Lazard tops profit estimates as dealmaking rebound drives record advisory revenue
By Arasu Kannagi Basil and Lananh Nguyen
(Reuters) -Investment bank Lazard (NYSE:LAZ) surpassed Wall Street estimates for second-quarter profit on Thursday, as a rebound in dealmaking helped power record revenue in its advisory business.
Dealmaking activity bounced back sharply in May and June, after grinding to a halt in April as uncertainty over U.S. tariffs weighed on corporate confidence.
Lazard’s financial advisory revenue jumped 21% to $497 million in the reported quarter, driven by robust activity in Europe.
"We are super busy," CEO Peter Orszag told journalists on a conference call. "We also see an increasingly constructive environment for dealmaking going forward."
The largest U.S. banks last week struck an optimistic tone about the outlook for the rest of the year after their profits beat expectations.
Investment banking fees rose 13% at Citigroup (NYSE:C), 7% at JPMorgan, 26% at Goldman Sachs, and 9% at Wells Fargo.
Lazard had advised Belgian healthcare REITs Aedifica and Cofinimmo (EBR:COFB) on their $13.8 billion merger during the second quarter.
In July, the company advised Italy’s Ferrero on its $3.1 billion deal for Froot Loops maker WK Kellogg.
Lazard has hired 14 managing directors in 2025 after setting an earlier target to add 10 to 15 per year, as part of its goal to double revenue by 2030.
On an adjusted basis, the company earned 52 cents per share in the quarter, beating expectations of 40 cents, according to estimates compiled by LSEG.
Adjusted revenue jumped 12% to $770 million, topping estimates of $683.4 million.
TURNAROUND TAKES ROOT
In asset management, Lazard registered net inflows of $677 million in the latest reported quarter, after grappling with outflows since the second quarter of 2023 that had stoked concerns among investors.
Analysts say the inflows could be an early signal of a turnaround for the business.
"Asset management achieved positive net flows in the quarter and record gross inflows for the first half of the year, demonstrating progress towards our goal for this year to serve as an inflection point for the business," Orszag said in the earnings statement.
Orszag told journalists there are inorganic growth opportunities on the asset management side, but Lazard has not yet found the "right match."
Asset management provides a durable source of revenue and helps diversify revenue from investment banking businesses that are driven by economic cycles.
Revenue in the asset management business increased 2% to $292 million in the quarter.
Lazard’s assets under management rose 2% to $248 billion, as of June 30.
