Perella Weinberg Partners

Previous wording

Non-controlling interests represent the ownership interests in PWP OpCo held by holders other than Perella Weinberg Partners, which are current and former working partners and the ILP. Profits and losses of PWP OpCo are allocated to the non-controlling interests in proportion to their ownership interest regardless of their basis, with an exception for certain equity-based compensation expense which was fully attributed to non-controlling interests prior to the Merger.

Current wording

Non-controlling interests represent the ownership interests in PWP OpCo held by holders other than Perella Weinberg Partners, which are current and former working partners. Profits and losses of PWP OpCo are allocated to the non-controlling interests in proportion to their ownership interest regardless of their basis, with an exception for certain equity-based compensation expense which was fully attributed to non-controlling interests prior to the Merger.

Previous wording

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

Current wording

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

Previous wording

Revenues were $272.0 million for the three months ended June 30, 2024 as compared with $165.5 million for the three months ended June 30, 2023, representing an increase of 64%. The increase was attributable to increased mergers and acquisition and financing and capital solutions activity, driven by larger transactions and related fee events across the business.

Current wording

Revenues were $278.2 million for the three months ended September 30, 2024 as compared with $139.0 million for the three months ended September 30, 2023, representing an increase of 100%. The increase was attributable to increased mergers and acquisition and financing and capital solutions activity, driven by larger transactions and related fee events across the business.

Previous wording

Revenues were $374.1 million for the six months ended June 30, 2024 as compared with $297.0 million for the six months ended June 30, 2023, representing an increase of 26%. Similar to the quarter-to-date period, revenues attributed to mergers and acquisition and financing and capital solutions activity were higher year-over-year, driven by larger transactions and related fee events across the business.

Current wording

Revenues were $652.4 million for the nine months ended September 30, 2024 as compared with $436.0 million for the nine months ended September 30, 2023, representing an increase of 50%. Similar to the quarter-to-date period, revenues attributed to mergers and acquisition and financing and capital solutions activity were higher year-over-year, driven by larger transactions and related fee events across the business.

Previous wording

For the three months ended June 30, 2024, total compensation and benefits expenses were $310.5 million, an increase of 109% compared with $148.4 million for the three months ended June 30, 2023. The substantial increase in total compensation and benefits expenses was primarily the result of the Vesting Acceleration of the Professional Partners Awards that resulted in $130.0 million of equity-based compensation expense for those awards for the three months ended June 30, 2024, compared to $15.2 million of equity-based compensation expense in the prior year period for those same awards. The overall increase was also driven by higher equity-based compensation expense from the phase-in of our annual award grants and by a higher bonus accrual in the current year period due to a higher revenue base.

Current wording

For the three months ended September 30, 2024, total compensation and benefits expenses were $202.3 million, an increase of 58% compared with $127.8 million for the three months ended September 30, 2023. The increase in total compensation and benefits expenses was primarily the result of a higher bonus accrual in the current year period due to a higher revenue base. This increase was partially offset by a decrease in equity-based compensation expense driven by the Vesting Acceleration in the second quarter of 2024 which fully expensed certain awards that were still being amortized in the prior year period.

Previous wording

For the six months ended June 30, 2024, total compensation and benefits expenses were $425.9 million, an increase of 60% compared with $266.1 million for the six months ended June 30, 2023. Consistent with the three months ended period, the increase in total compensation and benefits expenses was primarily the result of higher equity-based compensation expense as well as a higher bonus accrual due to increased revenues. The Vesting Acceleration resulted in $144.0 million of equity-based compensation related to the Professional Partners Awards as compared to $32.3 million in the prior year period for those same awards.

Current wording

For the nine months ended September 30, 2024, total compensation and benefits expenses were $628.2 million, an increase of 60% compared with $393.8 million for the nine months ended September 30, 2023. The increase in total compensation and benefits expenses was primarily the result of a higher bonus accrual due to increased revenues as well as higher year-to-date equity-based compensation expense. The Vesting Acceleration resulted in $144.2 million of equity-based compensation related to the Professional Partners Awards as compared to $46.9 million in the prior year period for those same awards.

Previous wording

For the three months ended June 30, 2024, total non-compensation expenses were $43.8 million, an increase of 13% compared with $38.9 million for the three months ended June 30, 2023. The increase in non-compensation expenses was primarily the result of increased legal and consulting spend, bad debt expense, and higher depreciation expense due to new assets being placed in service subsequent to the second quarter of 2023 related to the renovation of the New York office space. These increases were partially offset by lower rent costs and reduced VAT expense.

