PJT Partners Posts Record Revenue Amid Restructuring Surge

Date of Call: Feb 3, 2026

Financials Results

• Revenue: $1.14B for full year 2025, up 15% YOY; Q4 $535M, up 12% YOY
• EPS: $6.98 per share adjusted for full year 2025, compared with $5.02 in 2024; Q4 $2.55, compared with $1.90 in Q4 2024
• Operating Margin: Adjusted pretax margin 20.8% for full year 2025; Q4 23.7%

Guidance:

• Expect total non-compensation expense in 2026 to grow at a similar rate to 2025.
• Provide guidance on 2026 compensation estimate with Q1 results.
• Current estimate for 2026 tax rate is in the high teens percentage.
• Expect compensation ratio to continue to work its way down from the peak.

Business Commentary:

Record Financial Performance:

• PJT Partners reported record revenues of $1.14 billion for the full year 2025, up 15% year-over-year.
• The growth was driven by record revenues across all businesses, particularly in Strategic Advisory, which was the primary driver of revenue growth.

Restructuring and Liability Management:

• The company's restructuring business delivered record Q4 and full-year results, with the fourth quarter being the best ever for the business.
• This was due to companies grappling with over-leveraged balance sheets, challenged business models, technological disruption, and changing consumer preferences and governmental policies.

PJT Park Hill Performance:

• PJT Park Hill delivered its strongest quarter ever, with full-year results exceeding the record set in 2024.
• The growth in the private capital solutions business was driven by a challenging primary fundraising environment, leading to increased interest in alternative liquidity options and secondary products.

Strategic Advisory and M&A Activity:

• Strategic Advisory revenues reached record highs for both the fourth quarter and the full year, significantly outpacing 2024's record levels.
• This was attributed to increased M&A activity, with global announced volumes up significantly due to strength in debt and equity markets, greater regulatory confidence, and increased CEO confidence.

Capital Management and Share Repurchases:

• PJT Partners ended the year with record cash balances of $586 million and spent a record $384 million on share repurchases.
• The capital priority remained investing in the firm and returning capital to shareholders, with a focus on repurchases and potential partnership unit exchanges.

Sentiment Analysis:

Overall Tone: Positive

• Management reported record revenues, record adjusted pretax income, and record adjusted EPS. 'Across the board, our 2025 results were a record-setting...' and 'Our capital priority remains, first and foremost, to invest in our firm and our people...' Tone is confident with constructive outlook for M&A and restructuring.

Q&A:

• Question from Devin Ryan (Citizens Bank): Can you give color on restructuring activity types and expectations over the next 12-18 months?
  Response: In a multiyear period of elevated restructuring activity driven by normalized interest rates and technological disruption creating industry stress; activity is broad-based and expected to continue.

• Question from Devin Ryan (Citizens Bank): Can you discuss platform maturation and operating leverage in Strategic Advisory?
  Response: Strategic advisory partners were more productive in 2025; productivity is not linear due to investment pace and long sales cycle, but firm revenue is up nearly 75% since 2021.

• Question from Unknown Analyst for James Yaro (Goldman Sachs): Can M&A market continue at this pace or improve in 2026?
  Response: Expect a multiyear period of elevated deal activity due to attractive capital markets and regulatory environment, but not necessarily continuously hitting new highs.

• Question from Unknown Analyst for James Yaro (Goldman Sachs): What is the outlook for the compensation ratio?
  Response: Compensation ratio peaked and is expected to continue working down, with pace depending on market development and investment pace; guidance with Q1 results.

• Question from Brennan Hawken (BMO Capital Markets): Can you reconcile low restructuring revenue multiple with strong outlook and comment on sector activity?
  Response: Q4 was the best restructuring quarter ever; activity is broad-based across challenged industries like healthcare, software, media, and retail due to capital structure pressures.

• Question from Brennan Hawken (BMO Capital Markets): What were Park Hill revenue trends and impact of fundraising challenges?
  Response: PJT Park Hill delivered record Q4 and full-year results, with private capital solutions offsetting primary fundraising challenges; business is well positioned for 2026.

• Question from James Mitchell (Seaport Global Securities): Is M&A activity broadening to middle market and update on positioning with financial sponsors?
  Response: Deal count decline is in sub-billion transactions; private equity is returning to equilibrium, creating opportunities for PJT Park Hill and sponsor coverage through liability management and private capital solutions.

• Question from James Mitchell (Seaport Global Securities): Any help on Q1 tax rate given positive benefit?
  Response: High teens tax rate estimate for 2026 anticipates smoothing benefits over the full year.

