Moelis & Company (NYSE:MC) closed 2025 with what executives described as “significant momentum,” driven by higher client activity, record new business generation, and a broadened talent base. On the company’s fourth-quarter and full-year 2025 earnings call, CEO and co-founder Navid Mahmoodzadegan and CFO Chris Callesano highlighted record fourth-quarter revenues, improved operating leverage, and increased capital returns, while outlining expectations for an active transaction environment in 2026.
Record revenue in Q4 and 28% adjusted revenue growth for 2025
Moelis reported record fourth-quarter revenues of $488 million, up 11% from the prior-year period, and said full-year adjusted revenues rose 28% to $1.54 billion. Mahmoodzadegan said 2025 revenue was driven by 35% growth in M&A, a “record-setting year” for the firm’s capital markets business, and double-digit increases in both average fees and the number of completed transactions.
Mahmoodzadegan also pointed to several transactions the firm advised on since the prior earnings call, including:
- Netflix’s acquisition of Warner Bros. Discovery
- Allied Gold’s sale to Zijin Gold
- Ventyx Biosciences’ sale to Eli Lilly
- USA Rare Earth’s partnership with the U.S. Department of Commerce
- The debt restructuring of King Abdullah Economic City
- X-energy’s pre-IPO convert transaction
Management sees a constructive setup for 2026 across M&A, sponsors, and capital structure
Looking ahead, Mahmoodzadegan said constructive financing markets and strong equity market performance are “setting the stage for an active transaction environment in 2026.” He said strategics are becoming more active as boards gain confidence to pursue larger transformational deals tied to scale and technology shifts, while sponsor activity is “building” as valuation alignment improves and private equity firms face pressure to deploy and return capital.
On the M&A market’s composition, Mahmoodzadegan said mega-cap activity could continue, citing motivations such as creating scale, driving efficiencies, and positioning for technological change, alongside a regulatory and financing environment that has allowed large transactions to proceed. He also suggested momentum could broaden into the middle market as prior frictions—such as buyer-seller valuation disconnects and higher financing costs—ease and as sponsors increasingly bring long-held portfolio companies to market.
Asked about capital structure advisory, Mahmoodzadegan said the firm sees a “long runway” of liability management assignments due to leverage across many companies and the accelerating pace of technology disruption. Over time, he anticipates more traditional restructurings as out-of-court solutions “run their course.” He added that Moelis has invested in creditor-side capabilities and said that after a strong 2024 in capital structure advisory and a weaker 2025, he is now “predicting flat to up” for 2026 in that segment.
On geopolitical uncertainty, Mahmoodzadegan said it remains a topic in boardroom discussions and that uncertainty is generally not supportive of large corporate transactions. However, he also suggested boards may be “playing through” some near-term flare-ups unless there is a significant, visible shock, given the pressure to position businesses for technology disruption and equity-market priorities.
On quarter-to-quarter cadence, management declined to predict specific quarterly revenue outcomes. Mahmoodzadegan said the firm does not want to extrapolate from a single month of data, adding that new business generation and pipeline levels are at “all-time highs.” He noted that, in an improving environment, the first quarter tends to be seasonally weaker before building through the year.
Operating leverage improves as compensation and non-comp expense ratios decline
Moelis emphasized improved operating leverage in 2025. Callesano said the firm’s adjusted compensation ratio was 61.1% in the fourth quarter and 65.8% for the full year, down from 69% in the prior year. Mahmoodzadegan noted the full-year improvement represented a 320 basis point decline in the adjusted compensation ratio.
Adjusted non-compensation expenses were $60 million in the fourth quarter, representing a 12.4% ratio, while full-year adjusted non-compensation expenses were $224 million, a 14.6% ratio, down from 15.9% the prior year. Callesano attributed expense growth drivers to increased deal-related travel and entertainment and client conferences, ongoing investments in technology and data including AI, and higher occupancy costs tied to headcount growth. He said the firm currently anticipates full-year 2026 non-compensation expenses to grow at a similar rate to 2025.
Callesano said adjusted pre-tax margin was 28.6% in the fourth quarter and 21.5% for the full year, representing 510 basis points of improvement versus the 16.4% adjusted pre-tax margin in 2024.
EPS, taxes, and capital return: dividend and expanded buyback authorization
Moelis reported full-year adjusted EPS of $2.99, up 64% from $1.82 in 2024, which Callesano said reflected revenue growth and reductions in compensation and non-compensation expense ratios.
On taxes, Callesano said the firm’s normalized corporate tax rate for the year was 29.8% and its effective tax rate was 22.4%, with the difference primarily driven by excess tax benefits related to the delivery of equity-based compensation in the first quarter of 2025. He added that annual vesting of RSUs would occur later in the month and the firm expects an excess tax benefit that will favorably impact first-quarter EPS.
On capital allocation, the board declared a regular quarterly dividend of $0.65 per share. During the fourth quarter, Moelis repurchased 716,000 shares at an average price of $62.96, bringing total repurchases for the year to approximately 950,000 shares. Callesano said Moelis returned $284 million of capital to shareholders for the 2025 performance year through dividends, net settlement of shares, and open-market repurchases.
The company also announced a new share repurchase authorization of up to $300 million with no expiration date. Management said the dividend remains a priority, while buybacks are also intended to help mitigate dilution from equity compensation, all while maintaining what they described as a strong balance sheet. Callesano said Moelis ended the period with $849 million of cash and no debt.
Hiring, private capital advisory buildout, and talent ramp
Moelis highlighted continued investment in talent and expanded capabilities. Mahmoodzadegan said the firm added 21 managing directors during 2025, including nine lateral hires, and promoted an additional 13 professionals to managing director at the beginning of 2026. As of the call, Moelis had 178 managing directors.
In response to questions about the “ramp” of the MD base, Mahmoodzadegan said about one-third of MDs have been MDs on the platform for less than three years, and about one-quarter for less than two years (including both lateral hires and internal promotions). He characterized this as a sign the firm is still maturing into its talent base.
Management also discussed progress in building its Private Capital Advisory (PCA) business, focused on GP-led secondaries and related sponsor solutions. Mahmoodzadegan said the PCA team is integrated with industry and sponsor bankers and that the secondaries pipeline is developing rapidly. He noted the addition of a managing director focused on private credit secondaries joining the next week and said another MD is expected later in the year, which would bring the GP-led secondaries team to seven managing directors.
However, management said PCA remains in ramp mode, with most activity centered on winning mandates and origination. In response to a question about fourth-quarter trends, Mahmoodzadegan said investors should not expect “a lot of actual revenues” from PCA in the fourth quarter or in 2025, but he expects more meaningful revenue growth as the firm moves into 2026.
About Moelis & Company (NYSE:MC)
Moelis & Co operates as a holding company. It engages in the provision of financial advisory, capital raising and asset management services to a client base including corporations, governments, sovereign wealth funds and financial sponsors. The firm focuses on clients including large public multinational corporations, middle market private companies, financial sponsors, entrepreneurs and governments. The company was founded by Kenneth David Moelis, Navid Mahmoodzadegan, Jeffrey Raich and Elizabeth Ann Crain in July 2007 and is headquartered in New York, NY.
