PJT Partners Inc.

Previous wording

Mergers and acquisitions (“M&A”) is a cyclical business that is impacted by macroeconomic conditions. There are several factors influencing global M&A activity in the intermediate term, including monetary policy, greater economic and geopolitical uncertainty and global growth. Worldwide M&A announced volumes during the first nine months of 2024 were up 16% compared with the first nine months of 2023. On an annualized basis, volume was up 7% compared with 2023.1 How these macroeconomic factors will impact the strength of strategic activity in the intermediate term is still uncertain. While we expect the markets to recover to historical relationships between M&A activity and broader market benchmarks, the pace of such recovery remains unclear.

Current wording

Mergers and acquisitions (“M&A”) is a cyclical business that is impacted by macroeconomic conditions. There are several factors influencing global M&A activity in the intermediate term, including monetary policy, global trade policies, greater economic and geopolitical uncertainty and global growth. The current environment poses significant risks to the U.S. and Global economies as the current geopolitical uncertainties have weighed on business and impacted capital markets around the world. In the first quarter of 2025, worldwide M&A announced volumes increased modestly compared with prior year, however, the number of announced transactions declined 1. How these macroeconomic factors will impact the strength of strategic activity in the intermediate term is still uncertain. While we expect the markets to recover to historical relationships between M&A activity and broader market benchmarks, the pace of such recovery remains unclear.

Previous wording

Global restructuring and special situations activity continued to remain strong throughout the third quarter of 2024 due to continued elevated levels of liability management and more traditional balance sheet restructurings. A number of factors continue to drive activity, including companies proactively managing debt maturities and structural issues facing many industries. Activity in the third quarter was dispersed across companies, creditors and financial sponsors as well as a broad cross section of industries and geographies, demonstrating a continued multi-year trend of elevated activity.

Current wording

Global restructuring and special situations trends remained elevated during the first quarter of 2025 due to continued liability management activity and balance sheet restructurings. A number of factors continue to drive this elevated activity, as both corporates and sponsors deal with capital markets volatility, challenged business models, technological disruption, and changing consumer preferences. Activity during the first quarter of 2025 was dispersed across companies, creditors and financial sponsors as well as a broad cross section of industries and geographies, demonstrating a continued multi-year cycle of elevated activity, particularly in liability management.

Previous wording

Fund placement activity, although increased from a year ago levels, remained challenged given the global macroeconomic environment and supply of alternative investment opportunities in the market seeking capital. Additionally, limited partners have become more discerning in their deployment of capital for both existing and new fund manager relationships. Investors continue to focus on existing relationships and, as a result, the bar for fund managers to attract new investors remains high as a flight to quality persists. As it relates to private capital solutions, investors need for liquidity continues to be a driver for increased market volumes, and, absent any unexpected macroeconomic headwinds, these favorable conditions should persist.

Current wording

Fund placement activity remains challenging given the global macroeconomic environment, volatility in the market, an overall slowdown in realizations and the supply of alternative investment opportunities in the market seeking capital. Additionally, limited partners have become more discerning in their deployment of capital for both existing and new fund manager relationships. Investors continue to focus on existing relationships and, as a result, the bar for fund managers to attract new investors remains high as a flight to quality persists. As it relates to private capital solutions, investors' need for liquidity continues to be a driver for increased market volumes, and, despite recent market volatility we expect the environment to remain favorable in the intermediate term.

Previous wording

1 Source: LSEG Global Mergers & Acquisitions Review for First Nine Months of 2024 as of September 30, 2024.

Current wording

1 Source: LSEG Global Mergers & Acquisitions Review for First Quarter of 2025 as of March 31, 2025.

Previous wording

Compensation and Benefits – Compensation and Benefits expense includes salaries, restricted and unrestricted cash awards, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards to partners and employees. Changes in this expense are driven by fluctuations in the number of employees, the composition of our workforce, business performance, compensation adjustments in relation to market movements, changes in rates for employer taxes and other cost increases affecting benefit plans. The expense associated with our restricted and unrestricted cash award and equity plans can also have a significant impact and may vary from year to year. Certain awards are expensed over the requisite service period for partners and employees who are or will become retirement eligible prior to the stated vesting date. Over time, a greater number of partners and employees may become retirement eligible and the related requisite service period over which the expense is recognized will be shorter than the stated vesting period.

