partners fourth quarter 2025 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 ma'am thank you very much pjt partners and joining me today are paul tabman our chairman and chief executive officer and helen mates 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 2024 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 reconciliations, you we should refer to the financial data contained within the press release we issued this morning, also available on our website. And with that, I'll turn the call over to Paul.

Thank you, Sharon. Good morning, everyone, and thank you for joining us to review our fourth quarter and full year results. Across the board, our 2025 results were record-setting, as we reported record revenues, record-adjusted pre-tax income, and record-adjusted EPS. This strong performance reflects our sustained investment in building the best advisory-focused firm possible, a firm distinguished by its best-in-class talent and its unwavering commitment to a culture of collaboration and teamwork. This firm-wide investment continued in 2025 as we added senior talent across industries, capabilities, and geographies. For the year, firm-wide partner headcount increased 12%, while total headcount increased 7%. We ended the year with record cash balances of $586 million after directing a record $384 million to share repurchases. Our capital priority remains first and foremost to invest in our firm and our people, and second, to return capital to shareholders and to do so principally through repurchases. 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, for the full year 2025, total revenues were $1,714,000,000, up 15% year-over-year. As Paul mentioned, this is a record result for our firm. All of our businesses had record revenues with strategic advisory, the primary driver of revenue growth for the year. For the fourth quarter, total revenues were $535 million, up 12% year of the year, also reflecting a record revenue quarter for our firm. The growth in the fourth quarter was primarily driven by growth in restructuring and PJT Pākehā. Turning to expenses consistent with prior quarters, we presented the expenses with certain non-GAAP adjustments, which are more fully described in our 8K, first adjusted compensation expense. Full-year adjusted compensation expense was $1.15 billion, representing a compensation ratio of 67.1%, which compares to 69% for the full year 2024. Given the higher compensation accrual for the first nine months of the year, the resulting rate for the fourth quarter was 66.2 percent. We will provide guidance on our 2026 compensation estimate when we report our first quarter results. Turning to adjusted non-compensation expense. Total adjusted non-compensation expense was $207 million for the full year 2025, up 12 percent year-over-year. The main drivers of the year-over-year increase were higher occupancy costs, driven by additional space in New York and London, and higher travel and business-related expenses. In the fourth quarter, total adjusted non-compensation expense was $54 million, up 16% year-over-year, with the same drivers of year-over-year growth, higher occupancy costs, and higher travel and business-related expenses. As a percentage of revenues, our adjusted non-compensation expense was 12.1% for the full year 2025 and 10.1% for the fourth quarter. We expect our total non-compensation expense in 2026 to grow at a similar rate to 2025 and we will provide more guidance on our outlook for the year when we report our first quarter results. We report an adjusted pre-tax income of $357 million for the full year 2025 and $127 million for the fourth quarter, our adjusted pre-tax margin was 20.8% for the full year, and 23.7% for the fourth quarter. The provision for taxes, as with prior 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 for the full year was 14.1% as we realized the significant tax benefit from the delivery of vested shares. The 14.1% rate was below our previous estimate of 15.5%, primarily due to the final income allocations across state, local, and foreign entities. For 2026, our current estimate for the tax rate is in the high-teams percentage, which is between the 2024 rate and the 2025 rate. We'll provide an updated estimate when we report first quarter results. Our adjusted if converted earnings were $6.98 per share for the full year compared with $5.02 in 2024 and $2.55 for the fourth quarter compared with $1.90 for the fourth quarter 2024. On the share count for the year end of 2025, our weighted average share count was 43.9 million shares, slightly down year over year. During the year, we repurchased approximately 2.4 million shares in share equivalents, and as Paul mentioned, we spent a record of 384 million on share repurchases. We are in receipt of exchange notices for an additional 850,000 partnership units, and subject to board approval, we intend to exchange these units for cash. We view the partnership exchanges as an effective way to repurchase shares without impacting the float. And consistent with our capital priorities, we will continue to invest in the business while using excess cash to, over time, reduce our share count. On the balance sheet, we ended the year with a record $586 million in cash, cash equivalents and short-term investments, and $632 million in net working capital, and we have no funded debt outstanding. Additionally, the board has approved a quarterly dividend of $0.25 per share. Finally, a note on our revenue reporting. Going forward, we will report our revenue as a single line item and will no longer break out the advisory, placement, and other designations. In our earlier years as a public company, the placement fee line was a reasonable proxy for PJP Park Hill. Today, more than 10 years on with the expansion of our private capital solutions business and the growth in our corporate placement capabilities, that is no longer the case. Given our strategic priority of expanding and further integrating our broad advisory capabilities, these revenue designations do not reflect either how we manage our performance or how we measure our progress. As we have done in the past, we will continue to provide context around the key drivers of our performance. Back to Paul.

