Moelis & Company has recently released its 10-Q report, providing a detailed insight into its financial condition and operations. The company, founded in 2007 and headquartered in New York, operates as an investment banking advisory firm, offering a wide range of advisory services in areas such as mergers and acquisitions, recapitalizations, and capital markets transactions. It serves a diverse client base, including public multinational corporations, middle market private companies, financial sponsors, governments, and sovereign wealth funds across North and South America, Europe, the Middle East, Asia, and Australia.
In the recently released 10-Q report, Moelis & Company reported an increase in GAAP revenues for the first nine months of 2024, amounting to $755.8 million compared to $639.9 million for the same period in 2023, marking an 18% increase. This increase was driven by a rise in the number of completed transactions compared to the prior year period. The company's revenues are primarily generated from providing advisory services on transactions that are subject to individually negotiated engagement letters setting forth their fees. However, it's important to note that the timing of these fees, primarily generated at key transaction milestones, is outside of the company's control, leading to potential variability in revenues from year to year and quarter to quarter.
In terms of expenses, Moelis & Company reported total operating expenses of $258.2 million for the three months ended September 30, 2024, representing 94% of revenues, compared to $292.2 million for the same period in 2023, which represented 107% of revenues. The decrease in operating expenses was primarily driven by a decrease in compensation and benefits expense associated with lower target compensation as a percentage of revenues compared to the prior year period. For the nine months ended September 30, 2024, operating expenses were $714.4 million, representing 95% of revenues, compared to $670.9 million for the same period in 2023, which represented 105% of revenues. The increase in operating expenses was primarily driven by increased compensation and benefits expense associated with higher revenues compared to the prior year period.
The 10-Q report also highlighted that Moelis & Company earned revenues from 163 clients for the three months ended September 30, 2024, and 139 clients for the same period in 2023. Notably, the number of clients that paid fees equal to or greater than $1 million increased to 67 clients for the three months ended September 30, 2024, compared to 48 clients for the same period in 2023. For the nine months ended September 30, 2024, the company earned revenues from 314 clients, compared to 248 clients for the same period in 2023. Similarly, the number of clients that paid fees equal to or greater than $1 million increased to 177 clients for the nine months ended September 30, 2024, compared to 129 clients for the same period in 2023.
As a result of these announcements, the company's shares have moved -0.4% on the market, and are now trading at a price of $67.95. Check out the company's full 10-Q submission here.
