Good morning, and welcome to Evercore's first quarter 2026 earnings conference call. Today's call is scheduled to last about 1 hour, including remarks by Evercore management and the question and answer session. In order to ask a question, please press the star key followed by the number one on your touchtone phone at any time. I will now turn the call over to Katy Haber, Head of Investor Relations at Evercore. Please go ahead. Thank you, operator. Good morning, and thank you for joining us today for Evercore's first quarter 2026 financial results conference call. I'm Katy Haber, Evercore's Head of Investor Relations. Joining me on the call today is John Weinberg, our Chairman and CEO, and Tim LaLonde, our CFO. After our prepared remarks, we will open up the call for questions. Earlier today, we issued a press release announcing Evercore's first quarter 2026 financial results. Our discussion of our results today is complementary to the press release, which is available on our website at evercore.com. This conference call is being webcast live in the For Investors section of our website, and an archive of it will be available for 30 days beginning approximately one hour after the conclusion of this call. During the course of this conference call, we may make a number of forward-looking statements. Any forward-looking statements that we make are subject to various risks and uncertainties, and there are important factors that may cause actual outcomes to differ materially from those indicated in these statements. These factors include, but are not limited to, those discussed in Evercore's filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. I want to remind you that the company assumes no duty to update any forward-looking statements. In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance. For detailed disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is posted on our website. We continue to believe that it is important to evaluate Evercore's performance on an annual basis. As we've noted previously, our results for any particular quarter are influenced by the timing of transaction closings. I will now turn the call over to John. Thank you, Katy, and good morning, everyone. Our record first quarter results reflect the strong momentum that built throughout the second half of 2025, as well as the benefits of our multi-year investment strategy. Firmwide adjusted net revenues were $1.4 billion, double from a year ago and a new quarterly record for the firm. Revenues increased 8% sequentially from the fourth quarter, marking the first time in 15 years we've delivered growth from that period. We've now delivered three consecutive quarters of adjusted firm-wide net revenues over $1 billion. Performance in the quarter was broad-based across all of our businesses with our strongest revenue quarter ever for our North American advisory business and a record first quarter for EMEA advisory, PCA, PFG, equities, and wealth management. Further, our results continue to underscore the strength of our client franchise, the benefits of our diversified business model, and the consistent execution of our long-term strategy. First, I want to briefly discuss the current market environment. As we entered 2026, the backdrop for deal-making was robust, supported by healthy levels of strategic activity and continued engagement from both corporates and financial sponsors, with the expectation that these trends would carry into the year. We are seeing continued CEO and boardroom confidence, particularly around large cap transactions, and financing markets are open. However, conditions have become more mixed in recent months. Despite this, M&A activity experienced a strong quarter. Industry-wide announced global M&A activity, excluding several large direct AI investments, totaled over $1 trillion in the first quarter, up 11% from the prior year period, with large cap strategic transactions continuing to outperform. At Evercore, client engagement remains strong. We continue to see healthy levels of activity across a broad range of sectors, products, and geographies, with particular strength in large cap strategic M&A, including in areas where we have made recent investments. Many sectors, including healthcare, industrials, real estate, infrastructure, financials, and certain areas of technology, continue to operate at high levels. Our backlog remains strong and is replenishing at a healthy rate. This quarter was an exceptional quarter, demonstrating the breadth of the firm's capabilities, and we are pleased with our results. As we have noted in the past, investors should not place too much emphasis on any one quarter. This holds true in very strong quarters as well as challenging ones, and we would encourage you not to extrapolate these results. We are constructive on the outlook of our business and believe we are well positioned to serve our clients across a range of market environments. While ongoing geopolitical and macroeconomic uncertainty could extend transaction timelines if it persists throughout the year, we believe the underlying conditions for a strong M&A environment remain, albeit with some bumps along the way. Turning to talent, since our last call, three Senior Managing Directors have joined our investment banking practice in healthcare, equity capital markets, and private capital advisory. All three committed in 2025 and were included in our year-end SMD count of 171. 