Thank you, Helen. Beginning with restructuring. Notwithstanding broadly favorable macroeconomic and capital market conditions, an increasing number of companies continue to grapple with over-leveraged balance sheets, challenged business models, technological disruption, and changing consumer preferences and governmental policies. In this environment, demand for our liability management and restructuring advice remained elevated, and we delivered record Q4 and full-year results. Turning to PJT Park Hill, relatively modest capital returns have further strained an already challenged primary fundraising environment, prompting GPs and LPs alike to pursue alternative liquidity options. while investor interest in secondary products continues to grow, driven by an increasingly appreciated return profile. Against this backdrop, global primary fundraising volumes declined for the fourth straight year, while client interest in private capital solutions and other structured products continued to build. In this push-pull environment, our PJT Park Hill business delivered its strongest quarter ever, enabling full-year results to exceed 2024's record results, turning to strategic advisory. M&A activity increased sharply in 2025, with global announce volumes up significantly as strength in debt and equity markets, greater confidence regarding regulatory outcomes, as well as improved CEO confidence, all serve to make this the second best year ever for announced M&A activity. Our 2025 strategic advisory results benefited from this favorable deal environment, as well as the continued investment in and maturation of our advisory platform. 2025's strategic advisory revenues significantly outpaced 2024's record levels with revenues in our strategic advisory business reaching record highs for both the fourth quarter and the year. As we look ahead, the broader capital markets M&A environment continue to be highly constructive for deal-making. The momentum and global M&A activity observed in the second half of 2025 is likely to carry over through 2026 with strength in debt and equity capital markets, greater confidence regarding regulatory outcomes, and increased CEO confidence all providing ballast. As events of the last couple of weeks have shown, market sentiment can turn on a dime. Geopolitical risks, as well as debates surrounding the pace of AI development and capital deployment, and the economic returns associated with this investment continue to loom large. How these factors evolve will play a central role in shaping the year ahead. as it relates to our firm. In PJT Park Hill, the strength in our private capital solutions business should more than offset any declines in primary fundraising. In restructuring and liability management, we continue to operate in a sustained period of elevated activity, and our best-in-class team remains well-positioned to capture additional market share. In strategic advisory, while we began 2026 with a pipeline of announced transactions comparable to year-ago levels, our pipeline of pre-announced transactions, measured both by number of mandates and revenue opportunity, is up meaningfully from a year ago and now stands near record levels. We are better positioned than ever before to capitalize on a favorable deal environment due to our expanded footprint, enhanced capabilities, and growing brand awareness. Given our differentiated mix of businesses and the growth opportunities before us in each of these businesses, our firm remains well positioned to prosper in nearly any market environment. As before, we remain confident in our near, intermediate, and long-term growth prospects. And 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 1 on your telephone keypad.

To get out of the queue, press star 2. we'll take our first question from devon ryan with citizens bank your line is open uh good morning paul good morning helen how are you we're well good morning um i want to start with restructuring um obviously i think a lot of interest um in that business um in the industry just as the firms are saying kind of slightly different things on kind of the outlook there And so I'm curious if you could just give a little bit more color around the type of activity that you're seeing. Is it kind of amend and extend or kind of comprehensive liability management? Is there more in court? And then just expectations there as we go out. I know we don't have a crystal ball here, but in a world where F&A activity is kind of normalizing and accelerating nicely, does restructuring maintain, can it still grow, or does the normal pattern of it kind of falling off a little bit kind of play out? I'm just curious how you're thinking about not necessarily the next couple months, but probably the next, you know, 12 to 18 months. Thanks.

