted that activity primarily occurs with crypto-native customers directly on-chain via non-custodial wallets, contrasting with the U.S. market's regulated infrastructure.

James Yaro from Goldman Sachs asked about the key drivers behind the sequential increase in net contribution per trade across both the equities/commodities/currencies (ECC) and crypto segments.

Answer

CFO Meron Shani attributed the increase primarily to a 54% year-over-year growth in the average invested amount per trade. He also noted that the introduction of ticket fees in certain regions reduced smaller trades, further boosting the average. For crypto, the higher invested amount and slightly better volume internalization were the main drivers.

James Yaro from Goldman Sachs asked about the drivers behind the sequential increase in net contribution per trade for both equities/commodities/currencies (ECC) and crypto, and the outlook for take rates.

Answer

CFO Meron Shani attributed the increase primarily to the growth in the average invested amount per trade, which rose 54% year-over-year. He noted that the introduction of ticket fees outside the U.S. and UK also contributed by reducing smaller trades. For crypto, the increase was directly tied to the higher invested amount and a slightly better ability to internalize volume.

James Yaro from Goldman Sachs questioned whether the market is entering another crypto winter, the potential recovery timeline, and which key performance indicators (KPIs) investors should monitor for a market turnaround.

Answer

CEO Brian Armstrong stated that Coinbase generally avoids predicting market cycles, focusing instead on building products. He expressed enjoyment of down markets for building opportunities, buying Bitcoin, and stock buybacks. Armstrong suggested that market corrections are often psychological rather than tied to fundamentals, noting continued growth in stablecoin adoption. He observed that active traders on the platform are currently net buyers, but deferred investment decisions to the callers.

James Yaro at Goldman Sachs asked for Coinbase's perspective on whether the market is entering another crypto winter, the potential recovery timeline, and key performance indicators that might signal a market turnaround.

Answer

CEO Brian Armstrong refrained from predicting market cycles, emphasizing Coinbase's focus on product development. He expressed that down markets present opportunities for building, buying Bitcoin, and stock repurchases. Armstrong suggested the current market correction isn't fundamentally driven, pointing to continued stablecoin adoption, and noted that retail traders on the platform are currently net buyers.

James Yarrow of Goldman Sachs asked about the dynamics of yield on stablecoins under the Genius Act, noting the distinction between prohibited interest and permitted rewards, and questioned if users might eventually prefer tokenized money market funds.

Answer

CEO Brian Armstrong and CFO Alesia Haas both emphasized that Coinbase pays 'rewards' for platform engagement, not 'interest,' and as a non-issuer, they plan to continue this as a key differentiator. Haas added that for users, the primary driver will be utility and network effects, making the specific underlying asset less important as long as it is widely accepted.

James Yarrow of Goldman Sachs questioned the dynamics of stablecoin yield, asking about the distinction between interest (prohibited by the Genius Act) and rewards, the evolution of yield on stablecoins, and whether users might prefer tokenized money market funds instead.

Answer

CFO Alesia Haas clarified that Coinbase's rewards program is structured as a loyalty incentive for overall platform engagement, not as interest on a deposit. She argued that users will ultimately prioritize an asset's utility and network effect. CEO Brian Armstrong reinforced this, stating that Coinbase is not the issuer of USDC, does not pay interest, and plans to continue offering its competitive rewards program.

James Yaro of Goldman Sachs questioned the logic behind adding Binance to the USDC partnership with Circle, its impact on the total addressable market (TAM) for USDC, and how the economic split has changed.

Answer

CFO Alesia Haas detailed the economic arrangement, where Coinbase receives 100% of reserve income for on-platform USDC and shares a percentage of off-platform revenue with Circle and other distribution partners like Binance. She explained the rationale is to drive global adoption and liquidity. CEO Brian Armstrong added that the strategy for USDC growth is based on sharing economics with strong partners and maintaining a compliant approach.

James Yaro inquired about Robinhood's international expansion strategy, specifically comparing the attractiveness and go-to-market approaches in Europe versus Asia, and commenting on new markets like Indonesia.

Answer

CEO Vlad Tenev explained that in existing markets (U.K., E.U.), Robinhood will round out product suites (e.g., multi-currency wallets, ISAs). The E.U. serves as a test case for crypto-built Robinhood with stock tokens, aiming for 24/7 trading and self-custody. For Southeast Asia and other new markets, faster feature ramp-up is expected due to prior regulatory work and international design, anticipating international customer growth into the millions.

James Yaro of Goldman Sachs asked for a preview of the Robinhood Chain, its advantages for real-world assets, its competitive edge versus other layer-two blockchains, and an update on timing.

Answer

CEO Vlad Tenev stated that Robinhood Chain's biggest advantage is its captive audience of over 25 million customers with significant assets, which is difficult for others to replicate. He emphasized its unique focus on real-world assets, a niche he believes no one else is tackling as directly. He also mentioned strong inbound interest from developers since the announcement.

In a follow-up, James Yaro from Goldman Sachs asked how the Bitstamp acquisition could impact crypto order routing, internalization, and the retail crypto take rate once the deal closes.

Answer

CEO Vladimir Tenev expressed excitement about the deal, which is on track to close mid-year. While not front-running specific announcements, he highlighted that Bitstamp provides a significant opportunity in the institutional space and accelerates their global presence. He stated that Bitstamp will play a role in providing customers with choice and a great execution experience, giving them another lever for active traders.

James Yaro asked for a high-level breakdown of advisory revenue mix between M&A and non-M&A businesses for 2025. He also inquired about the firm's capital return priorities beyond organic investment and sought clarification on the starting point for the 2026 compensation ratio, confirming if the mid-60s target still holds.