3 additional SMDs have committed to join our franchise in key areas, including healthcare, industrials, and private capital advisory this year. In addition to our externally hired talent, we started the year with a class of eight promoted investment banking SMDs. In total, we now have 182 SMDs in investment banking, with more than 45 ramping, positioning us to drive sustained growth in activity over time. Now let me turn to our businesses. In North America Strategic Advisory, we achieved a new quarterly record for revenue, reflecting strong transaction announcements, trends carrying on from 2025, and strong activity levels across both corporates and financial sponsors. While exit activity among financial sponsors has been mixed recently, we continue to see increased engagement from a year- ago. Our EMEA Strategic Advisory business delivered a record first quarter with strong activity across a number of sectors and geographies. In the first quarter, we advised on a number of significant transactions globally, including Warner Bros. Discovery on its $110 billion sale to Paramount Skydance, Devon Energy on its $58 billion merger with Coterra Energy, Jetro Restaurant Depot on its sale to Sysco of for $29 billion, Apellis on its sale to Biogen for approximately $5.6 billion, and Beazley on its recommended cash offer by Zurich Insurance Group for GBP 8.2 billion. Industry-wide activist campaigns declined in the first quarter, although our strategic defense and shareholder advisory group continue to be busy. The liability management and restructuring business maintained robust activity levels in the quarter, with continued strength in client dialogues in recent months. Our private capital markets and debt advisory team remained active, particularly with structured minority deals, despite some lengthening in transaction timelines. The private capital advisory business delivered a record first quarter. New deal activity continues to be elevated, particularly on the LP side, while GP-led continuation funds remain active. We are also seeing strong momentum in newer product areas, including private credit and secondaries. The Private Funds Group also delivered a record first quarter, despite a challenging environment for fundraising. Our equity capital markets business had a solid quarter with revenues in line with the prior year. The business experienced strength across healthcare and energy as IPO and follow-on issuance trends were very healthy. In the quarter, we were lead book runner on Diamondback Energy's $2.2 billion follow-on for the third-largest U.S. E&P follow-on offering ever. Our equities business delivered a record first quarter driven by healthy levels of volatility, which contributed to strong performance across our trading businesses. Our teams continued to provide differentiated insights and thought leadership to clients amid increased market volatility. Finally, our wealth management business had record first quarter revenues. While we saw some moderation in performance and AUM relative to the year-end reflecting weaker markets, client engagement remains strong. Overall, our performance in the quarter highlights the progress we've made in scaling our platform and expanding our capabilities as we continue to support clients in an increasingly complex environment. We remain encouraged by the level of dialogue and activity we are seeing across our global franchise. Looking ahead, we recognize the potential for continued uncertainty in the near- term. We believe the underlying long-term drivers for growth remain intact and position us well to navigate the environment and capture opportunities over time. Let me now turn it over to Tim. Thanks, John. As John mentioned, we are pleased with our strong performance in the first quarter. Before I get into the details, I want to highlight some factors that drove the outperformance, including several large transactions that looked as if they might close in the fourth quarter then slowed and closed in the first quarter of this year. In addition, there were other large transactions that were on track for a second quarter closing this year then accelerated into the first quarter. Given this and the strong environment of the last several quarters, we experienced the greatest number of large transaction closings in any quarter in our history. Accordingly, we would expect our second quarter to be closer to what we experienced in last year's second quarter, which was a record. In aggregate, we believe our first half will reflect continued strong performance, and we remain enthusiastic about the outlook for our business. Turning to the quarter. For the first quarter of 2026, net revenues, operating income, and EPS on a GAAP basis were $1.4 billion, $331 million, and $7.20 per share, respectively. My comments from here will focus on non-GAAP metrics, which we believe are useful when evaluating our results. Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on evercore.com. Our first quarter adjusted net revenues were approximately $1.4 billion, up 100% versus the first quarter of 2025 and up 8% sequentially, representing a new record quarter for the firm. Adjusted operating income for the quarter was $354 million, up 205% year-over-year. Adjusted earnings per share was $7.53, up 116% versus the prior year period. Our adjusted operating margin for the quarter was 25.3%, up from 16.6% a year- ago, an improvement of approximately 870 basis points, reflecting a combination of the strong environment and our high first quarter revenues. Turning to the businesses. Adjusted advisory fees were approximately $1.2 billion in the quarter, up 123% year-over-year, representing a record quarter. The growth was driven by a significant increase in large transaction closings, as mentioned at the start of my remarks, as well as a continued increase in productivity across our platform. Underwriting fees were $55 million, in line with the prior year period. Commissions and related revenue was $63 million, up 14% year-over-year, driven primarily by higher trading volumes. Adjusted asset management and administration fees were approximately $24 million, up 8% versus the prior year. Adjusted other revenue net was approximately $15 million, reflecting higher interest income, partially offset by losses on our DCCP hedge portfolio as equity markets modestly declined in the quarter. Turning to expenses. Our adjusted compensation ratio for the quarter was 64%, down approximately 170 basis points from the 1st quarter of last year and down 20 basis points from the full year of 2025. The decline in our compensation ratio was driven by a