Current wording

Compensation and Benefits – Compensation and Benefits expense includes salaries, restricted and unrestricted cash awards, benefits, employer taxes and equity-based compensation associated with the grants of equity-based awards. Changes in this expense are driven by fluctuations in the number of employees, the composition of our workforce, business performance, compensation adjustments in relation to market movements, changes in rates for employer taxes and other cost increases affecting benefit plans. The expense associated with our restricted and unrestricted cash award and equity plans can also have a significant impact and may vary from year to year. Certain awards are expensed over the requisite service period for partners and employees who are or will become retirement eligible prior to the stated vesting date. Over time, a greater number of partners and employees may become retirement eligible and the related requisite service period over which the expense is recognized will be shorter than the stated vesting period.

Previous wording

We maintain compensation programs, including salaries, annual incentive compensation (that may include components of unrestricted cash, restricted cash and/or equity-based awards) and benefits programs. We manage compensation to estimates of competitive levels based on market conditions and performance. Our level of compensation reflects our plan to maintain competitive compensation levels to retain key personnel and it reflects the impact of newly-hired senior professionals, including related grants of equity awards that are generally valued at their grant date fair value.

Current wording

We maintain compensation programs, including salaries, annual incentive compensation (that may include components of unrestricted cash, restricted cash and/or equity-based awards) and benefits programs. We manage compensation to estimates of competitive levels based on market conditions and performance. Our compensation expense reflects our objective to retain key personnel by maintaining competitive compensation levels. It also reflects the impact of newly-hired senior professionals, including any related grants of equity awards.

Previous wording

The following table sets forth our condensed consolidated results of operations for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table sets forth our condensed consolidated results of operations for the three months ended March 31, 2025 and 2024:

Previous wording

The following table provides revenue statistics for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table provides revenue statistics for the three months ended March 31, 2025 and 2024:

Previous wording

Total Revenues were $326.3 million for the three months ended September 30, 2024, an increase of $48.0 million compared with $278.4 million for the three months ended September 30, 2023. Advisory Fees were $283.8 million for the three months ended September 30, 2024, an increase of $39.7 million compared with $244.1 million for the three months ended September 30, 2023. The increase in Advisory Fees was principally due to an increase in private capital solutions revenues. Placement Fees were $32.5 million for the three months ended September 30, 2024, an increase of $5.8 million compared with $26.7 million for the three months ended September 30, 2023. The increase in Placement Fees was due to an increase in fund placement revenues. Interest Income and Other was $10.1 million for the three months ended September 30, 2024, an increase of $2.5 million compared with $7.6 million for the three months ended September 30, 2023. The increase in Interest Income and Other was principally due to higher interest income.

Current wording

Total Revenues were $324.5 million for the three months ended March 31, 2025, a decrease of $4.9 million compared with $329.4 million for the three months ended March 31, 2024. Advisory Fees were $282.2 million for the three months ended March 31, 2025, a decrease of $6.5 million compared with $288.7 million for the three months ended March 31, 2024. The decrease in Advisory Fees was due to decreases in restructuring and private capital solutions revenues mostly offset by an increase in strategic advisory revenues. Placement Fees were $36.0 million for the three months ended March 31, 2025, an increase of $1.5 million compared with $34.5 million for the three months ended March 31, 2024. The increase in Placement Fees was due to an increase in fund placement revenues. Interest Income and Other was $6.3 million for the three months ended March 31, 2025, an increase of $0.1 million compared with $6.2 million for the three months ended March 31, 2024.

Previous wording

Expenses were $848.2 million for the nine months ended September 30, 2024, an increase of $149.5 million compared with $698.7 million for the nine months ended September 30, 2023. The increase in expenses was due to increases in Compensation and Benefits, Occupancy and Related, Other Expenses, Travel and Related and Communications and Information Services of $132.9 million, $7.5 million, $4.1 million, $4.0 million and $2.6 million, respectively. The increase in Compensation and Benefits was driven by higher revenues compared with the prior year. Occupancy and Related increased principally due to the expansion and lease term extension for our New York headquarters in the fourth quarter of 2023 and further expansion of our London office in the third quarter of 2024. Other Expenses increased principally due to increases in bad debt expense and market data expense. Travel and Related increased due to increased levels of business travel. Communications and Information Services increased principally due to investments in technology infrastructure.

