Good afternoon, welcome to the Moelis & Company earnings conference call for the second quarter of 2021. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. To begin, I'll turn the call over to Mr. Chett Mandel, Head of Investor Relations. Good afternoon. Thank you for joining us for Moelis & Company's second quarter 2021 financial results conference call. On the phone today are Ken Moelis, Chairman and Chief Executive Officer, and Joe Simon, Chief Financial Officer. Before we begin, I would like to note that the remarks made on this call may contain certain forward-looking statements, which are subject to various risks and uncertainties, including those identified from time to time in the risk factor section of Moelis & Company's filings with the SEC. Actual results could differ materially from those currently anticipated. The firm undertakes no obligation to update any forward-looking statements. Our comments today include references to certain adjusted financial measures. We believe these measures, when presented together with comparable GAAP measures, are useful to investors to compare our results across several periods and to better understand our operating results. The reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Reg G is provided in the firm's earnings release, which can be found on our investor relations website at investors.moelis.com. I will now turn the call over to Joe to discuss our results. Joe? Thanks, Chett. Good afternoon, everyone. On today's call, I'll go through our financial results, and then Ken will comment further on the business. We achieved $361 million of revenues in the second quarter, an increase of 126% over the prior year. This represents our second-largest quarter of revenues ever. Our first-half revenues of $625 million were up nearly 100% from the prior year period. The robust growth during the second quarter was primarily attributable to increased levels of transaction completions with particular strength in M&A. In addition, our restructuring and capital markets teams remain very active as our model truly has three powerful revenue engines. Moving to expenses. Our compensation expense was accrued at 59.3%, consistent with both the prior quarter and the prior year. Our second quarter non-comp expenses were $29 million, resulting in a solid non-comp ratio of 8%. We expect our non-compensation expenses to be in the range of $33 million-$34 million for the third quarter, primarily driven by anticipated increases in travel. We achieved a quarterly pre-tax margin of 33.5%, well exceeding our 25% target. Moving to taxes, our underlying corporate tax rate was 26% for the second quarter. Regarding capital allocation, the board declared a regular quarterly dividend of $0.60 per share, an increase of 9% from the first quarter of 2021, and our second increase since the end of 2020. In addition, we repurchased approximately 400,000 shares in the open market during the second quarter. In order to continue to execute on our capital management strategy, the board of directors has authorized an increase of $100 million to the repurchase authorization. Including today's announcement, our current repurchase capacity stands at approximately $150 million. As always, we remain committed to returning 100% of our excess cash. Lastly, we continue to maintain a fortress balance sheet with $281 million of cash and no debt. I'll now turn the call over to Ken. Thanks, Joe, and good afternoon, everyone. I've never been more optimistic about our business given the changing dynamics of the M&A market. Alternative asset managers have seen tremendous inflows of capital over the past year. This trend is accelerating, these institutions will become a dominant force in increasing the scale, velocity, and most importantly, the consistency of M&A going forward. Our holistic approach to client coverage brings comprehensive and innovative solutions to these clients across their entire portfolio and their investment cycle. Our approach is completely aligned with what is required by these companies. We believe that the combination of market factors and our model has resulted in Moelis & Company having entered a period of secular growth. Our strong financial performance over the last few quarters is the direct result of the deliberate choices we made over the last 10 years. By committing early on to spend the time, energy, and resources on internal talent development and promotion from within, we have created a growing and sustainable organic talent base. Combined with the dedication to having one P&L and no commission structure, we have a differentiated advisory offering, an exceptional pipeline of internal talent, and a franchise that would be extremely difficult to replicate. By setting up our platform the way we have since day one and remaining unwavering to that vision, we're able to be more nimble, integrated, and enter areas of high growth faster. For that reason, the pace of our new business activity remains high and our pipeline is stronger than it has ever been. I remain confident about our ability to continue to generating value for our shareholders for years to come. With that, we'll now welcome any questions. We will now begin