Answer

CEO Andrew Bednar respectfully declined to segment revenue by product, explaining that the firm is organized by sector to solve client problems, not sell products, but reiterated confidence in the Financing and Capital Solutions business, especially Liability Management. Regarding capital return, Bednar stated the priority stack remains unchanged: investing in future revenue/clients, managing share count, dividends, and opportunistic buybacks. For the compensation ratio, he clarified that the Q4 number is irrelevant, and the firm will start Q1 2026 with a 67% accrual, maintaining flexibility in Q4 to adjust based on business performance and investments.

James Yaro from Goldman Sachs questioned the potential scale of the senior banker base over the next few years and the long-term ramifications for the comp ratio. He also asked for an update on capital return aspirations given the increased investment in organic growth and acquisitions.

Answer

CEO Andrew Bednar explained that there is no set limitation on hiring, with the focus being on strategic fit, caliber, and cultural integration. He noted this year's hiring is above the typical trend of 4-5 net new partners annually. Regarding capital return, Bednar emphasized that while the firm is laser-focused on mitigating dilution and growing EPS, investing in the business through hiring and M&A is currently a more attractive use of capital. He confirmed the firm will remain mindful of shareholder returns but is in a period of heavier investment, while maintaining the quarterly dividend.

James Yaro requested more clarity on the assumptions baked into the 67% compensation ratio for the quarter and the potential for future progress. He also asked for a breakdown of the non-compensation expense increase, specifically the litigation costs, and an update on the full-year guidance.

Answer

CFO Alexandra Gottschalk clarified that the 67% compensation ratio is the firm's best estimate, which could be adjusted based on performance and recruiting pace. She specified that over $11 million in non-compensation expenses were one-time litigation costs from a concluded trial and reaffirmed that the prior guidance for a single-digit percentage increase for the full year remains the best estimate.

James Yaro from Goldman Sachs asked about the impact of higher interest rates on sponsor-led M&A, the outlook for the restructuring business, and the potential for further improvement in the firm's compensation ratio.

Answer

CEO Andrew Bednar stated that sponsor M&A activity can proceed in a higher-rate environment but expects a 'slower grind up' as sponsors focus on monetizing existing assets. He expressed strong optimism for the restructuring business, which has broadened into complex financing solutions. Regarding the comp ratio, he reiterated the firm's commitment to its mid-60s target and expects to gain leverage as the business scales, but did not provide a specific 2025 forecast.

James Yaro asked about two potential election-related impacts: how a steeper yield curve could affect M&A activity and the potential impact of tariffs. He also questioned the Q4 revenue outlook, asking if a pull-forward into Q3 or pre-election uncertainty was the cause for the sequential decline. Finally, he sought clarification on the end-of-period share count.

Answer

Andrew Bednar, Chief Executive Officer, opined that a steeper yield curve could slow the return of sponsor-led M&A, but that corporate activity would remain strong. He confirmed that over $25 million in revenue was pulled forward from Q4 into Q3, impacting the Q4 outlook, and called the election's impact a 'minor speed bump.' Alexandra Gottschalk, Chief Financial Officer, confirmed the analyst's calculation for the total end-of-period share count was correct.

James Yaro inquired about Piper Sandler's strategy for expanding into new businesses, particularly beyond non-M&A advisory, and whether future growth would primarily be organic or inorganic. He also asked for insights into the equity capital markets backdrop, given the firm's healthy corporate financing results despite recent market struggles.

Answer

Chairman and CEO Chad Abraham indicated that the firm is currently focused on leveraging existing products like restructuring, private capital advisory, and debt capital advisory, where there is significant runway for collaboration and penetration among bankers. He mentioned evaluating opportunities in other businesses, such as private stock trading within equities, as the platform strengthens. Regarding equity capital markets (ECM), Mr. Abraham acknowledged the market's volatility, noting that recent struggles were led by a tech and software sell-off, with healthcare performing better. He emphasized the difficulty of predicting ECM more than a few weeks out, despite a strong January.

James Yaro of Goldman Sachs inquired about the IPO market outlook, particularly for biotech, and asked to reconcile the positive bank M&A commentary with the weaker Q3 fixed income forecast. He also questioned the trajectory for compensation and non-compensation expenses.

Answer

Chairman & CEO Chad Abraham noted a bifurcated IPO market, with general activity improving but biotech remaining slow. President Deb Schoneman clarified that the Q3 fixed income moderation is due to a tough comparison against a very strong Q2, not a change in the fundamental outlook. CFO Kate Clune projected the compensation ratio would stay within its target range and explained that while non-comp expenses are elevated, the firm is not yet adjusting its full-year guidance.

James Yaro asked for context on the contribution from countercyclical advisory businesses like restructuring and debt capital markets. He also inquired about the firm's appetite for acquisitions in the current environment, the IPO pipeline backlog, particularly in healthcare, and what was driving fixed income trading activity among bank clients.

Answer

Chairman and CEO Chad Abraham stated that while countercyclical businesses like debt capital markets and restructuring are not half their business, they are growing faster than M&A and providing ballast. He confirmed it is a good time for acquisitions, targeting technology, software, and select European opportunities. Regarding the IPO market, he noted good backlog but expects the biotech sector to be slower to recover. President Debbra Schoneman explained that fixed income volatility is keeping many clients, including depositories, on the sidelines, with activity mainly tied to M&A-related balance sheet restructuring.

