Lazard, Inc.

Previous wording

Founded in 1848, Lazard is one of the world's preeminent financial advisory and asset management firms, with operations in North and South America, Europe, the Middle East, Asia, and Australia. Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals.

Current wording

Founded in 1848, Lazard is a global financial advisory and asset management firm with operations in North and South America, Europe, the Middle East, Asia, and Australia. Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals. We aim to deliver independent, differentiated advice and solutions grounded in contextual alpha—the broad insight and judgment needed to navigate macroeconomic, geopolitical, and other factors that we believe help leaders see beyond what the world sees today.

Previous wording

•Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services including M&A advisory, capital markets advisory, shareholder advisory, sovereign advisory, geopolitical advisory, restructuring and liability management, capital raising and placement, and other strategic matters; and

Current wording

•Financial Advisory, which offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a wide array of financial advisory services including M&A advisory, strategic capital solutions, shareholder advisory, sovereign advisory, geopolitical advisory, restructuring and liability management, capital raising and placement, and other strategic matters; and

Previous wording

In addition, we record selected other activities in our Corporate segment, including the management of cash, investments, deferred tax assets, outstanding indebtedness and certain contingent obligations. We also invest our own capital from time to time, generally alongside capital of qualified institutional and individual investors in alternative investments or private equity investments, and make investments to seed our Asset Management strategies.

Current wording

In addition, we record selected other activities in our Corporate segment, including cash management, investments, deferred tax assets, outstanding indebtedness and certain contingent obligations. We also invest our own capital from time to time, generally alongside capital of qualified institutional and individual investors in alternative investments or private equity investments, and make investments to seed our Asset Management strategies.

Previous wording

Economic and global financial market conditions can materially affect our financial performance. As described above, our principal sources of revenue are derived from activities in our Financial Advisory and Asset Management business segments. Our Financial Advisory revenues are primarily dependent on the successful completion of merger, acquisition, sale, restructuring, capital raising or similar transactions, and our Asset Management revenues are primarily driven by the levels of AUM. Weak global economic and financial market conditions can result in a challenging business environment for M&A and capital-raising activity as well as our Asset Management business, however, may provide opportunities for our restructuring business.

Current wording

Economic and global financial market conditions can materially affect our financial performance. As described above, our principal sources of revenue are derived from activities in our Financial Advisory and Asset Management business segments. Our Financial Advisory revenues are primarily dependent on the successful completion of merger, acquisition, sale, restructuring, capital raising or similar transactions, and our Asset Management revenues are primarily driven by the levels of AUM. Weak or uncertain global economic and financial market conditions can create a challenging environment for M&A and capital-raising activity and may also pressure our Asset Management business. However, these conditions may generate increased opportunities for our restructuring business. Additionally, heightened equity market volatility can create compelling investment opportunities for Asset Management.

Previous wording

We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge continuously, and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all potentially applicable factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. See Item 1A, “Risk Factors” in this Form 10-K. Furthermore, net income and revenue in any period may not be indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Current wording

New risks and uncertainties emerge continuously, and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all potentially applicable factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. See Item 1A, “Risk Factors” in this Form 10-K. Furthermore, net income and revenue in any period may not be indicative of full-year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Previous wording

Another measure of global restructuring activity is the number of corporate defaults, which decreased as compared to 2023. The number of defaulting issuers was 144 in 2024, according to Moody’s Investors Service, Inc., as compared to 164 in 2023.

Current wording

Another measure of global restructuring activity is the number of corporate defaults, which decreased as compared to 2024. The number of defaulting issuers was 125 in 2025, according to Moody’s Investors Service, Inc., as compared to 148 in 2024.

Previous wording

Net revenue trends in Financial Advisory are generally correlated to the level of completed industry-wide M&A transactions and restructuring transactions occurring subsequent to corporate debt defaults, respectively. However, deviations from this relationship can occur in any given year for a number of reasons. For instance, our results can diverge from industry-wide activity where there are material variances from the level of industry-wide M&A activity in a particular market where Lazard has greater or lesser relative market share, or regarding the relative number of our advisory engagements with respect to larger-sized transactions, and where we are involved in non-public or sovereign advisory assignments.

Current wording

Net revenue trends in Financial Advisory are generally correlated to the level of completed industry-wide M&A transactions and restructuring transactions occurring subsequent to corporate debt defaults. However, deviations from this relationship can occur in any given year for a number of reasons. For instance, our results can diverge from industry-wide activity where there are material variances from the level of industry-wide M&A activity in a particular market where Lazard has greater or lesser relative market share, or regarding the relative number of our advisory engagements with respect to larger-sized transactions, and where we are involved in non-public or sovereign advisory assignments.