continued improvement in revenues, reflecting market share gains, partially offset by our continued investment in talent, which is core to our growth strategy. We are striving to make additional progress on our compensation ratio over time, balancing that with investment in our business and the competitive market environment. While compensation expense and our ratio depend on numerous factors, including some for which we have limited visibility at this point, as I mentioned last quarter, we expect compensation ratio improvement this year will likely be meaningfully more modest than what we achieved in each of the last two years. Our goals are constant to deliver excellence to our clients and to create value for our shareholders over the medium to longer- term. Adjusted non-compensation expenses were $150 million, up 21% year-over-year. The non-compensation ratio was 10.7%, an improvement of approximately 700 basis points versus the first quarter of 2025, driven by stronger revenues. The increase in non-comp expenses year-over-year was primarily attributable to, first, higher technology and information services costs, reflecting increased licensing costs and investment in development and technology, which are intended to yield future benefits. Second, higher professional fees, including certain costs related to higher client activity levels, some of which may be recoverable, and a variety of other general corporate costs. Third, increased travel and related expenses driven by higher levels of client activity and engagement. In order to support our growth, business diversification, and technology initiatives, we would expect to see a similar growth rate in non-comps in 2026 in line with what we experienced in the last couple of years. Our adjusted tax rate for the quarter was 3% compared to a negative 39.7% a year- ago. Our tax rate in the first quarter is primarily impacted by the appreciation of the firm's share price upon vesting of RSU grants above the original grant price, generating a substantial tax benefit. We anticipate that our effective tax rate in the remaining three quarters of this year will be more similar to what we have experienced in those quarters during prior years. Turning to our balance sheet. As of March 31st, our cash and investment securities totaled nearly $2 billion. Similar to past years, our cash balance is down from year-end due to the payout of bonus compensation in March and share repurchases. In the quarter, we returned a total of $673 million of capital, which is a new quarterly record amount, through the repurchase of 1.9 million shares and the payment of dividends. Consistent with historical practice, we bought back stock through net settlements of RSU vesting and in the open market, offsetting the dilution from the RSU grants that were issued in the quarter as part of our annual bonus compensation process. It is important to note that of the 1.9 million shares we repurchased in the quarter, approximately 900,000 were through net settlements of vesting RSUs in early February at an average price of approximately $345 per share, which has been our historic practice. The remaining approximate 1 million shares were repurchased in the open market at an average price of approximately $302 per share. Altogether, the blended price per share was $322. Separately, our board declared a dividend of $0.89 per share, an increase of 6% from the prior dividend declared. Our first quarter adjusted diluted share count was 44.4 million shares, down over 500,000 shares from the fourth quarter, driven by share repurchases in the quarter, partially offset by the vesting of RSUs. We remain committed to repurchasing shares to offset dilution from our bonus-related RSU grants. For the six- year in a row, we have repurchased a number of shares greater than RSUs issued as part of our bonus process. We continue to remain or maintain a strong cash position and take into consideration our regulatory requirements, the current economic and business environment, cash needs for the implementation of our strategic initiatives, including hiring plans and preserving financial flexibility. We are pleased with our record performance in the first quarter. While we continue to be mindful of the continued market uncertainty, we remain optimistic about our medium and longer- term prospects. With that, we will now open the line for questions. Thank you. We will now conduct the question-and-answer portion of the conference. Please limit to one question only. You are welcome to rejoin the queue for additional questions, time permitting. Our first question comes from Alex Bond with KBW. Your line is now open. Hey, good morning, everyone. Thanks for taking the question. I guess just start, it would be great to get your thoughts around what's happening in the software space at the moment and how stress and lower valuations in the public market there have impacted both deal activity and sentiment on the M&A side. Then also it would be great to get your thoughts around what the potential opportunity could be there on the longer- term on the restructuring side, you know, if stress persists in that market and if you view that as an opportunity, just given the scale of your tech M&A practice. Yeah, just any thoughts there would be helpful. Thank you. Sure. On software, there's definitely a slowdown, but it's not a standstill, and it really does depend on the companies themselves. We're seeing on the one hand, there's some certain situations we are working on that have actually slowed substantially. There are other situations that we're in the middle of right now where we're seeing real opportunity in discussions with respect to consolidation as well as other opportunities that people are looking for. As you know, software is very different in terms of how it really is applicable to the markets that it's in. Not everyone is gonna be really responding the same way to what looks like a, you know, a hesitation in the software markets. On the M&A side, we're seeing, as I said, we're