Moelis & Company Reports Second Quarter and First Half 2023 Financial Results; Declares Regular Quarterly Dividend of $0.60 Per Share

Moelis & Company (NYSE: MC) today reported financial results for the quarter ended June 30, 2023. The Firm's second quarter GAAP revenues were $179.9 million as compared with $242.5 million in the prior year period. On an Adjusted basis, the Firm’s second quarter revenues of $182.2 million decreased 23% from the prior year period. The Firm reported a GAAP net loss of $13.2 million and $0.17 per share for the second quarter of 2023. On an Adjusted basis, the Firm reported a net loss of $2.6 million and $0.04 per share for the second quarter of 2023, which compares with net income of $43.2 million and $0.57 per share (diluted) in the prior year period. Adjusted net loss for the second quarter of 2023 excludes $10.4 million of expense related to an agreement in principle with the staff of the U.S. Securities and Exchange Commission (the "SEC") to resolve an investigation of our practices relating to recordkeeping of business communications on messaging applications (the "Settlement"). The Settlement will include a civil penalty of $10.0 million and we have incurred $0.4 million of related expenses. The Settlement is subject to approval by the SEC.

GAAP revenues for the first half of 2023 were $367.7 million. Adjusted revenues for the first half of 2023 were $367.5 million and represented a decrease of 31% from the prior year period. The Firm reported a GAAP net loss of $9.7 million, or $0.12 per share for the first half of 2023, as compared with GAAP net income of $117.5 million, or $1.49 per share (diluted), in the first half of 2022. On an Adjusted basis, the Firm reported net income of $1.2 million, or $0.02 per share (diluted) in the first half of 2023, as compared with $116.2 million, or $1.52 per share (diluted), in the prior year period. Adjusted net income for the first half of 2023 excludes $10.4 million of expense related to the Settlement. GAAP and Adjusted net income in the first half of 2023 include net tax benefits of approximately $0.05 per share related to the settlement of share based awards.

"Our strategic investments in talent over the last year better position us to provide innovative solutions to clients in the largest and most disruptive areas of the global economy," said Ken Moelis, Chairman and Chief Executive Officer.

The Firm’s revenues and net income can fluctuate materially depending on the number, size and timing of completed transactions as well as other factors. Accordingly, financial results in any particular quarter may not be representative of future results over a longer period of time.

Currently 91% of the operating partnership (Moelis & Company Group LP) is owned by the corporate partner (Moelis & Company) and is subject to corporate U.S. federal and state income tax. The remaining 9% is owned by other partners of Moelis & Company Group LP and is primarily subject to U.S. federal tax at the partner level (certain state, local and foreign income taxes are incurred at the company level). The Adjusted results included herein apply certain adjustments from our GAAP results, including the assumption that 100% of the Firm’s second quarter operating result was taxed at our corporate effective tax rate. We believe the Adjusted results, when presented together with comparable GAAP results, are useful to investors to compare our performance across periods and to better understand our operating results. A reconciliation between our GAAP results and our Adjusted results is presented in the Appendix to this press release.

GAAP and Adjusted (non-GAAP) Selected Financial Data (Unaudited)

Revenues

We earned GAAP revenues of $179.9 million in the second quarter of 2023, as compared with $242.5 million in the prior year period. On an Adjusted basis, we earned revenues of $182.2 million in the second quarter of 2023, as compared with $237.4 million in the prior year period, representing a decrease of 23%. This compares with a 46%¹ decrease in the number of global completed M&A transactions greater than $100 million in the same period. The decrease in second quarter revenues was driven by fewer transaction completions as compared with the prior year period.

For the first half of 2023, we earned GAAP revenues of $367.7 million, as compared with $544.6 million in the prior year period. On an Adjusted basis, we earned revenues of $367.5 million in the first half of 2023, as compared with $535.7 million in the first half of 2022, or a decrease of 31%.

We continued to execute on our strategy of organic growth. In the first half of 2023, we hired 19 Managing Directors focused on key areas of strategic importance to the Firm including Technology, Industrials, M&A, Capital Structure Advisory, Capital Markets, Private Funds Advisory and regional coverage in France. Additionally, two Industrials-focused Managing Directors will join the Firm in the coming months.

¹Source: Refinitiv as of July 6, 2023; includes all globally completed transactions greater than $100mm

Expenses

The following tables set forth information relating to the Firm’s operating expenses.