the question and answer session. Our first question will come from Devin Ryan with JMP Securities. Please go ahead. Terrific. Hi, Ken. Hi, Joe. Hi. Clearly a great quarter here. Love to maybe just dig in a little bit more, if you can, on the mix. I heard clearly that M&A was a big contributor, but that restructuring capital markets are very strong. If you can give any more color on just the contribution. Was it kind of the normal breakdown but just at a higher absolute level or anything else you can share there? Then in terms of the M&A market, Ken, if you could just talk maybe a little bit more between what you're seeing in the middle markets where we're hearing there's just tremendous activity versus maybe kind of larger end of the spectrum. I think on the breakdown, it was very similar. We always say restructuring is 20%-25% of our total revenues, and it was again. It was at the lower end, and that wasn't as a result of a low level of restructuring activity. It was more a result of very high level of M&A creating a bigger denominator. Restructuring had a good quarter just on a bigger denominator because M&A was so large. Capital markets is probably high single digits but growing rapidly. Because the SEC put back and delayed a lot of the SPAC financings due to the accounting they put in, I'm not sure that the quarter was. Well, I think they can do even a larger percentage. On your point, which is what I said in my remarks, I believe that the fundamentals of the M&A market are changing right in front of your eyes, and people aren't recognizing it as much. The flows of capital into alternative asset managers who then do not choose when to execute a transaction. 10 years, 20 years, 30 years ago, M&A was a coverage of strategics who would choose when and where they felt the market was good for them to act. The amount of capital flowing into an industry called private equity or alternatives or sovereign wealth. These entities, these institutions are getting extremely large. By the way, I think as a result of 2020 will accelerate because they did not at least report the volatility that the public capital markets did. You didn't have to suffer through a mark of March 30th, 2020. These entities have to transact. They are in the business of transacting. That's why I said I think we're going into that we have become a secular growth. I think M&A is in a secular growth mode. Lastly, I'd say there's a whole new asset class. I read somewhere, I think yesterday, that we're up to 900 unicorns. If you would've asked me six, seven years ago, five years, six years, five years ago, four years ago maybe, what was our coverage for venture capital? I would've said really not our client base. When you have 900 unicorns that I think have a market capitalization now of $3 trillion, that's another asset class that will do something. Some may go public, but some will M&A. I believe that's almost a market capitalization equivalent to private equity at this point. We're seeing just a whole new M&A market, I believe. Yeah. Appreciate the color. It's fascinating. Maybe a follow-up for Joe just on expenses. Heard the comment about the third quarter expectation with travel coming back in. Is that kind of the right level to be thinking about maybe is kind of a new base if travel is normalizing or are there other puts and takes in there? Then on the compensation outlook, clearly it looks like there should be some solid revenue growth on the year. I understand how you're accruing for comp over the first few quarters, but is it reasonable to think there's some flexibility as we get towards the end of the year here just given the revenue backdrop or how are you guys thinking about that here at the moment? Joe, let me talk about comp and then I'll turn it over to you on the expenses side. On the comp, we thought it best just to stay where we were. There's a lot of time left in the year to figure that out. Two things I want to be clear. First of all, we came close to a 34% margin. People ask can you get leverage on the model? I'd say getting close to a 34% margin in the second quarter is leverage on the model. We're pretty happy with that leverage. I would also point out there is a real war for talent out there now, and that's one of the reasons we didn't change. It's unclear. We'll see what happens over the rest of the year and where the year takes us to. Right now, we want to keep the talent that's producing these kind of 34%-type margins in place. Joe, I'll turn it over to you on the other expenses. I think it's all a guess in terms of travel. We're seeing increased activity. Our underlying quarterly non-comp run rate is probably $30 million-$31 million at the current travel level. We think that it's prudent to suggest that a couple more million per quarter isn't out of the band of reasonableness. I don't have any magic insight on that. Understood. Yeah, just wanted to get a little bit of framework. Appreciate it and I'll hop back in the queue. Thank you. Our next question will come from Ken Worthington with JP Morgan. Please go ahead. Hey, good afternoon. Wanted to talk about MD and headcount there. That 125 is about the same number that Moelis has had over the next couple of