Moelis (MC) Q3 2026 Earnings Report

The call was strongly positive overall. The firm reported double-digit revenue growth, record nine-month revenue and transaction fees, strong M&A and capital structure advisory performance, record pipeline levels, significant recruiting progress, expanding PCA capabilities, and a strong cash position with no debt. Offsetting issues included softer capital markets revenue, muted sponsor activity, higher non-compensation expenses, potential future tax-rate pressure, unresolved market volatility, and early-stage PCA revenue. Management remained constructive because of strong client demand, diversified capabilities, and a growing pipeline.

Management expects full-year non-compensation expense growth to be approximately 19% over last year, with non-compensation costs in the high teens, and expects to exhibit some comp leverage and a reduction in the compensation ratio by the time the year finishes up. For 2027, management is not providing any real direction, although technology expense could continue to grow, while real estate and other line items will not grow as much. The expected impact of Section 162(m) could add a few points to the tax rate, give or take, a point or two on either side. Management expects traditional restructurings to increase over time, believes there is a meaningful PCA pipeline building for next year, expects the remaining 11 Managing Directors to join over the remainder of 2026 and into 2027, and believes a fair amount of software liability management is likely to happen over the next 12 to 18 months.