MOELIS & CO, 10-Q filed on 7/25/2024
Quarterly Report
v3.24.2
Document and Entity Information - shares
 6 Months Ended
Jun. 30, 2024
Jul. 10, 2024
Entity Registrant Name Moelis & Co  
Entity Central Index Key 0001596967  
Document Type 10-Q  
Document Period End Date Jun. 30, 2024  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Interactive Data Current Yes  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Trading Symbol MC  
Entity File Number 001-36418  
Entity Tax Identification Number 46-4500216  
Entity Address, Address Line One 399 Park Avenue  
Entity Address, Address Line Two 4th Floor  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10022  
City Area Code 212  
Local Phone Number 883-3800  
Title of 12(b) Security Class A Common Stock  
Security Exchange Name NYSE  
Entity Incorporation, State or Country Code DE  
Document Quarterly Report true  
Document Transition Report false  
Class A Common Stock    
Entity Common Stock, Shares Outstanding   70,362,748
Class B Common Stock    
Entity Common Stock, Shares Outstanding   4,432,288
v3.24.2
Condensed Consolidated Statements of Financial Condition - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Assets    
Cash and cash equivalents $ 150,434 $ 186,417
Restricted cash 809 798
Receivables:    
Accounts receivable, net of allowance for credit losses of $2,286 and $1,263 as of June 30, 2024 and December 31, 2023, respectively 51,590 51,219
Accrued and other receivables 22,939 12,416
Total receivables 74,529 63,635
Deferred compensation 33,111 17,133
Investments 87,153 210,357
Right-of-use assets 165,158 171,998
Equipment and leasehold improvements, net 66,696 63,803
Deferred tax assets 444,034 437,238
Prepaid expenses and other assets 28,905 28,380
Total assets 1,050,829 1,179,759
Liabilities and Equity    
Compensation payable 139,941 259,771
Accounts payable, accrued expenses and other liabilities 25,136 32,626
Amount due pursuant to tax receivable agreement 288,410 304,567
Deferred revenue 3,671 4,649
Lease liabilities 209,220 215,684
Total liabilities 666,378 817,297
Commitments and Contingencies (See Note 11)
Treasury stock, at cost; 10,350,064 and 10,184,460 shares at June 30, 2024 and December 31, 2023, respectively (459,585) (450,859)
Additional paid-in-capital 1,651,502 1,573,702
Retained earnings (accumulated deficit) (831,053) (767,587)
Accumulated other comprehensive income (loss) (4,171) (3,928)
Total Moelis & Company equity 357,544 352,141
Noncontrolling interests 26,907 10,321
Total equity 384,451 362,462
Total liabilities and equity 1,050,829 1,179,759
Class A Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share 807 768
Class B Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share $ 44 $ 45
v3.24.2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Accounts receivable, allowance for credit losses $ 2,286 $ 1,263
Treasury stock, shares 10,350,064 10,184,460
Class A Common Stock    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 80,712,812 76,859,499
Common stock, shares outstanding 70,362,748 66,675,039
Treasury stock, shares 10,350,064 10,184,460
Class B Common Stock    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 4,432,288 4,489,778
Common stock, shares outstanding 4,432,288 4,489,778
v3.24.2
Condensed Consolidated Statements of Operations - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Revenues $ 264,586 $ 179,871 $ 482,071 $ 367,691
Expenses        
Compensation and benefits 197,873 145,794 362,348 294,033
Occupancy 7,073 6,872 14,162 12,706
Professional fees 5,961 6,907 12,126 11,853
Communication, technology and information services 11,990 11,215 24,234 22,049
Travel and related expenses 8,511 9,213 20,474 20,181
Depreciation and amortization 2,434 1,936 4,809 4,009
Other expenses 10,676 7,520 18,048 13,837
Total expenses 244,518 189,457 456,201 378,668
Operating income (loss) 20,068 (9,586) 25,870 (10,977)
Other income and (expenses) 1,708 (5,629) 5,937 (3,883)
Income (loss) before income taxes 21,776 (15,215) 31,807 (14,860)
Provision (benefit) for income taxes 6,855 (1,969) (599) (5,177)
Net income (loss) 14,921 (13,246) 32,406 (9,683)
Net income (loss) attributable to noncontrolling interests 1,760 (1,272) 2,679 (1,375)
Net income (loss) attributable to Moelis & Company 13,161 (11,974) 29,727 (8,308)
Class A Common Stock        
Expenses        
Net income (loss) attributable to Moelis & Company $ 13,161 $ (11,974) $ 29,727 $ (8,308)
Weighted-average shares of Class A common stock outstanding        
Basic (in shares) 72,148,948 68,504,772 71,239,595 67,852,077
Diluted (in shares) 75,788,525 68,504,772 75,593,865 67,852,077
Net income (loss) per share attributable to holders of shares of Class A common stock        
Basic (in dollars per share) $ 0.18 $ (0.17) $ 0.42 $ (0.12)
Diluted (in dollars per share) $ 0.17 $ (0.17) $ 0.39 $ (0.12)
v3.24.2
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ 14,921 $ (13,246) $ 32,406 $ (9,683)
Foreign currency translation adjustment, net of tax 504 305 (275) 589
Other comprehensive income (loss) 504 305 (275) 589
Comprehensive income (loss) 15,425 (12,941) 32,131 (9,094)
Less: Comprehensive income (loss) attributable to noncontrolling interests 1,788 (1,252) 2,647 (1,327)
Comprehensive income (loss) attributable to Moelis & Company $ 13,637 $ (11,689) $ 29,484 $ (7,767)
v3.24.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities    
Net income (loss) $ 32,406 $ (9,683)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Bad debt expense (benefit) 1,667 42
Depreciation and amortization 4,809 4,009
Equity-based compensation 85,935 93,219
Deferred tax provision (benefit) (599) (5,135)
Other (881) (2,881)
Changes in assets and liabilities:    
Accounts receivable (2,122) 11,948
Accrued and other receivables (4,214) (6,947)
Prepaid expenses and other assets (550) 1,956
Deferred compensation (15,986) (12,555)
Compensation payable (119,829) (174,492)
Accounts payable, accrued expenses and other liabilities (6,849) 14,681
Deferred revenue (978) 2,661
Dividends received 2,155 2,189
Net cash provided by (used in) operating activities (25,036) (80,988)
Cash flows from investing activities    
Purchases of investments (40,890) (34,615)
Proceeds from sales of investments 163,684 213,331
Notes issued to employees (6,330) 0
Purchases of equipment and leasehold improvements (7,704) (6,684)
Net cash provided by (used in) investing activities 108,760 172,032
Cash flows from financing activities    
Payments for dividends and tax distributions (90,726) (92,953)
Payments for treasury stock purchases (8,726) (44,756)
Payments under tax receivable agreement (20,103) 0
Net cash provided by (used in) financing activities (119,555) (137,709)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash (141) (60)
Net increase (decrease) in cash, cash equivalents, and restricted cash (35,972) (46,725)
Cash, cash equivalents, and restricted cash, beginning of period 187,215 207,539