James Yaro asked for the outlook on the Equity Capital Markets (ECM) business, particularly regarding IPOs and client appetite for healthcare deals, and also questioned how a longer M&A cycle might impact the firm's acquisition strategy.

Answer

Chairman and CEO Chad Abraham noted a very strong Q4 for ECM and stated that the IPO market feels like it's in the 'early innings of seeing some pretty good improvement,' citing recent successful Med-Tech and energy IPOs. On corporate development, Abraham expressed optimism, stating that the current environment is a 'pretty good market for acquisitions' as target firms have more realistic revenue outlooks, making deal-doing easier.

James Yaro of Stephens Inc. asked about the sequential slowdown in Corporate Finance, inquiring about the outlook for Equity and Debt Capital Markets (ECM/DCM) in Q4 and into next year. He also questioned the potential for continued growth and market share gains in the equities brokerage business.

Answer

CEO Chad Abraham explained that the Q3 corporate finance slowdown was partly idiosyncratic, with deals slipping into a very strong October. He anticipates Q4 will be meaningfully up sequentially, led by ECM. President Debbra Schoneman added that equities brokerage growth will be driven by expanding U.S. research sales globally and building out their electronics platform.

James Yaro inquired about the M&A composition in 2025, the outlook for large deals versus smaller deals, and when smaller deals might catch up. He also asked about the impact of the geopolitical backdrop on boardroom dialogues.

Answer

CEO Navid Mahmoodzadegan stated that mega-cap transactions are likely to continue due to motivations for scale and technology positioning, while the middle market is expected to catch up as financing issues dissipate and LP pressure for monetization increases. He acknowledged geopolitics as a boardroom topic but suggested boards are becoming more resilient to short-term flare-ups, focusing on long-term business positioning.

James Yaro asked for Moelis's perspective on the market expectation for a 'big bang' of M&A and IPO activity post-Labor Day. He also inquired about the guardrails for the private capital advisory (PCA) build-out, particularly in an environment of returning regular-way M&A.

Answer

CEO Kenneth Moelis stated that while he doesn't predict a 'big bang,' the market is improving almost daily, with new business activity getting stronger each week in June. He noted the S&P 500's strength as a positive indicator. Regarding PCA, Moelis explained the firm is not yet 'over-peopled' in the space and is focused on getting the team up to speed. He emphasized that PCA is a critical capability for advising sponsors on all their options, making it relevant even if it's not the chosen path for every transaction.

James Yaro asked for historical context on how long it takes for CEO confidence and M&A to recover from exogenous shocks, and followed up on the potential trajectory for the restructuring business in a harder economic landing.

Answer

Chairman and CEO Kenneth Moelis opined that the current M&A slowdown will be 'short, sharp' because it is driven by a specific policy decision that can be reversed, leading to a rapid snap-back in activity. For restructuring, he anticipates that in a downturn, the primary activity would be liability management exercises rather than traditional bankruptcies, given the significant equity cushions in most sponsor-owned companies. He also provided a Q1 revenue split of roughly two-thirds M&A and one-third capital markets and restructuring combined.

James Yaro asked about the 2025 outlook for the restructuring business and requested a revenue breakdown by segment. He also questioned the progression of the compensation ratio into 2025 and later sought clarification on the mechanics of its potential improvement.

Answer

CEO Ken Moelis projected that 2025 restructuring activity would likely resemble 2024, absent major external events, and stated that for the full year, M&A constituted about 60% of revenue. Regarding the comp ratio, Moelis and CFO Joe Simon explained that its decline is not linear and will slow as it approaches the low 60s, especially as the firm continues to make strategic investments like the new private funds advisory practice.

James Yaro inquired whether recent successful sponsor-led IPOs are becoming a more frequent topic in dialogues and if this could spur more ECM or M&A activity. He also asked for the revenue contribution split between M&A and other businesses for the quarter.

Answer

CEO Ken Moelis stated that he expects more sponsor-led IPOs, as it's an obvious exit path for large, successful buyouts, especially with the stock market at all-time highs. He believes a quality IPO market will develop if issuers bring good products at the right price. He also confirmed that the year-to-date revenue split has been consistent at approximately 60% from M&A and 40% from other activities like restructuring and capital markets.

James Yaro asked about the outlook for large deals, specifically whether the heavily mega-cap M&A-driven market of 2025 is expected to continue or accelerate into 2026.

Answer

CEO John Weinberg stated that a healthy environment for large deals is expected to persist, driven by strong business prospects, strategic outreach, access to capital, and a relatively benign regulatory environment. He noted that Evercore's backlogs are strong and diversified across all deal sizes, indicating a continuation of large-cap deals alongside others.

In a follow-up, James Yaro of Goldman Sachs asked for details on the Roby Warshaw deal financing, including the use of stock versus cash for the payment tranches and the structure of the performance-based incentives.

Answer

CFO Tim LaLonde clarified that while the first tranche is payable in stock, the firm is strongly considering repurchasing a similar number of shares, making it a 'net cash' transaction over time from a shareholder perspective. Chairman and CEO John Weinberg added that the potential future consideration is structured as a 'win-win,' earned only if the acquisition outperforms projections and achieves significant synergies, which also serves to align interests and retain the new team.

James Yaro from Goldman Sachs asked about the outlook for the Private Capital Advisory (PCA) business in a weaker M&A environment and later followed up on the equity capital markets (ECM) backlog and IPO outlook.

Answer

CEO John Weinberg stated the PCA business is strong, with GP-led continuation funds being a key driver as sponsors seek monetization alternatives to M&A. For ECM, he described the market as 'episodic' with a solid backlog of IPOs ready to launch once market volatility subsides, expressing optimism for the near future.

