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Mar 31, 2023
Moelis Q1 2023 Earnings Report
Moelis & Company's financial performance declined, with revenues and net income significantly lower compared to the prior year period, but strategic investments were made to expand capabilities.
Key Takeaways
Moelis & Company reported a decrease in revenues and net income for the first quarter of 2023 compared to the previous year. GAAP revenues were $187.8 million, and adjusted revenues were $185.3 million, a 38% decrease. Net income was $3.6 million, or $0.05 per share. The company continued to invest in talent, particularly in technology investment banking.
First quarter GAAP revenues were $187.8 million, a decrease of 38% year-over-year.
GAAP net income was $0.05 per share (diluted) for the first quarter, including a $0.05 per share tax benefit.
Adjusted pre-tax margin for the first quarter was 0.2%.
The company expanded its Technology Investment Banking franchise by appointing Jason Auerbach as Global Head and hiring 10 additional Managing Directors.
Moelis
Moelis
Forward Guidance
The M&A market is in a holding pattern, awaiting clarity on the end of Fed rate hikes. Banking market dislocation presents an opportunity to expand the franchise. Clients are planning for innovation and growth in a more stable credit environment.
Positive Outlook
- Opportunity to expand franchise due to banking market dislocation.
- Clients are planning for innovation and growth.
- Positioning to be a stronger partner in the next cycle.
- Expansion of technology investment banking capabilities with new hires.
- Strategic hires in Private Funds Advisory, Industrials, and Capital Structure Advisory.
Challenges Ahead
- M&A market is in a holding pattern.
- Uncertainty about when the Fed rate hikes will end.
- Revenues and net income significantly lower compared to the prior year period.
- Decrease in first quarter revenues was driven by fewer transaction completions.
- Decrease in first quarter revenues was driven by lower average fees earned per completed transaction.