Cash, cash equivalents, and restricted cash, end of period 151,243 160,814
Cash paid (received) during the period for:    
Income taxes, net 1,244 2,622
Other non-cash activity    
Class A Partnership Units or other equity converted into Class A Common Stock 1,092 302
Dividends in kind 8,915 11,199
Non-cash settlement of accounts receivable 261 0
Forfeiture of fully-vested Group LP units or other equity units $ 82 $ 0
v3.24.2
Condensed Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Total
Common Stock
Class A Common Stock
Common Stock
Class B Common Stock
Treasury Stock
Additional Paid-In Capital
Retained Earnings (Accumulated Deficit)
Accumulated Other Comprehensive Income (Loss)
Noncontrolling Interests
Balance at beginning of the period at Dec. 31, 2022 $ 458,938 $ 730 $ 46 $ (403,857) $ 1,412,795 $ (560,690) $ (4,529) $ 14,443
Balance at beginning of the period (in shares) at Dec. 31, 2022   73,063,181 4,635,898 (9,076,777)        
Changes in Equity                
Net income (loss) 3,563         3,666   (103)
Equity-based compensation 59,638 $ 34     48,656     10,948
Equity-based compensation (in shares)   3,396,802            
Other comprehensive income (loss) 284           256 28
Dividends declared and tax distributions (46,031)       5,711 (46,097)   (5,645)
Treasury Stock Purchases (44,526)     $ (44,526)        
Treasury Stock Purchases (in shares)       (1,057,278)        
Class A Partnership Units or other equity converted into Class A Common Stock 226 $ 3 $ (1)   (1,101)     1,325
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)   240,027 (146,120)          
Equity-based payments to non-employees 18       18      
Balance at end of the period at Mar. 31, 2023 432,110 $ 767 $ 45 $ (448,383) 1,466,079 (603,121) (4,273) 20,996
Balance at end of the period (in shares) at Mar. 31, 2023   76,700,010 4,489,778 (10,134,055)        
Balance at beginning of the period at Dec. 31, 2022 458,938 $ 730 $ 46 $ (403,857) 1,412,795 (560,690) (4,529) 14,443
Balance at beginning of the period (in shares) at Dec. 31, 2022   73,063,181 4,635,898 (9,076,777)        
Changes in Equity                
Net income (loss) (9,683)              
Other comprehensive income (loss) 589              
Treasury Stock Purchases $ (44,756)              
Treasury Stock Purchases (in shares) (1,063,410)              
Balance at end of the period at Jun. 30, 2023 $ 405,689 $ 767 $ 45 $ (448,613)   (660,529) (3,988) 15,537
Balance at end of the period (in shares) at Jun. 30, 2023   76,713,672 4,489,778 (10,140,187)        
Balance at beginning of the period at Mar. 31, 2023 432,110 $ 767 $ 45 $ (448,383) 1,466,079 (603,121) (4,273) 20,996
Balance at beginning of the period (in shares) at Mar. 31, 2023   76,700,010 4,489,778 (10,134,055)        
Changes in Equity                
Net income (loss) (13,246)         (11,974)   (1,272)
Equity-based compensation 33,581       30,817     2,764
Equity-based compensation (in shares)   13,662            
Other comprehensive income (loss) 305           285 20
Dividends declared and tax distributions (46,922)       5,488 (45,434)   (6,976)
Treasury Stock Purchases (230)     $ (230)        
Treasury Stock Purchases (in shares)       (6,132)        
Class A Partnership Units or other equity converted into Class A Common Stock 76       71     5
Equity-based payments to non-employees 15       15      
Balance at end of the period at Jun. 30, 2023 405,689 $ 767 $ 45 $ (448,613)   (660,529) (3,988) 15,537
Balance at end of the period (in shares) at Jun. 30, 2023   76,713,672 4,489,778 (10,140,187)        
Balance at beginning of the period at Dec. 31, 2023 362,462 $ 768 $ 45 $ (450,859) 1,573,702 (767,587) (3,928) 10,321
Balance at beginning of the period (in shares) at Dec. 31, 2023   76,859,499 4,489,778 (10,184,460)        
Changes in Equity                
Net income (loss) 17,485         16,566   919
Equity-based compensation 59,978 $ 34     45,618     14,326
Equity-based compensation (in shares)   3,436,930            
Other comprehensive income (loss) (779)           (719) (60)
Dividends declared and tax distributions (39,263)       6,007 (48,066)   2,796
Treasury Stock Purchases (8,394)     $ (8,394)        
Treasury Stock Purchases (in shares)       (158,878)        
Class A Partnership Units or other equity converted into Class A Common Stock 1,047 $ 5 $ (1)   980     63
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)   401,562 (57,490)          
Equity-based payments to non-employees 307       307      
Other (82)             (82)
Balance at end of the period at Mar. 31, 2024 392,761 $ 807 $ 44 $ (459,253) 1,626,614 (799,087) (4,647) 28,283
Balance at end of the period (in shares) at Mar. 31, 2024   80,697,991 4,432,288 (10,343,338)        
Balance at beginning of the period at Dec. 31, 2023 362,462 $ 768 $ 45 $ (450,859) 1,573,702 (767,587) (3,928) 10,321
Balance at beginning of the period (in shares) at Dec. 31, 2023   76,859,499 4,489,778 (10,184,460)        
Changes in Equity                
Net income (loss) 32,406              
Other comprehensive income (loss) (275)              
Treasury Stock Purchases $ (8,726)              
Treasury Stock Purchases (in shares) (165,604)              
Balance at end of the period at Jun. 30, 2024 $ 384,451 $ 807 $ 44 $ (459,585) 1,651,502 (831,053) (4,171) 26,907
Balance at end of the period (in shares) at Jun. 30, 2024   80,712,812 4,432,288 (10,350,064)        
Balance at beginning of the period at Mar. 31, 2024 392,761 $ 807 $ 44 $ (459,253) 1,626,614 (799,087) (4,647) 28,283
Balance at beginning of the period (in shares) at Mar. 31, 2024   80,697,991 4,432,288 (10,343,338)        
Changes in Equity                
Net income (loss) 14,921         13,161   1,760
Equity-based compensation 25,957       21,644     4,313
Equity-based compensation (in shares)   14,821            
Other comprehensive income (loss) 504           476 28
Dividends declared and tax distributions (49,704)       2,908 (45,127)   (7,485)
Treasury Stock Purchases (332)     $ (332)        
Treasury Stock Purchases (in shares)       (6,726)        
Class A Partnership Units or other equity converted into Class A Common Stock 45       37     8
Equity-based payments to non-employees 299       299      
Balance at end of the period at Jun. 30, 2024 $ 384,451 $ 807 $ 44 $ (459,585) $ 1,651,502 $ (831,053) $ (4,171) $ 26,907
Balance at end of the period (in shares) at Jun. 30, 2024   80,712,812 4,432,288 (10,350,064)        
v3.24.2
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares
 3 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Class A Common Stock        
Dividends declared per share of Class A common stock $ 0.60 $ 0.60 $ 0.60 $ 0.60
v3.24.2
Organization and Basis of Presentation
 6 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Basis of Presentation
1.
ORGANIZATION AND BASIS OF PRESENTATION