James Yaro of Goldman Sachs Group, Inc. inquired about the pace of M&A acceleration, which sectors are most active, and whether there was a significant pull-forward of deals into the quarter. He also asked about the strength and outlook for the restructuring business.

Answer

CEO John Weinberg stated that any deal pull-forward was on the smaller side and not out of the ordinary. He confirmed a continued build in activity across all businesses and sectors, including technology, healthcare, and industrials. Regarding restructuring, Weinberg noted 2024 was a very strong year (second best ever) and activity remains robust, driven increasingly by liability management, which expands the relevance of the service.

James Yaro of Goldman Sachs asked for an update on the cadence of the advisory recovery, noting that public backlog data appeared to have softened, and inquired about the potential impact of the U.S. election on activity.

Answer

CEO John Weinberg described the recovery as gradual but emphasized that Evercore's internal backlogs, engagement letters, and conflict checks are robust. He suggested the election might cause a short-term pause but is not expected to have a major medium-term impact on M&A activity, aside from potential regulatory shifts. CFO Timothy LaLonde clarified that internal backlogs include unannounced deals and non-M&A advisory work not captured by public data.

James Yaro asked if the mega-cap M&A driven backdrop of 2025 is expected to continue or improve in 2026. He also inquired about the outlook for the compensation ratio following a meaningful step down in Q4.

Answer

Paul Taubman, Chairman and CEO of PJT Partners, stated that the M&A market has not yet reached its full potential, and despite 2025 being a strong year, he anticipates a multi-year period of elevated deal activity driven by the macroeconomic backdrop, regulatory environment, and attractive capital markets. Regarding the compensation ratio, Mr. Taubman reiterated that it had peaked a couple of years ago and is expected to continue decreasing, with the pace dependent on market strength and investment. Helen Meates, CFO of PJT Partners, will provide a 2026 estimate in the Q1 results.

James Yarrow of Goldman Sachs asked about the potential impact of a government shutdown on PJT Partners' business in the fourth quarter and its broader implications for the macroeconomic environment. He also sought perspective on the sustainability and outlook for the primary fundraising business, considering a crowded market.

Answer

Chairman and CEO Paul Taubman indicated that a government shutdown would not meaningfully affect PJT Partners' business directly, but he expressed concern about its potential macro implications on economic output and confidence. Regarding primary fundraising, Mr. Taubman noted that while the environment is improving, it will become a "crowded trade," which he believes will play to PJT Partners' strengths as clients seek the best fundraising team.

James Yaro asked about the potential impact of the government shutdown on PJT Partners' business in the fourth quarter and beyond. He also inquired about the sustainability and outlook for the primary fundraising business, given its recent improvements, and asked about any revenue pull forward in the current quarter.

Answer

Paul Taubman, Chairman and Chief Executive Officer, stated that the government shutdown does not directly affect PJT's business in a meaningful way, but he is more concerned about its broader macroeconomic implications. For primary fundraising, Mr. Taubman noted that while the market is improving, it will become a 'crowded trade,' which he believes will benefit PJT's strong fundraising team. Helen Meates, Chief Financial Officer, added that the revenue pull forward for the quarter was a modest $8 million, similar to $6 million in the prior year.

James Yaro of Goldman Sachs inquired about the outlook for sponsor-led M&A, asking if portfolio companies are now positioned for profitable sales and when sponsor activity might fully resume. He also questioned how the growth of continuation funds might be affected by the return of traditional M&A and IPO markets.

Answer

Paul Taubman, Founder, Chairman & CEO of PJT Partners, explained that sponsor activity is increasing due to more receptive IPO markets, accommodative credit for dividend recaps, and renewed strategic interest post-tariff uncertainty. He noted that continuation funds are a permanent tool, not just a substitute, competing more with IPOs than regular M&A, and their growth is currently limited by the amount of dedicated capital available, not by a lack of demand.

James Yaro inquired about private equity's appetite for M&A and IPOs, the growth outlook for both GP-led and LP-led secondaries, the impact on primary fundraising, and the cadence for share buybacks.

Answer

Chairman and CEO Paul Taubman noted that while PE activity has slowed due to challenged capital returns, interest in continuation vehicles and LP stake sales is significantly up. This dynamic makes primary fundraising harder, but drives clients to top-tier advisors. CFO Helen Meates added that buybacks are typically weighted to Q1 but will continue opportunistically to offset dilution over time.

James Yaro asked for commentary on the M&A backdrop, contrasting the economic health of the U.S. and Europe. He also sought color on the drivers of the strong Q4 advisory results and the outlook for the secondary private capital solutions market in 2025.

Answer

Chairman and CEO Paul Taubman acknowledged the U.S. economy's strength but argued for a potential uptick in European M&A, driven by valuation disconnects, the need for European champions, and cross-border interest in the U.S. market. He confirmed Strategic Advisory was the standout performer in Q4. Regarding secondaries, Mr. Taubman expressed long-term optimism, citing secular growth trends as private asset owners seek liquidity alternatives to the less attractive IPO market, a trend PJT is well-positioned to capitalize on.

James Yaro asked for the specific factors driving confidence in a stronger M&A market in 2025 and questioned whether sponsor activity could return to the high levels seen in 2021-2022.

