Evercore delivered record third quarter results following a record first half with momentum across all business areas. Announced M&A activity has advanced at a healthy pace, led by larger strategic transactions, while capital markets activity has accelerated. In line with the momentum that we've experienced over the last several months, our backlogs continued to increase in the quarter, and client activity across the firm remains robust. We continue to see a healthy pipeline of external candidates, and attracting and developing exceptional talent remains core to our strategy and future success.
Our European advisory business delivered its best quarter on record, with strong performance across sectors, products, and geographies. We are seeing an increase in larger traditional restructuring assignments, and our backlog in this area remains strong as highly levered companies face ongoing challenges. Our private capital markets and debt advisory team continues to be active as the credit markets remain open and transaction activity picks up. Consistent with the strength we saw in the first two quarters of the year, our private capital advisory business delivered a record third quarter, driven in large part by GP-led continuation fund transactions.
In fact, through the first nine months of 2025, PCA revenues have already exceeded full year 2024, which was our best year on record. Equity capital markets saw a resurgence in activity in the third quarter, particularly with IPOs supported by lower levels of market volatility. We also experienced a significant increase in convertible issuance, an area where we have been investing in expanding our capabilities. For the third quarter of 2025, net revenues, operating income, and EPS on a GAAP basis were $1 billion, $216 million, and $3.41 per share, respectively.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year adjusted compensation ratio | Full year 2025 | Generally in line with current levels (~65%) |
| Q4 adjusted compensation ratio | Q4 2025 | Expected somewhat lower than Q3 to reach full-year target |
| Full-year non-compensation expense growth | Full year 2025 | Up year over year on a percentage basis, consistent with first nine months |
| Metric | YoY | Note |
|---|---|---|
| Adjusted net revenues | Up 42% to over $1 billion | Broad-based strength across diversified businesses, SMD hiring and promotions, and an improving market environment. |
| Adjusted operating margin | Up nearly 360 bps to 21.8% | Revenue growth and operating leverage, including improvement in both compensation and non-compensation ratios. |
| Commissions and related revenue | Up 15% to $63 million | Higher trading commissions on stronger volumes, higher subscription fees, and good activity in convertibles and derivatives; a record third quarter. |
| Asset management and administration fees | Up 10% to $24 million | Market appreciation and net inflows. |
| Adjusted compensation ratio | Down nearly 100 bps to 65% | Steady improvement in the investment banking environment and revenues, partly offset by record SMD recruiting investment. |
| Adjusted non-compensation expenses | Up 18% to $139 million (13.2% of revenue) | Higher client travel and events, occupancy from added New York floors and new international offices, and increased technology spend. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Investment banking recovery | Early-stage recovery led by larger strategic deals | Recovery broadening with mid-sized deals building and sponsor activity steadily picking up; backlogs as high as ever | Strengthening |
| Government shutdown | — | Slowing deal timing across M&A and ECM but viewed as temporary, not permanent | New headwind being monitored |
| European expansion | Built out Spain, France, Scandinavia, and Italy teams | Record European quarter and Robey Warshaw closed, with substantial remaining white space | Accelerating |
| Compensation ratio discipline | 67.6% two years ago, 66% a year ago | 65% this quarter, with gradual improvement targeted rather than a quick return to low-60s levels | Gradual improvement |
| Non-M&A revenue mix | 50% of trailing twelve-month revenues | 45% of third quarter revenues as M&A picks up | Declining as m&a recovers, but not expected far below 40% |
| Credit market and isolated losses | — | Recent losses at certain firms viewed as isolated and not a system-wide issue | Limited concern |