Evercore Inc. (EVR)·Q1 2025 Earnings Summary

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 .

Financial Results

Quarterly Trend vs Prior Periods

YoY Comparison (Q1 2025 vs Q1 2024)

Segment/Revenue Detail (GAAP)

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Evercore has never been better positioned. We continue to experience momentum across our businesses and remain committed to serving our clients.” — John S. Weinberg, CEO .
• “In the first quarter, more than 50% of total Evercore revenues were from non‑M&A sources.” — John S. Weinberg (prepared remarks) .
• “Adjusted earnings per share of $3.49 increased 64%... Our adjusted tax rate for the quarter was negative 39.7% which included a benefit of $78M related to the vesting of our RSUs...” — Tim LaLonde, CFO .

Q&A Highlights

• Backlogs: Record levels and growing; pauses but not cancellations; software, PCA, restructuring, activism/defense, infrastructure/power leading throughput .
• PCA outlook: Strong demand for GP‑led continuity funds as sponsors monetize and return capital; LP secondaries “quite strong” through year; no quantitative disclosure .
• Europe vs US: Healthy dialogues in Europe; regulation outlook in US uncertain; internal EU trade flows not hindered by tariffs .
• Cost dynamics: Non‑comp expense growth driven by occupancy and information services (subscription rates up > inflation); limited near‑term flex .
• ECM: Backlog ready; IPO activity expected to resume as uncertainty/volatility subsides; windows episodic .
• Near‑term guideposts: Q2–Q3 results may be impacted by volatility/uncertainty despite durable backlog and pipeline .

Estimates Context

Values retrieved from S&P Global.*

Implications:

• The revenue beat reflects strength across advisory, commissions, and asset management .
• The outsized EPS beat is largely tax‑driven (negative adjusted tax rate from RSU vesting benefit); management expects tax rate to normalize in subsequent quarters, implying EPS re‑bases lower absent similar benefits .

Key Takeaways for Investors

• Mix shift and diversification: Over 50% of revenues from non‑M&A sources supports resilience amid macro/tariff uncertainty .
• Backlog durability: Record and growing backlogs with strong engagement letter signings point to medium‑term conversion potential despite near‑term volatility .
• PCA secular strength: Record quarter across GP‑led continuation funds and secondaries underpins fee stability even when sponsor M&A slows .
• Watch ECM windows: Underwriting revenues are volatility‑sensitive; backlog exists but execution is episodic; use dislocations tactically .
• Expense lens: Non‑comp costs up 14% YoY on occupancy and information services; comp ratio accrual at 65.7% with improvement harder in uncertain revenue environments .
• Capital return: Dividend raised to $0.84 and new repurchase authorization up to $1.6B/8.0M shares provide downside support and shareholder yield .
• EPS normalization: The Q1 tax benefit boosted EPS; as tax rate normalizes, focus on underlying operating margin and fee generation trends .

Citations: Q1 2025 press release and 8‑K ; Q1 2025 earnings call transcript ; Prior quarters (Q4 2024, Q3 2024) ; Q1‑period press releases .