Executive Summary

Q3 2015 Total Revenues were $147.3M, up 85% year over year, driven by significant advisory fee realizations; GAAP Net Income was $41.9M and Adjusted Net Income was $47.3M .
Adjusted Pretax Income reached $49.1M vs $2.7M in Q3 2014; adjusted pretax margin was 33% vs 3% a year ago, reflecting stronger fees and contained compensation ratio at 46% of revenues .
Management guided Q4 2015 Total Revenues to “exceed $100M” but be below Q4 2014’s $149M; they expect Park Hill and Restructuring to be up in 2016 and total company revenues to grow in 2016 vs 2015 .
Transition-related non-recurring costs weighed on non-comp expenses; ~$10M of the ~$12M year-to-date one-offs hit Q3, but are “largely behind” post spin-off (Oct 1) .
Cash at quarter-end was $21.7M (press release) and ~$22M (call) with no debt; management intends to commence a dividend after Q4 results, with payout to holders of record in Q1 2016 .

What Went Well and What Went Wrong

What Went Well

Strong advisory execution: Advisory Fees rose to $116.2M from $53.4M (+118% YoY) on “significant fee realizations” from M&A transactions closing in the quarter .
Margin expansion: Adjusted pretax margin improved to 33% in Q3 from 3% a year ago; adjusted compensation ratio held at 46% of revenues despite growth .
Strategic momentum: “More than 20 joint projects” across Strategic Advisory, Restructuring, and Park Hill; examples include Park Hill-originated mandates leading to successful M&A outcomes (Taubman) .

What Went Wrong

Elevated non-comp costs: Adjusted non-comp expense jumped to $29.8M vs $15.9M YoY due to spin-off-related duplicate rents, legal/pro fees, consultants, and IT build-out; ~$10M of ~$12M YTD one-offs concentrated in Q3 .
Q4 outlook below prior year: Guidance indicates Q4 revenues “> $100M” but below Q4 2014’s $149M, tempering near-term growth optics .
Estimates visibility: Formal consensus EPS/revenue estimates via S&P Global were unavailable to assess beat/miss; management noted it’s “too early” to translate momentum into precise 2016 advisory revenues .

Financial Results

Consolidated Results (YoY)

Metric	Q3 2014	Q3 2015
Total Revenues ($USD Millions)	$79.5	$147.3
GAAP Net Income (Loss) ($USD Millions)	$(14.2)	$41.9
Adjusted Net Income ($USD Millions)	$2.0	$47.3
Adjusted Pretax Income ($USD Millions)	$2.7	$49.1
Interest Income & Other ($USD Millions)	$0.7	$3.3

Margins and Expense Ratios

Metric	Q3 2014	Q3 2015
Adjusted Compensation & Benefits (% of Revenues)	77%	46%
Adjusted Non-Compensation (% of Revenues)	20%	20%
Adjusted Total Expenses (% of Revenues)	97%	67%
Adjusted Pretax Margin (% of Revenues)	3%	33%
GAAP Pretax Margin (% of Revenues)	-17%	30%

Segment Breakdown

Segment	Q3 2014 ($USD Millions)	Q3 2015 ($USD Millions)
Advisory Fees	$53.4	$116.2
Placement Fees	$25.4	$27.8
Total Revenues	$79.5	$147.3

KPIs and Balance Sheet

KPI	Q3 2014	Q3 2015
Adjusted Non-Recurring Costs ($USD Millions, YTD)	N/A	~$12.0 YTD; ~$10.0 in Q3
Cash & Cash Equivalents ($USD Millions)	N/A	$21.7 (press release)
Cash & Cash Equivalents (call reference) ($USD Millions)	N/A	~$22.0 (call)
Debt	N/A	None