years with you guys continuing to be active on the hiring and promotion front, but it seems to be offsetting the attrition that you're generating. Clearly not having a negative impact on the revenue growth. As we think about the outlook for MD headcount over the next few years, what does that look like? Is now the right time to grow it? Is now the wrong time to grow it, and you sort of harvest the decisions that you've made in the past? Can you talk about the white space that you would like to fill in here? You mentioned sort of VC. Is that sort of the place that you think you'll look to grow, in coming years or there's other areas that you'd like to allocate your MD resources? On MD, I think, we're not harvesting. In fact, we have worked extremely hard to match our MDs to the rapidly changing world of what's going on in the world. I think one of the reasons our revenues are where they are is, I think I used the analogy in the last call, but I'll say it again, you guys might see the same MD count above the water, but below the water, it's like the duck. We're paddling like crazy, changing and focusing on sectors that are moving. We have added 11 MDs. The most important thing I can tell you is what I said, we believe our internal talent pool is phenomenal. It takes seven, eight, nine years for us to take a person from hiring as an associate out of business school to a managing director. Moelis & Company is only 14 years old, so the base of the pyramid didn't get large enough until seven, eight, nine years ago, where we were hiring enough people out of school that when they came to the class, came up, we had enough to repeat. We think we're looking at double-digit MDs internally. By the way, we are looking to hire, and we are hiring externally, but that is the fundamental power of the platform, is that they're coming up, and you can't go back 10 years and redo that. We did it. We've hired the people, we've trained them. By the way, a lot of the revenues right now are being generated by some of those as pre-managing directors, executive directors who are already becoming productive. I'm very excited about our ability to grow Managing Director headcount by double digits, and I'm hoping that's internal promotion plus a few externals, plus maybe some leavers. I'm very excited about what we have going on inside the firm. The second part of the question was sort of the white space to fill in. Oh. Lots of internal talent. Where are they getting assigned? Where do you want to direct them to help build their careers and build Moelis' revenue? Ken, it's so strong across the board. What's happening is a lot of it is coming from sizable transactions out of these alternative asset managers. The way you have to cover them, they want you to cover them in a holistic way. When we say white space, first of all, just executing on $360 million of revenue. There's more to be done. We have raised our average fee. We have tried to limit the work. There's a lot more work I think we could be doing. In order to get a margin like this, we're trying to select the best possible things we can work on. I would say that we want to continue to cover these entities that I think are growing way faster than the market. They cover Most of these alternative asset managers now have credit funds, real estate funds, all the sectors. That's one of the reasons why we went into secondaries. I know you saw it in the middle of the year, we hired a very prominent managing director in secondary transactions and funds. We just added more distribution this morning to our capital markets. I'd say, I'm trying to give you the feeling, I think the white space is uncovering an asset class that might go from $3 trillion- $5 trillion over the next five years. I think it will, which is alternative asset managers. Lastly, you mentioned the venture capital groups, and I agree with you that I don't think anybody is quite yet set perfectly to cover that $3 trillion of assets because of how rapidly it has shown up. Yes, I do want to figure out how to cover that better. Awesome. Thank you very much. Our next question will come from Richard Ramsden with Goldman Sachs. Please go ahead. Hey, good afternoon, guys. Ken, could you talk a little bit about the dynamic in the strategic M&A market? I guess specifically, I'm interested in whether or not you're seeing any shifts in terms of the geographic skew, in terms of activity. Then linked to that, I know President Biden recently signed an executive order, which I think has heightened the focus on antitrust enforcement. Do you think that will have much of an impact in terms of near-term pipelines for M&A transactions? Thanks a lot. Again, I've always said this, when something shocks the system, the U.S. rebounds quicker than anybody. Almost scary how well the U.S. overcomes volatility and reemerges. I think, again, we're seeing the U.S. lead the charge out of the COVID year. I will tell you, we've had a lot of strength down in Brazil. We've had strength in Europe. We've even had transactions in China, and actually Australia is doing very well, which is, people forget about our Australian business. The U.S., if you're looking for that, the U.S. is at a peak and just