Lazard (LAZ) Q4 2023 earnings summary

Executive summary

• FY23 operating revenue was $2.440B; adjusted earnings from operations were $165.6M, adjusted operating margin was 6.8%, and adjusted net income was $75M.

• Q4 net revenue was $806M and operating revenue was $761M; GAAP net income was $64M and adjusted net income was $65M.

• FY23 Financial Advisory and Asset Management operating revenue was $1.357B and $1.068B, respectively.

• Long-term targets include doubling revenue by 2030 and average annual total shareholder return of 10%–15%.

Financial highlights

• Q4 operating revenue rose 13% YoY to $761M; FY operating revenue fell 12% to $2.440B.

• FY GAAP net revenue was $2.515B, with a $75M net loss and $80.0M operating loss, versus operating income of $516.8M in 2022.

• FY adjusted net income was $75M, down from $384M in 2022; adjusted diluted EPS was $0.77 versus $3.73.

• Q4 adjusted earnings from operations were $97.1M, with a 12.8% operating margin.

Outlook and guidance

• Targets include annual net growth of 10 Managing Directors, revenue per MD of $8.5M in 2025 and $10M in 2028, and 30% of Asset Management revenue from alternatives/private investments and/or wealth management.

• Over the cycle, targets are an adjusted compensation ratio in the mid-to-high 50% range and an adjusted non-compensation ratio of 16%–20%.

• Management cited forward momentum, new client mandates, and positioning to advise clients on economic opportunities and geopolitical risks.