Previous wording

Lazard’s Asset Management segment principally includes LAM, LFG, LFB and Edgewater. Asset Management net revenue is derived from fees for investment management and advisory services provided to clients. As noted above, the main driver of Asset Management net revenue is the level and product mix of AUM, which is generally influenced by the performance of the global equity markets and, to a lesser extent, fixed income markets as well as Lazard’s investment performance, which impacts its ability to successfully attract and retain assets. As a result, fluctuations (including timing thereof) in financial markets and client asset inflows and outflows for any reason have a direct effect on Asset Management net revenue and operating income. Asset Management fees are generally based on the level of AUM measured daily, monthly or quarterly, and an increase or reduction in AUM, due to market price fluctuations, currency fluctuations, changes in product mix, or net client asset flows will result in a corresponding increase or decrease in management fees. Our investment advisory contracts are generally terminable at any time or on notice of 30 days or less. Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures for a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance. In addition, as Lazard’s AUM includes significant amounts of assets that are denominated in currencies other than U.S. Dollars, changes in the value of the U.S. Dollar relative to foreign currencies will impact the value of Lazard’s AUM and the overall amount of management fees generated by the AUM. Fees vary with the type of assets managed and the vehicle in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.

Current wording

Lazard’s Asset Management segment principally includes LAM, LFG, LFB and the Edgewater Funds (“Edgewater”). Asset Management net revenue is derived from fees for investment management and advisory services provided to clients. As noted above, the main driver of Asset Management net revenue is the level and product mix of AUM, which is generally influenced by the performance of the global equity markets and, to a lesser extent, fixed income markets as well as Lazard’s investment performance, which impacts its ability to successfully attract and retain assets. As a result, fluctuations (including timing thereof) in financial markets and client asset inflows and outflows for any reason have a direct effect on Asset Management net revenue and operating income. Asset Management fees are generally based on the level of AUM measured daily, monthly or quarterly, and an increase or reduction in AUM, due to market price fluctuations, currency fluctuations, changes in product mix, or net client asset flows will result in a corresponding increase or decrease in management fees. Our investment advisory contracts are generally terminable at any time or on notice of 30 days or less. Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures for a number of reasons, including investment performance, changes in prevailing interest rates and financial market performance. Moreover, it is possible that awarded institutional mandates may not be funded in the amounts and at the times initially anticipated, or at all. In addition, as Lazard’s AUM includes significant amounts of assets that are denominated in currencies other than U.S. Dollars, changes in the value of the U.S. Dollar relative to foreign currencies will impact the value of Lazard’s AUM and the overall amount of management fees generated by the AUM. Fees vary with the type of assets managed and the vehicle in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.

Previous wording

Our operating expenses also include “non-compensation expense”, which includes costs for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services, and other expenses. Our occupancy costs represent a significant portion of our aggregate operating expenses and are subject to change from time to time, particularly as leases for real property expire and are renewed or replaced with new, long-term leases for the same or other real property.

Current wording

Our operating expenses also include “non-compensation expense”, which includes costs for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services, and other expenses. Our occupancy costs represent a significant portion of our aggregate operating expenses and are subject to change from time to time, particularly as leases for real property expire and are renewed or replaced with new, long-term leases for the same or other real property. Our operating expenses also include our “benefit pursuant to tax receivable agreement obligation”.

Previous wording

We believe that “adjusted non-compensation expense”, a non-GAAP measure, when presented in conjunction with measures prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), provides a meaningful and useful basis for our investors to assess our operating results. For calculations with respect to “adjusted non-compensation expense”, see the table under “Consolidated Results of Operations” below. Our operating expenses also include our “benefit pursuant to tax receivable agreement”.

Current wording

We believe that “adjusted non-compensation expense”, a non-GAAP measure, when presented in conjunction with measures prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), provides a meaningful and useful basis for our investors to assess our operating results. For calculations with respect to “adjusted non-compensation expense”, see the table under “Consolidated Results of Operations” below.

Previous wording

Lazard, Inc. is subject to U.S. federal income taxes on all of its income and, through its subsidiaries, is also subject to state and local taxes on its income apportioned to various state and local jurisdictions. Lazard Group operates principally through subsidiary corporations, including through those domiciled outside the U.S., that are subject to local income taxes in foreign jurisdictions. In addition, Lazard Group is subject to Unincorporated Business Tax (“UBT”) attributable to its operations apportioned to New York City.