seeing activity. On the public offering side, we are in discussions, we just have to see how that plays out. I think in many respects, it won't surprise you that I say this, we're gonna have to see some of this play out. In terms of restructuring, we are seeing a lot of activity really across the board, multiple sectors. We definitely are seeing software opportunities on the restructuring side, but our business is so diverse with so much opportunity, we are really seeing an expansion. As you know, we had a record year- last- year, we are on a very good pace this year. I'd say that we're seeing it, but it's not really dominating the business. There are lots of other things. There's a lot of liability management opportunities out there that we're participating in. We are doing a lot of business with corporates as well as sponsors. From our perspective, the restructuring business is strong, but software is not dictating it, but there is software opportunities within it. Great. That's helpful color. Thanks, John. Thank you. Our next question comes from Ryan Kenny with Morgan Stanley. Hi. Good morning. Wanted to dig in a little bit on the Europe side. You've been focusing on expanding into Europe, and you do have the EU weighing overhauling the merger rules. Are you seeing any uptick in demand, or is there a pause and kind of wait and see what happens with the merger rules and any impact from energy prices in Europe is viewed kind of as, you know, disproportionately impacting Europe versus U.S.? What are your thoughts on Europe right now? Well, as you saw or as I said, our European business had a record first quarter. As you know, a big part of our experience in Europe right now is that we've been in a real build mode, and we've added substantial people and assets throughout Europe. We feel really good about those people, and we feel like we've really been able to build a much more diverse and deep business. We're seeing a lot of activity, and our dialogues are up. I think because we have such high-quality people, we're in a lot of the boardrooms and really having the opportunity to really have really consequential conversations. From our perspective, what we're seeing, and maybe this is limited more to us because we're growing it so much, but we're seeing a lot of activity, and we're in the middle of some really consequential strategic discussions. Do I think that Europe will slow down because of the examination of merger rules? I really don't right now until people really decide that they don't think they're gonna be able to get things done. That, from our experience, is not the case at this time. Thank you. Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities. Your line is now open. Hey, good morning. John, maybe just a follow-up question on financial sponsors, as particularly as it relates to the middle market, which has been kind of the slowest in rebounding. We all, you know, understand the AI and software valuation impact, but outside of that, it still seems sluggish. Can you discuss how much of a pause maybe the Iran war has caused and other factors still holding sponsors back, and how you see activity levels shaping up for the remainder year, just particularly in the middle market side? I think you nailed it, which is the larger large cap market in financial sponsors where they have big, high-quality assets, we're still in the art of the possible. There's a lot of activity there. When there's a really good big asset, there is a lot of activity and a lot of interest. Middle market has slowed. There's no question. It's a slowdown. It's not a standstill. There are transactions getting done. Our experience is that we are seeing a real pickup in our opportunity to pitch. Our pitch rate is higher now than it was this time last year. We're seeing a lot more now. Some of that, I think, is that we've really built out our sponsor business. As you know, one of our big objectives was to take what we thought were several really powerful sponsor-related franchises and bring them together to really have a coherent offering to financial sponsors generally. We actually see the fruits of that in that we're seeing a lot more. Our pitch rate is up. Actually, our win rate is up, we're feeling momentum in that business. Having said that, your original premise is what we are feeling and what I've been seeing, which is smaller deals, middle market things are really slowed. It's not to say they won't happen, but I think that it's not nearly as buoyant as we hoped it would be in the beginning of the year. Okay. Great. Thanks. Our next question comes from Daniel Cocchiara with Bank of America. Your line is now open. Hi. Good morning. In your, in your prepared remarks, you mentioned that some deals were accelerated, you know, from 2Q into the end of 1Q. Just given added uncertainties within the market, you know, I would think that it would be more likely to see those conversations extended rather than shortened. Would love to hear, you know, maybe just, like, some of the nature of those conversations in terms of why they may accelerate them, and is this a trend that's continued into the second quarter? Thank you. Yeah, thanks for the question, Daniel. Look, really, I would say don't read too much into that, the acceleration. I mean, at any one time, you know, we're working on a very large number of transactions, and each one has its own story. You know, there's some element of randomness and lumpiness to our business. It's always been that way. It just so happened that this quarter there were a couple of them that got on a little faster track and went a little more smoothly than anticipated, they happened to have significant fees attached to them. That's all. There's not some broader trend at play here. Thank you. I guess just kind of one follow-up. like, in a saturated market with so many different players spanning from the pure play investment banks to bulge brackets, you know, what exactly does Evercore do to differentiate themselves, and what is it about your franchise