Answer

Chairman and CEO Paul Taubman detailed both macro and micro factors for his 2025 optimism. Macro drivers include rate cuts, post-election regulatory clarity, and corporate demand for M&A. Micro drivers for PJT include a near-record mandate count and a dramatically improved backlog. Regarding sponsors, Taubman stated that the 2021-2022 activity levels were an 'aberrational' function of near-zero interest rates and are not expected to return, though he anticipates activity will be meaningfully better than recent levels.

James Yaro asked for Mike Novogratz's perspective on the current crypto market cycle, whether it signals a new crypto winter, the potential recovery timeline, and key inflection signals.

Answer

CEO Mike Novogratz described the current market as 'chilly,' with Bitcoin in a $70k-$100k range, but affirmed its status as a solidified macro asset. He attributed recent price action to a supply-demand imbalance and profit-taking. Novogratz believes the market is closer to the bottom of its range and anticipates a catalytic event, such as the market structure bill, to drive demand.

James Yaro asked for Mike Novogratz's perspective on the current crypto backdrop, whether the market is heading into another crypto winter, the potential timeline for recovery, and key signals to watch for market deterioration or inflection.

Answer

CEO Mike Novogratz described the current market as 'chilly,' with Bitcoin in a $70k-$100k range. He asserted Bitcoin is a solidified macro asset and that the market structure bill will activate Wall Street's selling machine, boosting demand. He believes the market is closer to the bottom of a bear market than the beginning of a new one, anticipating a catalytic event.

James Yaro of Goldman Sachs inquired about the growth outlook for non-US dollar stablecoins and sought an update on the expected financing cost range for the data center project debt for Phases one and two.

Answer

Founder, CEO & Director Michael Novogratz stated that while non-USD stablecoins will not be as large as USD-denominated ones in the short run, their long-term potential is great as digital currencies and payments evolve. President & CIO Christopher Ferraro added that Phase one financing is expected to yield a 10-11% cost of capital, and they anticipate more favorable terms for Phase two as the company demonstrates execution.

James Yaro requested more granularity on the growing and shrinking verticals within Lazard's Asset Management business to understand the drivers for positive net flows in 2026. He also inquired about the outlook for the secondaries business and whether its strong CAGR is expected to slow in 2026.

Answer

CEO of Asset Management Chris Hogbin explained the positive net flows confidence stems from strong gross inflows, normalized outflows (after a large sub-advised mandate closure), and $13 billion in unfunded mandates, particularly in emerging markets, systematic, and listed infrastructure. CEO and Chairman Peter Orszag stated no anticipated slowing in the secondaries business due to its modest penetration rate and increasing normalization as a market feature.

James Yaro asked for more granularity on the moving parts within Asset Management, specifically identifying growing versus shrinking verticals and key drivers for achieving positive net flows in 2026. He also inquired about the outlook for the secondaries business and whether its strong CAGR is expected to slow.

Answer

CEO of Asset Management Chris Hogbin expressed confidence in positive net flows for 2026, citing strong gross inflow budgeting and no expected repeat of the large sub-advised mandate closure. He highlighted client interest in emerging markets, systematic, listed infrastructure/real assets, and alternatives, noting a trend of asset owners diversifying into international markets. CEO and Chairman Peter Orszag added that there is no 'flashing red concentration' risk in the business. Peter Orszag also stated no anticipated slowing in the secondaries business, as its penetration rate remains modest, indicating ample room for continued expansion as a permanent market feature.

James Yaro inquired about the fee rates on inflows and outflows in Lazard's Asset Management, and the broader trend of the average fee rate going forward.

Answer

Peter Orszag, Lazard's CEO and Chairman, noted a small increase in the average fee rate for the quarter due to higher fees on inflows compared to outflows. He anticipates roughly flat average fee rates for the near term, with specifics depending on the mix of future inflows.

James Yaro inquired about the fee rates on inflows and outflows in Asset Management, and the broader trend for the average fee rate going forward.

Answer

Peter Orszag, Lazard's CEO and Chairman, noted a small increase in the average fee rate for the quarter due to higher fees on inflows compared to outflows. He anticipated roughly flat average fee rates for the near term, depending on the specific mix of future inflows.

James Yaro from Goldman Sachs asked for a timeline on the anticipated sponsor-led M&A recovery. He also sought clarification on the firm's goal for net flows in Asset Management, the impact of the flow mix on the fee rate, and the trajectory for non-compensation expenses.

Answer

Peter Orszag, CEO & Chairman, and Mary Ann Betsch, CFO, responded. Orszag explained that sponsor M&A should pick up as mounting pressure from LPs to return cash combines with resolving market headwinds. He reiterated that flat flows for the year is a 'stretch goal' and noted that a mix shift away from lower-fee sub-advised accounts should support the overall fee rate. Betsch revised the full-year non-comp expense guidance from mid-single-digit to high-single-digit growth, citing FX, business development, and technology investments.

James Yaro from Goldman Sachs inquired about sponsor-led M&A dynamics amid macro uncertainty, the outlook for the secondaries market, and trends in restructuring, specifically liability management versus Chapter 11.

Answer

CEO Peter Orszag detailed countervailing forces in sponsor M&A: a fundamental need to trade assets versus headwinds from tariff uncertainty, market volatility, and disrupted debt markets. He noted a strong underlying growth trend for secondaries, which could be accelerated by current conditions. Orszag also explained that the rise of private capital has shifted the restructuring mix more towards liability management over formal Chapter 11 proceedings.

James Yaro asked about the growth outlook for the secondaries market and Lazard's positioning, the Q1 advisory revenue trajectory following a strong Q4, and the outlook for non-compensation expenses.

