Moelis & Company (NYSE:MC) Q2 2023 Earnings Conference Call July 26, 2023 5:00 PM ET

Company Participants

Matt Tsukroff - Associate

Joe Simon - Chief Financial Officer

Ken Moelis - Chairman & Chief Executive Officer

Conference Call Participants

Ken Worthington - JPMorgan

James Yaro - Goldman Sachs

Brendan O'Brien - Wolfe Research

Ben Rubin - UBS Financial

Connell Schmitz - Morgan Stanley

Devin Ryan - JMP Securities.

Operator

Good afternoon, and welcome to the Moelis & Company Earnings Conference Call for the Second Quarter of 2023.

To begin, I'll turn the call over to Mr. Matt Tsukroff. Please go ahead.

Matt Tsukroff

Good afternoon, and thank you for joining us for Moelis & Company's second quarter 2023 financial results conference call. On the phone today are Ken Moelis, Chairman and CEO; 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 Factors 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'll now turn the call over to Joe.

Joe Simon

Thanks, Matt. Good afternoon, everyone. On today's call, I'll go through our financial results, and then Ken will comment further on the business. We reported $182 million of revenues in the second quarter, a decrease of 23% versus the prior year.

Our first half revenues of $368 million were down 31% from the prior year period which is primarily attributed to a decrease in M&A transaction completions. This compares to a 40% decline in global M&A announcements and a 50% decline in sponsor-backed M&A during the first half of 2023.

Moving to expenses. Our compensation expense was accrued at 80%, consistent with the prior quarter. Our second quarter adjusted non-comp expenses were $43 million, including approximately $2 million of transaction-related expense I believe that the run rate for adjusted non-comp before transaction-related expenses is closer to $41 million to $42 million per quarter on a prospective basis.