that really makes clients wanna work with you over the competition on these larger scale transactions? Thank you. Well, I think what we hopefully are able to communicate to clients is that we understand their business, that we put their interests first, and that we are highly capable. You know, what we've tried to build is a firm that has extraordinarily capable and competent people who really know the business and know their sectors, but at the same time are serving the clients in every respect, that we've been able to engender confidence in both management teams and boards. That's really what we, what we aspire to do. We've hired some really high-quality people. I think the people of Evercore in today's world are top-notch and A-plus level, and that's what we really have worked really hard to do. We hope we have given them a culture which has them working together so that we have everybody pulling on the same oar in the same direction. I'm hoping that really what really is our competitive edge is we're able to deliver better results for our clients in an ethical and client-oriented fashion, and that's really what we hope our clients see and hopefully why they choose us. Great. Thank you for taking my questions. Thank you. Our next question comes from Brendan O'Brien with Wolfe Research. Your line is now open. Good morning, thanks for taking my question. I just wanna drill down on the dynamics in the PCA business. You know, on the one hand, volatility and valuation concerns could impact price discovery and potentially weigh on activity. On the other, you know, you could also argue that the slower pace of exits could prove to be a tailwind for the business. Just wanna get a sense as to what you're seeing and hearing from clients. Also, if you could potentially just provide some color on what's driving the relative strength in LP-led s relative to GP-led s. Well, as I think we said in the call, PCA had a record year- last- year, and it's had a record first quarter this year so far. There's real momentum to the business. We have a pretty equal balance between LP and GP. We're quite balanced. I think the dynamics of the business is that it continues to be able to present clients with real alternatives in terms of how they want to get liquidity, concept, you know, to move assets to an ownership position that they're comfortable with, and really allows people the flexibility beyond the pure merger or IPO market to really monetize and to actual assign ownership. What we're seeing is there is just a continued interest in the flexibility that PCA is able to offer. In addition, there are lots of different new products that our PCA group is undertaking. They're very creative in how they think about the market. As secondaries grow and as it becomes more powerful, they are doing better and better. As you know, they have a very high market position, and they are really in, I think, presenting to the market highest quality advice. Really what we're seeing is that this is a very powerful growth engine for our firm, and I think we feel really comfortable with the way they're defining their market and how they're addressing that market. Great. Thank you for taking my question. Thank you. Our next question comes from Nathan Stein with Deutsche Bank. Your line is now open. Hey, good morning. I was hoping you could break down the advisory revenue split across M&A and non-M&A businesses broadly, and how do you expect that to trend from here? Yeah, sure. I think, you know, what we've seen in the past is it's been about kind of 45%. I would say it's still over 40%. By the way, the non-M&A businesses are doing great. We're really pleased with the strength of their performance, the backlog, the outlook. Having said that, we may be at a point in the cycle where M&A is strengthening a bit relative to some of the other businesses. It's, it's possible that, you know, as we move forward, you could see that statistic come down a bit due to the strength of the M&A market. But those businesses continue to perform well, and we're really pleased with both their performance and their outlook. Yeah. What you probably have seen is that we continue to invest in our M&A business, which clearly is a very important part of what we offer clients. We've also been allocating capital and investing in non-M&A businesses to diversify what we're able to provide to clients and really what we're able to deliver for shareholders, which is some diversification. We are not a balance sheet bank, which all of you know, so there's certain things we're not gonna be in. Everything that is not really balance sheet driven, we're thinking very aggressively about how do we participate, and can we really create a position where we have some competitive edge. I think we really feel good about the people who come to Evercore and the people we hire, and therefore, I think we have real opportunity across the board. Thank you. We'll go next to Brendan Hawkins with BMO Capital Markets. Your line is now open. Good morning. Thanks for taking my question. I wanted to drill into the lesser comp leverage expected this year versus recent years. Recognizing it's probably a push and pull, you guys also said that you don't expect all that much revenue growth year-over-year in the second quarter. The sort of strong note we're starting on here is not indicative. Can you talk about the differing factors and how much of a factor it is maybe, you know, tougher comps and therefore slowing revenue growth versus the continued elevated market, competitive market for talent, both acquisition and retention, out there? Yeah, sure, Brendan. I'm happy to answer that. The first thing I would do is point out. You did characterize my comments correctly, but I'd point out that in the last couple of years, I would say we made, by my measure, pretty strong improvement, meaning we went from 67.6% down to 65.7, so that was 190 basis points. As we moved from 2024 to 2025, we went from 65.7 to 64.2. That's another 150, and so that's 340 basis points. We, you