Evercore - Earnings Call - Q1 2025
April 30, 2025
Executive Summary
- Q1 2025 net revenues rose 20% YoY to $694.8M and adjusted diluted EPS increased 64% YoY to $3.49, supported by improved operating margin and a significant tax benefit tied to RSU vesting; GAAP diluted EPS was $3.48.
- Results materially beat Wall Street consensus: revenue $694.8M vs $600.7M consensus and adjusted EPS $3.49 vs $1.54 consensus; the outsized EPS beat reflects a one-time tax benefit, not core margin expansion.
- Dividend increased 5% to $0.84 per share and capital return was a record $454M in the quarter; Board approved new repurchase authorization up to the lesser of $1.6B or 8.0M shares.
- Management highlighted robust, growing backlogs and more than half of revenues from non‑M&A sources, but flagged near‑term macro/tariff‑driven volatility that may impact Q2–Q3 results.
What Went Well and What Went Wrong
What Went Well
- Adjusted EPS and operating margin expanded: adjusted EPS $3.49 (+64% YoY) and adjusted operating margin 16.6% (+118 bps YoY), underscoring operational leverage; “Adjusted earnings per share of $3.49, increased 64% versus the first quarter of last year”.
- Private Capital Advisory delivered a record quarter across GP‑led continuation vehicles, LP secondaries, and securitized solutions: “Our industry‑leading Private Capital Advisory Group had a record first quarter”.
- Strategic execution and diversification: “In the first quarter, more than 50% of total Evercore revenues were from non‑M&A sources,” with notable transactions (Calpine $29.1B, Ampere $6.5B) and strong Equities performance.
What Went Wrong
- Underwriting softness and ECM episodic pattern: underwriting fees decreased 2% YoY to $54.3M; management described ECM windows as “somewhat episodic” and sensitive to volatility.
- Other Revenue declined sharply due to lower hedge/fund performance: GAAP other revenue fell 75% YoY; adjusted other revenue fell 65% YoY, driven by the DCCP hedge performance swing (~$20.8M).
- Non‑comp expenses rose 14% YoY on occupancy and information services costs (subscription rate increases > inflation) with management cautious on flexing these costs near‑term.
Transcript
Operator (participant)
Good morning and welcome to Evercore's first quarter 2025 earnings conference call. Today's call is scheduled to last about one hour, including remarks by Evercore management and the question-and-answer session. In order to ask a question, please press the star key followed by the number one on your touch-tone phone at any time. I will now turn the call over to Katy Haber, Managing Director of Investor Relations at Evercore. Please go ahead.
Katy Haber (Head of Investor Relations)
Thank you, Operator. Good morning and thank you for joining us today for Evercore's first quarter 2025 financial results conference call. I'm Katy Haber, Evercore's Head of Investor Relations. Joining me on the call today is John Weinberg, our Chairman and CEO, and Tim LaLonde, our CFO. After our prepared remarks, we will open up the call for questions. Earlier today, we issued a press release announcing Evercore's first quarter 2025 financial results.
Our discussion of our results today is complimentary to the press release, which is available on our website at evercore.com. This conference call is being webcast live in the For Investors section of our website, and an archive of it will be available for 30 days beginning approximately one hour after the conclusion of this call. During the course of this conference call, we may make a number of forward-looking statements.
Any forward-looking statements that we make are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. These factors include, but are not limited to, those discussed in Evercore's filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. I want to remind you that the company assumes no duty to update any forward-looking statements. In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance.
For detailed disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is posted on our website.
We continue to believe that it is important to evaluate Evercore's performance on an annual basis. As we have noted previously, our results for any particular quarter are influenced by the timing of transaction closings. I'll now turn the call over to John.
John Weinberg (Chairman and CEO)
Thank you, Katy, and good morning, everyone. Before we turn to the quarter, I want to first address the current environment. As a result of heightened geopolitical and trade tensions, we are experiencing increased volatility in global financial and asset markets. This reflects growing concerns about inflation, interest rates, and the global and domestic economic outlook. While there are many unanswered questions at this time, the Evercore of today is far better positioned than Evercore in the past. Our diversified platform across geographies, sectors, products, client types, and deal sizes enables us to perform across varied market environments.