Answer

CEO Peter Orszag stated that while a need for liquidity may have been an accelerant, the secondaries market is expected to see continued structural growth as more sponsors recognize its benefits. He noted Lazard is well-positioned to capture this growth. Regarding Q4 advisory revenue, Orszag explained that the outperformance was driven by low-probability deals hitting, reflecting a stronger environment. CFO Mary Ann Betsch suggested that mid-single-digit growth for non-comp expense is a reasonable proxy for the year ahead.

James Yaro asked about Lazard's secondaries business performance relative to industry forecasts and its potential growth in 2025. He also inquired about the advisory revenue trajectory for Q1 and whether a material pull-forward of revenue occurred in Q4.

Answer

CEO Peter Orszag stated that he anticipates continued growth in the secondaries market as more sponsors recognize its structural benefits, and noted Lazard's Private Capital Advisory (PCA) team is well-positioned to capture this expansion. Regarding advisory revenue, he clarified that while some pull-forwards occurred in Q4, the quarter's outperformance was driven by low-probability deals closing, not by a net shift of revenue from future periods. He declined to give specific Q1 guidance but reiterated a constructive outlook for the year.

James Yaro from Goldman Sachs questioned how the diverging macroeconomic trends between the U.S. and Europe are impacting the M&A environment. He also asked about the drivers of the strong non-compensation expense performance and its future trajectory.

Answer

CEO Peter Orszag acknowledged the U.S. macro outlook is stronger but stressed that sector-specific dynamics often override broader economic trends, pointing to strong European advisory growth in the quarter. CFO Mary Ann Betsch explained that non-comp expenses are seasonally low in Q3 and will be highest in Q4. She noted that disciplined cost management has offset growth-related investments and expects full-year non-comp dollars to increase by a 'tick or two'.

James Yaro asked for a comparison of growth potential between Houlihan Lokey's U.S. and non-U.S. Corporate Finance businesses, particularly in light of idiosyncratic growth drivers in Europe. He also sought insight into the firm's overall European strategy and how recent acquisitions, such as Mellum Capital's real estate advisory and Audere Partners, integrate into this mosaic.

Answer

Scott Adelson, CEO, stated that the U.S. remains the largest and most important market, but the European business is growing incredibly well due to a differentiated product. Lindsey Alley, Managing Director, noted that the Audere Partners combination in France lifts all boats in Europe, while the Mellum Capital acquisition helps reduce the underweighting in real estate within Capital Solutions.

James Yaro inquired about the comparative growth potential between Houlihan Lokey's U.S. and non-U.S. Corporate Finance businesses, particularly in Europe given recent acquisitions. He also asked about the overall strategy for Europe and how the two recent acquisitions (Mellum Capital's real estate advisory and Audere Partners) fit into completing the European business mosaic.

Answer

CEO Scott Adelson stated that the U.S. remains the largest and most important market, but the European business is growing incredibly well due to a differentiated product. He explained that the Audere Partners acquisition significantly enhances the French footprint, while the Mellum Capital acquisition strengthens the Capital Solutions capabilities in real estate, addressing an underweight area. Managing Director Lindsey Alley added that the France combination lifts all boats in Europe.

James Yaro inquired about the growth algorithm and long-term growth profile of the financial and valuation advisory (FVA) business, and asked for specifics on the timing shift in corporate finance deals between fiscal Q3 and Q4.

Answer

Scott Adelson, CEO, explained that FVA comprises non-cyclical portfolio valuation, a hybrid opinion business, and M&A-tied transaction advisory services, with a meaningful non-cyclical portion. Lindsey Alley, CFO, noted FVA generally follows corporate finance but with less volatility. Regarding corporate finance timing, Scott Adelson attributed it to building momentum and historical second-half strength, while Lindsey Alley clarified it's an unusual seasonality dynamic for Q3 vs. Q4, but overall yearly views are unchanged.

James Yaro from Goldman Sachs asked for details on the Financial Restructuring business, specifically the mix between liability management and traditional bankruptcies. He also inquired about the growth and integration of the secondaries advisory business.

Answer

CEO Scott Adelson noted that restructuring activity is strong across both in-court and out-of-court work. He also expressed that the secondaries business, now part of the Capital Solutions group, is performing very well and scaling effectively on the Houlihan Lokey platform. CFO J. Lindsey Alley added that liability management is considered part of restructuring and is expected to remain strong.

James Yaro asked for insights into the Financial Restructuring business, specifically the mix between liability management and Chapter 11 filings, and whether recent market events altered the firm's multiyear outlook. He also questioned the impact of fundraising challenges for smaller private equity firms on Houlihan Lokey's client base.

Answer

CEO Scott Adelson reaffirmed the expectation for elevated restructuring activity, noting recent events have increased their confidence in this outlook. He explained that the firm views all such work as 'restructuring,' as the final form is often unknown at the outset. Regarding private equity, he acknowledged fundraising constraints but highlighted that alternative capital sources like continuation vehicles are filling the void. CFO J. Alley added a reminder about the typical seasonality of the restructuring business, which often sees a strong fourth quarter.

James Yaro of Goldman Sachs Group, Inc. questioned the likelihood of the Financial Restructuring segment growing in calendar 2025 and asked how the slow M&A recovery impacts Houlihan Lokey's own hiring and acquisition strategy.

Answer

CEO Scott Adelson reiterated that the Restructuring business is performing better than anticipated and remains elevated due to high interest rates, but he did not provide a specific growth forecast. On the topic of talent acquisition, Adelson stated that the firm continues to find opportunities in all market conditions. CFO J. Alley added that while they expect to gain market share, mid-market peers are also performing reasonably well as the market recovers.

