Good day, and welcome to the PJT Partners first quarter 2024 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead. Thanks very much. Good morning, and welcome to the PJT Partners first quarter 2024 earnings conference call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners, and joining me today is Paul Taubman, our Chairman and Chief Executive Officer, and Helen Meates, our Chief Financial Officer. Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that these factors are described in the Risk Factors section contained in PJT Partners' 2023 Form 10-K, which is available on our website at pjtpartners.com. I want to remind you that the company assumes no duty to update any forward-looking statements, and that the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance. For detailed disclosures on these non-GAAP metrics and their GAAP reconciliation, you should refer to the financial data contained within the press release we issued this morning, also available on our website. With that, I'll turn the call over to Paul. Thank you, Sharon. Good morning, everyone, and thank you for joining our earnings call. Earlier today, we reported first quarter revenues of $329 million, up 65%, adjusted pre-tax income of $55 million, up 81%, and adjusted EPS of $0.98, up 81% from year-ago levels. We had our second highest revenue quarter ever, reflecting strong performance in all of our businesses as we benefited from continued momentum in Restructuring, significantly improved results in PJT Park Hill, and strong performance in Strategic Advisory. While we report results quarterly, we measure our progress not in quarters, but in years. After a highly successful quarter, our focus remains on ending the year a meaningfully stronger firm than when we began the year. A core element of that progress is the continued addition of highly talented professionals, with particular emphasis on filling out our Strategic Advisory footprint. The recruiting environment continues to be conducive to senior hiring, and we expect our hiring to remain elevated this year, even if it does not match 2023's record recruiting. In the first quarter, we had our highest open market repurchases ever, as we remain focused on offsetting dilution from these investments. After Helen takes you through our financial results, I will review our business performance and outlook in greater detail. Helen? Thank you, Paul. Good morning. Beginning with revenues. Total revenues for the quarter were $329 million, a record first quarter, up 65% year-over-year. Revenues were meaningfully higher across all businesses, with the highest growth coming from restructuring. We had a number of transaction completions that met the criteria for revenues to be pulled forward in the first quarter, totaling $25 million. Excluding the impact of pull forwards in both periods, our revenue growth would have been 52%. Turning to expenses. Consistent with prior quarters, we've presented the expenses for certain non-GAAP adjustments, which are more fully described in our 8-K. First, compensation expense. We accrued compensation expense at 69.5% of revenues for the first quarter, compared with 69.8% for the full year 2023. This ratio represents our current best expectations for the full year 2024. Turning to adjusted non-compensation expense. Total adjusted non-compensation expense was $45 million in the first quarter, up from $36 million in the first quarter last year. The higher expense was primarily driven by increases in occupancy costs, travel and related, as well as bad debt expense, which is included in other expenses. Despite the high year-over-year increase in first quarter non-comp expense, we continue to expect that our full year 2024 non-comp expense will grow at a similar rate to the growth rate we experienced in 2023. This growth will be primarily driven by an increase in our occupancy costs, as well as increased travel and related expense. Turning to adjusted pre-tax income. Our adjusted pre-tax income was $55 million in the first quarter, compared with $30 million for the same period last year, and our adjusted pre-tax margin was 16.8% for the first quarter, compared with 15.2% for the same period a year ago. The provision for taxes, as with prior year, quarters, we presented our results as if all partnership units had been converted to shares and that all of our income was taxed at a corporate tax rate. Our effective tax rate was 22% for the first quarter, below our full year 2023 rate of 25.3%. The tax benefit relating to the delivery of vested shares during the first quarter was greater than last year's benefit. We take a full year view of that benefit, and we currently expect our full year effective tax rate to be around 22%.... Our adjusted or converted earnings were $0.98 per share for the first quarter, compared with $0.54 per share in the first quarter last year. On the share count for the quarter, our weighted average share count was 43.7 million shares, up 5% versus a year ago. This increase primarily reflects the full share count impact of 1.3 million performance shares, which reached