Our global M&A advisory franchise has proven resilient through different markets. In addition, our capabilities in liability management and restructuring, private capital advisory and fundraising, debt capital markets advisory, equity underwriting, equity research, and sales and trading continue to contribute meaningfully amid shifting market conditions.
We are built to deliver for clients in all environments, including ones like this. In challenging markets, our ability to provide thoughtful, strategic, and financial advice is more important than ever. Based on what we see today, market complexity has prompted greater caution and has weighed on CEO and board confidence levels and, in turn, has impacted the broader transaction environment. We expect transaction levels to pick up once there is greater clarity and stability in the macroeconomic backdrop and financial markets.
Client dialogues remain active and constructive, supporting our robust backlogs and new engagement letter signings, and there is a high degree of pent-up demand to transact among both strategic and sponsor clients. While the timing and shape of the market recovery is uncertain at this time, we will continue to operate with the same long-term client-centric focus that has always defined Evercore.
As we've discussed on prior calls, we continue to believe in our business model and expect to invest in talent through the cycle. In the first quarter, two Senior Managing Directors have joined our investment banking practice, both of whom were announced in 2024, and four additional investment banking SMDs have committed to join our franchise, three of whom will be in our industrials, healthcare, and private capital advisory practices, and one in Europe.
Also, earlier this month, we announced that Bill Burns, former director of the CIA, will be joining Evercore in June as a Senior Advisor with a focus on global affairs. In addition to our externally hired SMDs, we started the year with a class of 11 promoted investment banking SMDs and an additional four in other areas of the firm. Developing our internal talent has always been a core priority for us.
Now, let me briefly discuss the quarter. We delivered solid year-over-year growth across nearly all areas of the firm, reflecting the strength of our diversified revenue base. In the first quarter, more than 50% of total Evercore revenues were from non-M&A sources. In advisory, we've advised on a number of notable and complex transactions in the quarter, including Calpine on its sale to Constellation Energy for $29.1 billion, which is one of the largest transactions so far this year, and Ampere on a $6.5 billion sale to SoftBank.
Momentum has carried into April, with several significant transactions announced in recent weeks, including advising the shareholders of Colonial Enterprises on its $9 billion sale to Brookfield Infrastructure Partners, Woodside Energy on its $5.7 billion sale of a 40% interest in Louisiana LNG infrastructure to Stonepeak, Dotmatics on its $5.1 billion sale to Siemens, and EQT on the minority stake sale of IFS for over EUR 15 billion.
Turning to financial sponsors, industry-wide global volumes increased in the first quarter compared to the prior year, though the number of transactions declined due to the recent macroeconomic and market headwinds. Sponsor deal activity remained selective, dependent on asset quality and sector. That said, our sponsors team has meaningfully expanded its global client base and continues to see strong dialogue levels. Our strategic defense and shareholder advisory group remains busy as the number of activist campaigns hit new records last quarter.
Our liability management and restructuring group continues to see strong activity in the quarter, driven in part by private equity-led liability management situations. Currently, we are focused on sectors expected to be impacted by newly announced tariffs. Our team continues to collaborate closely across the firm to support clients as they navigate increased uncertainty. Our industry-leading private capital advisory group had a record first quarter. We continue to lead in GP-led continuation vehicles, which remain the primary revenue driver for PCA.
We also achieved a record quarter in LP secondaries and made significant progress in our securitized capital solutions business. Our private funds group continues to perform well as it broadens its client base. Underwriting had a strong first quarter, with issuance activity showing solid momentum compared to historical periods.
As we've experienced a slowdown in underwriting in the first few weeks of the quarter, we note that market conditions for this business can shift quickly in either direction. Our equities franchise had its strongest first quarter since the first quarter of 2020, driven by market volatility and increased trading volumes. Our market-leading macro and sector research teams have been highly engaged throughout the recent market volatility, and together with sales and trading, are supporting our institutional clients as they navigate a rapidly evolving environment.