Sure. I think we've been remarkably consistent on this point, which is we're in a multi-year period of elevated restructuring activity, and there are lots of reasons for that, some of which is the benchmarks and the mindset relate back to historically low interest rates that were aberrational, and we're dealing in a more normalized rate environment today than before. The second is we're dealing in a world that is speeding up, not slowing down, and the technological innovation is fueling the economy, but at the same time it's creating winners and those winners are redefining, you know, who the losers are left behind companies are in what industries and which companies. And as a result, you can have a world where you have robust GDP growth, you have consensus that the macroeconomic environment is constructive, but at the same time have very concentrated stress in certain industries and with certain companies. And I think that suggests to us that this has legs and is going to continue to play out for a period of time. And the reality is we haven't really hit a recessionary environment for an extended period of time. If we were to, then all this commentary sort of gets taken off the board, and you're looking at a meaningful leg up. But if you just assume the current economic environment, we think you're going to continue to see robust liability management and restructuring. We have not seen any diminution in that activity, and if anything, we think we're starting to see the very early signs of that growing. In addition, every day, the goal of broadening our footprint – broadening our footprint with sponsors, broadening our footprint in industry groups, broadening our footprint geographically – and every day that we broaden that footprint gives us a greater addressable market, in which market those leading liability management and restructuring capabilities, and as we're able to reach a broader group and become relevant to a broader group, that gives us the prospect of continuing to grow our business at rates that may be greater than what the overall liability management or restructuring data suggests.

Thank you. And then just for my follow-up, I want to talk about the kind of platform naturation. You kind of mentioned that a couple times. Obviously, there's tremendous growth in strategic advisory over the last, you know, really last decade. But the last handful of years, really, the business has been maturing. And so, and again, I appreciate you don't break out a segment P&L. It's not how you run the firm. But can you help us get comfort around, you know, the ability to drive operating leverage off of those investments? You know, is there any proof points that you're seeing that? And then just kind of order a magnitude of operating leverage as the business backdrop transitions to a stronger M&A environment to the extent it does. You know, I don't know if there's a way to think about an algorithm of revenue versus expense growth or just how you would frame just given the growth you've had and then the maturation of some of that growth as well.

Well, I don't think we've had a year to date where our strategic advisory partners writ large have been more productive than in 2025. So clearly, as you just look at the maturation and the progression of our firm, that continues to be up and to the right. At the same time, that may direct to up and to the right, but that doesn't mean that every Every quarter and every year is precisely up and to the right. And as an example, one factor is just the pace of investment. And we've made it very clear that when we find individuals who match our expectations for talent, relationships, and personal integrity, and ability to operate in a culture of teamwork and collaboration, we're not going to be shy about onboarding those individuals. So some of these productivity measures get masked from time to time based on what's the rate and pace of investment. So that's why it's never a straight line. And also the strategic advisory business is a long-scale cycle business. So many times you could be having real impact and effect. And from the KPIs one would look at, you're seeing increased productivity even if the revenue lags. lags, but I think we look back on 2025 and we're just a fundamentally different firm. And maybe the easiest way to see that is if you just look at our firm-wide revenue and compare it to 2021, which was the peak year for M&A activity of all time, on that basis, we're up nearly 75% in firm revenues from 2021 to 2025. So just to give you some perspective as to how this continued investment is starting to gel, I think there's been real returns. But we're not satisfied with where we are because we have really high expectations and aspirations. But we're going to just continue to methodically get after all of the white space that we see across the board.

Appreciate it. And I'll hop back in the queue.

Thank you, Devin. we'll take our next question from james yarrow with goldman sachs your line is open uh hi this is song change i'm stepping for james i'm paul 2025 was a mega cap m a driven backdrop so can do you think can this part of market continue at this pace or improve for further in 26 I certainly think where we haven't tasted the full extent of how robust the M&A market can be but when you have a year like 2025 where depending