the price hurdles at the end of 2023. During the first quarter, we repurchased the equivalent of approximately 1.5 million shares, primarily through open market repurchases. In addition, we plan to exchange 116,000 partnership units for cash on May 9, 2024, and on the balance sheet, we ended the quarter with $236 million in cash, cash equivalents, and short-term investments, and $408 million in net working capital, and we continue to have no funded debt outstanding. Finally, the board has approved a dividend of $0.25 per share. The dividend will be paid on June 20, 2024 to Class A common shareholders of record as of June 5. With that, I'll turn back to Paul. Thank you, Helen. Beginning with PJT Park Hill. Revenues in our PJT Park Hill business were up significantly quarter on quarter and year over year, driven by meaningful growth in private capital solutions. GPs and LPs alike continue to be attracted to private capital solutions as they seek to enhance liquidity, particularly given the current low levels of portfolio monetizations. This, combined with a more constructive environment in which to execute secondary transactions, helped drive strong Q1 results in PJT Park Hill. On the primary side, the fundraising environment remains challenged, although somewhat improved from year ago levels, as higher equity valuations have served to bring alternatives allocations better into line for many LPs. Turning to restructuring. Our leading restructuring team continues to be extremely active in both liability management assignments as well as in court restructurings. Revenues in our Restructuring business were up sharply year-over-year, but up more modestly quarter-over-quarter, reflecting continued high levels of activity. We are in a multi-year cycle of elevated activity in liability management and in-court restructurings. In many instances, more favorable financing markets will prove insufficient to stave off broader restructuring activity. With each passing day, it is clearer that rates will remain higher for longer, that increasing numbers of companies are being disrupted by technological innovation and changing consumer preferences, and that companies continue to contend with challenges to their business models that link back to the pandemic. While the near-term maturity wall has largely been addressed, another one looms in 2028. In this highly constructive restructuring environment, we expect our 2024 Restructuring revenues to remain elevated and to approach last year's record performance. Turning to Strategic Advisory. In the first quarter, our strategic advisory business delivered strong revenue growth compared to the prior year. As we highlighted on our last earnings call, we began 2024 with a near record pre-announced pipeline, but an atypically low backlog of announced pending closed transactions. Our mandate count continues to grow and stands at record levels. Our announced pending closed pipeline has also grown appreciably year to date, and given the momentum we see in our business, we expect it to continue to build as 2024 progresses. In 2023, announced global M&A volumes declined to levels not seen in a decade. Over the past several months, the pieces necessary for an M&A recovery have increasingly fallen into place, driven by stronger than expected economic prints, rising global equity valuations, a significant recovery in the debt and equity capital markets, and increasing pent-up demand for strategic assets following two years of sharply reduced transaction activity. Amidst broad-based expectations for a sharp uptick in global M&A activity in 2024, annualized year-to-date activity is tracking only modestly ahead of 2023 levels. We expect to see a gradual increase in M&A activity until certain catalysts are in place, which should further propel activity, namely central bank rate clarity and election results in the U.S. and elsewhere. The highest strategic priority for our strategic advisory business is to ensure we are best positioned to capitalize on the multi-year M&A upturn that is ahead of us. The continued addition of senior talent is an important element of that positioning.... To close, looking back, we delivered differentiated performance in 2022 and 2023 as we continued to invest in our franchise. As we look forward, we are equally committed to further investment to ensure that we are best positioned to capitalize on the future, regardless of market conditions. As before, we remain confident in our long-term growth prospects. With that, we will now take your questions. Ladies and gentlemen, at this time, the floor is open for your questions. To ask a question, please press star one on your telephone keypad. You may remove yourself at any time by pressing star two. Once again, to ask a question, please press star one. Our first question comes from Devin Ryan with Citizens JMP. Please go ahead. Hey, good morning. Good morning, Paul. Good morning, Helen. How are you? Good morning, welcome. Very well. Thank you. Good. Good. First question, just want to kind of take a step back and think about just the broader M&A market