Current wording

Lazard, Inc. is subject to U.S. federal income taxes on all of its income and, through its subsidiaries, is also subject to state and local taxes on its income apportioned to various state and local jurisdictions. Lazard Group LLC operates principally through subsidiary corporations, including through those domiciled outside the U.S., that are subject to local income taxes in foreign jurisdictions. In addition, Lazard Group LLC is subject to Unincorporated Business Tax attributable to its operations apportioned to New York City.

Previous wording

Additionally, the Organization for Economic Cooperation and Development (the “OECD”) reached agreement among various countries, including the EU member states, to establish a 15% minimum tax on certain multinational companies, commonly called “Pillar Two”. Many countries continue to announce changes in their tax laws and regulations to implement the OECD Pillar Two proposals. Lazard is continuing to evaluate the potential impact on future periods of the Pillar Two proposals, as new guidance becomes available.

Current wording

Additionally, the Organization for Economic Cooperation and Development (the “OECD”) reached agreement among various countries, including the EU member states, to establish a 15% minimum tax on certain multinational companies, commonly called “Pillar Two”. We are continuing to monitor Pillar Two legislative developments and their impact on future periods.

Previous wording

Noncontrolling interests primarily consist of (i) amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own, (ii) profits interest participation rights, (iii) consolidated VIE interests held by employees and (iv) Lazard Growth Acquisition Corp I (“LGAC”) interests through February 2023. See Notes 15 and 24 of Notes to Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs.

Current wording

Noncontrolling interests primarily consist of (i) amounts related to Edgewater’s management vehicles that the Company is deemed to control but not own, (ii) profits interest participation rights and (iii) consolidated VIE interests held by employees. See Notes 15 and 24 of Notes to Consolidated Financial Statements for information regarding the Company’s noncontrolling interests and consolidated VIEs.

Previous wording

(a)Revenue or loss related to the consolidation of noncontrolling interests and similar arrangements are excluded from adjusted net revenue because the Company has no economic interest in such amounts.

Current wording

(a)Revenue related to the consolidation of noncontrolling interests and similar arrangements are excluded from adjusted net revenue because the Company has no economic interest in such amounts.

Previous wording

(e)Represents losses associated with the closing of certain offices as part of the cost-saving initiatives, including the reclassification of currency translation adjustments to earnings from accumulated other comprehensive losses in the years ended December 31, 2024 and 2023 and transactions related to foreign currency exchange in the year ended December 31, 2023.

Current wording

(e)Represents losses associated with the closing of certain offices as part of the cost-saving initiatives, primarily consisting of the reclassification of currency translation adjustments to earnings from accumulated other comprehensive losses in the years ended December 31, 2024 and 2023 and transactions related to foreign currency exchange in the year ended December 31, 2023.

Previous wording

(g)Adjusted net revenue is a non-GAAP measure.

Current wording

(h)Adjusted net revenue is a non-GAAP measure.

Previous wording

(d)Represents expenses associated with senior management transition reflecting the departure of certain executive officers.

Current wording

(c)Represents expenses associated with the departure of certain executive officers.

Previous wording

(c)Represents estimated statutory profit-sharing expenses associated with the sale of an owned office building.

Current wording

(d)Represents estimated statutory profit-sharing expenses associated with the sale of an owned office building.

Previous wording

(d)Adjusted non-compensation expense and adjusted non-compensation expense, as a percentage of adjusted net revenue are non-GAAP measures.

Current wording

(c)Adjusted non-compensation expense and adjusted non-compensation expense, as a percentage of adjusted net revenue are non-GAAP measures.

Previous wording

The Company reported net income attributable to Lazard, Inc. of $280 million, as compared to net loss attributable to Lazard, Inc. of $75 million in 2023.

Current wording

The Company reported net income attributable to Lazard, Inc. of $237 million, as compared to net income attributable to Lazard, Inc. of $280 million in 2024.

Previous wording

Net revenue increased $536 million, or 21%, with adjusted net revenue increasing $450 million, or 18%, as compared to 2023. Fee revenue from investment banking and other advisory activities increased $363 million, or 26%, as compared to 2023. Asset management fees, including incentive fees, increased $37 million, or 3%, as compared to 2023. In the aggregate, interest income, other revenue and interest expense increased $136 million, as compared to 2023, primarily due to a gain on sale of property of $114 million in 2024 as compared to losses incurred from the impairment of equity method investments and the liquidation of LGAC in 2023. This increase was partially offset by lower gains in 2024 as compared to 2023 attributable to investments held in connection with LFI.