upon how one counts volumes are up 35 40 even even higher than 40% and you're looking at the second highest revenue year it becomes a difficult comparison But I focus less on, you know, whether we're going to ring the bell and top tick last year. I ask myself, are we in a multiyear period of elevated deal activity? And I think given the current macroeconomic backdrop, the regulatory posture of this administration, the desire, you know, in Europe to address certain issues in terms of industry consolidation and the like, which has perhaps been a negative for the continent. When I think about the attractive capital markets backdrop and a world that is speeding up and not slowing down, which means you either need to press your competitive advantage, And one of the ways to do that is with more scale and to use your capabilities to continue to build most, or you find yourself left behind and you need to think about, you know, the corporate structure that you have, or you're vulnerable to shareholder activism, or you need to pair the mission and focus on areas where you have clear core competencies and advantages. all of that suggests that we should be in a multi-year period of elevated deal activity it's easy to talk about inflection points when things are going to get better or things are going to get worse so when you're dealing with quite attractive macro backdrop the issue is just simply how long is it going to continue and we think it has legs but whether we're continuously hitting new highs that's much harder to call very helpful just a follow-up here you you You delivered a meaningful step down in the comp ratio in the quarter.

Can you please help us think through the outlook for the comp ratio from here?

Well, I think we've said a couple of years ago that when we, you know, we're, you know, delivering our financial results that we thought that based on everything we had seen, our compensation as percentage of revenue had peaked, and it had peaked because we had maximal investment in a period of relatively low velocity M&A activity, and that confluence had caused that ratio to gap out in the short term, but we expected that to continue to work its way down. And I don't think we're done working it down, but simply the pace and rate of that, and that's in part going to be a function of how the markets develop over the next couple of years and how strong they are and how much operating leverage we get by revenue growth. But some of it's also going to be the pace of investment, which is still very much TBD. And we'll report at the end of the first quarter when we deliver our Q1 results our best estimate for what that ratio should be for 2026.

We'll take our next question from Brennan Hawken with BMO Capital Markets. Your line is open.

Good morning. Thanks for taking my questions. Good morning. Hi, Paul. I'm hoping you can help me with something because I'm struggling a little bit here. So I hear you loud and clear that restricting the outlook is pretty good. But, you know, when we look at the revenues here in the fourth quarter, I know you guys flagged in the press release that restriction was up. But, like, the multiple on the deal logic revenue was one of the lowest that we've seen in years. So, to me, that suggests that the actual quarter was a little bit lighter on the restructuring side than what we've been seeing. So, number one, I'd love to hear you maybe speak to those. I know restructuring is chunky, right? So, like, that can happen quarter to quarter. But maybe help reconcile that a little bit. And then when you're thinking about restructuring, could you speak to maybe certain sectors and where you're seeing a lot of activity? There's a lot of agita out there around software, so curious about what you're seeing in your business there.

Okay. I don't spend a lot of time looking at geologic data. I just focus on the business that we do, and we are pretty clear in how we communicate to our investors. We had our record quarter in restructuring. Q4 was the best restructuring quarter we've ever had. The year was the best restructuring year we've ever had, and we continue to be constructive and optimistic about the future prospects for our franchise. I can't be any clearer than that. Those are the facts.

Okay. And sectors? Were you busy in restructuring?

Look, we're really busy across the board, but, you know, I think there are areas. You know, I think you look at challenged industries, you know, parts of the healthcare, you know, complex, there's a lot of pain. Software is an area where there will be, you know, elevated focus just given, you know, events and pressures coming from AI. We've talked, you know, consistently about the fact that AI is going to be a disruptor. The whole digitization, you know, and the consumption of media has created significant opportunities in media. There are issues in retail which also come from, you know, online versus offline shopping and changing, you know, consumer behaviors. I think it's broad-based. It's not narrow because in many industries there are companies that are being left behind and their business models took on, you know, or suggested they could support a quantum of debt about the right capital structure, and companies are increasingly trying to get ahead of these issues and they're looking at where their choke points might be in the future as far as covenants or significant maturities, and they're using the creativity and deep capital markets and the ability to access public or private markets to come up with a better capital solution. So it's really quite fraud-based, and our focus is not narrow. And that's another reason why I have greater confidence that this trend continues. If it was just, you know, a couple of very narrow verticals, there's always the risk that that well runs dry, but that's not what we're seeing.