Moelis & Company and its consolidated subsidiaries (the “Company,” “we,” “our,” or “us”) is a leading global investment bank, incorporated in Delaware. Prior to the Company’s Initial Public Offering (“IPO”), the business operated as a Delaware limited partnership that commenced operations during 2007. Following the IPO, the operations are owned by Moelis & Company Group LP (“Group LP”), a U.S. Delaware limited partnership, and Group LP is controlled by Moelis & Company. Moelis & Company’s shareholders are entitled to receive a portion of Group LP’s economics through their direct ownership interests in shares of Class A common stock of Moelis & Company. The noncontrolling interest owners of Group LP (not Moelis & Company) receive economics of the operations primarily through their ownership interests in Group LP partnership units.

The Company’s activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, financial sponsors and governments, a range of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings and other corporate finance matters.

Basis of Presentation — The condensed consolidated financial statements of Moelis & Company include its partnership interests in Group LP, its equity interest in the sole general partner of Group LP, Moelis & Company Group GP LLC (“Group GP”), and its interests in its subsidiaries. Moelis & Company will operate and control all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Group GP. The Company operates through the following subsidiaries:

•
Moelis & Company LLC (“U.S. Broker Dealer”), a Delaware limited liability company, a registered broker-dealer with the U.S. Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
•
Moelis & Company Israel Ltd., a limited company incorporated in Israel.

 

•
Moelis & Company International Holdings LLC (“Moelis International”), a Delaware limited liability company, owns the following entities and investments, directly or indirectly:

 

•
Moelis & Company UK LLP (“Moelis UK”), a limited liability partnership registered under the laws of England and Wales. In addition to the United Kingdom, Moelis UK maintains operations through the following branches:

 

•
Moelis & Company Europe Limited, Frankfurt am Main Branch (German branch)

 

•
Moelis & Company UK LLP, DIFC Branch (Dubai branch)

 

•
Moelis & Company Asia Limited (“Moelis Asia”), a limited company incorporated in Hong Kong licensed under the Hong Kong Securities and Futures Ordinance to provide financial advisory services. In addition to Hong Kong, Moelis Asia maintains operations in Beijing, China through a wholly-owned Chinese subsidiary, Moelis & Company Consulting (Beijing) Company Limited.

 

•
Moelis & Company Netherlands B.V., a private limited company incorporated in Amsterdam, Netherlands. In addition to Amsterdam, Moelis Netherlands maintains operations in Paris, France through a branch, Moelis & Company Netherlands B.V. French Branch

 

•
Moelis & Company Europe B.V., a private limited company incorporated in Amsterdam, Netherlands.

 

•
Moelis & Company India Private Limited, a private limited company incorporated in Mumbai, India.

 

•
Moelis & Company Assessoria Financeira Ltda. (“Moelis Brazil”), a limited liability company incorporated
in São Paulo, Brazil.

 

•
Moelis & Company Saudi Limited, a limited liability company incorporated in Riyadh, Saudi Arabia.

