Moelis Reports Strong Q3 Earnings and Growth

Moelis ((MC)) has held its Q3 earnings call. Read on for the main highlights of the call.

Moelis & Company recently held its earnings call, reflecting a strong financial performance and growth across key segments such as M&A and Capital Markets. The company benefited from a favorable regulatory environment, although challenges in Capital Structure Advisory and potential risks from AI disruption and private credit markets were acknowledged.

Strong Revenue Growth

Moelis reported adjusted revenue of $376 million for Q3 2025 and $1.05 billion for the first nine months, marking impressive increases of 34% and 37% respectively compared to the previous year. This growth underscores the company’s robust financial health and strategic execution.

Record Capital Markets Performance

The Capital Markets segment delivered a standout performance, with year-to-date revenues more than doubling compared to the same period last year. This remarkable achievement highlights the segment’s pivotal role in Moelis’ overall growth strategy.

M&A Activity Surge

Moelis experienced a surge in M&A activity, driven by larger strategic and sponsor transactions. This uptick was supported by a more accommodative regulatory environment, positioning the company favorably in the competitive M&A landscape.

Expansion of Managing Director Count

The firm concluded the quarter with 170 managing directors, having hired 10 new MDs year-to-date. This expansion enhances Moelis’ expertise in key sectors, reinforcing its capacity to drive growth and innovation.

Strong Balance Sheet

Moelis maintained a robust balance sheet with approximately $620 million in cash and liquid investments, and no debt. This financial strength provides the company with flexibility to pursue strategic opportunities and weather potential market challenges.

Private Capital Advisory Growth

The Private Capital Advisory segment showed significant early momentum, and is expected to become a key growth engine for Moelis. This development aligns with the firm’s strategic focus on expanding its advisory capabilities.

Improved Pre-Tax Margin

The company’s adjusted pre-tax margin improved to 22.2% for Q3 and 18.2% for the first nine months, compared to prior year periods. This improvement reflects Moelis’ effective cost management and operational efficiency.

Decline in Capital Structure Advisory

Despite overall revenue growth, Moelis experienced a decline in Capital Structure Advisory due to fewer traditional restructurings. This highlights a challenge within an otherwise strong performance landscape.

Potential Impact of U.S. Government Shutdown

The potential U.S. government shutdown could slow regulatory reviews, potentially affecting deal closing timelines. Moelis is monitoring this situation closely as it could impact future transactions.

Concerns Around AI Disruption

AI is anticipated to disrupt various sectors, creating potential restructuring opportunities but also posing risks. Moelis is aware of these challenges and is preparing to adapt to the evolving technological landscape.

Private Credit Market Concerns

Recent higher profile defaults in the private credit markets pose potential risks, although they are not seen as systemic. Moelis remains vigilant in monitoring these developments to mitigate any adverse impacts.

Forward-Looking Guidance

Moelis provided forward-looking guidance indicating continued revenue growth driven by its M&A and Capital Markets businesses. The firm expects to maintain its strong balance sheet and improve its compensation expense ratio. The announcement of a regular quarterly dividend of $0.65 per share reflects confidence in sustained financial performance.

In summary, Moelis & Company’s earnings call conveyed a positive sentiment with strong financial results and strategic growth across key segments. Despite some challenges, the company is well-positioned to capitalize on future opportunities, supported by a robust balance sheet and a growing team of managing directors.