Current wording

Expenses were $272.0 million for the three months ended March 31, 2025, a decrease of $3.5 million compared with $275.5 million for the three months ended March 31, 2024. The decrease in expenses was principally due to a decrease in Compensation and Benefits of $7.8 million, partially offset by increases in Travel and Related, Occupancy and Related and Communications and Information Services of $2.1 million, $1.7 million and $1.3 million, respectively. The decrease in Compensation and Benefits was principally driven by a lower accrual rate compared with prior year. Travel and Related increased principally due to greater business travel. Occupancy and Related increased principally due to the expansion of our London and New York offices. Communications and Information Services increased principally due to higher market data expense and investments in technology infrastructure.

Previous wording

The Company’s Provision for Taxes for the three months ended September 30, 2024 was $8.3 million, which represents an effective tax rate of 16.8% on pretax income of $49.4 million. The Company’s Provision for Taxes for the three months ended September 30, 2023 was $11.4 million, which represents an effective tax rate of 26.8% on pretax income of $42.6 million.

Current wording

The Company’s Benefit for Taxes for the three months ended March 31, 2025 was $21.6 million, which represents an effective tax rate of -41.1% on pretax income of $52.6 million. The Company’s Provision for Taxes for the three months ended March 31, 2024 was $0.5 million, which represents an effective tax rate of 1.0% on pretax income of $53.9 million. The decrease in the effective tax rate was due to an increased tax benefit related to the delivery of vested shares at a value in excess of their amortized cost.

Previous wording

Net Income Attributable to Non-Controlling Interests is calculated by multiplying the Income Before Provision for Taxes by the percentage allocation of the income between the holders of common units of partnership interest in PJT Partners Holdings LP (“Partnership Units”) and holders of Class A common stock of PJT Partners Inc. after considering any contractual arrangements that govern the allocation of income.

Current wording

Net Income Attributable to Non-Controlling Interests is calculated by multiplying the Income Before Provision (Benefit) for Taxes by the percentage allocation of the income between the holders of common units of partnership interest in PJT Partners Holdings LP (“Partnership Units”) and holders of PJT Partners Inc. Class A common stock after considering any contractual arrangements that govern the allocation of income.

Previous wording

On July 29, 2024, PJT Partners Holdings LP, as borrower, entered into a new syndicated revolving credit agreement (the “Credit Agreement”) and related documents with Bank of America, N.A., as the administrative agent (the “Administrative Agent”), and certain other financial institutions party thereto as lenders. The Credit Agreement, which replaces the Borrower's existing Amended and Restated Loan Agreement in its entirety, provides for a revolving credit facility with aggregate principal amount of up to $100 million. Outstanding borrowings under the revolving credit facility bear interest of Secured Overnight Financing Rate plus 1.85% per annum. In connection with the closing of the Credit Agreement, the Borrower paid certain closing costs and fees. In addition, the Borrower will also pay a commitment fee on the unused portion of the revolving credit facility of 0.25% per annum, payable quarterly in arrears. The revolving credit facility will mature and the commitments thereunder will terminate on July 29, 2026, subject to extension by agreement of the Borrower and Administrative Agent. Further information regarding the Credit Agreement can be found in Note 13. “Commitments and Contingencies—Commitments, Line of Credit” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing.

Current wording

On July 29, 2024, PJT Partners Holdings LP, as borrower the ("Borrower"), entered into a syndicated revolving credit agreement (the “Credit Agreement”) and related documents with Bank of America, N.A., as the administrative agent (the “Administrative Agent”), and certain other financial institutions party thereto as lenders. The Credit Agreement provides for a revolving credit facility with aggregate principal amount of up to $100 million. Further information regarding the Credit Agreement can be found in Note 13. “Commitments and Contingencies—Commitments, Line of Credit” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing. As of March 31, 2025 and December 31, 2024, we were in compliance with the debt covenants under the Credit Agreement. Additionally, as of March 31, 2025 and December 31, 2024, there were no borrowings outstanding under the Credit Agreement.

