Evercore delivered record third-quarter results, with adjusted net revenues up 42% to over $1 billion, adjusted EPS up 71% to $3.48, and operating margin expanding nearly 360 basis points, driven by broad-based advisory strength, a record European quarter, and record private capital advisory. Recruiting reached its strongest year to date and the Robey Warshaw acquisition closed on October 1, though the compensation ratio remained elevated at 65% and non-compensation expenses rose 18% on continued investment. Management expects less pronounced fourth-quarter seasonality given strong year-to-date results and a government shutdown slowing deal timing, but views the shutdown impact as temporary and sees the M&A recovery broadening into 2026.
Thank you, operator. Good morning and thank you for joining us today for Evercore's third quarter 2025 financial results conference call. I'm Katy Haber, Evercore's Head of Investor Relations. Joining me on the call today is John Weinberg, our Chairman and CEO, and Tim LaLonde, our CFO. After my prepared remarks, we'll open up the call for questions. Earlier today, we issued a press release announcing Evercore's third quarter 2025 financial results. Our discussion of our results today is complementary to the press release, which is available at our website at evercore.com. This conference call is being webcast live in the For Investors section of our website, and an archive of it will be available for 30 days, beginning approximately one hour after the conclusion of this call. During the course of this conference call, we may make a number of forward-looking statements.
Any forward-looking statements that we make are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. These factors include, but are not limited to, those discussed in Evercore's filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. I want to remind you that the company assumes no duty to update any forward-looking statements. In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance. For detailed disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is posted on our website.
We continue to believe that it is important to evaluate Evercore's performance on an annual basis. As we have noted previously, our results for any particular quarter are influenced by the timing of transaction closing. I will now turn the call over to John.
Thank you, Katy. Evercore delivered record third quarter results following a record first half with momentum across all business areas. We generated over $1 billion in adjusted net revenues, up 42% year over year, marking our best third quarter ever and the second best quarter in our history, behind the fourth quarter of 2021. Our quarterly and year-to-date results reflect the strengths of our diversified revenue streams, the impact of our Senior Managing Director hiring and promotions over the past several years, and the benefits of a steadily improving market environment. We remain committed to delivering for our clients and shareholders by executing our long-term strategy, which includes focusing on areas of sector and geographic white space, broadening our client coverage, and expanding and deepening our product capabilities. We are working at closing out 2025 on a strong note and positioning ourselves for a successful 2026.
Throughout the third quarter and in October, market conditions and investment banking activity have continued to strengthen, supporting a more conducive environment to deal making. Announced M&A activity has advanced at a healthy pace, led by larger strategic transactions, while capital markets activity has accelerated. Transactions that were impacted by market volatility earlier this year are now returning to the market. 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 expect these trends to carry through year-end and into 2026. It's worth noting that in many years, we've experienced significant positive seasonality in our business in the fourth quarter.
This seasonality is likely to be less pronounced this year versus prior years, given the strength of our year-to-date results, the timing of some transactions closing that may have been impacted by the market volatility earlier in the year, and a possible timing impact from the government shutdown, which we are continuing to monitor closely. That said, we expect continued strengthening in the market and our business. Overall, we continue to believe we are in the early stages of an investment banking recovery driven by a combination of cyclical and structural factors. Global announced M&A as a percentage of global market cap remains well below historical averages, and pent-up demand from both corporates and sponsors, together with broader secular shifts such as accelerating impact of AI and other long-term trends, is driving new opportunities across sectors. Turning to talent, we continue to make strong progress on our recruiting efforts.
We successfully closed the Robey Warshaw transaction on October 1st, which has been an important addition to our build-out in Europe and significantly enhances our ability to serve clients across the regions and around the world. Along with the five new investment banking SMDs from Robey Warshaw, four additional SMDs have committed to join our global investment banking practice. Two in the U.S., with one focused on financial sponsors and the other on healthcare, and two in Europe, with one covering financial sponsors and another advising Nordic clients. So far, 2025 has been our strongest recruiting year to date. With our most recent joiners and commits, we now have 168 investment banking SMDs, up nearly 50% from the year-end 2021, positioning us well as the market strengthens.
