Evercore delivered record third quarter results following a record first half with momentum across all business areas. Announced M&A activity has advanced at a healthy pace, led by larger strategic transactions, while capital markets activity has accelerated. In line with the momentum that we've experienced over the last several months, our backlogs continued to increase in the quarter, and client activity across the firm remains robust. We continue to see a healthy pipeline of external candidates, and attracting and developing exceptional talent remains core to our strategy and future success.

Our European advisory business delivered its best quarter on record, with strong performance across sectors, products, and geographies. We are seeing an increase in larger traditional restructuring assignments, and our backlog in this area remains strong as highly levered companies face ongoing challenges. Our private capital markets and debt advisory team continues to be active as the credit markets remain open and transaction activity picks up. Consistent with the strength we saw in the first two quarters of the year, our private capital advisory business delivered a record third quarter, driven in large part by GP-led continuation fund transactions.

In fact, through the first nine months of 2025, PCA revenues have already exceeded full year 2024, which was our best year on record. Equity capital markets saw a resurgence in activity in the third quarter, particularly with IPOs supported by lower levels of market volatility. We also experienced a significant increase in convertible issuance, an area where we have been investing in expanding our capabilities. For the third quarter of 2025, net revenues, operating income, and EPS on a GAAP basis were $1 billion, $216 million, and $3.41 per share, respectively.

What went well
  • Evercore delivered record third quarter results, generating over $1 billion in adjusted net revenues, up 42% year over year, its best third quarter ever and second best quarter in firm history.
  • Adjusted operating income rose 69% to $228 million and adjusted EPS rose 71% to $3.48, with adjusted operating margin expanding nearly 360 basis points to 21.8%.
  • Adjusted advisory fees of $884 million increased 49% year over year, a third quarter record reflecting continued market share gains.
  • The European advisory business delivered its best quarter on record, and the Robey Warshaw transaction closed on October 1st, adding five investment banking SMDs.
  • Private capital advisory delivered a record third quarter driven by GP-led continuation funds, with nine-month PCA revenues already exceeding full-year 2024.
  • Recruiting reached its strongest year to date, with 168 investment banking SMDs, up nearly 50% from year-end 2021, and Evercore ISI ranked number one in the Institutional Investor All-American Research Survey for a fourth straight year.
What went wrong
  • The typical positive fourth quarter seasonality is expected to be less pronounced this year given strong year-to-date results, the timing of transactions impacted by spring volatility, and a possible government shutdown impact.
  • The government shutdown is slowing the pace of M&A and equity capital markets deals due to reduced staffing at the SEC, FTC, and Justice Department, though management expects no permanent impact.
  • Underwriting revenues of $44 million were down 1% from a year ago.
  • The adjusted compensation ratio remained elevated at 65%, improving only about 100 basis points year over year despite strong revenue growth, reflecting heavy SMD hiring.
  • Adjusted non-compensation expenses rose 18% year over year to $139 million as the firm invested in occupancy, new international offices, and technology.

Guidance Changes

MetricPeriodCurrent guidance
Full-year adjusted compensation ratioFull year 2025Generally in line with current levels (~65%)
Q4 adjusted compensation ratioQ4 2025Expected somewhat lower than Q3 to reach full-year target
Full-year non-compensation expense growthFull year 2025Up year over year on a percentage basis, consistent with first nine months

Performance Breakdown

MetricYoYNote
Adjusted net revenues Up 42% to over $1 billion Broad-based strength across diversified businesses, SMD hiring and promotions, and an improving market environment.
Adjusted operating margin Up nearly 360 bps to 21.8% Revenue growth and operating leverage, including improvement in both compensation and non-compensation ratios.
Commissions and related revenue Up 15% to $63 million Higher trading commissions on stronger volumes, higher subscription fees, and good activity in convertibles and derivatives; a record third quarter.
Asset management and administration fees Up 10% to $24 million Market appreciation and net inflows.
Adjusted compensation ratio Down nearly 100 bps to 65% Steady improvement in the investment banking environment and revenues, partly offset by record SMD recruiting investment.
Adjusted non-compensation expenses Up 18% to $139 million (13.2% of revenue) Higher client travel and events, occupancy from added New York floors and new international offices, and increased technology spend.

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Investment banking recoveryEarly-stage recovery led by larger strategic dealsRecovery broadening with mid-sized deals building and sponsor activity steadily picking up; backlogs as high as everStrengthening
Government shutdown—Slowing deal timing across M&A and ECM but viewed as temporary, not permanentNew headwind being monitored
European expansionBuilt out Spain, France, Scandinavia, and Italy teamsRecord European quarter and Robey Warshaw closed, with substantial remaining white spaceAccelerating
Compensation ratio discipline67.6% two years ago, 66% a year ago65% this quarter, with gradual improvement targeted rather than a quick return to low-60s levelsGradual improvement
Non-M&A revenue mix50% of trailing twelve-month revenues45% of third quarter revenues as M&A picks upDeclining as m&a recovers, but not expected far below 40%
Credit market and isolated losses—Recent losses at certain firms viewed as isolated and not a system-wide issueLimited concern

Q&A Summary

How is the breadth of deal activity evolving as we exit the year?
Activity is strengthening broadly across nearly every sector, with larger deals starting earlier, mid-sized deals building, and sponsor conversations and bake-offs picking up; this is expected to continue into 2026.
Why has the compensation ratio only declined about 70 basis points despite strong revenue growth?
The ratio is down 260 bps over two years and 100 bps versus the relevant quarter last year while adding 18 partners and a senior advisor; the focus is optimizing platform value rather than micromanaging the ratio, with further gradual progress targeted.
Do investors need to give up on a return to low-60s compensation ratios?
There will not be a quick return to those levels; the firm targets gradual annual progress while prioritizing client service and medium-to-long-term value creation.
What is the impact of the government shutdown on the business?
It is slowing M&A and ECM deal timing due to reduced regulator staffing, but the impact is expected to be temporary with rapid recovery once the government reopens, not permanent.
What is the outlook for Europe and remaining white space after Robey Warshaw?
Europe had a record quarter with broad strength, and there remains a tremendous amount of white space as the firm fills out countries and covers many companies it never served before.
Where will the non-M&A revenue share settle as M&A recovers?
It is hard to say precisely, but with non-M&A businesses firing on all cylinders it is not expected to fall much below 40% even as M&A strengthens.

More on Evercore Inc.

Reported 2025-10-29 · figures from the Evercore Inc. Q3 2025 earnings call.

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