leading the way out of the COVID year. To the Biden executive order, look, we're watching that carefully. I do think there'll be transactions that are affected by that. I would look at our revenues and say 99% of them would not have been affected. Let's just say 99% of the first half probably would've gone forward anyway, even if those executive orders turned into some type of more active legislation or policy. I do think there'll be some large transactions that might have happened that won't. Again, it'll be a little like the dog that didn't bark. I'm not sure we'll know which ones didn't happen, but I think there will be a few. Secondly, can you just talk a little bit about the capital return philosophy? As you've said, you've increased the dividend twice. I think you bought back $100 million of stock in the first half of the year alone. Historically, you also use special dividends as a capital return mechanism. How attractive do you think that is, and is that something that we should think about when we model capital returns for you in the second half of the year? Yes. By the way, we did two specials of $2, I believe, in the last seven or eight, seven months. Returning a lot of capital. Look, I think we always said we would look to all methods. We were active as we saw in what we talked about today on the call. I think we got active when we saw the whole dynamic of the M&A market become I think it's both our effectiveness and our model and how it's working, and also the realization that the M&A market has fundamentally changed, and I think we'll go through secular growth. I know a lot of people keep asking, they always ask, "Where are we in a cycle?" Well, if alternative asset managers continue to grow their assets under management by double digits, then we're not going to cycle. Those managers are not going to sit on their hands. It's just not what they do for a living. It's not their business. I think we got active in buying back the stock early in the year. We've continued through this quarter, and we'll continue to focus on all different methods. As Joe said, we have no debt and $281 million of cash on the balance sheet. I wouldn't rule out any method that we can get our capital back to our shareholders. Okay, thanks. That's very helpful. Our next question will come from Steven Chubak with Wolfe Research. Please go ahead. Good afternoon. This is Brennan O'Brien filling in for Steven. Ken, I know you mentioned that restructuring activity was strong in the quarter, but at a recent industry conference, you said that industry restructuring activity has slowed down dramatically. I guess, how much of the restructuring activity and revenues in the quarter was related to COVID mandates? How would you compare the pace of new mandates today relative to, say, 2019? Well, look, I don't know what you'd define as a COVID mandate because COVID's been with us now for 16 months or 17 months, so almost everything you're working on started, or M&A might be COVID mandates. I would say everybody always has idiosyncratic backlog in everything. I watch M&A, some people have a idiosyncratic backlog. We happened to go into 2021 with a very good backlog of restructurings, and I think we will continue to be in the range, I believe, of 20%-25% of our revenue restructuring through the end of this year. Now, I do know, and our team has told me, that the pitches, the pitching for new restructurings throughout the world is dropping off rather dramatically as capital becomes relatively free and equity markets are at all-time peaks, and you would expect that. I like our backlog remains strong for the rest of the year because of the deals that we happen to have. I do know, and I think I said it, that the number of opportunities to pitch new restructurings has gone down significantly. I will say this, by the way. Somebody once had a famous quote, bull markets, it's stairs up and elevator down. Every time we've ever gone into a restructuring market from 2009 to 1998 to 2020 to 1994, nobody ever has in their five-year projections a catastrophe, but they happen. The elevator, and it goes down quick. Again, everybody asks me what do I think about 2022. We're maintaining our whole team. We would even improve it. There's a lot of leverage in the system. There's a lot of companies out there. I don't know what will happen, but I know something always does happen. When it happens, it happens quickly. Again, there are not a lot of pitches right now, but when they are, they usually come very quickly as COVID did last year. Well, look, let me go back and say this. I have never, from the time we went on our IPO, I have never used productivity per MD. I think it's a terrible statistic. I get laughed at because I said I could tell you our revenues and I could tell you our MDs. I guess I could tell you what a revenue per MD is. It's a meaningless number. I don't know why. We're a system. We're a company. I'll tell you what we're really trying to do is produce a 30-plus margin right now. That's not even what we were hoping. We were hoping for 25% margin. We produce revenue throughout the system. I don't have a target on that. I would ask you to just take our managing directors and divide