We continue to see a healthy pipeline of external candidates, and attracting and developing exceptional talent remains core to our strategy and future success. Now, let me turn to the businesses. We experienced broad-based strengths across our diversified platform, both sequentially and year over year. In the third quarter and over the last 12 months, approximately 45% and 50% of total revenues, respectively, were from non-M&A sources. Our U.S. M&A advisory practice continued to gain momentum across sectors, including tech, infrastructure, and healthcare. Financial sponsor activity is steadily picking up, and we expect this positive trend to continue into next year. Evercore's well-positioned should benefit as we have meaningfully built out our sponsor coverage effort in recent years. Our European advisory business delivered its best quarter on record, with strong performance across sectors, products, and geographies.
We are very pleased with our progress across the region and are seeing high-quality engagements with both corporates and sponsors. We expect this to continue as we welcome the Robey Warshaw team and expand our presence in Europe. As of the end of the quarter, we advised on four of the 11 largest global M&A transactions. We've continued to experience strong activity in October, including advising Carlyle on its $7.7 billion acquisition of BASF Coatings and Huntington Bancshares on its acquisition of Cadence Bank for $7.4 billion, representing our second transaction advising Huntington this year. Next, our strategic defense and shareholder advisory group remains busy as the number of activist campaigns in the U.S. is at record levels. The liability management and restructuring business continued to see robust activity in the quarter, generally tracking in line with trends experienced earlier this year.
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. We continue to see strong momentum in all areas of the business, including GP-led continuation funds, LP secondaries, and securitizations. Similarly, our private funds group generated a record third quarter.
While the overall fundraising market remains challenging, our team continues to be active, operating at a very high level. Equity capital markets saw a resurgence in activity in the third quarter, particularly with IPOs supported by lower levels of market volatility. Our underwriting business remains active throughout the quarter as we continue to focus on our sector and product diversification efforts. We saw particular strength in tech and industrials, with Evercore serving as an active book runner on Carmen's $1 billion follow-on offering. We also experienced a significant increase in convertible issuance, an area where we have been investing in expanding our capabilities. Our equities business, Evercore ISI, has achieved the number one ranking in XTEL's All-American Research Survey for the fourth straight year. Additionally, the business had its best quarter since the fourth quarter of 2016, reflecting healthy levels of volatility and broad-based activity across products and services.
Strong client engagement, combined with a constructive market backdrop and healthy client performance, all contributed to the quarter's results. Lastly, wealth management achieved record quarter-end AUM of approximately $15.4 billion, driven by both market appreciation and strong new net client inflows. Before I turn it over to Tim, I'd like to make a final comment. The strength of our third quarter and year-to-date results reflect the power of our diversified platform, the continued execution of our strategy, and our commitment to our clients. As we look ahead, we're confident in our ability to continue delivering value for our clients, shareholders, and people. With that, let me turn it over to Tim.
Thank you, John. Evercore's third quarter results reflect an environment which has continued to strengthen across all our businesses. 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. My comments from here will focus on non-GAAP metrics, which we believe are useful when evaluating our results. Our standard GAAP reporting and reconciliation of GAAP to adjusted results can be found in our press release, which is on our website. Our third quarter adjusted net revenues of $1 billion increased 42% versus the third quarter of 2024. Third quarter adjusted operating income of $228 million increased 69% versus the third quarter of 2024. Adjusted earnings per share of $3.48 increased 71% versus the third quarter of last year.
Our adjusted operating margin was 21.8%, up from 18.2% in the prior year period, an improvement of nearly 360 basis points. Turning to the businesses, third quarter adjusted advisory fees of $884 million increased 49% year over year, which is a record for the third quarter and reflects continued market share gains. While we recently have experienced a strong uptick in activity and expect that momentum to continue in the fourth quarter, the seasonality we typically see in our fourth quarter advisory revenues is likely to be less pronounced this year versus prior years. This reflects the record results we've achieved year to date, as well as the impact of the market volatility in March and April, which may have influenced the timing of certain transactions and related revenues, and possible timing impacts from the government shutdown.