Previous wording

We evaluate our cash needs on a regular basis. As of September 30, 2024 and December 31, 2023, we had cash, cash equivalents and short-term investments of $477.0 million and $436.9 million, respectively. The vast majority of these balances are either held in institutions labeled by the Financial Stability Board as global systemically important banks or Treasury securities. Although we maintain multiple banking relationships with both global and regional banks and actively monitor the financial stability of such institutions, a failure at any institution where we maintain a banking relationship could impact our liquidity.

Current wording

We evaluate our cash needs on a regular basis. As of March 31, 2025 and December 31, 2024, we had cash, cash equivalents and short-term investments of $226.8 million and $546.8 million, respectively. The vast majority of these balances are either held in institutions labeled by the Financial Stability Board as global systemically important banks, money market funds or Treasury securities. Although we maintain multiple banking relationships with both global and regional banks and actively monitor the financial stability of such institutions, a failure at any institution where we maintain a banking relationship could impact our liquidity.

Previous wording

Our liquidity is highly dependent upon cash receipts from clients, which are generally dependent upon the successful completion of transactions as well as the timing of receivable collections. As of September 30, 2024 and December 31, 2023, total accounts receivable, net of allowance for credit losses, was $343.6 million and $263.5 million, respectively. As of September 30, 2024 and December 31, 2023, the allowance for credit losses was $4.0 million and $2.4 million, respectively. Included in Accounts Receivable, Net are long-term receivables of $88.5 million and $84.4 million as of September 30, 2024 and December 31, 2023, respectively, related to placement fees that are generally paid in installments over a period of three to four years.

Current wording

Our liquidity is highly dependent upon cash receipts from clients, which are generally dependent upon the successful completion of transactions as well as the timing of receivable collections. As of March 31, 2025 and December 31, 2024, total accounts receivable, net of allowance for credit losses, was $338.6 million and $320.8 million, respectively. As of March 31, 2025 and December 31, 2024, the allowance for credit losses was $4.1 million and $2.5 million, respectively. Included in Accounts Receivable, Net are long-term receivables of $92.8 million and $88.6 million as of March 31, 2025 and December 31, 2024, respectively, related to placement fees that are generally paid in installments over a period of three to four years.

Previous wording

We are subject to regulatory requirements in the U.S. and certain international jurisdictions to ensure general financial soundness and liquidity. This requires, among other things, that we comply with certain minimum capital requirements, recordkeeping, reporting procedures, experience and training requirements for employees and certain other requirements and procedures. These regulatory requirements may restrict the flow of funds to and from affiliates. See Note 14. “Regulated Entities” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing for further information. The licenses under which we operate are meant to be appropriate to conduct our business. We actively monitor our regulatory capital and we believe that we provide each of these entities with sufficient capital and liquidity, consistent with their business and regulatory requirements.

Current wording

We are subject to regulatory requirements in the U.S. and certain international jurisdictions to ensure general financial soundness and liquidity. This requires, among other things, that we comply with certain minimum capital requirements, recordkeeping, reporting procedures, experience and training requirements for employees and certain other requirements and procedures. These regulatory requirements may restrict the flow of funds to and from affiliates. See Note 14. “Regulated Entities” in the “Notes to Condensed Consolidated Financial Statements” in “—Item 1. Financial Statements” of this filing for further information. The licenses under which we operate are meant to be appropriate to conduct our business. We actively monitor our regulatory capital base and we believe that we provide each of these entities with sufficient capital and liquidity, consistent with their business and regulatory requirements.

Previous wording

Subject to the terms and conditions of the exchange agreement, as amended, between us and certain of the holders of Partnership Units (other than PJT Partners Inc.), Partnership Units are exchangeable at the option of the holder for cash or, at our election, for shares of our Class A common stock on a one-for-one basis. Depending on our liquidity and capital resources, market conditions, the timing and concentration of exchange requests and other considerations, we may choose to fund exchanges of Partnership Units with available cash, borrowings or new issuances of Class A common stock or to settle exchanges by issuing Class A common stock to the exchanging holder of Partnership Units.