Lastly, wealth management delivered a solid quarter, achieving net new business amid a volatile environment. Before I turn it over to Tim to discuss the financial results, I want to wrap up with a few points. As we move through this period, we will continue to focus on long-term value creation for our clients and shareholders.
Our capital return philosophy has not changed, and we have returned a record amount of capital to our shareholders in the quarter. We remain optimistic about our prospects over the medium and long term and are committed to building our firm across the cycle. Historically, we have emerged from challenging periods stronger than when we entered them, and we believe we have the opportunity to do so again. With that, let me turn it over to Tim.
Timothy G. LaLonde (CFO)
Thank you, John. Evercore delivered strong performance in the first quarter. Our results reflected the early stages of a gradual recovery that had begun last year. That said, based on what we know today, we expect results in the second and third quarter will experience an impact from the volatility in the markets and broader uncertainty in the environment. I will now discuss our financial results.
For the first quarter of 2025, net revenues, operating income, and EPS on a GAAP basis were $695 million, $111 million, and $3.48 per share, respectively. My comments from here will focus on non-GAAP metrics, which we believe are useful when evaluating our results.
Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website. Our first quarter adjusted net revenues of $700 million increased 19% versus the first quarter of 2024. First quarter adjusted operating income of $116 million increased 28% versus the first quarter of 2024. Adjusted earnings per share of $3.49 increased 64% versus the first quarter of last year. Our adjusted operating margin was 16.6% for the first quarter, up from 15.4% in the prior year period.
In addition, we had significant net tax benefit this quarter, for which we will provide additional commentary. Turning to the businesses, first quarter adjusted advisory fees of $557 million increased 29% year over year, representing the strength of both our M&A and non-M&A advisory businesses. Our first quarter underwriting revenues were $54 million, down 2% from a year ago. Lower levels of follow-on activity were offset by improvement in the IPO market in the quarter and an increase for our business in the convertible area.
Of course, activity in the equity capital markets business is sensitive to volatility and the overall health of public capital-raising activities, and that market can open and close quickly. Commissions and related revenue of $55 million in the first quarter increased 14% year over year, primarily reflecting increased trading volume relating to higher levels of volatility.
That business has gotten off to a good start in the second quarter. First quarter adjusted asset management and administration fees of $22 million rose 8% year over year, driven by an increase in fees as AUM increased. First quarter adjusted other revenue net was approximately $11 million, which compares to $33 million a year ago. The primary driver of the other revenue reflects lower performance of our DCCP hedge, which is correlated to the performance of the broader equity market, and had a negative impact of $5.9 million this year compared to a positive impact of $14.9 million in the year-ago quarter, an approximately $20.8 million swing.
The interest income was very similar to last year. Turning to expenses, the adjusted compensation ratio for the first quarter is 65.7%, down 30 basis points from the prior year period and consistent with our 2024 full-year compensation ratio.
As a reminder, on our last earnings call, we noted that we were striving to achieve meaningful improvement in our compensation ratio in 2025, which may prove more challenging in the current environment. As we have discussed in the past, one of the most significant drivers of the comp ratio is revenue. It is still early in the year, and therefore our best judgment is to accrue at 65.7%, and we will adjust appropriately as we progress through the year and obtain better visibility. Non-compensation expenses in the quarter were $124 million, up 14% from a year ago and less than 1% versus last quarter. The increase from a year ago is primarily driven by two things. First, communication and information services expense rose due to vendor rate increases and IT spend attributable to headcount growth.
Subscription rates on information services generally have increased at a rate higher than inflation, and we believe this is broadly true in the industry. Second, occupancy and equipment increase related to the addition of new floors in our New York headquarters and the transition to a new location for some of our corporate employees due to the expiration of a lease, as well as a new office in Paris and one in Dubai. We are maintaining a disciplined focus on managing our non-compensation expenses.
Our non-comp expense ratio for the year also, of course, will be influenced by our revenues. While activity levels are good, full-year revenues are difficult to predict with a high level of certainty.
