Lazard Ltd. ((LAZ)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Lazard Ltd. recently held its earnings call, revealing a generally positive sentiment driven by strong financial performance in its financial advisory and asset management segments. The company reported record revenues and positive net inflows, although there were some concerns about the potential impact of a U.S. government shutdown on deal timings and challenges with sub-advised funds. Overall, the positive aspects of the earnings call notably outweighed the negatives.
Record Financial Advisory Revenue
Lazard Ltd. reported a record $1.3 billion in financial advisory revenue for the first nine months of 2025. This achievement reflects robust M&A activity across key sectors such as healthcare, industrials, and consumer markets, underscoring the company’s strong position in the financial advisory domain.
Asset Management Revenue Growth
The asset management segment also showed impressive growth, with revenue reaching $827 million for the first nine months of the year. This represents an 8% year-over-year increase in the third quarter, highlighting the firm’s successful strategies in asset management.
Significant Increase in AUM
Lazard’s total Assets Under Management (AUM) saw a significant increase of 17% year-to-date, reaching $265 billion by the end of September 2025. This growth was bolstered by a net inflow of $4.6 billion in the third quarter, demonstrating strong investor confidence in the firm’s asset management capabilities.
Expansion in Financial Advisory
The company expanded its financial advisory capabilities by adding 20 new Managing Directors this year. This strategic move enhances Lazard’s advisory services across various sectors and regions, positioning the firm for continued growth.
Positive Flow in Asset Management
Lazard experienced net positive flows of $1.6 billion year-to-date, with significant inflows into quantitative and emerging market strategies. This positive flow indicates a successful alignment of the firm’s asset management strategies with market demands.
Improved Compensation Ratio
The firm reported an improved compensation expense ratio, reduced to 65.5% from 66% in the same quarter last year. This reduction signifies enhanced operational efficiency and cost management within the company.
Potential Impact of U.S. Government Shutdown
There are concerns that a U.S. government shutdown could delay deal approvals, potentially affecting the timing of Lazard’s financial advisory activities. The company is closely monitoring the situation to mitigate any adverse impacts.
Challenges with Sub-Advised Funds
Lazard continues to face challenges with sub-advised funds, experiencing outflows that are partially offset by inflows into other strategic areas. The firm is working to address these challenges and optimize its fund management strategies.
Forward-Looking Guidance
Looking ahead, Lazard provided guidance that underscores strong performance across its financial advisory and asset management divisions. The company reported total firm-wide revenue of $2.1 billion for the first nine months, with a notable third-quarter revenue increase driven by financial advisory and asset management growth. Lazard emphasized ongoing growth initiatives, including strategic expansions and the addition of new managing directors, projecting a full-year 2025 effective tax rate of around 20%.
In summary, Lazard Ltd.’s earnings call painted a positive picture of the company’s financial health, with record revenues and strong growth in key segments. While there are some concerns about external factors like a potential U.S. government shutdown, the firm’s strategic expansions and improved operational efficiencies position it well for future success.