 

•
An equity method investment in MA Financial Group Limited ("MA Financial", previously known as Moelis Australia Limited), a public company listed on the Australian Securities Exchange.
v3.24.2
Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting — The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the combined operations, assets and liabilities of the Company. The Notes are an integral part of the Company's condensed consolidated financial statements. As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Consolidation — The Company’s policy is to consolidate (i) entities in which it has a controlling financial interest, (ii) variable interest entities where the Company has a variable interest and is deemed to be the primary beneficiary and (iii) limited partnerships where the Company has ownership of the majority of voting interests. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity’s operating and financial decisions, the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. All intercompany balances and transactions with the Company’s subsidiaries have been eliminated in consolidation.

Use of Estimates — The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and could have a material impact on the condensed consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary.

In preparing the condensed consolidated financial statements, management makes estimates and assumptions regarding:

•
the adequacy of the allowance for credit losses;
•
the assessment of whether revenues from variable consideration should be constrained due to the probability of a significant revenue reversal;
•
the assessment of probable lease terms and the measurement of the present value of such obligations;
•
the assessment of long-lived assets for impairment and measurement of impairment, if applicable;

 

•
the measurement and realization of deferred taxes;

 

•
the measurement of amount due pursuant to tax receivable agreement; and

 

•
other matters that affect the reported amounts and disclosures of contingencies in the condensed consolidated financial statements.

 

Cash, Cash Equivalents and Restricted Cash — Cash and cash equivalents include all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase.

The Company’s cash is maintained in U.S. and non-U.S. bank accounts, of which most bank account balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance

Corporation and U.K. Financial Services Compensation Scheme coverage limits). The Company’s cash equivalents are invested primarily in U.S. and U.K. sovereign debt securities and money market funds.

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future U.S. medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of June 30, 2024 and 2023, is presented below.

 

 

June 30,

 

 

2024

 

2023

Cash

 

$

47,837

 

$

34,741

Cash equivalents

 

 

102,597

 

 

125,458

Restricted cash

 

 

809

 

 

615

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

 

$

151,243

 

$

160,814

 

Additionally, as of December 31, 2023, the Company held cash of $49,054 and cash equivalents of $137,363.

Receivables — The accompanying condensed consolidated statements of financial condition present accounts receivable balances net of allowance for credit losses based on the Company’s assessment of the collectability of customer accounts.

Included in the accounts receivable balances at June 30, 2024 and December 31, 2023 were $2,432 and $4,422, respectively, of long-term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. Long-term receivables generated interest income of $23 and $53 for the three months ended June 30, 2024 and 2023, respectively, and $55 and $123 for the six months ended June 30, 2024 and 2023, respectively.

The Company maintains an allowance for credit losses that, in management’s opinion, provides for an adequate reserve to cover losses that may be incurred. For purposes of determining appropriate allowances, the Company stratifies its population of accounts receivable into two categories, one for short-term receivables and a second for private funds advisory receivables. Each population is separately evaluated using an aging method that results in a percentage reserve based on the age of the receivable, in addition to considerations of historical charge-offs and current economic conditions.

After concluding that a reserved accounts receivable is no longer collectible, the Company will charge-off the receivable. This has the effect of reducing both the gross receivable and the allowance for credit losses. If a reserved accounts receivable is subsequently collected, such recoveries reduce the gross receivable and the allowance for credit losses and is a reduction of bad debt expense, which is recorded within other expenses on the condensed consolidated statement of operations. The combination of recoveries and the provision for credit losses of a reported period comprise the Company’s bad debt expense.

The following tables summarize credit loss allowance activity for the three and six months ended June 30, 2024 and 2023:

 

Three Months Ended June 30, 2024

 

Three Months Ended June 30, 2023

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,920

 

$

35

 

$

1,955

 

$

1,043

 

$

582

 

$

1,625

Charge-offs, foreign currency translation and other adjustments

 

(371)

 

 

—

 

 

(371)

 

 

71

 

 

—

 

 

71

Recoveries

 

(980)

 

 

(4)

 

 

(984)

 

 

(593)

 

 

(19)

 

 

(612)

Provision for credit losses

 

1,682

 

 

4

 

 

1,686

 

 

680

 

 

4

 

 

684

Allowance for credit losses, ending balance

$

2,251

 

$

35

 

$

2,286

 

$

1,201

 

$

567

 

$

1,768

 

 

 

Six Months Ended June 30, 2024

 

Six Months Ended June 30, 2023

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,221

 

$

42

 

$

1,263

 

$

1,136

 

$

593

 

$

1,729

Charge-offs, foreign currency translation and other adjustments

 

(644)

 

 

—

 

 

(644)

 

 

(3)

 

 

—

 

 

(3)

Recoveries

 

(1,544)

 

 

(12)

 

 

(1,556)

 

 

(1,322)

 

 

(30)

 

 

(1,352)

Provision for credit losses

 

3,218

 

 

5

 

 

3,223

 

 

1,390

 

 

4

 

 

1,394

Allowance for credit losses, ending balance

$

2,251

 

$

35

 

$

2,286

 

$

1,201

 

$

567

 

$

1,768

Deferred Compensation — Deferred compensation costs represent arrangements with certain employees whereby cash payments are subject to a required period of service subsequent to payment by the Company. These amounts are charged to expenses over the period that the employee is required to provide services in order to vest in the payment.

Financial Instruments at Fair Value — Fair value is generally based on quoted prices, however if quoted market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations, price activity for equivalent instruments and valuation pricing models. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of instrument, the characteristics specific to the instrument and the state of the marketplace (including the existence and transparency of transactions between market participants). Financial instruments with readily-available actively quoted prices or for which fair value can be measured from actively-quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest level of observability) based on inputs:

Level 1 — Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the quoted price.

Level 2 — Pricing inputs that are significant to the overall fair value measurement are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level 1. Fair value is determined through the use of models or other valuation methodologies.