know, reduced another 20 basis points this quarter, so that's 360 basis points in just a little over two years, which, at least by my measure, is pretty strong improvement. We're striving to continue to make improvement, and we're hopeful that we can and we will. I think what I intended to convey is that it just won't be the same magnitude, we don't think, as we saw in the last couple of years, because it's just hard to keep it going at that rate. Then you raised the question, were my comments based on outlook for revenue or and/or outlook for the continued competitiveness in the environment for hiring and retention? I think there, you know, on the revenue, as you heard in John's comments, I think we remain optimistic and enthusiastic about our outlook. You know, the backlogs, pipelines, you know, continue to look good. Activity levels remain high, and, you know, we're hopeful that this recovery has, and our performance in it, has some real legs to it. I wouldn't interpret anything I've said as a reflection of our views on the revenue outlook. It is the case, I think, that competition remains high for the best talent. We're, of course, committed to obtaining the best talent, and, you know, as you've seen these last couple of years and into the early part of this year, we've continued to be pretty proactive in augmenting our partner ranks and really strengthening that in a way that looks like it's earning positive returns for us. We're, you know, continuing to attempt to do that. I think the key takeaways here is we are striving to make continued progress, although might not be the same magnitude we've seen in the last couple of years, where we remain optimistic about the outlook. Yes, the market for talent remains competitive. Got it. Thanks for that. I know it's one question. I can re-queue for sure, but do you mind if I ask a follow-up? We appear to just polled, so I'm guessing we're towards the end here. Sure. Sure. Please. Great. Thank you. It's actually a real follow-up, Tim. On that point, like, you know, clearly the revenue's been great. Your productivity numbers have been great, so the hiring is very effective. Like, you know, this is not a criticism. It's just a question of, like, monitoring facts. Is it sort of the competition for talent, has it, like, scaled to a level and is it that the talent you guys are hiring has also scaled to a level where, you know, maybe a return to the sub 60% comp ratio is gonna be more challenging? Therefore, like, you guys are driving the business, and you wanna make sure that you're not compromising on standards and whatnot, so that's just sort of, like, reality and a law of nature now, or, is that the way we should think about it? Yeah. So we- Brendan, thanks again for the follow-up question. I think, you know, it's interesting. As you can imagine, we're always doing internal exercises that analyze our results and our returns and where we can do better and so forth. You know, I've just been through some exercises recently to look at the returns on our partner hiring and, you know, I would say that, you know, the NPVs and the IRRs have been pretty good. You know, what we're focused on, first and foremost is serving our clients with excellence, but secondarily, you know, building value for the firm. I'm wanting to be careful that, you know, when we're doing what I would call positive NPV partner hiring and partner hiring that has pretty good, you know, IRRs associated with it, I don't sub-optimize by focusing solely on the comp ratio and thereby, you know, foregoing certain hires or additions that are clearly adding value. That would be the first point. You know, look, on the sub 60%, you know, what I've been, I think saying hopefully pretty consistently over these last quarters and even years is, you know, we're focused on making improvement next quarter and the quarter after and the quarter after that. You know, we're still a ways from sub 60. I'm just trying to do better than we did last year. At the end of next year, you can ask me, you know, how much improvement I think I can make in 2027. For now, we're just trying to improve from where we are. Let me make one comment about the marketplace for talent. Your presumption, which is that it's more competitive and it's hard to get people, is absolutely true. The ante's been raised. Spending virtually every day in the market talking about it, I'm sure you know that our a big piece of our strategy is bringing in A-plus players. An A-plus player will without doubt create value for the firm. We're spending a lot of time on really bringing in the high-quality people. I think what's happening for our firm is that because we have really been able to create momentum for our franchise, that we are seeing more and more highly talented people who actually are interested in coming to us because we have a firm, I think, that people really think has momentum and really is gonna provide them an opportunity to work with other talented people and to provide even better service for their clients. I think that as it's getting more competitive and how as difficult as it is, I think it's not easier for us, but I think that we are actually finding real success with high-quality people continuing even as the market gets more competitive. Yeah. It's clear in the numbers too. Thanks for taking my question. Thanks, Brendan. Thank you. Our next question comes from James Yaro with Goldman Sachs. Good morning, thanks for taking the question. 