Our adjusted tax rate for the quarter was negative 39.7%, which included a benefit of $78 million related to the vesting of our RSUs and our share price at the time of vesting in relation to the price at the time of grant. This year, we received a greater benefit as our stock price appreciation at the time of vesting was significantly higher than the appreciation a year ago. We anticipate that our effective tax rate in the remaining three quarters of this year will be more similar to or slightly higher than what we experienced in those quarters during prior years. Turning to our balance sheet, as of March 31, our cash and investment securities totaled nearly $1.4 billion, which is in line with our cash balance at the end of the first quarter a year ago.
Our cash balance is down from year-end due to the payout of bonus compensation in March and share repurchases consistent with historical practices. In the quarter, we returned $454 million of capital, which was a record amount through the repurchase of 1.6 million shares and the payment of dividends. Consistent with historical practice, we bought back stock through net settlements of vesting RSUs and in the open market, offsetting the dilution from the RSU grants that were issued in the quarter as part of our annual bonus compensation process. It is important to note that of the 1.6 million shares we repurchased in the quarter, nearly 60% were through net settlements at an average price of approximately $285, which has been our practice since our IPO in 2006.
In most recent years, this has been beneficial as our share price has trended upward, but in this year, it resulted in the net settlement of shares at a price materially higher than current levels. The remaining 40% was repurchased prior to quarter-end at an average price of $227, with the last 400,000 shares repurchased at an average price of $201. Separately, our board declared a dividend of $0.84 per share, an increase of 5% from the prior dividend declared.
Our first quarter adjusted diluted share count was 44.4 million shares, an increase from the prior year, but down nearly 600,000 shares from the fourth quarter. We expect that the same accounting impact with regard to unvested RSUs that increased our weighted average share count as our share price was rising should cause a modest decrease in share count during the second quarter due to the decline in our share price.
We continue to maintain a strong cash position, taking into consideration the current economic and business environment, cash needs for the implementation of our strategic initiatives, including hiring plans, and preserving a solid financial footing, which is particularly important in moments of volatility and uncertainty. It is still early in the year, and there are some bright spots.
Since the beginning of April, we have announced a number of significant transactions, which John mentioned in his comments. Our backlogs, activity levels, engagement letter signings, and client discussions remain strong, and our firm is durable and broadly diversified. We have confidence in the strength of our firm and our financial condition. We believe we are well-positioned to execute on our strategy in all environments, including this one. With that, we will now open the line for questions.
Operator (participant)
Thank you. We will now conduct the question-and-answer portion of the conference. Please limit to one question only. You are welcome to rejoin the queue for additional questions, time permitting. Again, in order to ask a question, please press the star key followed by the one on your touch-tone phone. Our first question will come from Devin Ryan with Citizens. Please go ahead.
Hey, thanks. Good morning. How are you guys?
Timothy G. LaLonde (CFO)
Good. Thanks, Devin.
Good. I want us to just start off on the backlogs. Obviously, you heard kind of the comment wrapping up, Tim, just about kind of backlogs and activity levels being strong. It would be great to get any of the nuance just amongst kind of client types or even geographies. More than anything, I think people are just trying to figure out, so I'd love to get your thoughts around what you guys think it'll take to actually see things that are in the backlog progressing.
Is it just a few weeks of the markets settling down, or is it just data suggesting the economy's not rolling over? Just what do you think it'll take to kind of get people to build conviction to actually move forward on these backlogs that, as you're talking about, still sound like they're pretty healthy?
John Weinberg (Chairman and CEO)
Thanks for the question, Devin. I'd like to start by just saying I'm really pleased with how our business and our team are responding to these conditions. As you indicated, there is a lot of uncertainty out there. Our backlogs are robust. They're at record levels, and they're growing. Our dialogues are very high and really across the board. Engagement letters are running at a very strong clip. Several of our areas are really doing extremely well. Obviously, there are others that are more impacted by the current uncertainty and the conditions regarding tariffs and other situations.