Current wording

For the three months ended September 30, 2024, total non-compensation expenses were $40.0 million, an increase of 6% compared with $37.9 million for the three months ended September 30, 2023. The increase in non-compensation expenses was primarily the result of higher depreciation expense, consulting costs, bad debt expense, and certain technology costs. The increase in depreciation is driven by leasehold assets placed in service after the third quarter of 2023 related to the renovation of the New York office space. The overall increase was partially offset by lower rent costs and reduced legal spend.

Previous wording

For the six months ended June 30, 2024, total non-compensation expenses were $84.1 million, an increase of 12% compared with $75.4 million for the six months ended June 30, 2023. Consistent with the three months ended period, the increase in non-compensation expenses was primarily the result of increased legal and consulting spend, bad debt expense, as well as higher depreciation expense due to the timing of leasehold assets being placed in service from our New York and London office renovation and relocation. These increases were partially offset by reduced rent costs, VAT expense, and D&O insurance costs.

Current wording

For the nine months ended September 30, 2024, total non-compensation expenses were $124.1 million, an increase of 10% compared with $113.3 million for the nine months ended September 30, 2023. The increase in non-compensation expenses was primarily the result of increased depreciation expense driven by renovation-related leasehold assets, legal and consulting spend, and bad debt expense. These increases were partially offset by reduced rent costs, VAT expense, and D&O insurance costs.

Previous wording

For the three months ended June 30, 2024, non-operating income was $0.7 million compared with non-operating expenses of $(1.1) million for the three months ended June 30, 2023. In the current period, non-operating income included interest income partially offset by a loss on fixed asset disposals and a net loss from foreign exchange rate fluctuations. In comparison to the current year, non-operating expenses for the three months ended June 30, 2023 included slightly lower interest income, a larger net loss from foreign exchange rate fluctuations, and a non-operating loss on investment. For both periods, the impact of foreign exchange rate fluctuations was largely related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries.

Current wording

For the three months ended September 30, 2024, non-operating income was $0.5 million compared with non-operating income of $2.8 million for the three months ended September 30, 2023. In the current period, non-operating income included interest income almost fully offset by a net loss from foreign exchange rate fluctuations. Non-operating income for the three months ended September 30, 2023 included interest income and a net gain from foreign exchange rate fluctuations, partially offset by a $1.25 million charge from a previously reported settlement reached with the staff of the SEC relating to recordkeeping of business communications on “off-channel” messaging applications (the “Settlement”). For both periods, the impact of foreign exchange rate fluctuations was largely related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries.

Previous wording

For the six months ended June 30, 2024, non-operating income was $3.4 million compared with non-operating expenses of $(0.5) million for the six months ended June 30, 2023. In the current period, non-operating income included interest income, which increased from the prior year due to higher interest rates and larger interest-bearing cash balances. Non-operating expenses in the prior year period primarily included interest income offset by a non-operating loss on investment as well as a net loss from foreign exchange rate fluctuations as compared to a nominal net gain during the six months ended June 30, 2024. For both periods, the impact of foreign exchange rate fluctuations was largely related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries.

Current wording

For the nine months ended September 30, 2024, non-operating income was $3.9 million compared with non-operating income of $2.3 million for the nine months ended September 30, 2023. In the current period, non-operating income included interest income, which increased from the prior year due to higher interest rates and larger interest-bearing cash balances, partially offset by a net loss from foreign exchange rate fluctuations. Non-operating income in the prior year period primarily included interest income, which was partially offset by a non-operating loss on investment, the $1.25 million charge recognized by the Company related to the Settlement, as well as a smaller net loss from foreign exchange rate fluctuations as compared to the current year. For both periods, the impact of foreign exchange rate fluctuations was largely related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries.

Previous wording

The Company’s income tax benefit and effective tax rate were $(0.6) million and 0.8%, respectively, for the three months ended June 30, 2024 compared to an income tax benefit and effective tax rate of $(4.5) million and 19.9%, respectively, for the three months ended June 30, 2023. The change in the effective tax rate was primarily due to the relative size of our permanent differences in relation to the pre-tax loss in the respective periods.

Current wording

The Company’s income tax expense and effective tax rate were $7.5 million and 20.7%, respectively, for the three months ended September 30, 2024 compared to an income tax benefit and effective tax rate of $(0.2) million and 0.8%, respectively, for the three months ended September 30, 2023. The change in the effective tax rate was primarily due to the relative size of our permanent differences in relation to the pre-tax income (loss) in the respective periods and also included the recognition of tax benefits associated with the appreciation in our share price upon vesting of RSUs above the original grant price during the three months ended September 30, 2024.