Current wording

Subject to the terms and conditions of the exchange agreement, as amended, between us and certain of the holders of Partnership Units (other than PJT Partners Inc.), holders of Partnership Units have the right, subject to the terms and conditions set forth in the partnership agreement of PJT Partners Holdings LP, on a quarterly basis, to exchange all or part of the Partnership Units. Further, the Company may also require holders of Partnership Units who are not Service Providers (as defined in the Partnership Agreement of PJT Partners Holdings LP) to exchange such Partnership Units. We retain the sole option to determine whether to settle the exchange in either cash or for shares of PJT Partners Inc. Class A common stock on a one-for-one basis. Depending on our liquidity and capital resources, market conditions, the timing and concentration of exchange requests and other considerations, we may choose to fund exchanges of Partnership Units with available cash, borrowings or new issuances of PJT Partners Inc. Class A common stock or to settle exchanges by issuing PJT Partners Inc. Class A common stock to the exchanging holder of Partnership Units.

Previous wording

Certain holders of Partnership Units exchanged 0.4 million and 0.3 million Partnership Units, respectively, for cash in the amounts of $43.4 million and $19.6 million, respectively, for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

For the three months ended March 31, 2025 and 2024, certain holders of Partnership Units exchanged 0.3 million and 0.2 million Partnership Units, respectively, for cash in the amounts of $57.3 million and $18.7 million, respectively.

Previous wording

On February 6, 2024, the Company announced that the Board authorized a $500 million Class A common stock repurchase program, which replaced the then-existing $200 million repurchase program authorized on April 25, 2022. Under the new repurchase program, which has no expiration date, shares of the Company’s Class A common stock may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date.

Current wording

On February 6, 2024, the Company announced that the Board authorized a $500 million Class A common stock repurchase program, which replaced the then-existing $200 million repurchase program authorized on April 25, 2022. As of March 31, 2025, the Company’s remaining repurchase authorization was $150.5 million. Under the current repurchase program, which has no expiration date, shares of the Company’s Class A common stock may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased depend on a variety of factors, including legal requirements, price, and economic and market conditions. The repurchase program may be suspended or discontinued at any time.

Previous wording

During the nine months ended September 30, 2024, the Company repurchased 1.9 million shares of the Company’s Class A common stock at an average price per share of $100.08, or $185.5 million in aggregate, pursuant to the share repurchase program. As of September 30, 2024, the Company’s remaining repurchase authorization was $327.2 million.

Current wording

During the three months ended March 31, 2025, the Company repurchased 0.8 million shares of the Company’s Class A common stock at an average price per share of $158.51, or $127.1 million in aggregate, excluding excise tax on net share repurchases, pursuant to the share repurchase program.

Previous wording

The Company provides a guarantee to a lending institution for certain loans held by employees for investment in funds of its former Parent, which are secured by the underlying investments in those funds. The amount guaranteed was $2.0 million and $2.3 million as of September 30, 2024 and December 31, 2023, respectively. In connection with this guarantee, we currently expect any associated risk of loss to be insignificant.

Current wording

The Company provides a guarantee to a lending institution for certain loans held by employees for investment in funds of its former Parent, which are secured by the underlying investments in those funds. As of March 31, 2025 and December 31, 2024, the amount guaranteed was $1.8 million and $2.0 million, respectively. In connection with this guarantee, we currently expect any associated risk of loss to be insignificant.

Previous wording

We have entered into a tax receivable agreement with the holders of Partnership Units (other than PJT Partners Inc.) that provides for the payment by PJT Partners Inc. to exchanging holders of Partnership Units of 85% of the benefits, if any, that PJT Partners Inc. is deemed to realize as a result of the increases in tax basis related to such exchanges of Partnership Units and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. As of September 30, 2024 and December 31, 2023, the Company had amounts due of $30.7 million and $29.7 million, respectively, pursuant to the tax receivable agreement, which represent management’s best estimate of the amounts currently expected to be owed in connection with the tax receivable agreement. Actual payments may differ significantly from estimated amounts due.

Current wording

We have entered into a tax receivable agreement with the holders of Partnership Units (other than PJT Partners Inc.) that provides for the payment by PJT Partners Inc. to exchanging holders of Partnership Units of 85% of the benefits, if any, that PJT Partners Inc. is deemed to realize as a result of the increases in tax basis related to such exchanges of Partnership Units and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. As of March 31, 2025 and December 31, 2024, the Company had amounts due of $32.8 million and $29.3 million, respectively, pursuant to the tax receivable agreement, which represent management’s best estimate of the amounts currently expected to be owed in connection with the tax receivable agreement. Actual payments may differ significantly from estimated amounts due.