2025 was a heavily large strategic M&A-driven market. I'd just love to get your thoughts on a few things as it relates to that particular part of the market. To what degree do you believe the large strategic deals could actually accelerate from here, which is already a fairly strong base? Maybe within the answer, could you speak to the ingredients that you hear in the boardroom that are driving a large cap activity? Could you also comment on considerations around the antitrust backdrop in the U.S., perhaps ahead of and after the U.S. midterms? Okay. Well, with respect to the M&A market generally and large cap, there is no question that large cap has been a major part of the market probably for the last 18 months or so, maybe even more. Part of that is that companies and managements are seeing that it is more and more acceptable and actually welcomed by shareholders. As you know, throughout the time that certainly I've been on Wall Street, there are times when the market is really excited about big strategic deals, and there are other times when the market really is looking for something else. Right now, amidst uncertainty and some instability, big deals are actually welcomed. There is an opportunity in the current regulatory environment to get deals done, whereas there have been other regulatory environments that are not as friendly to larger deals. I think there is a perception that if you're gonna do a larger deal and you're in a management team and a board, you better put it on the agenda and be looking at it and make a decision if you wanna do it because this is a good time. Not every deal is gonna be welcomed in, but there is a willingness to consider these on the regulatory side that I think is quite promising and positive. We see this continuing. We see that there is going to continue to be strength. You asked what the factors are. Well, clearly there are some factors that really exist that really have existed before, but they're quite strong right now. Number one, CEO confidence is very sound and quite high. Number two, the economy, despite the fact that there is dislocation and there is some uncertainty geopolitically, the economy is quite resilient. Number three, the financing markets are not just open, but they're really abundant. There's real financing opportunity. There is a real can-do attitude. I think finally, I think boards are very comfortable that scale is good right now for lots of different reasons, whether it has to do with how do you deal with AI? How do you deal with the world around you? How are you thinking about your supply chains and things? Scale is actually looked upon as a positive, not a negative. That's another reason. I think all those factors are pointing to the fact that not that everybody's gonna do a big deal, but there's a lot of very large companies that are thinking about deals. You know, we're seeing those in the boardrooms that we're in. That's a very helpful answer. Thanks a lot, John. Thank you. Our next question comes from Michael Brown with UBS. Great. Good morning. Thanks for taking my question. Cash continues to really run at high levels here, and the buyback activity was accelerated in the quarter. How are you thinking about maybe that cash level? Can you just give us an update on capital allocation here as you think about share buybacks? Is it possible that we could see more inorganic M&A here? You've got some quite good success here with Robey Warshaw. Could we see more deals in the future? Thanks. Yeah, sure. Look, we've always been committed to returning capital to our shareholders. I think if you look back. We're pretty proud of our track record, which includes, you know, 18 consecutive years of dividend increases, six consecutive years of repurchasing shares at least equivalent to our RSU issuance as part of the bonus process and in fact, in many years, significantly more. You know, we're very cognizant of the return of capital to shareholders and committed to it. You know, with respect to acquisitions, look, we're always seeking to create value, whether it's through developing our people internally, hiring people externally. We certainly evaluate situations from time to time, but I would say, you know, we've not been a serial acquirer and we're highly selective. Yeah, what I'd say about the strategic acquisition side is Robey Warshaw was a unique opportunity for us, and we were really excited to do that. We're not looking to use our capital by doing acquisitions. In fact, to do an acquisition is a very high bar for us. I would just say, if you're thinking about how we're gonna use our capital, it's gonna be in terms of we're gonna return capital. We're going to be looking at really high-quality talent to bring in and really drive our base businesses. We're gonna look at new businesses and talent that can help us drive those and build those out. I think probably last on the agenda is we are looking at the landscape and we're always open to thinking about something strategically. I think what I'd like to make sure you understand is it's not a priority for us. We'd do it if something really came along that was really exciting for our franchise, but I think it's a very high bar. Got it. Thank you both. Very clear. Thank you. Our next question comes from Devin Ryan with Citizens. Your line is now open. Hi, guys. Neil Eloff on here for Devin. Our question's on AI and the impact to the business model. There have been a lot of headlines suggesting that AI will eventually lead to some fee compression, so would love to get your thoughts on the narrative and maybe the moat that protects the sector. Also if you guys could quickly touch on, like, AI implementation at the firm and what productivity gains you're already seeing. Why don't I start and let Tim carry it through in terms of implementation at the firm? We think that AI provides tremendous opportunity, and we're spending a lot of time understanding both how it impacts us internally as well as how it's gonna impact businesses in the longer- term. There is no question that there is an investment theme that having AI as a part of business, there are gonna be certain businesses that are gonna do a lot better because they have AI and they're using AI. There are other businesses that are gonna feel impaired by what AI can do to basically somehow undermine what they actually do and what they bring to the market. Both of those possibilities create value if you're looking at the strategic side and the M&A side. We think that we have to be very cognizant of what's happening in the market, the impact AI has on