Directly to your question, the backlog levels, we think that the businesses that we have that are doing quite well right now, which include our software business, our PCA business, our restructuring business, activism and defense, infrastructure and power, those are going to continue, we think, at a decent clip.
We think that deals in the backlog on those will come through. In terms of the certainty level and really how it opens up for really the whole expanse of our client base, it's going to take time because the uncertainty created doesn't just immediately go away. Having said that, when there is more certainty and there is less volatility, we think there will be a pretty strong recovery. In places like sponsors and in some of the other larger industry sectors, there's continuing to be a lot of work being done to prepare for the opening of the market. I'd say that it will begin. It's really impossible to say when this uncertainty is going to lift. The uncertainty will impact the volatility.
Clearly, the more progress that's made to stabilize really how people are thinking about the economy and people's view that there's not going to be radical changes to the extent that happens, it will go relatively quickly.
I guess the answer to your question is hard to call when the uncertainty is going to lift, but clearly the market is ready. Clients are ready. I think that with respect to what's in our backlog, we aren't seeing a lot of cancellations. We're seeing some pauses, but we're not seeing a lot of cancellations.
Operator (participant)
Thank you. Our next question will come from James Yaro with Goldman Sachs. Please go ahead.
Good morning, and thanks for taking my question. You indicated that you had a record first-quarter contribution from private capital advisory. Could you speak to the outlook for the secondaries business from here in a weaker sponsor M&A backdrop than I think at the beginning of the year? Relatedly, is there any ability to provide anything more quantitative on how big this business has become?
John Weinberg (Chairman and CEO)
Our private capital advisory business is actually, as you indicated, strong. And as you know, these are limited partner businesses; they're general partner businesses. The general partner business is very much driven right now by continuity funds. And continuity funds are actually doing really quite well in terms of being a method that sponsors are thinking about to actually try to monetize.
One of the things we all know is that there's a lot of pressure on financial sponsors to return capital to LPs. The continuity fund does that quite well. You asked in your question whether the M&A market slowing might impact kind of how this business really fares. In fact, I think there's a lot more interest in continuity funds right now because it's a very strong and effective method of monetizing some of these assets and returning capital to the LPs.
There is no question that that is actually impacting that business, and we think it will sustain over the period. The LP business is actually doing quite well also, as we said. We are running at record levels there in the first quarter. That one is not going to be quite as buoyant, I think, but it will be actually strong through the end of the year. I think it is not going to be lifted as much by that overall economic power and thing that we talked about, which is the fact that the continuity funds are being driven by the fact that mergers are not there. The LP business will be quite strong. Generally, I think that that business is going to continue to go along quite strongly. In terms of the size of that business, I do not think we disclose that.
Just to say it's a very significant and effective business.
Operator (participant)
Thank you. Our next question will come from Brendan O'Brien with Wolfe Research. Please go ahead.
Good morning, and thanks for taking my question. I just wanted to ask on Europe. There's been a lot more positivity on the M&A backdrop in the region relative to the U.S., just given some of the potential positive steps by local governments there and a little bit more protection from tariffs. I just want to get a sense as to how your conversations compare in Europe relative to those in the U.S. and whether we could see a recovery in activity in the region more quickly, in your view.
John Weinberg (Chairman and CEO)
I would say that from what I'm hearing from our European business, I don't think that that market is being driven by forces stronger than where things are in the U.S. I think that in the U.S., there is clearly focus on regulatory and really how that's going to play out. I don't think any of us really know yet exactly how that's going to be. We've heard the sentiments. At one point, we were hearing that the current administration was going to echo the past administration.
On the other hand, there's a lot of people who are participants who believe that there will be a variation on that kind of regulation and that things may be, in many cases, loosened to a degree to allow business and allow deals that might not have gone in the last administration. Frankly, it's just too early to know.
With respect to Europe, we think that it's a good activity level in terms of dialogues and transactions that are being contemplated. It really remains to be seen whether Europe is really going to recover faster. As I said, from what we see and what I see, it doesn't look like it's going to be particularly stronger in terms of its recovery. We do think that there is a good, healthy level of activity and velocity going on there.