Our third quarter underwriting revenues were $44 million, down 1% from a year ago, but up 36% sequentially. Commissions and related revenue of $63 million in the quarter increased 15% year over year and was a record third quarter and the highest quarter in nearly a decade. The strength in the quarter was primarily related to higher revenues from trading commissions on stronger trading volumes, as well as higher subscription fees and good activity in convertibles and derivative products. Third quarter adjusted asset management and administration fees of $24 million rose 10% year over year, driven by market appreciation and net inflows. Third quarter adjusted other revenue net was approximately $33 million, which compares to $26 million a year ago.
Nearly two-thirds of the gain is related to interest income in the quarter, with most of the balance of other revenue related to gains in our DCCP hedge portfolio, which is correlated to the performance of the broader equity market. Turning to expenses, the adjusted compensation ratio for the third quarter is 65%, down nearly 100 basis points from the prior year period and down 40 basis points from last quarter. Our compensation ratio for the quarter reflects the continued steady improvement we have seen in the investment banking environment and in our revenues. We remain committed to investing in our business and executing on our strategic growth plan, as reflected in the record SMD recruiting we've achieved so far this year. As we have mentioned on past calls, we are balancing our investments in growth with striving to make further improvement in our compensation ratio over time.
Based on our current visibility, we expect our full-year ratio to be generally in line with current levels. Adjusted non-compensation expenses in the quarter were $139 million, which is 13.2% of net revenue. This is an improvement of 260 basis points from a year ago and nearly 270 basis points compared to last quarter. The adjusted non-comp expenses of $139 million is up 18% from the third quarter a year ago. As a reminder, the non-comp expense line consists of a mix of fixed and variable expenses. Some of the related line items are going to increase as client activity increases, and some of those are client billable expenses and are recouped over time. An example of this would be travel and related expenses, which increase due to higher levels of client travel, as well as spend for conferences and client events.
Other non-comp expenses increased as we build our business and execution capacity, like occupancy and equipment expenses, which reflected the acquisition of additional floors in our New York locations and new leases in Dubai, Paris, and London. Some of our non-comp expenses occur as we are investing in what we hope will provide improved efficiencies or competitive advantage in the near to medium term, such as increased technology spend, which includes investment in the development and implementation of newer technologies, as well as spend on licensing and consulting fees. Accordingly, we would expect our non-comp expenses for the full year to be up year over year on a percentage basis, generally consistent with what you have seen for the first nine months. As I've mentioned in the past, we continue to maintain a disciplined focus on our non-compensation expenses while investing in areas that are necessary to support our growth.
Our adjusted tax rate for the quarter was 28.7%, down modestly from the third quarter of last year. Turning to our balance sheet, as of September 30, our cash and investment securities totaled over $2.4 billion. In the third quarter, we repurchased approximately 170,000 shares at an average price of $326.62, and our share repurchase activity continued into the early part of the fourth quarter. Through the end of the third quarter, we have returned approximately $624 million of capital to shareholders through the repurchase of shares at an average purchase price of $264.72 and the payment of dividends. We have more than fully offset the dilution associated with RSU grants from our 2024 bonus cycle, and additionally, we have repurchased a number of shares that exceeds those issued for the initial payment related to the Robey Warshaw transaction. Our second quarter adjusted diluted share count was 44.6 million shares.
As we have mentioned previously, our shares outstanding are impacted by the changes in our share price due to the accounting for unvested RSUs, as our average share price increased 42% in the third quarter. We continue to maintain a strong cash position and take into consideration our regulatory requirements, the current economic and business environment, cash needs for the implementation of our strategic initiatives, including hiring plans, and preserving a solid financial footing. While various geopolitical and macroeconomic uncertainties remain present, we enter the fourth quarter optimistic about the environment and are encouraged by the momentum we are experiencing across the firm. We believe we are well-positioned and are confident in our ability to deliver strong results. With that, we will now open the line for questions.