Got it. Got it. Yeah, and look, the strength of the restructuring franchise that you've built is clearly quite good. Maybe I'm going to try my question in a different direction. I know you don't pay attention to deal logic, but, you know, we're stuck here using the data that we've got. So could you speak to Park Hill? I know you spoke to the challenges in the fundraising environment, but there's also the GPU ed secondaries business, which has been better. What did trends in Park Hill, revenue trends in Park Hill look like? And was that maybe a little bit weaker just because the fundraising remained so challenging?

I think most of my commentary throughout the year was that we expected the year to, you know, come close to or be proximate to the prior year's record performance. 2024 was a record for the Park Hill business. We ended up with a record fourth quarter, and as a result of a record fourth quarter, we full-year record, our 2025 results eclipsed 2024. I mean, if we just step back for a moment, we generate over $500 million in revenues in the quarter. We've never done that before as a firm. We had a record quarter. We pierced $500 million by a significant amount. We had the best quarter ever in restructuring. We had the best quarter ever in strategic advisory. We had the best quarter ever in PJT Park Hill. And the reality is we're dealing with, you know, a fourth quarter a year ago where we also had records. So we had, you know, very tough hurdles there, and we cleared them across the board. So all of the businesses are very well positioned going forward. I think as you look at the Park Hill business going forward, solutions, structured products, and the like, increasingly represent, you know, the bulk of the revenue opportunity. And that market, as I said in the outlook, is growing meaningfully faster for us than any potential, you know, diminution or flatness in the primary fundraising line, which makes us optimistic about the Park Hill business in aggregate. We're feeling pretty good about where we stand at the end of 2025, moving into 2026.

Thanks for those comments, Paul. Appreciate it.

Absolutely. we'll move next to jim mitchell with seaport global securities your line is open hey good morning um paul last you mentioned that m&a volumes are the second best year ever um but when we look at sort of the number of deals uh down for the fourth year in a row last year so very much a mega cap kind of environment so i guess number one are you seeing activity starting to broaden out to more of the middle market and down. And then secondly, for you specifically, for PJT, I know you've been looking to build out your touch points with financial sponsors. So just any kind of update on how you're positioned for that maybe middle market recovery among financial sponsors?

So volumes are up immediately, deals count down. Although, if you really double-click on that, a lot of the reduction in deal count is in the sub-billion-dollar transactions, and that's not a place that we play as much in. So, in some respects, that's not as broad-based as people might think, because a lot of that reduction in deal count is at the much, much smaller level than it is in chunky $3, $5, $10 billion transactions. That would be the first point. I think the second point is if you look at the buying binge in private equity in 2021, the painful comeuppance in 2023 when there were somewhere like nine rate hikes in 2023, you've got the low-velocity private equity environment. And I think what we're doing is we're getting back to equilibrium between capital expended and DPI. And we've talked about this. It's not always the easiest way to shift from a fundamental imbalance where all this capital has been called and relatively little. If you do that for a period of time, you create stresses and strains in the system. I think the industry has worked through a lot of firms as they become more comfortable in monetizing investments. at these valuations. And the more that they can monetize, I think that will make it easier for them to be more forward-leaning and commit more capital, and we'll get this ecosystem employed in capital return. I don't think that it's going to be perfectly in balance, which is why we're so constructive on the private capital solutions business. I think that's an arrow in one's quiver that's going to continue for a considerable period of time. And as far as the private equity, even how we cover it, touch it and cover it, it's through all the liability management exercises we do. And as we continue to broaden our sponsors, it shouldn't be a surprise that some of that foundation's liability management, adding private capital solutions, that's an area, advisory, we've become more relevant expertise.

Maybe a quick one for Helen. I appreciate not giving the full year tax rate yet, but can you give us any help on the first quarter, given the likely quite positive benefit in the first quarter, any way to think about what the tax rate could be in the first quarter?

Sure. When we estimate the taxes, Jim, we look at it over the full year and smooth it over the full year when we do the adjusted effective tax rate. So when we do that, when I gave you the high teens, that anticipated that benefit from the January will be early March.

That's right.

You smooth it out.