it by whatever our trailing 12 months run rate is, and you can have your own one number. I think the system provides leverage. As our clients want to stay in contact with the system and look to stay in contact, we're a huge feeder of that base of asset managers that we were talking about. I think I look at it systematically, and I really have never talked about a revenue per MD productivity number. Great. Thanks for taking my question. Our next question will come from Manan Gosalia with Morgan Stanley. Please go ahead. Again, hi, Joe. I know you said that M&A is in secular growth mode, and you also said your pipelines are at record levels, which is pretty impressive, just given the level of completions coming through. Is it too early here to get a read-through into 2022? I'm sort of assuming that a majority of these deals in the pipeline should get completed by your end. Some of our pipeline is 2022. It's really too early to get a read other than my gut feel, which is, there is nothing that says assets won't continue to flow to the alternatives. They will continue to execute transactions, buy, sell, whatever. I expect 2022 to be a great year, but I don't have any unique crystal ball into that other than our pipeline is at all-time record highs, and some of that will flow into 2022. It's just my sense of where the secular growth of capital and what those people are going to do with their capital. Okay, great. Then, maybe I just wanted to follow up on the comment on pre-tax margins. We're at record levels here, well above 25% that you've been targeting in the past. Other than hiring, are there any areas you would want to invest in or any investments that you might want to accelerate here, just given how strong the environment is right now? I think it would be all around hiring and coverage. It would be all normal course of business, I think. We put some money into distribution, which was kind of a new, but I don't think that has more leverage on it, so we're not going to have to hire too many more people in there. I think it would just be general coverage, general banker hiring. Got it. Thank you. Our next question will come from Michael Brown with KBW. Please go ahead. Great. Thank you, operator. Hey, Ken and Joe. Hi. In your presentation, I saw that a comment that said capital markets advisory has seen a record first half. Obviously, 2020 had a really strong second half. When we think about that comparable period, is it possible for that business to be above 2020? I understand it's a smaller piece of the revenues, but clearly an area that you are investing in. I guess the stock regulatory environment could certainly impact how things play out from here. Based on what you know today, just kind of interested in your thoughts on how that could play out for the rest of the year. Yeah, I would hope so. I would hope it would be larger. We had hired that team, and they really just started with us, some of the new team, September of last year. They didn't have a long lead time coming into the fourth quarter. That and the fact that a lot of the PIPEs and some of the capital markets around SPAC transactions were pushed out. There were a lot of transactions that were pushed out of this quarter and probably will happen in the back half of the year. Again, I suspect it will be very strong back half of the year for capital markets. Okay. To follow on your comment earlier, you mentioned war on talent. We're also seeing headlines across Wall Street and related to talent. It appears to be really across the side of the pyramid there. What are you doing to kind of proactively retain talent? Are there actions that you need to do here? I don't know if that's me, but you're fading. Is that me or is it everybody? It's you. I'm going to answer the question, what I think you said, because I think some of it faded. I should say it's a war for talent because I think some of the periodicals actually do report that it's a war on talent, but it's really we're not fighting the war on our talent, we're fighting a war for talent. We are trying to do all sorts of We are hiring as many people as we can to, in the junior ranks especially, to take the burden off. You can imagine, I think on this $360 million in revenue, we had over 180 fee events. You can imagine, it's a lot of revenue on the talent. They're doing a great job. We are doing things. They're numerous though, and I don't want to go into them all. Maybe Chett could do it offline. We are trying to make life better, easier, hire more people, give protected time off, all the things that you would try and still satisfy clients and make sure we get great work product. Yeah, we are doing that and that's one of the reasons why we did not change our comp ratio yet, or may not. It's a time to keep your talent. There's enough happening out there, and one of the key things you want to do is have a great motivated set of workers. Okay, great. Thanks, Ken. Hopefully you can hear me okay. I guess the other piece of that question was just in terms of what you're seeing in the market. I just was curious to hear if some of the players have kind of reached a level of maybe becoming somewhat irrational with guarantees or what you're seeing