Current wording

Net revenue increased $47 million, or 2%, with adjusted net revenue increasing $140 million, or 5%, as compared to 2024. Investment banking and other advisory fees increased $73 million, or 4%, as compared to 2024. Asset management fees, including incentive fees, increased $81 million, or 7%, as compared to 2024. In the aggregate, interest income, other revenue and interest expense decreased $107 million, or 56%, as compared to 2024, primarily due to a gain on the sale of an owned office building of $114 million in 2024.

Previous wording

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $1,903 million, an increase of $201 million, or 12%, as compared to $1,703 million in 2023. The ratio of adjusted compensation and benefits expense to adjusted net revenue was 65.9% for 2024, as compared to 69.8% for 2023.

Current wording

Adjusted compensation and benefits expense (which excludes certain items and which we believe allows for improved comparability between periods, as described above) was $1,985 million, an increase of $81 million, or 4%, as compared to $1,903 million in 2024. The ratio of adjusted compensation and benefits expense to adjusted net revenue was 65.5% for 2025, as compared to 65.9% for 2024.

Previous wording

Adjusted non-compensation expense increased $11 million, or 5%, as compared to 2023, primarily due to increased marketing and business development and technology and information services expenses.

Current wording

Non-compensation expense increased $34 million, or 5%, as compared to 2024. Adjusted non-compensation expense increased $38 million, or 7%, as compared to 2024. Such increases in non-compensation expense and adjusted non-compensation expense were primarily due to increased marketing and business development, fund administration and outsourced services and technology and information services expenses. The ratio of adjusted non-compensation expense to adjusted net revenue was 20.2% for 2025, as compared to 19.9% for 2024.

Previous wording

Adjusted operating income increased $245 million, or 148%, as compared to 2023, and as a percentage of adjusted net revenue was 14.2%, as compared to 6.8% in 2023.

Current wording

Adjusted operating income increased $21 million, or 5%, as compared to 2024, and as a percentage of adjusted net revenue was 14.3%, as compared to 14.2% in 2024.

Previous wording

The provision (benefit) for income taxes reflects an effective tax rate of 25.8%, as compared to 28.3% in 2023. See Note 19 of Notes to Consolidated Financial Statements.

Current wording

The provision for income taxes reflects an effective tax rate of 23.4%, as compared to 25.8% in 2024. See Note 19 of Notes to Consolidated Financial Statements.

Previous wording

Net income attributable to noncontrolling interests decreased $11 million as compared to 2023. See Note 15 of Notes to Consolidated Financial Statements.

Current wording

Net income attributable to noncontrolling interests increased $7 million as compared to 2024.

Previous wording

Adjusted net revenue, adjusted operating income, and adjusted operating income as a percentage of adjusted net revenue, are non-GAAP measures in the tables below.

Current wording

Adjusted net revenue, adjusted operating income (loss), and adjusted operating income as a percentage of adjusted net revenue, are non-GAAP measures in the tables below.

Previous wording

The geographical distribution of Financial Advisory adjusted net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory adjusted net revenue, which are located in the Americas

Current wording

The geographical distribution of Financial Advisory adjusted net revenue is set forth below in percentage terms and is based on the Lazard offices that generate Financial Advisory adjusted net revenue and therefore may not be reflective of the geography in which the clients are located.

Previous wording

Financial Advisory net revenue increased $371 million, or 27%, as compared to 2023. Financial Advisory adjusted net revenue increased $374 million, or 28%, as compared to 2023. The increase in Financial Advisory net revenue and adjusted net revenue was primarily driven by an increased number of completed M&A transactions with values greater than $500 million as compared to 2023.

Current wording

Financial Advisory net revenue increased $78 million, or 4%, as compared to 2024. Financial Advisory adjusted net revenue increased $94 million, or 5%, as compared to 2024. The increase in Financial Advisory net revenue and adjusted net revenue was primarily attributable to an increase in the average fee for completed non-M&A transactions as compared to 2024.

Previous wording

Prices of equity and debt securities and other instruments that comprise our AUM are provided by well-recognized, independent, third-party vendors. Such third-party vendors rely on prices provided by external pricing services which are obtained from recognized exchanges or markets, or, for certain fixed income securities, from evaluated bids or other similarly sourced price.

Current wording

Prices of equity and debt securities and other instruments that comprise our AUM are provided by independent, third-party vendors. Such third-party vendors rely on prices provided by external pricing services which are obtained from recognized exchanges or markets, or, for certain fixed income securities, from evaluated bids or other similarly sourced prices.