• Question from Michael Brown (UBS): What are expectations for GP/LP mix in secondary markets and primary fundraising recovery for Park Hill?
  Response: Primary fundraising is challenged due to allocator concentration and vintage performance, but private capital solutions and secondary interest present secular growth and market share opportunities.

• Question from Michael Brown (UBS): Are you seeing competition for talent in restructuring?
  Response: Focused on best talent and culture; franchise is attractive for investment and adding talent to capture white space.

• Question from Brendan O'Brien (Wolfe Research): What drives delta between Capital Markets optimism and January data downturn?
  Response: Banker optimism in January is traditional; constructive backdrop exists but is fragile to news flow; focus remains on gaining market share in a healthy deal environment.

• Question from Brendan O'Brien (Wolfe Research): Implications of low percentage of partners on platform for comp leverage and revenue growth?
  Response: New partners' productivity increases over time; adding partners to greenfield initiatives creates step-function changes; walk-in business and franchise value drive productivity.

• Question from Alexander Bond (KBW): What are main drivers for higher non-comp expense in 2026?
  Response: Tailwinds include less occupancy growth and leverage from fixed costs; headwinds are people-related expenses like travel and IT.

Contradiction Point 1

Compensation Ratio Trajectory

Contradiction on the direction of the compensation ratio's movement, impacting financial forecasting and cost structure expectations.

What is the outlook for the compensation ratio in 2026? - James Yaro (Goldman Sachs)

20260203-2025 Q4: The compensation ratio is expected to continue working its way down from its peak in 2025. - [Paul Taubman](CEO)

How would a slowdown in restructuring activity affect comp leverage? - Alexander Bond (KBW)

2025Q3: Under steady growth, the compensation ratio is on a baseline downward trend. - [Paul Taubman](CEO)

Contradiction Point 2

Primary Fundraising Business Outlook

Contradiction on the outlook for the primary fundraising business, affecting expectations for revenue streams and market conditions.

What are your expectations for the GP and LP mix in secondaries by 2026, PJT's market share opportunity, and when primary fundraising might strengthen for Park Hill? - Michael Brown (UBS)

20260203-2025 Q4: Primary fundraising remains challenged due to allocator concentration and performance variability. - [Paul Taubman](CEO)

What's the outlook for the main fundraising business? - James Yaro (Goldman Sachs Group, Inc.)

2025Q3: The outlook is positive as the market improves, but it will become a 'crowded trade'. - [Paul Taubman](CEO)

Contradiction Point 3

Primary Revenue Driver for Park Hill

Contradiction on the stated primary revenue driver for Park Hill, affecting strategic focus and business model clarity.

Can you explain PJT Park Hill's revenue trends and if Q4 weakness was attributed to primary fundraising challenges? - Brennan Hawken (BMO Capital Markets)

20260203-2025 Q4: The private capital solutions and secondary products business is growing meaningfully faster and is expected to be the primary revenue driver going forward. - [Paul Taubman](CEO)

Could you explain the revenue components of PJT Park Hill, specifically the placement line and expected acceleration in PCS fees? - Brendan O'Brien (Wolfe Research, LLC)

2025Q3: The firm suggests moving away from the current advisory/placement designations as they can be unhelpful for clarity. - [Paul Taubman](CEO) & [Helen Meates](CFO)

Contradiction Point 4

M&A Market Outlook

Contradiction on the pace and drivers of M&A activity recovery, impacting expectations for deal volume and market growth.

Will the M&A market sustain its momentum or accelerate by 2026? - James Yaro (Goldman Sachs)

20260203-2025 Q4: The firm believes the M&A market is in a multiyear period of elevated deal activity... - [Paul Taubman](CEO)

Are many sponsor assets now generating enough EBITDA to be sold for a gain, and when do you expect sponsor sell-sides to resume? - James Edwin Yaro (Goldman Sachs)

2025Q2: Increased sponsor activity is evident... The return of capital is improving, which will likely lead to increased M&A activity, though it will be a gradual return to normalcy. - [Paul Taubman](CEO)

Contradiction Point 5

Sponsor Activity and Capital Return Outlook

Contradiction on the state and expected trajectory of sponsor capital returns and M&A readiness, affecting market recovery expectations.

Are you seeing M&A activity expand into the middle market, and what updates do you have on sponsor relationship development? - James Mitchell (Seaport Global Securities)

20260203-2025 Q4: The private equity ecosystem is gradually rebalancing capital deployment and returns. - [Paul Taubman](CEO)

Are sponsor assets currently generating enough EBITDA to justify a profitable sale, and when might we see a resurgence in sponsor-led sell-side transactions? - James Edwin Yaro (Goldman Sachs)

2025Q2: Return of capital is improving, which will likely lead to increased M&A activity... - [Paul Taubman](CEO)