Thanks for them to account. yeah okay thank you thanks jess we'll take our next question from mike brown with ubs your line is open great uh good morning paul and helen good morning so paul i wanted to just double click on the private client solutions opportunity here you you've touched on it a number of times on the call um maybe just start on the secondary side of the market you know What are you expecting from kind of a GP and LP side in terms of the mix in 26 compared to 25? And then your positive views there, it sounds like it's kind of a secular growth, but maybe can you unpack a little bit about PJT's opportunity from market share opportunity? And then just on the primary side, if you could spend a minute there, we are seeing realizations picking up for the industry. So when could that return of capital start to translate to stronger fundraising on the primary side Okay, why don't we start there?

I think that the primary industry across the board is challenged for a variety of reasons, right? One of which is increasingly asset allocators are allocating larger and larger percentages of their allocations to the largest fund complexes. And as a result, many of those have their capabilities in-house. So you're really dealing with the next level. That trend towards consolidating relationships and the like, I don't expect to change. I think that's the first thing. I think the second is the performance across the industry has been a bit uneven, and I think the 2021 vintage may choose, may turn out to be a less than flattering vintage when history is written. And as a result, there's also the risk that just the absolute allocations to the asset class sort of. At the same time, there's immense interest and opportunity in credit and credit products and structured credit. And I think we're very well in real estate. And I think that the dynamics to then they've been for a concern. It's not like one monolithic industry. It's the fact that, you know, there are going to be pockets of opportunity, capital. clients are going to be more discerning about whether or not to employ a placement agent if they use the placement agent just that supposedly those assets that are being presented to the marketplace are the highest quality assets so i think that that's going to have a thanks paul

for all of that color there uh just wanted to follow up on the restructuring side so very positive outlook here for restructuring that was that was clear um just wanted to ask are you seeing any competition for talent in the restructuring business. You've obviously got a premier franchise and leading share, but we did observe that a partner looks like they spun out and are creating their own restructuring business. I'm just curious how you're thinking about the war for talent and that restructuring side of the business. Thank you.

Look, we're a talent-focused firm, so we're always focused on making sure that we have the best talent, and we believe we have the best talent, We believe we have the best culture, and we believe we have tremendous opportunities ahead of us as we start to get at the white space that we have. And I think our franchise enjoys more white space than most anyone else. We're very comfortable that it is a highly attractive destination, and we'd love nothing more than to continue to invest in our franchise and to add more talent if those opportunities arise.

Thanks, Paul.

We'll move next to Brendan O'Brien with Wolf Research. Your line is open.

Good morning. Thank you for taking my questions. Isn't this just a bigger picture question, Paul? You know, there's obviously been a lot of optimism on the capital market's outlook this earnings season, but just based on what we can see in the data, it looks like announced volumes for January were down around 10% year on year. You know, I know that one month does not make a trend, but as you flagged in your prepare remarks, we have seen a notable uptick in geopolitical tension and political uncertainty in the U.S., which is only likely to intensify into the midterms. So I just wanted to see if you had any views as to what is driving that delta between, you know, the optimism and the data thus far, and whether you've seen the rhetoric and resulting market volatility have any impact on dialogues at this point.

I think bankers love to be optimistic in January. I think that's a tried and true tradition, and that doesn't seem to vacillate regardless of the macro environment. I think maybe because I've been around so long, I have a more sober view of the world, which is I think we have a highly constructive macro backdrop. But, you know, the deal environment and the capital markets environments are inherently fragile, and they react, you know, in a punishing way to news flow, and the news flow could be positive or it could be negative, and we're dealing with some, you know, large geopolitical risks, and we're dealing with some very large debates about the capital being deployed to AI, the pace of that capital deployment, what the returns are, the implications for industries and for changing market winners and resultant market losers. So I think we have a very constructive backdrop, but I'm not prepared to kind of just wave the flag and bring out the pom-poms and talk about how this is going to be the best year ever and the like. I think it's a highly constructive environment. I've taken note of the first month. I think it is just a month, but maybe when we have our conversation at the end of the first quarter, will have more clarity. But the reality is 2025 was a pretty darn good year with volumes up, however you count it, 35, 40, 40-plus percent, the second-best year. It does create a high bar. So to me, it's less about is this year better than last year? The issue in my mind is how long is this runway And how do we, as a firm, focus our efforts on continuing to gain market share? And we've always talked about our firm as a market share and not a market size. And what that means is, as long as we have a relatively healthy deal backdrop, and as long as deals can get done, our goal is to win over clients one at a time and to be more relevant and more active and more geographies, more industries with more capabilities and a longer and longer record of excellence. So in my mind, if things get a little tougher, that's actually good because it just means that advice matters more. And when advice matters more in the selection process, that's good for our firm. So I'm still highly constructive on the M&A environment.