Previous wording

Total AUM at December 31, 2024 was $226 billion, a decrease of $20 billion, or 8%, as compared to total AUM of $247 billion at December 31, 2023, due to net outflows and foreign exchange depreciation, partially offset by market appreciation. Average AUM for the year ended December 31, 2024 increased $10 billion, or 4%, as compared to 2023.

Current wording

Total AUM at December 31, 2025 was $254 billion, an increase of $28 billion, or 12%, as compared to total AUM of $226 billion at December 31, 2024, due to market and foreign exchange appreciation, partially offset by net outflows. Average AUM for the year ended December 31, 2025 increased $4 billion, or 2%, as compared to 2024.

Previous wording

Our top ten clients accounted for 32%, 29% and 27% of our total AUM at December 31, 2024, 2023 and 2022, respectively.

Current wording

Our top ten clients accounted for 24%, 32% and 29% of our total AUM at December 31, 2025, 2024 and 2023, respectively.

Previous wording

As of December 31, 2024, approximately 82% of our AUM was managed on behalf of institutional and intermediary clients, including corporations, labor unions, pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors compared to 85% as of December 31, 2023. As of December 31, 2024, approximately 18% of our AUM was managed on behalf of individual client relationships compared to 15% as of December 31, 2023.

Current wording

As of both December 31, 2025 and 2024, approximately 82% of our AUM was managed on behalf of institutional and intermediary clients, including corporations, labor unions, pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors. As of both December 31, 2025 and 2024, approximately 18% of our AUM was managed on behalf of individual client relationships.

Previous wording

As of December 31, 2024, AUM with foreign currency exposure represented approximately 62% of our total AUM as compared to 64% at December 31, 2023. AUM with foreign currency exposure generally declines in value with the strengthening of the U.S. Dollar and increases in value as the U.S. Dollar weakens, with all other factors held constant.

Current wording

As of December 31, 2025, AUM with foreign currency exposure represented approximately 67% of our total AUM as compared to 62% at December 31, 2024. AUM with foreign currency exposure generally declines in value with the strengthening of the U.S. Dollar and increases in value as the U.S. Dollar weakens, with all other factors held constant.

Previous wording

Net flows were primarily driven by outflows in Global, Local and Multi-Regional Equity platforms and Emerging Markets Fixed Income platform.

Current wording

Net flows were primarily driven by the Local, Multi-Regional and Global Equity platforms.

Previous wording

We use adjusted net revenue, a non-GAAP measure, for comparison of revenues between periods.

Current wording

(b) Adjusted net revenue, adjusted operating income, and adjusted operating income as a percentage of adjusted net revenue are non-GAAP measures.

Previous wording

Asset Management net revenue increased $35 million, or 3%, as compared to 2023. Asset Management adjusted net revenue increased $32 million, or 3%, as compared to 2023. Management feesand other revenue, on an adjusted basis, was $1,057 million, an increase of $19 million, or 2%, as compared to$1,038 million in 2023. Incentive fees, on an adjusted basis, were$43 million, an increase of $13 million, as compared to$30 million in 2023.

Current wording

Asset Management net revenue increased $88 million, or 7%, as compared to 2024. Asset Management adjusted net revenue increased $66 million, or 6%, as compared to 2024. Management feesand other revenue, on an adjusted basis, was $1,107 million, an increase of $50 million, or 5%, as compared to$1,057 million in 2024. Incentive fees, on an adjusted basis, were$59 million, an increase of $16 million, as compared to$43 million in 2024.

Previous wording

Asset Management adjusted operating income was $267 million, a decrease of $37 million, or 12%, as compared to adjusted operating income of $303 million in 2023, and as a percentage of adjusted net revenue was 24.2%, as compared to 28.4% in 2023.

Current wording

Asset Management adjusted operating income was $269 million, an increase of $3 million, or 1%, as compared to adjusted operating income of $267 million in 2024, and as a percentage of adjusted net revenue was 23.1%, as compared to 24.2% in 2024.

Previous wording

Adjusted compensation and benefits expense, including centrally managed costs, increased $25 million, or 18%, as compared to 2023, primarily associated with increased total firm adjusted net revenue.

Current wording

Adjusted compensation and benefits expense, including centrally managed costs, increased $4 million, or 3%, as compared to 2024.

Previous wording

Adjusted non-compensation expense, including centrally managed costs, decreased $16 million, or 10%, as compared to 2023, primarily due to decreased professional services and occupancy and equipment expenses.

Current wording

Adjusted non-compensation expense, including centrally managed costs, increased $2 million, or 1%, as compared to 2024.