Level 3 — Pricing inputs that are significant to the overall fair value measurement are unobservable for the instruments and include situations where there is little, if any, market activity for the investments. The determination of fair value is based on the best information available, may incorporate management's own assumptions, and involves a significant degree of judgment.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument. The Company's methodology for reclassifications impacting the fair value hierarchy is that transfers in/out of the respective category are reported at fair value as of the beginning of the period in which the reclassification occurred.

Equity Method Investments — The Company accounts for its equity method investments under the equity method of accounting as the Company does not control these entities but has the ability to exercise significant influence. The amounts recorded in investments on the condensed consolidated statements of financial condition reflect the Company’s share of contributions made to, distributions received from, and the equity earnings and losses of, the investment. The Company reflects its share of gains and losses of the investment in other income and expenses in the condensed consolidated statements of operations using the most recently available earnings data at the end of the period.

Leases — The Company maintains operating leases for corporate offices and an aircraft. The Company determines if a contract contains a lease at inception. Operating leases are recorded as right-of-use (“ROU”) assets and lease liabilities on the condensed consolidated statements of financial condition. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at the lease commencement date and are measured at the present value of anticipated lease payments over the lease term. The operating lease ROU assets are equal to the lease liabilities, adjusted for certain lease incentives, accrued rents, and prepaid rents. Typically, our borrowing rate is used to determine the present value of lease payments because the implicit rate is not readily determinable. Our lease terms may include options to extend or terminate the lease. These options are factored into our present value calculations when it is reasonably certain that such options will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term. ROU assets are evaluated for impairment when an event or change in circumstances indicates the carrying value of the assets may not be recoverable. If this occurs, the Company recognizes an impairment charge for the difference between the carrying amount and the estimated fair value of the assets.

Equipment and Leasehold Improvements — Office equipment and furniture and fixtures are stated at cost less accumulated depreciation, which is determined using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years, respectively. Leasehold improvements are stated at cost less accumulated amortization, which is determined using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset.

Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Assets that are in development and have not yet been placed in service are generally classified as “Construction in Progress” and are reclassified to the appropriate category when the associated assets are placed in service. Equipment and leasehold improvements are evaluated for impairment when an event or change in circumstances indicates the carrying value of the assets may not be recoverable. If this occurs, the Company recognizes an impairment charge for the difference between the carrying amount and the estimated fair value of the assets. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations.

Software — Costs related to implementation of cloud computing arrangements that qualify for capitalization are stated at cost less accumulated amortization within prepaid and other assets on the Company’s condensed consolidated statement of financial condition. Such capitalized costs are amortized using the straight-line method over the term of the cloud computing service contract or another rational basis, beginning when the cloud computing arrangement is substantially complete and ready for its intended use. All costs not directly related to the implementation of cloud computing arrangements, including overhead costs and costs of service agreements, are expensed in the period they are incurred. The amortization expense of such capitalized costs are presented under communication, technology and information services on the condensed consolidated statement of operations.

Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement — In conjunction with the IPO, the Company was treated for U.S. federal income tax purposes as having directly purchased Class A partnership units in Group LP from the existing unitholders. Additional Group LP Class A partnership units may be issued and exchanged for shares of Class A common stock in the Company. The initial purchase and future exchanges are expected to result in an increase in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP. These increases in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP would not have been available but for the initial purchase and future exchanges. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax the Company would otherwise be required to pay in the future. As a result, the Company records a deferred tax asset for such increase in tax basis.

The Company has entered into a tax receivable agreement with its eligible Managing Directors that will provide for the payment by the Company to its eligible Managing Directors of 85% of the amount of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that the Company actually realizes as a result of (a) the increases in tax basis attributable to exchanges by its eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of this tax receivable agreement. The Company expects to benefit from the remaining 15% of cash savings, if any, in income tax that it realizes and record any such estimated tax benefits as an increase to additional paid-in-capital. For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing the Company’s actual income tax liability to the amount of such taxes that it would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Group LP as a result of the exchanges and had it not entered into the tax receivable agreement. The term of the tax receivable agreement commenced upon consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. The Company has recorded the estimated tax benefits related to the increase in tax basis and imputed interest as a result of the initial purchase and subsequent exchanges described above as a deferred tax asset in the condensed consolidated statements of financial condition. The amount due to its

eligible Managing Directors related to the tax receivable agreement as a result of the initial purchase and subsequent exchanges described above is recorded as amount due pursuant to tax receivable agreement in the condensed consolidated statements of financial condition. The amounts recorded for the deferred tax asset and the liability for our obligations under the tax receivable agreement are estimates. Any adjustments to our estimates subsequent to their initial establishment will be included in net income (loss). Future exchanges of Class A partnership units in Group LP for Class A common shares in the Company will be accounted for in a similar manner.

Revenue and Expense Recognition — We earn substantially all of our revenues by providing advisory services on mergers and acquisitions, recapitalizations and restructurings, capital markets transactions, private fund raisings and secondary transactions, and other corporate finance matters. The Company also acts as an underwriter of certain securities offerings. We provide our advisory services on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. In many cases, we are not paid until the completion of an underlying transaction.

The Company recognizes the vast majority of its advisory services revenues over time, including reimbursements for certain out-of-pocket expenses, when or as our performance obligations are fulfilled and collection is reasonably assured. The determination of whether revenues are recognized over time or at a point in time depends upon the type of service being provided and the related performance obligations. We identify the performance obligations in our engagement letters and determine which services are distinct (i.e. separately identifiable and the client could benefit from such service on its own). We allocate the transaction price to the respective performance obligations by estimating the amount of consideration we expect in exchange for providing each service. Both the identification of performance obligations and the allocation of transaction price to the respective performance obligations requires significant judgment.

