Lazard Reports Strong Q2 Earnings, Driven by Financial Advisory and Asset Management Growth

Lazard Ltd. reported strong Q2 earnings with record Financial Advisory revenue of $861mln and Asset Management revenue of $533mln. The company achieved several new mandates and increased private capital engagement, but faced challenges such as a higher tax rate and compensation expense ratio, as well as high gross outflows in Asset Management. Despite these challenges, Lazard remains optimistic about its future, expecting private equity to play a bigger role in M&A.

Lazard Ltd. (LAZ) reported robust financial results for the second quarter of 2025, with significant growth in its Financial Advisory and Asset Management segments. The company's adjusted net revenue for the first half of 2025 reached $1.4 billion, driven by strong performance in Financial Advisory, which saw adjusted net revenue of $861 million, and Asset Management, which recorded adjusted net revenue of $533 million. This growth was supported by new mandates and increased private capital engagement, with the company reporting record revenue in France and Germany.

However, Lazard faced several challenges during the period. The adjusted effective tax rate for the second quarter was 36.5%, significantly higher than the 14% from the same quarter in 2024. Additionally, the compensation expense ratio remained high at 65.5%, and high gross outflows were observed in the Asset Management business, indicating ongoing client attrition. Despite these challenges, Lazard remains optimistic about its future, expecting private equity to play a bigger role in M&A.

The company's CEO, Peter Orszag, noted that while the advisory business is diversifying beyond M&A, the environment is increasingly constructive. He also highlighted changes in sales and distribution teams and increased clarity and accountability as key factors driving distribution momentum in the Asset Management business. The company is expanding its presence in Europe, with US activity expected to pick up in the second half of the year.

Lazard's strong performance in the first half of 2025, despite market challenges, reflects its ability to adapt and innovate in a rapidly changing financial landscape. The company's focus on private capital engagement and its commitment to raising productivity and hiring the right people position it well for future growth.

References:
[1] https://www.gurufocus.com/news/3004527/lazard-inc-laz-q2-2025-earnings-call-highlights-strong-revenue-growth-amid-market-challenges?mobile=true