Note: Adjusted vs GAAP reconciliations reflect add-backs of Blackstone IPO-related equity compensation and intangible amortization; depreciation/amortization and transaction-related comp adjustments detailed in reconciliation tables .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenues	Q4 2015	Not previously quantified	“In excess of $100M,” below Q4 2014’s $149M	Initiated quantitative range
Segment Outlook	FY 2016	Not disclosed	Park Hill and Restructuring expected up YoY; total company revenues expected to grow vs 2015	Qualitative positive outlook
Dividend	Post Q4 2015	Not disclosed	Intend to commence dividend after Q4 results; payable to holders of record in Q1 2016	New policy indication
Capital Return Priorities	Ongoing	Not disclosed	Talent investment first; share repurchases “a close second”; dividend nominal near-term	Policy clarified

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2015)	Trend
Spin-off integration and infrastructure	N/A (not available)	Built out new offices (NY, SF, London, HK), full corporate infrastructure; spin-off completed Oct 1	Completed foundational transition
Cross-business collaboration	N/A	>20 joint projects; Park Hill originations driving advisory mandates	Strengthening collaboration
Advisory pipeline and M&A momentum	N/A	“Significant engagement,” more transaction flow; examples: Yum! Brands China separation advisory; Weather Company assets sale to IBM	Improving pipeline
Restructuring activity	N/A	“Increased markedly” YoY; poised for significant growth	Uptrend
Cost structure and one-time spend	N/A	~$10M Q3 one-offs; duplicate rents, legal/IT build; largely behind post spin-off	One-offs rolling off
Capital allocation (dividend/buybacks)	N/A	Dividend initiation post Q4; buybacks priority after talent	Policy framed

Management Commentary

“PJT Partners brings together three best-in-class franchises – Strategic Advisory, Restructuring and Park Hill… creating a premier advisory-focused investment bank” (Taubman) .
“Total revenues in the third quarter were $147 million… up 85% versus the same period last year” (Meates) .
“We expect Q4 2015 revenues to exceed $100 million but be below last year’s Q4 revenues of $149 million” (Taubman) .
“We intend to commence paying a dividend after the fourth quarter results… payable to holders of record in the first quarter of 2016” (Meates) .
“Our advisory business is not dependent on the M&A cycle… we can grow even if the overall market does not” (Taubman) .

Q&A Highlights

The accessible transcript excerpts end prior to the Q&A session; Q&A content was not available due to document retrieval limitations. Key pre-Q&A clarifications included Q4 revenue guidance (> $100M and < $149M prior year), 2016 segment outlook (Park Hill and Restructuring up YoY), and capital return policy (dividend initiation; buybacks prioritized after talent) .

Estimates Context

Wall Street consensus for Q3 2015 EPS and Revenue via S&P Global was unavailable due to data access limits, so beat/miss vs consensus cannot be assessed at this time. Management emphasized strong advisory fee realizations driving the quarter and provided Q4 revenue guidance and 2016 directional outlook .

Key Takeaways for Investors

Revenue inflection: Q3 delivered $147.3M (+85% YoY) on significant advisory realizations; margin structure improved materially with adjusted pretax margin at 33% .
Near-term moderation: Q4 revenue guide “> $100M” but below $149M last year suggests sequential normalization after a strong Q3; watch advisory close cadence .
2016 setup constructive: Park Hill and Restructuring expected up; firm-level growth expected in 2016 vs 2015, with advisory market share gains central to thesis .
One-time cost roll-off: ~$10M Q3 spin-related expenses are “largely behind,” supporting cleaner non-comp run-rate from Q4 onward .
Capital return: Dividend initiation post Q4 with nominal near-term payout; buybacks positioned as secondary but meaningful after talent investment .
Balance sheet flexibility: $21.7M cash and no debt affords optionality for talent hiring and selective share repurchases .
Monitor disclosures: Expect fuller tax framework, balance sheet adjustments (goodwill, intangibles, deferred tax asset) and dividend specifics with Q4 results .

PJT Partners Inc. (PJT)·Q3 2015 Earnings Summary