in terms of what's needed to lure bankers away. Competitors' irrationality is only when they hire somebody you stop bidding on, then all of a sudden they seem irrational. I will say that it's in the eye of the beholder. It's funny, the MD talent has always had a value, and I'd say there's still a war for talent at the MD level. The war that I think is most active right now is for below the MD level. Obviously everybody wants to hire a great managing director, and that happens every year. They're rare enough that even whenever they come up, there's a war for that kind of talent. What's different about what's going on now, it's throughout the pyramid. It's up and down the whole structure of everybody's company. I assume others are having it, and that's really where it's happening. Okay, great. Thanks for the color, Ken. Our next question will come from Brennan Hawken with UBS. Please go ahead. Hey there. Thanks for taking my questions. Ken, interested to circle back on some of the comments and the metaphor of the duck's feet swimming under the water and the processes and success that you've had around talent development. Can you talk about what specifically, do you guys have a process in place? Is it more laissez-faire and up to various team leads to drive that? In the decade or 15 years that you guys have been at this, how have you refined that process? How much of the success that you've had recently, I guess, is result of design versus maybe refinement in talent selection, and whatnot? What do you attribute the success to, and how systematized is it? I don't know. Hopefully that makes sense. Oh, no. Look, I appreciate that question because I think that's an under-talked about answer. Let me bore some of you with a real answer that I think fundamentally changes our model from everybody else's. First of all, we do have an internal training program that's extensive. People are evaluated on them replacing themselves and training, and their comp is on it. When I talk about not being on commission, I'm going to say two things that are maybe investment banking, advanced investment banking, but I think it's important to know. First of all, if you're on commission structure, then if you don't get paid for training, you're not going to train. We evaluate people on that. We evaluate on how much they go to campus and help recruit. It's fundamentally part of it. By the way, I'm not sure if anybody else had this, but I think from when we were a very small firm, I forget when you get promoted, we send you back for executive training at I think we do it, I know we do it with the Wharton MBA program. We used to send people back for three days. I think we're now going to four days. We have the board of directors meet with them down there. We have senior management interact all the time, but we spend money on that. That's in our income statement, and it's not cheap. We do it. We train people on presentation skills from very early on. It's systematized. Let me say one fundamentally last thing because everybody says when I say we have one P&L and it's not a commission, nobody seems to care. Brendan, if you had a commission and you were covering industrials, let's say you were covering the auto business, and I told you that I had a really intelligent, brilliant executive director and could you help them? Well, your first thought would be, "No, I need to get that guy out of my system. God forbid I introduce him to the executives at the companies I'm covering, and they like him. That would disintermediate my commission. Why would I ever introduce a smart, energetic person to my accounts?" The fact that we have 1 P&L, and we actually evaluate you on that is very important, and you can't get over that. I've never heard of a commissioned salesman wanting to hand their accounts over to anybody. Our model is systematized for this. It took a long time to show up because the base of the pyramid is never as big as the growth at the top. Now, I look back six or seven years ago, we probably were hiring 80 people- 100 people, now they're starting to show up, that is a fundamental change, that's why I think you're seeing so much productivity, because some of it's coming from EDs who have been with us a long time. I'm very excited about the pipeline that's coming up through the system as a result of that. I hope that wasn't too long an answer, but it's fundamental to our success. Right. No, thanks for that color, Ken. Appreciate it. This might invite another long answer, but I'm going to give it a shot anyway. From my perspective, Ken, this is clearly your swan song. The firm bears your name, and you've put a lot of blood, sweat, and tears into it. I do run into investors that get concerned about key man risk. What is it that you can tell us about the succession planning process within Moelis, and what is involved in that process, and what we can do to help allay concerns around key man risk at the firm? You're worried about Joe? You're that worried about Joe? Of course. Hey, look, we talk about it a lot. I want to say one thing to you. COVID, I think, unveiled this. My main job at the firm is meeting clients, putting our flag out there. That's really what I did for 14 years. I