Our record second quarter revenues capped off a record first half for the firm, underscoring the strength of our platform and strategy. For the quarter, we generated $1 billion of adjusted net revenues and adjusted diluted earnings per share of $2.91, up 19% and 20% respectively from the second quarter of last year. Performance in the quarter continued to be broad-based across nearly all of our businesses with record second quarter revenues in our North American Strategic Advisory business, the Private Funds Group, and the Equities business. Global industry-wide announced M&A activity remains healthy and is currently tracking well above last year's year-to-date levels, which was the second most active year for M&A on record.
Looking ahead to the second half of the year, client engagement remains strong, our backlog currently sits near record levels. Though, as is always the case, the timing of backlog conversion into revenue can vary from quarter to quarter, it is best to evaluate our business on a longer-term basis. While the market backdrop remains dynamic, we are encouraged by the outlook for our business and expect to see continued activity in the latter part of this year and into next. Since our last earnings call, four Senior Managing Directors have joined our investment banking practice in healthcare, industrials, private capital advisory, and our private capital markets group, all based in New York.
and Europe, healthcare, chemicals, and equity capital markets, as well as two new hires based in our Frankfurt office. Our EMEA strategic advisory business had a strong quarter and a record first half. Our private capital markets and debt advisory team remains active, with particular strength in structured equity transactions and securitizations as clients continue to seek innovative capital solutions. Private capital advisory maintained its position as the market-leading business in this space and delivered another strong quarter.
| Metric | Period | Current guidance |
|---|---|---|
| Non-comp expense ratio | FY2026 | Striving for a ratio approximately in line with last year, with a modestly higher non-comp growth rate than recent years |
| Non-comp expenses (sequential) | Q3 2026 | Not expected to increase sequentially like Q2 did (episodic items should ease) |
| Compensation ratio | Long-term | Gradual improvement over time, balanced against continued investment |
| Effective tax rate | H2 2026 | Similar to the same quarters over the last few years |
| Revenue outlook | H2 2026 | No explicit guidance; near-record backlog, strong client engagement, continued gradual build into late 2026 and 2027 (against record 2025 comps) |
| Metric | YoY | Note |
|---|---|---|
| Adjusted net revenues | +19% to ~$1.0B | Record second quarter with broad-based strength as market conditions and deal activity improved through the quarter. |
| Adjusted diluted EPS | +20% to $2.91 | Revenue growth plus comp-ratio improvement; GAAP diluted EPS of $2.32. |
| Advisory fees | +11% to ~$776M | Record second-quarter advisory with strength across nearly every area and higher productivity. |
| Underwriting fees | +201% to $97M | Best quarter to date on robust follow-on and IPO issuance and a healthcare resurgence. |
| Commissions and related | +9% to $64M | Record second quarter in the Equities business on best-in-class content, corporate access and execution. |
| Adjusted operating margin | 19% (Q2), 22.7% (H1) | Improved comp ratio offset by elevated, partly episodic non-comp expenses and continued growth investment. |
| Capital returned | $823M in H1 | $734M of buybacks at ~$325 average (a full-year record already surpassed) plus dividends; share count down over 730,000 sequentially. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Record first half and cycle durability | Recovering M&A market | Record H1 revenues of $2.4 billion (+56%) with near-record backlog; management sees the M&A cycle with further room to run over the medium term, supported by large-cap activity and rising sponsor/middle-market participation. | — |
| AI as an M&A catalyst | Emerging theme | AI is driving strategic dialogue as large strategics pursue scale and capabilities; software M&A is warming after a mid-year pause, and AI/software stress is also generating restructuring and liability-management activity. | — |
| Non-comp investment cycle | Lean non-comp base | A larger-than-normal non-comp increase reflects near-term deal-pitching/conference costs, medium-term hires (11 external SMDs, 8 promotions, 50+ ramping), technology/AI and data investments, plus episodic items, with the full-year ratio targeted near 2025's 14.2%. | — |
| European expansion | Robey Warshaw combination announced 2025 | Integration going smoothly with joint deal wins; Evercore added Frankfurt hires, a Stockholm office, and is building out Milan, Paris, Spain, and European restructuring/debt advisory, expecting to build share. | — |
| Talent strategy | Selective senior hiring | Continued one-by-one recruiting of A-plus talent across both bulge-bracket and independents rather than large lift-outs; headcount up ~10% while revenues grow faster over multi-year periods. | — |
| Margins in context of growth | Historical 24.5%-28.5% operating margins | Management frames margins hand-in-hand with growth (revenues quadrupled over a dozen years to $4.7B trailing), viewing current sub-historical margins as recovery-plus-investment, with full-cycle normal nearer 24.5-25%. | — |