and PJT's positioning in it. And Paul, you gave some comments on the outlook, which I appreciate. But, you know, if we looked at just the market overall, you know, 2021 was, you know, the most recent kind of active year we had. That was probably a year for the backdrop that was above normal. But when we look at PJT specifically, I think Strategic Advisory partners have increased by over 40% since, since that time. So I just want to kind of think about or how you would frame what a more normalized environment means for PJT's Strategic Advisory business, the type of revenues or, or production you would expect out of partners or any other parameters that we can think about, kind of how much larger this business is and potential is today relative to that time, just because we're kind of the business has transitioned so much since, you know, there's actually been an active environment. So I think people are having a hard time kind of trying to think about what a normalized revenue potential could be for PJT. Thanks. Yeah, look, it's really hard to sort of pinpoint what we would look like in a normalized environment, but let's try and have a go at it. If right now we were to experience a 2021 market environment all over again, we would be far better positioned to capitalize on that upswing than we were in actuality in 2021. We're not expecting tomorrow to wake up and be back into 2021 M&A environment, but if we were, we would find ourselves to be able to deliver meaningfully greater performance because our coverage footprint is much greater today, because our coverage footprint better matches where the wallet is distributed, because we have less partially built-out industry verticals and more fully built-out industry verticals, because our brand and years of sustained coverage are greater, and we're better known to clients today than we were three years ago. What we are focused on is where we believe the M&A market is going, and it's clear that 2022 and 2023 are aberrationally low levels of quote-unquote, normalized M&A. Early on, we said, "This is not a light switch in 2024. Do not look at the light switch that got flipped from 2020 to 2021 and just see this explosive rebound in M&A from 2023 to 2024." We have always viewed it as more of a slow, gradual rebuild. We made the point that two years of successive global declines in M&A volume, that we didn't believe you'd see a third, that when you do have an inflection point, you typically see first-year growth of 10%-15% in volumes. I think year to date, we're tracking global annualized volume is up 8% or 9%. I expect that that momentum will build a bit over the year, and I continue to believe we'll end up the year up 10%-15% in global M&A volume. But I do think there's an opportunity for there to be a step function change in that in 2025 and beyond, and that's what we're playing for. And there's no doubt that in any environment you pick, Devin, our ability to capitalize on that is going to be fundamentally different today than it was three or four years ago. Hopefully, that's helpful. Yeah, appreciate that, Paul. And then just as a follow-up here, on just the comp ratio, just trying to maybe dig in and square a little bit more between the 69.5% relative to the second-best-ever revenue quarter. Obviously, 69.5% still higher than, I think, kind of historically, where you've been at. And so just want to think about how much of that is maybe a function of seasonal dynamics, like retirement eligible expense, or the competitive backdrop that you're seeing right now, or, you know, obviously heard commentary around, you know, the desire to lean in again on recruiting. So just love to kind of think about that number, what that means, and then what the implication is on a go-forward basis, particularly in an environment where, over the next couple of years, revenues are potentially recovering. Thanks. ... Well, so first of all, 69.5% is our current best estimate of the full year. That is marginally below full year comp ratio for last year. What I said on the last earnings call is, in order to see meaningful comp leverage for the ratio to come down meaningfully, we need to see the revenue growth measured in years exceed the headcount growth. And you've made the point, and I think I said on the last earnings call, that over the last three years we had added 35% headcount, but we haven't grown our revenues near 35%. I don't believe that that day is far away, and when those two are aligned, that's when you're likely to see, you know, meaningful, you know, reductions in comp as a percentage of revenue. But we do remain very focused on keeping recruiting elevated. We do believe that the investments we're making are bearing significant fruit, but until all of those revenues are fully realized, the ratios are likely to be out of whack, and we're still uncertain as to what the true, you know, market compensation environment will be at the end of the year. So based on all of that, 69.5% is our current best estimate. Okay, yeah, very clear. Thanks a lot. Appreciate it. Thank you. Thank you. Our next question