traveled incessantly. Really, at this point, if you're doing a software deal, they want a software banker. If you're doing a consumer deal, you want a consumer banker. I realize I always thought my role was to put the flag out there and meet people and get them comfortable. I will tell you, Brennan Hawken, COVID, I didn't get a chance to do that. Nobody would take my meeting. You couldn't go anywhere. Zoom calls aren't really the greatest for that. Our trailing 12-month revenues is up above anything we've ever done. Our quarters are I'll tell you what, it makes you almost feel like you're not needed. Forget swan song. I want you to know we talk about, and we have lots of discussions over how we would succession plan if I was hit by a bus. I just want you to know my birthday was two days ago. I turned 63 years. I'm in great health. I've never had more fun than what we're doing because the most fun part of my job now is watching young people we hired out of school really dominate industries, create their own franchises. I'm just telling you, the firm is so much wider. When you do $360 million in a quarter, believe me, that's not me. I'm having fun doing it, and we do have a plan, and I have no plans to go anywhere. I really don't. It's become more and more fun as I've seen young people really take charge. I've had more fun this year almost than ever before to see the talent and what they're capable of doing. I want you to know internally we do talk about it. It's just that I'm in good health, and I'm enjoying it, and I think we're not really thinking about it right now actively. Yeah. No, that's fair. Happy belated birthday, Ken. Thank you. Sorry, I just want to sneak one last one in. Joe, you referenced the $30 million-$31 million non-comp at the current rate. 2Q was a little lower than that. Does that imply that you guys reversed some of that provision-oriented noise that we had in 1Q in this quarter? Exactly which is why the run rate went up? That's exactly right. Yeah. Bad debt. Okay basically trending exactly where it does every year, about $2 million-$2.5 million a year. We're at $1.3 million for the first half. The path that we took was much more volatile. We had a little over $3 million in the first quarter, and we had a reversal in the second. Great. Thanks for that. Sure. Again, if you have a question, please press star then one. Our next question will come from Jeff Harte with Piper Sandler. Please go ahead. Good afternoon, guys. Very nice quarter. This has been touched on a few times, but I want to go back to it. We're used to looking at MD count, but the thing that really stood out to me is the banker count going up to 670. That was a sizable increase. We're seeing the trend of bankers per MD continuing to climb as well. This has been touched on a bit, can you talk a bit about the efficiency of non-MD client coverage and kind of that productivity? As we look forward, should we kind of keep thinking that the bankers per MD kind of continues to go up, or is maybe some of the increase just a function of you've got a lot of promotions kind of to make over the next couple of years? No, I think some of that goes to the changing nature of the environment. Again, 10 years, 20 years ago, to get into a big strategic boardroom, they'd want to see somebody that looked and felt like me. When you have all this money in alternative capital, some of it is actually decisions are being made by people who are 30 years- 40 years old. In those asset managers, they actually run significant assets and do the M&A themselves. I feel like this whole idea of, maybe you just touched on it, revenue per MD. I think we have vice presidents who are experts in their fields, who are talking to people of their age or slightly. They're not CEOs of General Motors anymore, but they're running an M&A portfolio that's every bit as big, if not bigger. Those people are very effective and having those people is becoming more and more a key to winning the business of these institutions. The market's changing. I think the way we're doing it and holistically covering those people from at each segment, you'd be surprised how young some of those decision makers are on significant M&A transactions now, and are willing to deal with what they perceive as an expert that 20 years ago you wouldn't have thought would make it into a corporate boardroom, but different type of transactions right now. Okay. Just looking at the revenue strength, it's always nice to see. Is there anything to highlight as far as deals having closed in July that might have helped revenues being pulled into the quarter from Q3 to Q2? On the pull forward? Joe, you want to go through the pull forward? Yeah. It was maybe four transactions. I think it aggregated to something around $20 million. It's nothing out of the ordinary. Okay, thank you. Sure. This concludes our question and answer session. I would like to turn the conference back over to Ken Moelis for any closing remarks. Well, thanks for your time. We appreciate your support, we'll see you in three months. Feel free to call Chett if you want any more insight into some of these questions. Thanks a lot. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.