different companies, and really how that's going to change the competitive landscape sector by sector, business by business. For us internally, I'll let Tim answer it, but we're spending a lot of time on it. Yeah, sure. Look, I'd echo John's comments about the landscape, which is, you know, we're excited about AI in two ways, and one is what John just described because we think it may change, you know, the very structure of certain industries or types of businesses. That type of structural change is good for a firm like ours, which advises on situations like that. We do think that over time, AI with respect to our market, will create opportunities and, you know, we're of course in the middle of that and doing what we can to assist our clients in evaluating all of that. Internally, we're also excited. We've by the way, in the past year, we have a new chief information officer who has joined us, and then we've also continued to augment that team at the top levels. It's an area in which we're investing. We think that in the shorter run, you know, what one is likely to see is productivity enhancements, and those could be both with our banking team and possibly with the way we run our business inside of corporate. In the longer- term, I think you could see opportunities for continued deal efficiencies, and I'm talking about processing now, and potentially idea generation. You know, we're working hard at this, as I'm sure many firms are. We think there's some real opportunity, but I think I'll leave it at that. Great. Thanks for answering the question. Thank you. We'll take a follow-up from Alex Bond with KBW. Your line is now open. Hey, thanks for taking the follow-up. Just wanted to ask around the ECM outlook for the remainder of the year. It does seem like there's a decent amount of pre-IPO activity at the moment, especially with some of the larger deals rumored to launch later this year. Could you just share how you're thinking about the ECM opportunity through year-end? And also maybe help us size up the potential there maybe relative to last year's full year results. Thank you. Well, we see that the ECM business looks quite healthy. There's some very high quality, large companies that would like to get to market, and we don't see any reason why that's not gonna happen. You know, as you all know, if geopolitical gets really difficult, that could interrupt some of the equity market opportunities. We don't really see that right now, and we think that it's very possible that this could sustain itself. We do a lot in the biotech side, and we see real opportunities there throughout the year. I think our point of view is that equities is gonna continue to be strong, that the ECM opportunities will actually play out quite nicely, and that some of these big deals will be successful, and they will fuel the market and create excitement. We think that for the most part, unless there's a real interruption, we could easily see, you know, a healthy ECM market that compares quite well to last year. Got it. That's helpful. Thank you. Thank you. Our final question is a follow-up from James Yaro with Goldman Sachs. Your line is now open. Thanks for taking the follow-up. I just wanted to clarify one of your comments and thinking about the run rate further afield. I just wanted to confirm that you expect the 2Q revenues of this year to be closer to 2Q 2025 levels. Is that in part because of your comment around certain larger deals closing faster in the 1Q? If I sort of run that out further, that would mean that, you know, it may be a more normal cadence of deal closings not impacted by, you know, deals closing faster would be sort of the back half of the year. Is that a fair way to think about it? Yeah. I think, you know, the first part of your question, I think you characterized things appropriately. We did talk about some deals that looked like they would close in 4Q, being a bit prolonged and closing in 1Q, and then other deals that were significant that looked like they were gonna close in 2Q accelerating and therefore ended up with a quite large 1Q. You know, we would encourage people to look at our business and evaluate it across a multi-quarter timeframe. You know, that's kind of always our business. The nature of our business has been that it's a little bit lumpy and that's been true for years. We're encouraging a multi-quarter outlook. Then, secondly, I think, and you heard it quite strongly from John, and I have exactly the same view, which is, we think business is good. We are coming off, you know, a record year- last- year, a record quarter this quarter. Activity levels remain strong across essentially all of our businesses. So we're enthusiastic about the outlook. That's probably I think if you take all of those comments in totality, that's a fair representation of what we think. Yeah. I agree with that. One thing that I'm sure that you're aware of and seeing as we are, the fee environment, there are more large fees and big deals that are in and around than really I can remember. I think what that does is it does create lumpiness. You know, I don't think that's gonna be something that we're gonna be rid of in the near future, and maybe I hope we don't. You know, I think that we are seeing really high quality, big things inside the firm right now. We anticipate that some of those will not happen, but we believe that some will happen. I think that, you know, it's a very healthy, a very healthy market right now, and I think we feel really good about the fact that we're participating in a very tangible way. How that translates into quarter by quarter by quarter, I think we've always said, you know, it's gonna, it's gonna actually play out, and there will be lumpiness. I'm sure that you're used to that, and you've seen it, and maybe there's even more lumpiness if the fees are big. That's very helpful. Thanks a lot. Thank you. This does conclude today's question and answer session, as well as the Evercore first quarter 2026 earnings conference call. You may now disconnect.