comes from James Yaro with Goldman Sachs. Please go ahead. Good morning, and thanks for taking my questions. Maybe just starting with Placement, which was excellent in the quarter. I know this can be one of the lower quarters from a seasonal perspective across the year for Placement. There's obviously been a strong step up in the business versus last year. So does that suggest that, you know, there could actually be substantial growth from here, and we can see the normal seasonal improvement over the course of the year in that business for 2024? Yeah, and I always hesitate to try and reduce our business to, you know, 13-week earnings cycles as to what's gonna fall into any cycle. So it's easier, James, for us to talk about it on a year basis. I think we've been pretty consistent that 2023 was an aberrationally difficult year in terms of total revenue results for PJT Park Hill. That the environment, while still far from perfect, is improved. And then if you just look at placement, which really is closer to primary capital raise, but it also, you know, encompasses things like corporate private placements and the like. I think there's no doubt that we're in a more favorable environment, and we all expect that to be an up year. But where it falls quarter to quarter, I'd rather refrain from speculating. Okay, that makes a lot of sense. Maybe just a longer-term question on the strong growth in secondaries and continuation funds that we're seeing across the industry, and I think you're benefiting from that as well. Maybe just your longer-term outlook on the businesses, the ability for the strong growth to be sustained, and then you know, how they interplay with the lack of M&A and whether that's supporting some of the activity, and growth that we've seen more recently? Probably yes, yes, and yes, if I kept track of all of your, of all of your questions. I think it does have some interrelationship where it is, it is related to some extent to the dearth of M&A monetizations, because it's been difficult for private equity to be comfortable monetizing investments in this rate environment, and that that is an opportunity to create liquidity for investors. But I think this trend is far beyond that. I think there is increasing recognition that it is an important tool in the toolkit. I think it can be very helpful when there are high-quality assets that sponsors would like to continue to own and manage, and they recognize that selling, there's probably more friction costs, more disruption than just creating a vehicle for certain LPs to exit and others to enter. I think one of the challenges has been that there's probably far greater demand on the part of sponsors to deploy continuation fund vehicles than there is dedicated capital to the asset class. I think one could make a very strong, compelling case that investors are significantly underallocated to this asset class. And what you're starting to see in recent time is very significant pools of capital raised by leading sponsors to increase the available capital. And as that capital builds, which I expect it will, and as more capital is redirected into secondaries and continuation funds, I think this is a long-term trend, and it's a trend that we intend to capitalize on. Very clear. Thank you so much. Thank you. Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities. Please go ahead. Hey, good morning. Maybe, maybe just a follow-up on restructuring. Paul, we did have record debt issuance in the first quarter, so as to, to your point, we had a lot of refinancing, that might have solved a lot of issues for, for this year at least. So I guess, what gives you the confidence that that doesn't continue and start to maybe create a little bit of a headwind in restructuring? It feels like we've been through this cycle before, when refinancing really picks up, we do get eventually some slowdown or restructuring. So just wanted to get maybe a little more detail what, what your confidence level is in that continuing the restructuring levels that we're seeing. Well, there's two different things. One is, you know, are we going to set records every year, or are we going to fall back to earth the way we did from 2020 to 2021? And what I've said repeatedly is, 2020 to 2021 is not in any way indicative of the environment that we're in today. So I can't sit here and say that every year is going to be a record year, but I think we're going to enjoy elevated levels of liability management for an extended period of time for all of the factors I've talked about. Some is simply that rates are not coming down nearly as quickly as people had hoped or expected, and that weighs. There is real disruption and lots of winners, and there's all the new economy, and there's all of these incredible success stories, but there's creative destruction, and you can't just have a world where there are winners and there are no losers. So there are companies who we didn't even talk about five or 10 years ago, who are incredibly disruptive. And all of these trends, decarbonization, electrification, AI, digitization, they're all highly