During such advisory engagements, our clients are continuously benefitting from our advice and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees, which are variable in nature, is constrained until substantially all services have been provided, specified conditions have been met (e.g. transaction closing) and it is probable that a significant reversal of revenue will not occur in a future period. Upfront fees and retainers specified in our engagement letters that meet the over time criteria will be recognized on a systematic basis over the estimated period where the related services are performed.

With respect to fairness opinions, fees are fixed and delivering the opinion is a separate performance obligation from other advisory services that may be promised under the same engagement letter; as such these revenues are recognized at a point in time when the engagement is formally completed and the client can obtain substantially all of the benefits from the service. Similarly, underwriting engagements are typically a single performance obligation and fees are generally recognized as revenue when the offering has been deemed to be completed by the lead manager of the underwriting group. In these instances, point in time recognition appropriately matches the transfer and consumption of our services.

Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the condensed consolidated statement of operations upon completion of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated).

Complications that may terminate or delay a transaction include failure to agree upon final terms with the counterparty, failure to obtain required regulatory consents, failure to obtain board or stockholder approvals, failure to secure financing, adverse market conditions or unexpected operating or financial problems related to either party to the transaction. In these circumstances, we often do not receive advisory fees that would have been received if the transaction had been completed, despite the fact that we may have devoted considerable time and resources to the transaction. Barriers to the completion of a restructuring transaction may include a lack of anticipated bidders for the assets of our client, the inability of our client to restructure its operations, or indebtedness due to a failure to reach agreement with its creditors. In these circumstances, our fees are generally limited to monthly retainer fees and reimbursement of certain out-of-pocket expenses.

We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments.

Equity-based Compensation — The Company recognizes the cost of services received in exchange for equity instrument awards. The cost of such awards reflects the grant-date fair value, which is typically based on quoted market prices of the Company's stock at the time of grant, amortized over the service period required by the award’s vesting terms. The Company also grants equity-based awards with post-vesting restrictions or market conditions. For these types of awards the grant-date fair value reflects the post-vesting restrictions or the probability of achieving the market conditions. The Company also recognizes the cost of services received from a nonemployee in exchange for an equity instrument based on the award’s grant-date fair value. The Company records as treasury stock shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the vesting of restricted stock units (“RSUs”). The Company records dividends in kind, net of forfeitures, on outstanding RSUs as a reduction of retained earnings with a corresponding increase in additional paid-in capital, resulting in no net change to equity. Dividends in kind on RSUs and other stock-based awards are subject to the same vesting conditions as the underlying awards on which they were accrued. Dividends in kind will be forfeited if the underlying award does not vest.

The Company has terms that qualify certain employees to terminate their services while not forfeiting certain qualifying incentive awards granted during employment. For qualifying awards, (i) the employee must be at least 56 years old, (ii) the employee must have provided at least 5 consecutive years of service to the Company and (iii) the total of (i) and (ii) must be equal to at least 65 years. Any such awards will continue to vest on their applicable vesting schedule, subject to noncompetition and other terms. Over time a greater number of employees may become retirement eligible and the related requisite service period over which we will expense these awards will be shorter than the stated vesting period. Unvested RSUs and certain stock-based awards are eligible to receive dividends in kind; however, the right to dividends in kind will be forfeited if the underlying award does not vest.

Income Taxes — The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s condensed consolidated statements of financial condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three and six months ended June 30, 2024 and 2023, no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three and six months ended June 30, 2024 and 2023, no such amounts were recorded.

The Company recognizes excess tax benefits and deficiencies as income tax benefits or expenses in the condensed consolidated statement of operations. These are reflected in accounts payable, accrued expenses and other liabilities within the condensed consolidated statement of cash flows.

Foreign Currency Translation — Assets and liabilities held in non-U.S. dollar denominated currencies are translated into U.S. dollars at exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.
v3.24.2
Recent Accounting Pronouncements
 6 Months Ended
Jun. 30, 2024
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Recent Accounting Pronouncements
3.
RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting" ("ASU 2023-07"). ASU 2023-07 requires public companies to disclose significant expenses and other income for each of their segments. Furthermore, it requires public companies to disclose the title and position of the Chief Operating Decision Maker ("CODM") and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing performance and deciding how to allocate resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024. Upon initial evaluation, the Company does not expect the adoption of ASU 2023-07 to have a material impact to the Company's consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes" ("ASU 2023-09"). ASU 2023-09 requires entities to disclose more qualitative and quantitative information in the reconciliation of federal statutory tax rates. Furthermore, it requires

entities to disaggregate the total income taxes paid by federal, state, and foreign taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Upon initial evaluation, the Company does not expect the adoption of ASU 2023-09 to have a material impact to the Company's consolidated financial statements.

In March 2024, the FASB issued ASU No. 2024-01, "Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01"). ASU 2024-01 clarifies appropriate accounting for awards issued with the intent to align compensation with operating performance by providing specific examples for issuers to follow. Beyond these clarifying examples, no changes to the codification were made. ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, and interim periods within the fiscal years beginning after December 15, 2024. The Company has evaluated ASU 2024-01 and does not expect its adoption to have a material impact to the Company's consolidated financial statements.
v3.24.2
Fixed and Intangible Assets
 6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Fixed and Intangible Assets
4.
FIXED AND INTANGIBLE ASSETS

 

Equipment and leasehold improvements, net consists of the following:

 

 

 

June 30,

 

December 31,

 

 

2024

 

2023

Office equipment

 

$

18,967

 

$

18,931

Furniture and fixtures

 

 

16,488

 

 

16,143

Leasehold improvements

 

 

73,223

 

 

69,910

Construction in progress

 

 

3,921

 

 

1,714

Total

 

 

112,599

 

 

106,698

Less: Accumulated depreciation and amortization

 

 

(45,903)

 

 

(42,895)

Equipment and leasehold improvements, net

 

$

66,696

 

$

63,803

 

