In addition to today's audio comments, we have posted our earnings release on our website. A reconciliation of these non-GAAP financial measures to the comparable GAAP measures is provided in our earnings release and investor presentation. Our fourth quarter and full year results demonstrate our ongoing focus on executing our Lazard 2030 long-term growth strategy. For 2025, we reported firm-wide revenue of $3 billion, with record revenue in financial advisory and assets under management up 12% in asset management.
Before we turn to our outlook and financial results, I would like to take a moment to thank Mary Ann and welcome Tracy as our new CFO. As CFO, he will lead efforts to improve operational efficiency, helping drive profitable, profitable growth and progress towards Lazard 2030, while playing a central role in engaging with the investment community. You can read more about Tracy in the press release we issued this morning alongside our earnings release. As we look ahead, we see substantial growth in both of our businesses.
In financial advisory, the M&A cycle continues to deepen, while client demand remains strong for our other advisory solutions, such as private capital advisory and restructuring and liability management. Looking back on 2025, in Financial Advisory, we reported record revenue of $1.8 billion. We continue to anticipate hiring within or above our stated range going forward, and we will prioritize acquiring top talent to deliver long-term profitable growth over time. This is an increase of $2.5 million per MD since 2023, and we expect continued significant improvement in this important metric in the years ahead, which I will discuss later.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue per Managing Director | 2030 | $12.5 million target (Newly added goal) |
| Net flows (Asset Management) | FY2026 | Positive net flows expected |
| Financial Advisory MD net additions | Annual (Q1 to Q1) | Within or above the 10-15 range (Reaffirmed/at-or-above) |
| Non-compensation expense | FY2026 | Mid- to high-single-digit dollar increase, depending on FX |
| M&A activity | FY2026 | Expected to accelerate |
| Metric | YoY | Note |
|---|---|---|
| Firm-wide revenue (Q4) | +10% to $892 million | Growth across both Financial Advisory and Asset Management |
| Financial Advisory revenue (Q4) | +7% to $542 million | Diversified deal activity across teams and geographies plus marquee transactions |
| Asset Management revenue (Q4) | +18% to $339 million | Higher average AUM (+12%), management fees up 17%, and higher incentive fees |
| Average AUM (Q4) | +12% to $261 billion | Market appreciation and gross inflows |
| Revenue per Managing Director (FY) | +$2.5 million since 2023 to $8.9 million | Higher client traction and productivity despite elevated share of new MDs |
| Compensation ratio (FY) | Improved to 65.5% from 65.9% | Productivity gains even amid accelerated talent investment |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| M&A cycle outlook | — | Expected to accelerate in 2026 as companies seek scale and focus, alongside elevated restructuring and private equity activity | Improving |
| Private capital / non-M&A mix | Private-capital advisory ~25% in 2019 | ~40% today, targeting 50% over time; non-M&A revenue ~40%+ of advisory, can rise toward 50% | Growing |
| MD productivity | $8.9 million per MD in 2025 | Targeting $12.5 million by 2030, with ~$1 million uplift expected as the new-MD share normalizes to ~30% | Rising |
| Asset Management transformation | 2025 an inflection point | New leadership under Chris Hogbin; focus on quant, emerging markets, and customized solutions; positive net flows expected in 2026 | Repositioning |
| Secondaries / continuation funds | Strong multi-year growth | Expected to continue without slowing given low penetration (~one-third), seen as a permanent feature of private equity | Sustained growth |
| AI and Contextual Alpha | Discussed for a couple of years | Adoption accelerated in 2025 with new tools; positioned to drive productivity and operating efficiencies; CEO uses LLMs in daily workflow | Accelerating |