Previous wording

The Company’s income tax expense and effective tax rate were $18.5 million and (13.9)%, respectively, for the six months ended June 30, 2024 compared to an income tax expense and effective tax rate of $0.7 million and (1.7)%, respectively, for the six months ended June 30, 2023. The change in the effective tax rate was primarily due to the relative size of our permanent differences in relation to the pre-tax loss in the respective periods, which was partially offset by the recognition of tax benefits associated with the appreciation in our share price upon vesting of RSUs above the original grant price during the six months ended June 30, 2024.

Current wording

The Company’s income tax expense and effective tax rate were $26.0 million and (27.0)%, respectively, for the nine months ended September 30, 2024 compared to an income tax expense and effective tax rate of $0.6 million and (0.8)%, respectively, for the nine months ended September 30, 2023. The change in the effective tax rate was primarily due to the relative size of our permanent differences in relation to the pre-tax loss in the respective periods and also included the recognition of tax benefits associated with the appreciation in our share price upon vesting of RSUs above the original grant price during the nine months ended September 30, 2024.

Previous wording

We regularly monitor our liquidity position, including cash and cash equivalents, working capital assets and liabilities, commitments and other liquidity requirements. Our primary sources of liquidity are generally our cash balances, investments in short-term marketable debt securities, the net cash generated from operations, and the available borrowing capacity under our Revolving Credit Facility. Our primary cash needs are for working capital, operating expenses (including cash compensation for our employees), repurchasing shares of the Company’s Class A common stock, withholding tax payments for vested PWP Incentive Plan Awards, cash-settled exchanges of PWP OpCo Units, income taxes, dividends and distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments, and strategic investments. We generally pay a significant portion of our annual cash incentive compensation during the first quarter of each calendar year with respect to the prior year’s results. Therefore, levels of cash and/or investments in short-term marketable debt securities generally decline during the first quarter and build over the remainder of the year.

Current wording

We regularly monitor our liquidity position, including cash and cash equivalents, working capital assets and liabilities, commitments and other liquidity requirements. Our primary sources of liquidity are generally our cash and cash equivalent balances, investments in short-term marketable debt securities, the net cash generated from operations, and the available borrowing capacity under our Revolving Credit Facility. Our primary cash needs are for working capital, operating expenses (including cash compensation for our employees), repurchasing shares of the Company’s Class A common stock, withholding tax payments for vested PWP Incentive Plan Awards, cash-settled exchanges of PWP OpCo Units, income taxes, dividends and distributions, capital expenditures, making payments pursuant to the tax receivable agreement, commitments, and strategic investments. We generally pay a significant portion of our annual cash incentive compensation during the first quarter of each calendar year with respect to the prior year’s results. Therefore, levels of cash and cash equivalents and/or investments in short-term marketable debt securities generally decline during the first quarter and build over the remainder of the year.

Previous wording

Our current assets are primarily composed of cash, receivables related to fees earned from providing advisory services, certain prepaid expenses and certain amounts due from related parties. Our current liabilities are primarily composed of accrued employee compensation, accounts payable and other accrued expenses. Cash includes cash held at banks, including interest-bearing money market accounts. As of June 30, 2024 and December 31, 2023, we had cash balances of $185.3 million and $247.2 million, respectively, and as of December 31, 2023, investments in short-term marketable debt securities, consisting entirely of U.S. Treasury securities, of $91.2 million.

Current wording

Our current assets are primarily composed of cash and cash equivalents, investments in short-term marketable securities, receivables related to fees earned from providing advisory services, certain prepaid expenses and certain amounts due from related parties. Our current liabilities are primarily composed of accrued employee compensation, accounts payable and other accrued expenses. Cash and cash equivalents include cash held at banks, including interest-bearing money market accounts, and short-term highly liquid investments that have original maturities of three months or less from the date of purchase. We had cash balances of $240.1 million and $247.2 million as of September 30, 2024 and December 31, 2023, respectively, and cash equivalents of $20.1 million as of September 30, 2024, which included investments in U.S. Treasury securities. As of December 31, 2023, we held no cash equivalents. Additionally, as of September 30, 2024 and December 31, 2023, the Company held U.S. Treasury securities of $74.9 million and $91.2 million, respectively, which were classified as Investments in short-term marketable debt securities within the condensed consolidated financial statements.

Previous wording

Our liquidity is highly dependent upon cash receipts from clients, which generally require the successful completion of transactions. Accounts receivable typically have net terms of 30 days. Accounts receivable were $90.5 million, net of a $1.2 million allowance for credit losses balance as of June 30, 2024. Accounts receivable were $47.8 million, net of a $2.2 million allowance for credit losses balance as of December 31, 2023.