Depreciation and amortization expenses for fixed assets totaled $2,434 and $1,936 for the three months ended June 30, 2024 and 2023, respectively, and $4,809 and $4,009 for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, there were $1,047 and $1,151 of costs capitalized, net of $1,824 and $1,720 of accumulated amortization, respectively, within prepaid expenses and other assets on our condensed consolidated statements of financial condition related to the implementation of cloud computing arrangements. The amortization expense of the capitalized costs was $46 and $122 for the three months ended June 30, 2024 and 2023, respectively, and $104 and $244 for the six months ended June 30, 2024 and 2023, respectively. The amortization expense was recorded within communication, technology and information services on the condensed consolidated statements of operations.
v3.24.2
Investments
 6 Months Ended
Jun. 30, 2024
Investments, All Other Investments [Abstract]  
Investments
5.
INVESTMENTS

Investments Measured at Fair Value

Fair value investments are presented within investments on the Company’s condensed consolidated statements of financial condition. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring investments at fair value. See Note 2 for further information on the Company's fair value hierarchy.

The estimated fair value of sovereign debt securities, money market funds and certificates of deposit are based on quoted prices for recent trading activity in identical or similar instruments. The Company primarily invests in U.S. and U.K. sovereign debt securities with maturities of less than twelve months and we consider these securities to be risk free. Therefore, we do not reserve for expected credit losses on these investments.

Fair Value of Financial Assets

The fair value of the Company's financial assets as of June 30, 2024, have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

$

42,124

 

$

—

 

$

42,124

 

$

—

Money market funds

 

42,132

 

 

—

 

 

42,132

 

 

—

Certificates of Deposit

 

18,341

 

 

—

 

 

18,341

 

 

—

Total financial assets included in cash and cash equivalents

 

102,597

 

 

—

 

 

102,597

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

 

40,889

 

 

—

 

 

40,889

 

 

—

Total financial assets included in investments

 

40,889

 

 

—

 

 

40,889

 

 

—

Total financial assets

$

143,486

 

$

—

 

$

143,486

 

$

—

There were no unrealized gains or losses on equity securities held at the reporting date for the three and six months ended June 30, 2024. Unrealized gains of $595 and unrealized losses of $1,829 were recognized on equity investments measured at fair value and held at the reporting date for the three and six months ended June 30, 2023, respectively. For sovereign debt securities measured at fair value and held at the reporting date, unrealized gains of $308 and losses of $28 were recognized for the three months ended June 30, 2024 and 2023, respectively, and unrealized gains of $260 and losses of $28 were recognized for the six months ended June 30, 2024 and 2023, respectively. All gains and losses were recognized in other income and expenses on the condensed consolidated statement of operations. The cost basis of the investments recorded at fair value shown in the preceding table and included in investments on the condensed consolidated statement of financial condition was $40,629 as of June 30, 2024.

The fair value of the Company's financial assets as of December 31, 2023 have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

$

84,343

 

$

—

 

$

84,343

 

$

—

Money market funds

 

46,818

 

 

—

 

 

46,818

 

 

—

Certificates of Deposit

 

6,202

 

 

 

 

 

6,202

 

 

 

Total financial assets included in cash and cash equivalents

 

137,363

 

 

—

 

 

137,363

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

 

162,899

 

 

—

 

 

162,899

 

 

—

Total financial assets included in investments

 

162,899

 

 

—

 

 

162,899

 

 

—

Total financial assets

$

300,262

 

$

—

 

$

300,262

 

$

—

The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $160,125 as of December 31, 2023.

Equity Method Investments

Equity-method investments are presented within investments on the Company’s condensed consolidated statements of financial condition. As of June 30, 2024 and December 31, 2023, the carrying value of the Company's equity method investment in MA Financial (formerly known as Moelis Australia Limited) was $46,264 and $47,458, respectively. The Company's share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operation.

During the six months ended June 30, 2024 and 2023, MA Financial declared dividends, of which the Company received $2,155 and $2,189, respectively. The Company accounted for the dividends as returns on investment and reduced the carrying value of the investment in MA Financial by the amount of dividends received.

From time to time, MA Financial may issue shares in connection with a transaction or employee compensation which reduces the Company's ownership interest in MA Financial and can result in dilution gains or losses. Such gains or losses are recorded in other income and expenses on the condensed consolidated statements of operation.
v3.24.2
Net Income (Loss) Per Share Attributable to Class A Common Shareholders
 6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Net Income (Loss) Per Share Attributable to Class A Common Shareholders
6.
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS

The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three and six months ended June 30, 2024 and 2023 are presented below.

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

(dollars in thousands, except per share amounts)

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to holders of shares of Class A common stock—basic

 

 

$

13,161

 

 

$

(11,974)

 

 

$

29,727

 

 

$

(8,308)

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

Net income (loss) attributable to holders of shares of Class A common stock—diluted

 

 

$

13,161

 

 

$

(11,974)

 

 

$

29,727

 

 

$

(8,308)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

 

72,148,948

 

 

 

68,504,772

 

 

 

71,239,595

 

 

 

67,852,077

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

Weighted average number of incremental shares issuable from unvested RSUs and stock options, as calculated using the treasury stock method

 

(b)

 

3,639,577

 

(b)(c)

 

—

 

(b)

 

4,354,270

 

(b)(c)

 

—

Weighted average shares of Class A common stock outstanding—diluted

 

 

 

75,788,525

 

 

 

68,504,772

 

 

 

75,593,865

 

 

 

67,852,077

Net income (loss) per share attributable to holders of shares of Class A common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

0.18

 

 

$

(0.17)

 

 

$

0.42

 

 

$

(0.12)

Diluted

 

 

$

0.17

 

 

$

(0.17)

 

 

$

0.39

 

 

$

(0.12)

 

We have not included the impact of Class B common stock because these shares are entitled to an insignificant amount of economic participation.