James Yaro inquired about the near-term outlook for Houlihan Lokey's Corporate Finance division, including any risk of abnormal seasonality and potential catalysts for acceleration beyond the election. He also asked for more detail on the strategic rationale and synergies of the Prytania Solutions acquisition.

Answer

CEO Scott Adelson confirmed the steady improvement in Corporate Finance, noting that while deal velocity is increasing, closing timelines remain elongated. He acknowledged external risks like geopolitics and the election but stated clients are moving forward regardless. Regarding Prytania, Adelson highlighted its superior technology for the portfolio valuation business, and CFO J. Alley pointed out its UK base as a key benefit for international growth.

James Yaro sought to quantitatively understand the use of USDC in non-crypto trading, DeFi, and developing market access use cases, specifically payments and capital markets, asking if this growth is already material or 'on the come.' He also asked about the potential impact on Circle's business if stablecoins were permitted to be interest-bearing under Congress's market structure bill.

Answer

Jeremy Allaire, Co-Founder, CEO, and Chairman, confirmed growth in cross-border use cases, citing third-party reporting from Artemis on international business-to-business payments, and noted that CPN flows are inherently cross-border. He stated that Circle does not break out these specific volumes but emphasized that third parties are tracking ecosystem-wide growth. Regarding interest-bearing stablecoins, Mr. Allaire clarified that the Genius Act prohibits stablecoin issuers from paying interest, and the current discussion in market structure legislation focuses on whether *distributors* of stablecoins can offer rewards, which Circle supports as a form of business model innovation while maintaining stablecoins as cash-equivalent instruments.

James Yaro requested a quantitative sense of how much USDC is being used in payments and capital markets, outside of crypto trading, DeFi, and developing market access to dollars, comparing current usage to the IPO period. He also asked about the potential impact on Circle's business if stablecoins were permitted to be interest-bearing under Congress's market structure bill.

Answer

CEO Jeremy Allaire noted that while Circle doesn't break out specific transaction volumes by use case, third-party data (like Artemis) indicates strong growth in international business-to-business payments. He clarified that the discussion in market structure legislation is not about stablecoin issuers paying interest, but rather allowing stablecoin distributors (exchanges, brokerages) to offer rewards. Allaire stated that Circle supports the Genius Act's balanced approach, which maintains stablecoins as cash-equivalent instruments, and also supports business model innovation for distributors.

James Yaro from Goldman Sachs inquired about the outlook for non-dollar stablecoins like EURC and their necessity for cross-border payments, and asked about the opportunity for Circle Gateway and how it differs from or integrates with CCTP.

Answer

Chairman, CEO & Co-Founder Jeremy Allaire expressed long-term optimism for non-dollar stablecoins, which Circle plans to support on ARC and CPN. He explained that Circle Gateway is a user experience abstraction layer built on top of protocols like CCTP. While CCTP is a low-level settlement protocol, Gateway simplifies the user experience by presenting a single USDC balance that can be spent seamlessly across any supported chain.

James Yaro from Goldman Sachs asked about the impact of AI on FTI Consulting's various businesses, differentiating between positive and negative effects, and sought insights into the future outlook for the restructuring business.

Answer

Steven Gunby, CEO and Chairman, discussed AI's impact, noting its current positive influence on client work through tools like Ariadne and IQAI for investigations, and new assignments related to AI algorithm regulatory violations. He clarified that while AI is not yet transformative for overall economics, it's a prelude to future changes, and he doesn't foresee significant negative impacts on billable hours due to the expert-driven nature of FTI's services. Paul Linton, Interim CFO, added that the restructuring business remains strong across multiple geographies, positioning FTI for large mandates and continued market share growth.

James Yaro asked about the impact of AI on FTI Consulting's various businesses, requesting differentiation between positive and negative effects. He also sought clarification on whether the company anticipates any negative impact on billable hours due to AI. Additionally, Yaro inquired about the outlook for the restructuring business, noting its recent all-time high performance.

Answer

Steven Gunby, CEO and Chairman of FTI Consulting, described AI's impact as currently positive, enhancing capabilities in large-scale investigations with tools like Ariadne and IQAI, and generating new work in areas like investigating AI algorithm misuse. He noted that while AI hasn't yet transformed internal operations or cost reduction, it's a prelude to future transformation. Gunby stated that FTI is not currently seeing significant negative impacts on billable hours, emphasizing the expert-driven nature of their work. Paul Linton, Interim CFO and Chief Strategy and Transformation Officer, indicated that the restructuring business remains strong, with continued strength across multiple geographies, positioning FTI for larger mandates and benefiting from market conditions.

James Yaro of Goldman Sachs Group, Inc. questioned the drivers of continued weakness in the transformation and strategy business, the company's philosophy on leverage capacity, the expected margin trajectory for the Technology segment, and sought an update on the magnitude of the EBITDA impact in the Economic Consulting business.

Answer

CFO Ajay Sabherwal attributed the transformation business weakness to tough comps, overseas softness, and a shift to matters with back-end success fees. On leverage, he stated it is an 'outcome, not a target,' highlighting the company's significant capacity relative to peers. CEO Steven Gunby indicated he does not expect strong margins from the Tech segment for the rest of the year due to pricing pressure in a slow market. For the Econ segment, Mr. Gunby confirmed the EBITDA impact is larger than the previously guided $35 million, driven by higher-than-anticipated talent investments and market weakness in EMEA.

