What Management Said
Read the full Q2 2026 transcript ↗Our record second quarter revenues capped off a record first half for the firm, underscoring the strength of our platform and strategy. For the quarter, we generated $1 billion of adjusted net revenues and adjusted diluted earnings per share of $2.91, up 19% and 20% respectively from the second quarter of last year. Performance in the quarter continued to be broad-based across nearly all of our businesses with record second quarter revenues in our North American Strategic Advisory business, the Private Funds Group, and the Equities business. Global industry-wide announced M&A activity remains healthy and is currently tracking well above last year's year-to-date levels, which was the second most active year for M&A on record.
Looking ahead to the second half of the year, client engagement remains strong, our backlog currently sits near record levels. Though, as is always the case, the timing of backlog conversion into revenue can vary from quarter to quarter, it is best to evaluate our business on a longer-term basis. While the market backdrop remains dynamic, we are encouraged by the outlook for our business and expect to see continued activity in the latter part of this year and into next. Since our last earnings call, four Senior Managing Directors have joined our investment banking practice in healthcare, industrials, private capital advisory, and our private capital markets group, all based in New York.
and Europe, healthcare, chemicals, and equity capital markets, as well as two new hires based in our Frankfurt office. Our EMEA strategic advisory business had a strong quarter and a record first half. Our private capital markets and debt advisory team remains active, with particular strength in structured equity transactions and securitizations as clients continue to seek innovative capital solutions. Private capital advisory maintained its position as the market-leading business in this space and delivered another strong quarter.
What went well
- Evercore posted record second-quarter revenues that capped a record first half, with adjusted net revenues of approximately $1.0 billion (up 19%) and adjusted diluted EPS of $2.91 (up 20%); first-half adjusted revenues were $2.4 billion, up 56% year over year.
- On a GAAP basis, net revenues were $990.2 million, operating income $146.6 million, and diluted EPS $2.32, with a 14.8% GAAP operating margin.
- Performance was broad-based with record second-quarter revenues in North American Strategic Advisory, the Private Funds Group and Equities, and the best-ever quarter for both underwriting (fees up 201% to $97 million) and wealth management (AUM of $16.2 billion).
- Non-M&A businesses generated more than 40% of trailing-twelve-month revenue, and the firm advised on marquee deals including Arcosa's $8.5 billion sale to CRH, Iridium's $8 billion sale to Rocket Lab, and Parabilis Medicine's $771 million IPO (the largest biotech IPO ever).
- The adjusted compensation ratio improved to 63.5%, down ~190 basis points year over year, and first-half operating leverage was strong (revenues +56%, adjusted operating income +99%).
- Evercore returned $823 million of capital in the first half ($734 million of buybacks at ~$325 average), already surpassing its full-year buyback dollar record, while adding 19 senior managing directors year to date (188 total, 50+ ramping) and maintaining a near-record backlog.
What went wrong
- Adjusted non-compensation expenses spiked, lifting the Q2 non-comp ratio to 17.5% (versus 13.5% for the first half), driven by growth investments plus episodic/seasonal items - including a significant bad-debt/credit-loss provision, elevated search-and-placement fees, conferences, offsites and summer interns - totaling double-digit millions of one-timers.
- The adjusted operating margin was 19% in the quarter and 22.7% for the first half, still below the firm's historical full-cycle range as it invests and recovers from the 2023 banking downturn.
- Middle-market and financial-sponsor M&A activity, while improving, continued to run below historical levels, leaving large-cap strategics as the primary driver of the market.