Timothy G. LaLonde (CFO)
Yeah. The only other point I would add to that is that while the tariffs, of course, affect Europe-U.S. trade flow, the trade flow within Europe itself is not hindered at the moment, which is a helpful factor.
Operator (participant)
Thank you. Our next question will come from Mike Brown with Wells Fargo Securities. Please go ahead.
Great. Thank you. I wanted to follow up on the comp ratio. Tim, what kind of revenue growth do you think you need in 2025 to deliver year-over-year improvement? Just given the headcount is up, there is inflationary pressure, deferred comp dynamics. Can you give us a little color about how we can think about the fixed cost component for 2025 relative to 2024? Thank you.
Timothy G. LaLonde (CFO)
Yeah, sure. Look, we had talked about, if you go back to the last couple of earnings calls, we had talked about trying to make progress. We had, in fact, made progress. Things were kind of humming along pretty well. We obviously saw last year, each quarter in terms of revenues was a better revenue quarter than the quarter before.
The year was up 23%. You've seen our first quarter results where our revenues were up 19%. As John talked about, our backlog's pretty strong. In that environment of absent the trade issues and the uncertainty created by that, we felt like we were tracking pretty well to make continued improvement. I think given the uncertainty we've seen in the market in this past month, now, I might note that Evercore itself in this past month has actually performed reasonably well, I think.
You could see that if you went back and looked at the transactions we announced over the last month. As John alluded to, our backlogs over this past month have actually increased, not decreased, which means we had more coming in than going out. Nonetheless, revenues are a pretty important factor when you're thinking about comp ratio improvement because we've built the firm and we're a much stronger, more diversified firm than we were a few years back. In order to make real progress there, the revenues have to improve. John mentioned in his Q&A comments that it's difficult to know exactly how long the level of uncertainty will last. I think I'm going to stop there and not try to make a prediction.
Operator (participant)
Thank you. As a reminder, that is star one to ask a question. Our next question will come from Jim Mitchell with Seaport Global Securities. Please go ahead.
Hey, good morning. Maybe you could just talk a little bit about the restructuring environment. Obviously, a lot of it's been liability management. Is there any issue in the debt markets in sort of fulfilling liability management assignments? Does that sort of put a pause on that business or push deal flow more towards Chapter 11 filings? Or is there still a good environment and a good ability to execute on those?
John Weinberg (Chairman and CEO)
Thanks, Jim. Restructuring business is running at a very healthy clip right now. It had a very strong first quarter, and they had a really strong year last year. They are running ahead at this time in their backlogs of last year. On many different counts, the business is quite healthy. In terms of debt markets and liability management, we're not seeing any limitation on our ability to serve the clients on liability management. In fact, that part of the business continues to be strong and to power forward and to build. Obviously, there are people looking at bankruptcies and the fact that rates are relatively high and that there is some kind of a concern with respect to 2025 and the debt wall. I'd say that the business is quite diversified. It's the debtor side. We have significant creditor business.
The liability management piece just continues to power forward. I do not think there is really any limitation right now. We feel very constructive about that business.
Operator (participant)
Thank you. Our next question will come from Ryan Kenny with Morgan Stanley. Please go ahead.
Hi, good morning. Thanks for taking my question. Can you talk a bit about the hiring environment and what your hiring plans are in a potentially slower M&A backdrop? Should we expect the pace of hiring versus last year to slow down or pick up? Any color on the areas that you're leaning into would be helpful. Thanks.
John Weinberg (Chairman and CEO)
Sure. As we've said before, our hiring philosophy is that we continue to look at the areas that we think that we need talent in and we hire. In addition, if there's A-plus talent that would like to come over, we accommodate that. Frankly, we've been running at a pretty consistent clip in terms of the people coming over. We have a good pipeline, and we're going to continue to consistently hire very strong people who want to come over and are available. We're going to stay on that.
