Lazard’s third quarter results outperformed Wall Street’s consensus for both revenue and adjusted earnings, but the market responded with a modestly negative reaction. Management attributed the quarter’s performance to robust activity in financial advisory, particularly across M&A in healthcare, industrials, and consumer sectors, as well as continued momentum in restructuring and fundraising mandates. CEO Peter Orszag emphasized Lazard’s ability to capture new business opportunities and highlighted the impact of strategic hiring, with 20 new managing directors joining so far this year. Meanwhile, the asset management division saw improved investment performance and record gross inflows, driven by quantitative, emerging markets, and custom mandates. Orszag noted, “Our commercial and collegial approach is producing results by capturing new business opportunities.”
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Lazard (LAZ) Q3 CY2025 Highlights:
- Revenue: $724.7 million vs analyst estimates of $714.1 million (12.2% year-on-year growth, 1.5% beat)
- Adjusted EPS: $0.56 vs analyst estimates of $0.44 (27.7% beat)
- Adjusted EBITDA: $94.96 million vs analyst estimates of $113.5 million (13.1% margin, 16.4% miss)
- Operating Margin: 13.1%, down from 25% in the same quarter last year
- Market Capitalization: $4.54 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Lazard’s Q3 Earnings Call
- Alexander Bond (KBW): Asked how Lazard balances new hiring with compensation leverage, particularly as competition for senior talent remains high. CEO Peter Orszag explained that productivity gains from new hires drive operating leverage, and the firm has seen strong retention and engagement.
- James Mitchell (Seaport Global Securities): Queried about persistently high asset management outflows and progress toward net neutral flows. Orszag clarified that outflows are concentrated in sub-advised accounts, while core strategies see positive trends; 97% of asset management revenue is now outside sub-advised funds.
- Brennan Hawken (BMO Capital Markets): Sought clarity on when new asset management leadership will unveil strategic plans. Orszag indicated that Chris Hogbin, who starts in December, should present a framework by early next year, following fourth quarter results.
- Brendan O'Brien (Wolfe Research): Questioned the outlook for restructuring given recent credit defaults and central bank policy shifts. Orszag said he does not view recent bankruptcies as systemic and expects restructuring and M&A activity to increasingly coexist.
- Ryan Kenny (Morgan Stanley): Asked about the impact of a potential U.S. government shutdown on advisory deals. Orszag stated that while some deals may face approval delays, backlogs are typically resolved within weeks once the government reopens.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will be tracking (1) the pace of new advisory mandates and the mix between M&A and restructuring, (2) the trajectory of asset management inflows, particularly as new leadership takes over, and (3) the firm’s ability to sustain hiring momentum and productivity gains in key regions. Progress on scaling ETF offerings and adapting to regulatory and macroeconomic shifts will also be important markers.
Lazard currently trades at $47.86, down from $49.74 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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