- Second-half comparisons are demanding, as both Q3 and Q4 2025 were record quarters, and Q1 2026 was the largest revenue quarter in firm history at $1.4 billion.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Non-comp expense ratio | FY2026 | Striving for a ratio approximately in line with last year, with a modestly higher non-comp growth rate than recent years |
| Non-comp expenses (sequential) | Q3 2026 | Not expected to increase sequentially like Q2 did (episodic items should ease) |
| Compensation ratio | Long-term | Gradual improvement over time, balanced against continued investment |
| Effective tax rate | H2 2026 | Similar to the same quarters over the last few years |
| Revenue outlook | H2 2026 | No explicit guidance; near-record backlog, strong client engagement, continued gradual build into late 2026 and 2027 (against record 2025 comps) |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Adjusted net revenues | +19% to ~$1.0B | Record second quarter with broad-based strength as market conditions and deal activity improved through the quarter. |
| Adjusted diluted EPS | +20% to $2.91 | Revenue growth plus comp-ratio improvement; GAAP diluted EPS of $2.32. |
| Advisory fees | +11% to ~$776M | Record second-quarter advisory with strength across nearly every area and higher productivity. |
| Underwriting fees | +201% to $97M | Best quarter to date on robust follow-on and IPO issuance and a healthcare resurgence. |
| Commissions and related | +9% to $64M | Record second quarter in the Equities business on best-in-class content, corporate access and execution. |
| Adjusted operating margin | 19% (Q2), 22.7% (H1) | Improved comp ratio offset by elevated, partly episodic non-comp expenses and continued growth investment. |
| Capital returned | $823M in H1 | $734M of buybacks at ~$325 average (a full-year record already surpassed) plus dividends; share count down over 730,000 sequentially. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Record first half and cycle durability | Recovering M&A market | Record H1 revenues of $2.4 billion (+56%) with near-record backlog; management sees the M&A cycle with further room to run over the medium term, supported by large-cap activity and rising sponsor/middle-market participation. | — |
| AI as an M&A catalyst | Emerging theme | AI is driving strategic dialogue as large strategics pursue scale and capabilities; software M&A is warming after a mid-year pause, and AI/software stress is also generating restructuring and liability-management activity. | — |
| Non-comp investment cycle | Lean non-comp base | A larger-than-normal non-comp increase reflects near-term deal-pitching/conference costs, medium-term hires (11 external SMDs, 8 promotions, 50+ ramping), technology/AI and data investments, plus episodic items, with the full-year ratio targeted near 2025's 14.2%. | — |
| European expansion | Robey Warshaw combination announced 2025 | Integration going smoothly with joint deal wins; Evercore added Frankfurt hires, a Stockholm office, and is building out Milan, Paris, Spain, and European restructuring/debt advisory, expecting to build share. | — |
| Talent strategy | Selective senior hiring | Continued one-by-one recruiting of A-plus talent across both bulge-bracket and independents rather than large lift-outs; headcount up ~10% while revenues grow faster over multi-year periods. | — |
| Margins in context of growth | Historical 24.5%-28.5% operating margins | Management frames margins hand-in-hand with growth (revenues quadrupled over a dozen years to $4.7B trailing), viewing current sub-historical margins as recovery-plus-investment, with full-cycle normal nearer 24.5-25%. | — |
Q&A Summary
Steven Chubak (Wolfe Research) pressed on why non-comp leverage lags peers given the 30% year-to-date non-comp increase and asked what it implies about the second-half ramp.
LaLonde reframed to a multi-quarter view (13.5% H1 non-comp ratio, targeting ~2025's 14.2% for the year), attributing increases mainly to growth investments (SMD hires, AI/technology) plus episodic/seasonal items, and Weinberg pointed to a very strong second half with near-record backlogs.
James Yaro (Goldman Sachs) asked for color on the two-speed market and what improves middle-market and sponsor activity.
Weinberg said sponsor pitch and win rates are up materially with expanded coverage and integration of private capital advisory, and middle-market dialogues are healthy though not yet matching large-cap strategics, viewing both as a build rather than an imminent surge.
Brennan Hawken (BMO) asked whether second-half revenue can exceed the first half given tough comps and an extraordinary Q1.
LaLonde noted Q4 is historically the best quarter and Q1's $1.4 billion was the firm's largest ever, but stopped short of guidance, citing near-record backlog and a continued gradual build into late 2026 and 2027; Weinberg emphasized strong dialogue and in-house deals.
Neil Iliff (Citizens) asked how AI is affecting buyer/seller expectations, especially in software, and whether spreads are tightening.
Weinberg said software M&A dialogues are warming again (high-quality assets active on both buy and sell sides), AI is a major catalyst for large strategics pursuing scale and capabilities, and it is also driving restructuring/liability-management work; LaLonde noted 'green shoots' on the software M&A side.
Mike Brown (UBS) asked for an update on Europe and the Robey Warshaw acquisition.
Weinberg said Europe is a real strength with smooth Robey Warshaw integration and joint large-deal wins, plus added capability in Frankfurt, Stockholm, Milan, Paris, Spain and European restructuring/debt advisory, and expects to build share.
Ryan Kenny (Morgan Stanley) asked about client dialogue around potential rate hikes and pipeline resilience.
Weinberg said rates are not currently driving merger or sponsor activity and financeability is not an issue, though a substantial rate rise could stress some sponsor portfolio companies; Evercore ISI projects roughly neutral rates through year-end.
Gabriel Angelini (Bank of America) and Steven Chubak (Wolfe) asked about hiring appetite/competition and the cost of recruiting deferred comp from bulge-bracket versus independent peers.
Weinberg said Evercore recruits one-by-one for A-plus culturally-fitting talent (not big lift-outs) across both bulge-bracket and independents, sees no material difference by source, and that the ROI on hired talent on the Evercore platform is very good.
James Yaro (Goldman Sachs) and Brennan Hawken (BMO) followed up on the operating-margin trajectory and quantifying the Q2 one-timers.
LaLonde framed full-cycle normal margins nearer 24.5-25% (recovering from the 2023 downturn with each year improving), noting non-comp is ~300 bps below pre-COVID offsetting a higher comp ratio, and quantified Q2 one-timers (bad debt, legal/audit fees, clustered search fees, conferences/interns) at double-digit millions not expected to recur at the same magnitude.
More on Evercore Inc.
Reported 2026-07-29 · figures from the Evercore Inc. Q2 2026 earnings call.
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