Moelis Posts Record Revenue as Deal Fees Rise
Adjusted pre-tax margin widened to 18.6% as expenses grew more slowly than revenue.
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Moelis & Company (MC), the investment bank, posted record second-quarter revenue as higher average fees per completed transaction lifted results.
Revenue rose 12% from a year earlier to $409.4 million and increased about 28% from an implied $319.8 million in the first quarter. First-half revenue climbed 9% to a record $729.2 million, extending the benefit from higher average transaction fees.
Adjusted net income rose 19% to $54.1 million, while adjusted diluted earnings increased to $0.63 a share from $0.53 a share. Adjusted pre-tax income advanced 18% to $76.3 million, faster than revenue growth.
The stronger quarter followed a softer start to the year. First-half adjusted net income and adjusted earnings each fell 3%, to $97.2 million and $1.13 a share, respectively, as tax benefits tied to share awards declined to about $0.11 a share from $0.28 a share.
Adjusted operating expenses increased 10% to $335.8 million, reducing them to 82.0% of revenue from 83.4% a year earlier. Compensation and benefits expense rose 7% to $269.4 million because of higher headcount, though its share of revenue fell to 65.8% from 69.0%.
Adjusted non-compensation expense climbed 26% to $66.5 million, partly offsetting the lower compensation ratio. Moelis attributed the increase in part to deal-related travel and client conferences, new-office costs, professional fees for its public-equity capital-markets business and spending on artificial-intelligence technology.
The firm hired 12 managing directors through the first half, with six already in place and six expected to join later in 2026 across businesses including private credit, debt capital markets, energy and private capital advisory. Moelis also recorded a $0.7 million quarterly adjustment for its move into new U.K. office space, bringing first-half costs associated with the move to $2.4 million.