Current wording

Our liquidity is highly dependent upon cash receipts from clients, which generally require the successful completion of transactions. Accounts receivable typically have net terms of 30 days. Accounts receivable, net of allowance for credit losses were $87.5 million and $47.8 million as of September 30, 2024 and December 31, 2023, respectively.

Previous wording

Based on current market conditions, we believe that our cash on hand, net cash generated from operations and the available borrowing capacity under our Revolving Credit Facility will be sufficient to meet our operating needs and commitments for the next twelve months; however, if these sources of liquidity are not sufficient, we may seek additional debt or equity financing.

Current wording

Based on current market conditions, we believe that our cash on hand, cash equivalents, investments in short-term marketable debt securities, net cash generated from operations, and the available borrowing capacity under our Revolving Credit Facility will be sufficient to meet our operating needs and commitments for the next twelve months; however, if these sources of liquidity are not sufficient, we may seek additional debt or equity financing.

Previous wording

Operating activities resulted in a net cash outflow of $116.3 million primarily attributable to an increase in client receivables and cash operating expense outflows, including the settlement of liability-classified ACUs during the second quarter and discretionary bonuses paid during the first quarter of 2024 with respect to prior year compensation expense.

Current wording

Operating activities resulted in a net cash inflow of $83.9 million primarily attributable to cash collections from clients partially offset by an overall increase in client receivables and by cash operating expense outflows, including the settlement of liability-classified ACUs during the second quarter and discretionary bonuses paid during the first quarter of 2024 with respect to prior year compensation expense.

Previous wording

Investing activities resulted in a net cash inflow of $76.5 million attributable to the maturation of investments in U.S. Treasury securities partially offset by capital expenditures related to office space renovations.

Current wording

Investing activities resulted in a net cash inflow of $0.6 million attributable to the maturation of investments in U.S. Treasury securities, which was almost fully offset by the purchase of additional investments and capital expenditures related to office space renovations.

Previous wording

Financing activities resulted in a net cash outflow of $23.0 million primarily due to withholding tax payments for vested PWP Incentive Plan Awards and equity-classified ACUs, the cash settlement of exchanges of PWP OpCo Units, share repurchases, dividend payments, and distributions to partners, all of which was partially offset by the issuance of 5,750,000 shares of Class A common stock for net proceeds of $66.0 million.

Current wording

Financing activities resulted in a net cash outflow of $74.4 million primarily due to withholding tax payments for vested PWP Incentive Plan Awards and equity-classified ACUs, the cash settlement of exchanges of PWP OpCo Units, share repurchases, dividend payments, and distributions to partners, all of which was partially offset by the issuance of 5,750,000 shares of Class A common stock for net proceeds of $66.0 million.

Previous wording

Operating activities resulted in a net cash outflow of $50.4 million primarily attributable to cash operating expense outflows, including discretionary bonuses paid during the first quarter of 2023 with respect to prior year compensation expense, partially offset by cash collections from clients.

Current wording

Operating activities resulted in a net cash outflow of $12.5 million primarily attributable to cash operating expense outflows, including discretionary bonuses paid during the first quarter of 2023 with respect to prior year compensation expense, partially offset by cash collections from clients.

Previous wording

Investing activities resulted in a net cash inflow of $56.5 million largely attributable to the maturation of investments in U.S. Treasury securities, net of additional investments in U.S. Treasury securities as well as capital expenditures related to office space renovations.

Current wording

Investing activities resulted in a net cash inflow of $26.3 million largely attributable to the maturation of investments in U.S. Treasury securities, net of additional investments in U.S. Treasury securities as well as capital expenditures related to office space renovations.

Previous wording

Financing activities resulted in a net cash outflow of $50.1 million primarily related to the repurchase of shares pursuant to the stock repurchase program, withholding tax payments for vested PWP Incentive Plan Awards, distributions to partners, and dividend payments.

Current wording

Financing activities resulted in a net cash outflow of $60.0 million primarily related to the repurchase of shares pursuant to the stock repurchase program, withholding tax payments for vested PWP Incentive Plan Awards, distributions to partners, and dividend payments.

Previous wording

Our board of directors approved a stock repurchase program under which we are authorized to repurchase up to $200.0 million of our Class A common stock with no requirement to purchase any minimum number of shares. During the six months ended June 30, 2024, we repurchased 1,000,000 founder shares at a purchase price of $15.00 per share. As of June 30, 2024, $93.8 million remains of the $200.0 million authorized for share repurchases.

