Moelis & Company (NYSE:MC) Q3 2022 Results Conference Call November 2, 2022 5:00 PM ET

Company Participants

Mat Tsukroff - IR

Ken Moelis - Chairman, CEO

Joe Simon - CFO

Conference Call Participants

Michael Falco - JMP Securities

Manan Gosalia - Morgan Stanley

Brendan O'Brien - Wolfe Research

Brennan Hawken - UBS

Mike Brown - KBW

Operator

Good afternoon and welcome to the Moelis & Company Earnings Conference Call for the Third Quarter of 2022.

To begin, I'll turn the call over to Mr. Mat Tsukroff.

Mat Tsukroff

Good afternoon, and thank you for joining us from Moelis & Company's third quarter 2022 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 will now turn the call over to Joe to discuss our results.

Joe Simon

Thanks Matt, and good afternoon, everyone. On today's call, I'll go through our financial results and then Ken will comment further on the business. We achieved 232 million of adjusted revenues in the third quarter, a decrease of 55% from the record prior your third quarter. The decrease during the quarter is primarily attributable to lower levels of transaction completions driven by the volatile markets. Our nine-month total revenues of 768 million were down 33% from the record prior year period.

Moving to expenses, our year-to-date compensation expense was accrued at 62%. Given the dislocation in the transaction environment, our investment in new MD hires and non-MD compensation inflation across the industry, the 62% comp ratio is our best full year estimate. Our third quarter non-comp expenses were 38 million, resulting in a year-to-date non-comp ratio of 15%. T&E is still tracking at 75% of pre pandemic levels consistent with expectations. Our year-to-date pre-tax margin is 24%.