disruptive. And that means that you can have a robust economy, and you can have companies that fundamentally have business models that no longer work. That is not going to diminish; that is going to increase. And also, I think we were right, we were right for the long term and wrong in the short term, which is we talked about COVID doing permanent damage to a very significant number of companies. The reality is the extraordinary fiscal and monetary stimulus that all appeared at the end of 2020 and into 2021 covered up a lot of sins. What that did is it enabled companies to continue, but they're really the walking wounded, and at some point they need to address their issues. We see this as a multi-year cycle, but a multi-year cycle can operate at elevated levels, but not necessarily be at elevated, at record levels every year. Just as we expect there to be a very robust multi-year M&A wave, but that doesn't mean we're predicting that every year is going to stairstep be better than the year before. I think if you step back and widen the lens and look at sort of where historical default rates were, that's the aberration. That's what's not sustainable. We're in a different environment, and it's a multi-year cycle. Yep. Nope, that's helpful. Maybe just switching to buybacks and/or capital return, if we assume sort of activity and therefore profitability and cash flow are improving in the coming years. I'm not putting words in your mouth, but I guess that's the expectation for most people. How do you think about the priorities of that extra cash flow, putting it to work? Is it really first in net buybacks? Could we start to see net buybacks versus offsetting dilution, or is it a higher dividend? How do you think about a scenario where, you know, cash flow is growing pretty nicely? Well, the first thing is investing in the business, and whether it's organic, inorganic, we're investing in our business. That has to be priority one, two, and three. It's all of the above. We've got to focus on that. What we—if you look at all of the incentive awards in the first six years, and Helen can augment this commentary, we ultimately got it all back. And I think we've talked about these performance awards, which were triggered. They've worked beautifully. We want to get them all back, and we're going to work to do it. I think what we've done, you know, in a quarter is we've neutralized and then pretty much, we pretty much neutralized all of last year's regular way issuance. Pretty darn close. And if not, then certainly by, you know, the second of May. Now, the next objective is going to be over time to get at that. I think that's a higher priority than, you know, increasing the dividend, but that doesn't mean we can't do a little bit of both. It doesn't mean we do all of one and none of another. But if you ask just sort of directionally priorities, invest in the business. And I think lessons should, you know, be well understood by everyone, that you need to focus on growing and investing in your core business. Then the second is to make sure that we're not diluting our precious equity. And then I'm confident we could do both of those and in the appropriate time and at the appropriate, you know, in the appropriate cadence to to grow the dividend. But it's one, two, three. But just to confirm that- Okay, great. - to date, most of their repurchases have been, to neutralize the issuances. So of course, maybe in the future we take that further, but for now, that's where we are. Okay, great. Thank you. Thank you. Our next question will come from Steven Chubak with Wolfe Research. Please go ahead. Good morning. This is Brendan O'Brien, filling in for Steven. I just want to talk a bit about, you know, the revenue outlook commentary you provided. I mean, if we put the pieces together with Restructuring down modestly, Strategic Advisory likely to be up slightly, depending on how the back half plays up and plays out, and Park Hill expected to be up more meaningfully. ... It sounds like you're pointing to a similar level of revenue growth as you guys saw last year. Is that a fair interpretation of your comments? We can interpret my comments many different ways, but let me be really precise. What we said was we currently expect our Restructuring business to approach last year's record levels. We expect the Park Hill business to enjoy a very significant recovery from last year's levels. And I've talked about all of the puts and takes in Strategic Advisory, which is there's tremendous momentum. The mandate count continues to grow. It sits at record levels. We talked a quarter ago about, you know, record or near record, you know, pre-announced pipeline. That pipeline continues to grow. We see the environment getting more constructive by the day. We talked about the one Achilles heel at the beginning of the year was a typically low announced pending closed. That number has grown appreciably. We expect it'll continue to grow. How that all works out with closings and the like, TBD. Got you. Thanks for the color. And I guess for my follow-up, I just wanted to touch on the