Current wording

Our board of directors approved a stock repurchase program under which we are authorized to repurchase up to $200.0 million of our Class A common stock with no requirement to purchase any minimum number of shares. During the nine months ended September 30, 2024, we repurchased 1,000,000 founder shares at a purchase price of $15.00 per share. As of September 30, 2024, $93.8 million remains of the $200.0 million authorized for share repurchases.

Previous wording

As of June 30, 2024, we had an amount due of $33.8 million pursuant to the tax receivable agreement, which represents management’s best estimate of the amounts currently expected to be owed in connection with the tax receivable agreement for the Business Combination and subsequent exchanges made to date. See Note 15—Related Party Transactions in the notes to the condensed consolidated financial statements included elsewhere in the Form 10-Q for further information as well as the expected timing of payments.

Current wording

As of September 30, 2024, we had an amount due of $46.2 million pursuant to the tax receivable agreement, which represents management’s best estimate of the amounts currently expected to be owed in connection with the tax receivable agreement for the Business Combination and subsequent exchanges made to date. See Note 15—Related Party Transactions in the notes to the condensed consolidated financial statements included elsewhere in the Form 10-Q for further information as well as the expected timing of payments.

Previous wording

We have various non-cancelable operating leases for our office space and certain equipment. As of June 30, 2024, we had $181.5 million of operating lease liabilities. See Note 4—Leases in the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q for further information as well as the expected timing of payments.

Current wording

We have various non-cancelable operating leases for our office space and certain equipment. As of September 30, 2024, we had $188.4 million of operating lease liabilities. See Note 4—Leases in the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q for further information as well as the expected timing of payments.

Previous wording

When we invest our excess cash, we manage our credit risk exposure by holding investments primarily with investment grade credit quality.

Current wording

When we invest our excess cash, we manage our credit risk exposure by holding investments primarily with investment grade credit quality. As of September 30, 2024, the Company held investments of $95.0 million in U.S. Treasury securities with maturities of less than 12 months. Of this amount, $20.1 million is presented in Cash and cash equivalents and $74.9 million is presented in Investments in short-term marketable debt securities on the Condensed Consolidated Statements of Financial Condition.

Previous wording

We are exposed to exchange rate risk as a result of having foreign subsidiaries with non-U.S. dollar functional currencies as well as from entering into transactions and holding monetary assets and liabilities that are not denominated in the functional currency of its operating subsidiaries. Specifically, the reported amounts in our consolidated financial statements may be affected by movements in the rate of exchange between the pound sterling, euro, and Canadian dollar and our reporting currency, the U.S. dollar. For the six months ended June 30, 2024 and 2023, the net impact of non-functional currency related transaction gains (losses) recorded in Other income (expense) on our Condensed Consolidated Statements of Operations was $0.3 million and $(2.2) million, respectively, primarily related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries as the strength of the U.S. dollar fluctuated. For the six months ended June 30, 2024 and 2023, the net impact from the fluctuation of foreign currencies recorded in Foreign currency translation gain (loss) within our Condensed Consolidated Statements of Comprehensive Income (Loss) was $(1.2) million and $3.5 million, respectively. We have not entered into any transactions to hedge our exposure to these foreign currency fluctuations using derivative instruments or other methods but may do so if we deem appropriate in the future. As of June 30, 2024, we held cash balances of $27.4 million in non-U.S. dollar currencies, composed of pound sterling, euros, and Canadian dollars.

Current wording

We are exposed to exchange rate risk as a result of having foreign subsidiaries with non-U.S. dollar functional currencies as well as from entering into transactions and holding monetary assets and liabilities that are not denominated in the functional currency of its operating subsidiaries. Specifically, the reported amounts in our consolidated financial statements may be affected by movements in the rate of exchange between the pound sterling, euro, and Canadian dollar and our reporting currency, the U.S. dollar. For the nine months ended September 30, 2024 and 2023, the net impact of non-functional currency related transaction gains (losses) recorded in Other income (expense) on our Condensed Consolidated Statements of Operations was $(2.4) million and $(0.3) million, respectively, primarily related to U.S. dollar-denominated cash and intercompany receivables held by our foreign subsidiaries as the strength of the U.S. dollar fluctuated. For the nine months ended September 30, 2024 and 2023, the net impact from the fluctuation of foreign currencies recorded in Foreign currency translation gain (loss) on our Condensed Consolidated Statements of Comprehensive Income (Loss) was $2.5 million and $0.7 million, respectively. We have not entered into any transactions to hedge our exposure to these foreign currency fluctuations using derivative instruments or other methods but may do so if we deem appropriate in the future. As of September 30, 2024, we held cash balances of $29.8 million in non-U.S. dollar currencies, composed of pound sterling, euros, and Canadian dollars.