I just am not sure anyone can tell you exactly how good it's going to be. but relative to what we what we dealt with in 22 and 23 and you know pockets of 24 there's no doubt that we're in a much more favorable construction that's helpful caller thank you paul and i guess for my follow-up you know we talked a lot about the mass creation of the platform on this call and one thing that stood out to me in your deck is that you're entering 2026 with the lowest percentage of partners on the platform for less than two years since you went public by a pretty significant margin i was hoping you could help us think through the implications of this for

your ability to generate comp leverage and revenue growth in 2026 just given you'll have less under earning partners on the platform um it was so ironic about all of this i think we introduced this concept when we went public and we just sort of broke out two-year partners because we made the observation at the time that it was quite difficult for any new partner when you actually went through the calendar to generate any revenues of consequence in the first two years because by the time someone came on to the platform they still had non solicit issues then after those handcuffs came off and they went to engage with all of their clients they needed to get to know you process so if they could better introduce their new firm then you needed to see whether or not a mandate was available that mandate was available that might or might not lead to an announcement even if it led to so we started out by just sort of saying don't even expect any revenues for two years and somehow that's now the view that that's like a fully functioning mature partner on the platform and the reality is that every year every year there should be greater and greater productivity, so it's not like the magic. In year three, there's the calendar invites the opportunity for there to be real revenue, but year four is better than year three, year five is better than year four. That's the first point I would make. The second point I would make is that in many or second partners to a Greenfields initiative, It might take four or five partners until you get to critical mass. So the productivity curve of going from zero to one, one to two, two to three might be quite light. When you add that fourth to that fifth, all of a sudden, you have a step function change because you light up the network. So it's not as easy to model. And the third point, which I talk about all the time, is the walk-in business where people reach out to you because they've heard of the firm. There have been very positive experiences. Their chairman has a direct experience. Their CEO, someone else in the C-suite, or someone else in the ecosystem. And every day that goes by, that continues to expand. And that also is a meaningful driver of productivity, which is what I call sort of the firm or the franchise value. We're very much in play, and I think we're in the very early days of getting to that potential that we aspire to, which is to continue to build the world's best investment bank. I think as we do it, bit by bit, brick by brick, we should have financial rewards that come along with it.

Great. Thank you so much for taking my questions.

We'll move next to Alex Bond with KBW. Your line is open.

Thanks. Good morning, everyone. Most of my questions have been asked already, but maybe a quick one for Helen just on the non-comp side. So, I heard the guide for the year of roughly similar to the year-over-year increase to last year, but maybe if you could just help us think through what are going to be the main drivers there of the higher nominal amount in 2026, that would be helpful.

Yeah, so as I said, we'll give a more refined view in the first quarter, but if you think of the tailwinds going into 26, we definitely should experience less occupancy growth. We've made some pretty significant investments in New York and London, so that growth should slow. And we're always going to get leverage out of some of our fixed costs around our IT infrastructure or some of the professional fees that we have relating to being a public company. So they would be the tailwinds. And I think the headwinds are more people. More people brings more travel, more market data, more IT and comms support. So I think against that, that's where we're going to see the growth and just trying to figure out how we manage that. I think it would be fair to say we've been very disciplined in how we manage our expenses, but there are some just activity-related expenses that are going to drive those non-concepts.

Got it. That makes sense. And that's helpful. I'll leave it there. Thank you, everyone.

Thank you. Thank you. That concludes our question and answer period. I would now like to turn the call back over to Mr. Taubman for closing remarks.

Just once again, we want to thank everyone for joining us this morning as we reported our full year results. We're very excited to get on with 2026, and we look forward to reconvening to report our Q1 results in April. Thank you very much, and have a great day.