I would say that I wouldn't think that we're going to change dramatically as we don't manage to numbers. To the extent that there are really good people available, we are going to move on that.
To the extent that those people in our pipeline go slower, that may slow down, and it may actually take more time. I would say that we're going to try and remain pretty consistent, manage to this overall talent quality level. In terms of areas that we continue to look at, I mean, frankly, there's a lot of opportunity, whether it's in tech and TMT or healthcare and technology and services. We look at consumer. We have FIG. As you've seen, we've grown Europe over time.
We basically added a team in France, and we just hired someone in Italy. We're going to continue on all of those places. We have a number of areas that we can fulfill. We clearly feel that talent drives opportunity, and that's, I think, where we're going with that.
Operator (participant)
Thank you. Next, we have a follow-up question from James Yarrow with Goldman Sachs. Please go ahead.
Thanks for taking the follow-up. I just wanted to touch on the equity capital markets business. Could you perhaps update us on the backlogs there, your outlook for IPOs, and perhaps how those have evolved, perhaps year to date with the recent market volatility?
John Weinberg (Chairman and CEO)
Sure, Jim. Equity capital markets right now, we're looking at it as somewhat episodic in that there are definitely movements to prepare for a window opening. We will see whether that happens. We have a pretty good backlog. We have several places where we're involved in some sound and we think strong IPO transactions. We will see whether those actually roll out.
I think our equity capital markets group feels quite optimistic that we're going to start that activity up in the not-too-distant future. I think that in terms of thinking about that, I would say that the market will actually take their cues from certainty and from volatility. To the extent those do allow the market to open, I think you'll see it open.
I think there's a pretty good backlog of transactions that are ready to go that basically have gone through some of the filing processes and are actually loaded to go. I think you'll see as that uncertainty level starts to diminish, you'll see that build. I think we feel optimistic that that business will begin to unfold and really begin to transact in the not-too-distant future. We'll see. As I said, it all depends on the market and really volatility levels.
Operator (participant)
Thank you. Next, we do have a follow-up question from Jim Mitchell with Seaport Global Securities. Please go ahead.
Hey, thanks for taking the follow-up. Just on maybe, Tim, you could talk about the non-comp expense side. Is there ability to flex a little in a tougher environment and how you're thinking about growth in non-comps this year?
Timothy G. LaLonde (CFO)
Yeah, sure. If you kind of look at our results, what you saw is that they're up only slightly from the fourth quarter, and they were up 14% from the year earlier. Those were really driven primarily by two things. One was occupancy. We took three floors in the building here. We relocated our finance team from one location to another in New York as the lease was expiring. We opened a Paris office for the team we added, which we talked about last quarter, and also moved a team in Dubai. Some of that was occupancy, and some of it was what we call communication and information services, which also has certain IT costs folded in. That's kind of driven by really two things primarily. One is headcount increases because that, of course, increases subscription costs.
The second would be the rates on the subscriptions themselves. The information services companies are obviously important to our business and many businesses. They have some pricing power. Those rates have gone up faster than the rate of inflation.
There is not a giant amount in the short term, not a giant amount in the short term. We have tried to run a pretty tight ship. I think our comp ratios, if you look at them in relation to the peer group, have been toward the lower end. I think on the travel side, we want our people out seeing clients. I think there has obviously been a benefit there from an increased post-COVID, an increased use of Zoom for meetings. It is not every meeting that we have to hop on a plane and fly somewhere for.
That, to some extent, will be probably permanently a little lower. The normalization, I think, is starting to flatten a bit. That is a good sign on there. I think the last thing you'd say is we do have revenue leverage. It's not perfectly tied to our revenue.
In a quarter like this one we just experienced where we outperformed on the revenue front, we were able to demonstrate some leverage on the comp ratio. We hope that when the level of uncertainty decreases and we see revenues coming back in a stronger way, we'll continue to be able to demonstrate some leverage in that area and operate at non-comp ratio levels that are lower than what we were operating at pre-COVID.
Operator (participant)
Thank you. This concludes today's Evercore first quarter 2025 earnings conference call. You may now disconnect.