election, which you called out as a potential catalyst. You know, last quarter, it sounded like the election had not yet been top of mind for clients. However, given we're just a few months away, I just want to get a sense as to what type of impact this is having, on that maybe conversion from the pending, amount or pre-announced to that pending at close, backlog. Yeah, look, again, I don't think it's a light switch, then all of a sudden, everyone is obsessing about the election. What we said early on is we think that that's a risk to activity that's not well understood and not appreciated, but over time, it will be. I think you're starting to see more and more commentary that people are, you know, very much focused on the election. You know, if you look at sort of forward bets on volatility, they've increased appreciably as you get closer to the election. I think it's two things. I think companies that are thinking about transformative M&A that involves an interpretation of policy, enforcement at the FTC and the DOJ, I think this weighs on them, and that for a number of clients, they're going to wait and see the results of the election and then decide what their course of action is. It could be that they were thinking of a larger target, and they now believe it's, you know, unlikely, and they're going to pivot to a different target or a different way to scratch the itch, or it could mean that the second term of the current administration might have a different focus on enforcement once you get past the re-election campaign, or it could mean that with a change in administration, you have a fundamentally different approach. That is freezing some activity. I can't say it's freezing tremendous amounts, but there are pockets where that affects it, number one. Number two, I believe that as we get a lot closer to the election, we're going to see a lot more volatility, a lot more uncertainty, a lot of dueling policy prescriptions, which are going to create different sets of winners and losers, different proposed tax policies, regulatory policies, different approaches to China. And as a result, as we get closer, I think you're going to see activity dip as a result of that because of that volatility, and people are going to want to get through it. So it's going to manifest itself over time. It's going to manifest itself in different ways, depending upon what type of M&A you're looking at. But in the aggregate, I think when you get behind it and we're past the elections, I believe all else equal, we're going to end up with more activity, not less, post-election than pre-election. Thank you for taking my questions. Absolutely. Thank you. Thank you. Our next question comes from Brennan Hawken with UBS. Please go ahead. Good morning, this is Ben Rubin filling in for Brennan. Thanks for taking my questions. Sure. My first question is on restructuring. After a record year last year, it looks like you guys had another strong quarter, this Q1, and it seems like the commentary was quite bullish with that respect. I was wondering if you could just give me a sense of where your restructuring pipeline sits today. And you also spoke to a record mandate counts within the strategic advisory practice. So I was just curious, how does that compare for the restructuring group? And then just lastly, any type of color you can provide around the overall contribution, in terms of revenue that the restructuring practice had on this quarter's results, would be helpful. Thanks. I'll answer the last question first. We don't break out the contribution from each of the businesses. I think we've been pretty consistent on that. And then in terms of the pipeline, I think Paul's commentary about where we see the year ending up versus last year is, as you can imagine, the pipeline would look consistent with that. Okay, great. Thanks. And then for my follow-up, just as on recruiting, obviously last year was a record year, and it sounds like, you know, it will stay elevated in terms of the pace this year. And according to the slide deck, which I thought was interesting, there actually are several hires outside of Strategic Advisory. Could you speak to your latest expectations for the overall pace of recruiting this year, and will you continue to add senior-level talent in areas outside of Strategic Advisory? Thanks. Yes, I'll talk about the increase in the partner count, which we disclosed in our report this morning. That does include promotions. So historically, the growth in partners in the businesses outside of strategic advisory has usually been from internal promotes. And within advisory, it's a combination of internal promotes and new hiring. So when you see increases, you shouldn't assume that all of that comes from outside. Great. Thanks for taking my questions. Thank you. That does conclude today's Q&A session. I will now turn the call back to Mr. Taubman for closing remarks. Well, thank you all for joining us this morning. We very much appreciate your interest and your support, and we look forward to reconvening after second quarter earnings are released. Thank you very much.