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Jun 30, 2020
Evercore Q2 2020 Earnings Report
Evercore's results reflect the ability to support clients, with record underwriting revenues, despite a decrease in overall net revenues compared to the prior year period.
Key Takeaways
Evercore reported a decrease in net revenues by 5% on a U.S. GAAP basis for Q2 2020, primarily due to a decrease in Advisory Fees, which was partially offset by increases in Underwriting Fees and Commissions. Despite the challenging environment, the company delivered a 20% Adjusted operating margin.
Second quarter Net Revenues decreased 5% on a U.S. GAAP basis and 4% on an Adjusted basis versus the prior year period.
Record quarterly Underwriting Revenue of $93.6 million in the second quarter increased 453% versus the prior year period.
Evercore ISI research and trading maintained high levels of engagement with clients as volatility remained elevated, driving an 11% increase in Commissions Revenue versus the prior year period.
Maintained #1 league table ranking for announced M&A among independents over the last twelve months and achieved #1 league table ranking by number of announced and number of completed Restructuring deals in the U.S. for the first half of 2020
Evercore
Evercore
Evercore Revenue by Segment
Revenue by Segment
Advisory Fees Revenue
CapyFin.comUnderwriting Fees Revenue
CapyFin.comCommissions and Related Revenue
CapyFin.comAsset Management and Administration Fees Revenue
CapyFin.com Forward Guidance
The worldwide COVID-19 pandemic has continued to have, and is expected to continue having, a significant negative effect on our business. The degree of the impact will likely be directly correlated to the length and depth of any economic slowdown and the speed of any recovery.
Positive Outlook
- Ensuring the health, wellness and safety of our workforce, including redoubling our commitment to our diversity and inclusion objectives
- Focusing our Advisory and Research businesses to meet the immediate needs of our clients, while helping them be well-positioned for the eventual recovery
- Sustaining our operating infrastructure to support flexible and efficient working arrangements and planning and implementing our return to office on a thoughtful and disciplined basis
- Maintaining our strong and liquid balance sheet
- Equity underwriting activity levels have meaningfully increased.
Challenges Ahead
- M&A activity remains limited
- Uncertainty and market volatility have led to delays or, in some cases, terminations of transactions
- Significant decline in global and domestic M&A transactions
- A prolonging of transaction closings as the conditions typically required for global and domestic M&A are generally not present
- Decline in revenue will have a significant impact on our results of operations and cash flows
Revenue & Expenses
Visualization of income flow from segment revenue to net income