James Yaro asked about the potential impacts of tariffs on FTI's various business lines, the effect of recent regulatory policy changes on the Forensic and Litigation Consulting (FLC) business, and for clarification on whether the company's full-year 2025 guidance remains applicable.

Answer

CEO Steve Gunby explained that while the full impact of tariffs is speculative, the company is seeing activity in areas like export controls, supply chain, and national security, with potential for increased restructuring stress. He noted that while significant regulatory rollbacks could affect the FLC business, no major impact has been observed yet, as evidenced by the segment's booming quarter. Gunby also confirmed that the previously issued full-year guidance is still applicable, with an update planned for the second quarter call.

James Yaro asked for an update on the challenging demand environment, seeking details on affected products and geographies and any signs of improvement. He also requested more color on the expected demand pickup in the Forensic and Litigation Consulting (FLC) segment and asked if the Econ Consulting departures impacted Q4 2024 results.

Answer

President and CEO Steve Gunby attributed the demand slowdown to a mix of market forces, like slower M&A and economic pressure in the U.K., and some firm-specific project roll-offs. He expressed confidence in FLC's growth, driven by the U.S. team's increasing commercial success and targeted international investments. Gunby clarified that the Econ Consulting departures had no impact on Q4 2024 results, as they all occurred in the first quarter of 2025.

James Yaro asked for perspective on the drivers of the weaker consulting industry backdrop, whether FTI's business is more or less impacted, and the potential for a soft spot in growth due to hiring cadence, seeking clarity on a normalized long-term hiring rate.

Answer

President and CEO Steve Gunby suggested the industry slowdown could be a 'catch-down' from prior over-exuberance, combined with global economic and geopolitical uncertainty. He believes FTI is less impacted due to its diverse and counter-cyclical businesses like restructuring. Chief Financial Officer Ajay Sabherwal clarified that the recent hiring increase was driven by prior commitments to university graduates. Steve Gunby added that the company's long-term aspiration is for mid-to-high single-digit organic growth, which is necessary to maintain a vibrant firm that attracts top talent.

James Yaro asked about recent geographic client acquisition trends, specifically the impact of China's regulatory environment on growth, and sought an update on Interactive Brokers' digital asset aspirations, including the Zero Hash investment and the 30% limit on crypto customers' account percentage.

Answer

Milan Galik, President and CEO, explained that Chinese regulators' clampdown now requires account applicants to prove non-mainland residence, resulting in a smaller but still present client acquisition from China. He detailed the digital asset strategy, including increased investment in Zero Hash for European crypto offerings (Dutch license expected Oct/Nov), stablecoin deposits (end of Oct), crypto asset transfers (end of year), and staking (early next year), anticipating asset transfers to boost client inflow due to competitive pricing.

James Yaro from Goldman Sachs asked for Interactive Brokers' perspective on the rise of tokenized equity products in Europe, questioning their competitive threat and potential advantages or disadvantages. He also inquired about the execution cost differences for stocks between overnight and regular trading hours.

Answer

CEO Milan Galik provided a detailed critique of current tokenized stock offerings from competitors, arguing they are inferior derivative products with higher costs and risks compared to trading actual US shares on IBKR's platform. He explained that overnight stock execution occurs on IBKR's ATS, offering liquidity at a low cost, while exchange-traded products have the same costs day or night.

James Yaro asked for Interactive Brokers' perspective on tokenized equity products in Europe as a competitive threat and inquired about the execution cost differences between overnight and regular market hours.

Answer

CEO Milan Galik characterized competitors' tokenized stock products as 'fundamentally worse' than IBKR's direct offering of real shares, citing issues like derivative risk, transfer restrictions, higher costs, and price dislocations. He explained that for stocks, overnight execution costs differ from regular hours as they trade on ATSs, but IBKR's system provides deep liquidity at a low cost.

James Yaro inquired about the impact of recent market volatility on Interactive Brokers' business, specifically asking about client deleveraging, trading activity in April, and any shifts in client allocations between cash and risk assets. He also asked about the effect of recent tariff news on the appetite of non-U.S. customers for U.S. stocks.

Answer

CEO Milan Galik responded that the company saw record volumes during the recent market drop and rebound. He noted a shift from options to futures, fixed income, and forex. Galik confirmed a modest 10-12% decrease in margin loans as clients reduced risk but stated that the appetite from non-U.S. clients for U.S. markets remains strong, as they are likely weighing potential tariffs against proposed lower taxes and deregulation.

James Yaro questioned if potential deregulation of bulge-bracket prime brokers could threaten Interactive Brokers' growth and asked about the 2025 product roadmap for the high-touch prime business. He also asked if the firm's best-in-class adjusted margin could continue to rise.

Answer

CEO Milan Galik stated that deregulation is not a threat, as competition comes from large, established banks. He highlighted success in the prime business, including revamped capital introduction events and new APAC algorithms developed from client feedback. Regarding margins, he said they are not expected to go higher as the focus is on client value, not margin optimization, amid rising service and compliance costs.

James Yaro asked about the expected timeline for the ForecastEx business to reach material scale and its associated balance sheet risks. He also inquired about the growth trajectory of the RIA channel and whether the firm is attracting a different type of RIA client. Finally, he asked about the Chairman's stock selling plans.

Answer

Founder and Chairman Thomas Peterffy projected that ForecastEx would scale later in the year, driven by election interest, which he sees as a gateway for clients to trade the platform's core economic and climate contracts. President and CEO Milan Galik noted ongoing improvements to the RIA platform are expected to attract more advisors, teasing a new feature. Peterffy stated he is not selling stock into the open market but may consider offers from large bidders.