(a) Class A partnership units may be exchanged for Moelis & Company Class A common stock on a one-for-one basis, subject to applicable exchange restrictions. If all Class A partnership units were to be exchanged for Class A common stock, fully diluted Class A common stock outstanding would be 82,088,700 shares and 74,789,460 shares for the three months ended June 30, 2024 and 2023, respectively, and 81,907,500 and 74,042,471 shares for the six months ended June 30, 2024 and 2023, respectively. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) available to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests in consolidated entities associated with the Group LP Class A partnership units (including any tax impact). For the three and six months ended June 30, 2024 and 2023, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

 

(b) Certain RSUs assumed to be issued as Class A common stock pursuant to the treasury stock method were antidilutive and therefore excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. During the three months ended June 30, 2024 and 2023, there were 0 RSUs and 73,447 RSUs that would have been included in the treasury stock method calculation if the effect were dilutive, respectively, and 1,979 and 59,733 RSUs for the six months ended June 30, 2024 and 2023, respectively.

 

(c) The Company incurred a loss for the three and six months ended June 30, 2023, and as a result the assumed issuance of any Class A common stock pursuant to the treasury stock method is antidilutive. There were 2,967,363 and 3,883,800 shares pursuant to the treasury stock method related to unvested RSUs that were excluded from diluted share count for the three and six months ended June 30, 2023, respectively. If such shares were included, diluted Class A common stock outstanding would be 71,472,135 and 71,735,877 shares for the three and six months ended June 30, 2023, respectively.
v3.24.2
Equity-Based Compensation
 6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Equity-Based Compensation
7.
EQUITY‑BASED COMPENSATION

Omnibus Incentive Plans

In connection with the IPO, the Company adopted the Moelis & Company 2014 Omnibus Incentive Plan (the “2014 Plan”) to provide additional incentives to selected officers, employees, Managing Directors, non-employee directors, independent contractors, partners, senior advisors and consultants. On June 6, 2024, stockholders approved the Moelis & Company 2024 Omnibus Incentive Plan (the "2024 Plan"), which replaces the 2014 Plan that expired by its terms on April 14, 2024. The 2024 Plan provides for the issuance of a maximum of 15,000,000 shares plus any shares associated with awards granted under the 2014 Plan outstanding as of April 14, 2024 that are subsequently forfeited, canceled, exchanged or surrendered without distribution of shares, or settled in cash. Issuances pursuant to the 2024 Plan may be in the form of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, stock bonuses, other stock-based awards (including partnership interests that are exchangeable into stock upon satisfaction of certain conditions) and cash awards.

Restricted Stock Units (RSUs) and other stock-based awards

Pursuant to the 2024 Plan and in connection with the Company’s annual compensation process and ongoing hiring process, the Company issues RSUs and other stock-based awards which generally vest over a service life of four to five years. For the three months ended June 30, 2024 and 2023, the Company recognized expenses of $25,957 and $33,581, respectively, and $85,935 and $93,219 for the six months ended June 30, 2024 and 2023, respectively.

The following table summarizes activity related to RSUs for the six months ended June 30, 2024 and 2023.

 

Restricted Stock Units

 

2024

 

2023

 

 

 

Weighted

 

 

 

Weighted

 

 

 

Average

 

 

 

Average

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

Shares

 

Fair Value

 

Shares

 

Fair Value

Unvested Balance at January 1,

7,850,573

 

$

46.82

 

8,099,629

 

$

47.49

Granted

3,630,864

 

 

54.84

 

3,626,424

 

 

44.28

Forfeited

(761,568)

 

 

51.03

 

(119,074)

 

 

42.39

Vested

(3,021,231)

 

 

46.46

 

(3,454,469)

 

 

45.83

Unvested Balance at June 30,

7,698,638

 

$

50.44

 

8,152,510

 

$

46.72

 

The Company also issues partnership units that are intended to qualify as "profits interest" for U.S. federal income tax purposes ("Partnership Units") that, subject to certain terms and conditions, are exchangeable into shares of Moelis & Company Class A common stock on a one-for-one basis. These Partnership Units are recorded as noncontrolling interests in the Company's condensed consolidated statements of financial condition. Partnership Units generally vest over a service life of two to five years, however in certain arrangements the Partnership Units are granted without a service requirement, but do not have exchange rights until the second through fifth anniversaries of the grant-date. The expense for Partnership Units is recognized over the service period and reflects the fair value determined at grant-date, which may factor in other attributes, such as post-vesting restrictions. For the six months ended June 30, 2024 and 2023, the Company granted 415,753 and 482,941 Partnership Units with grant-date fair values of $20,914 and $20,037, respectively.

 

Certain Partnership Units and RSUs vest upon the achievement of both market conditions and service requirements that are generally over three to five years ("Performance Units"). These units accrue distributions in kind, which are subject to the same vesting conditions as the underlying Performance Units. The expense for Performance Units is recognized over the service period and reflects the fair value determined at grant-date, which factors in the probability of the market conditions being achieved. During the six months ended June 30, 2024, the Company granted 91,498 target Performance Units with a grant-date fair value of $5,133. In the six months ended June 30, 2023, the Company granted 100,722 target Performance Units with a grant-date fair value of $4,594. Performance Units have a maximum vesting of up to 150% of the target units if the pre-specified market conditions are achieved and service requirements are met.

 

As of June 30, 2024, the total compensation expense related to unvested RSUs and other stock-based awards not yet recognized was $226,749, which is expected to be recognized over a weighted-average period of 1.9 years.
v3.24.2
Stockholders Equity
 6 Months Ended
Jun. 30, 2024
Stockholders' Equity Note [Abstract]  
Stockholders Equity
8.
STOCKHOLDERS EQUITY

Class A Common Stock

In April 2014, the Company issued 15,263,653 shares of Class A common stock in connection with the IPO and reorganization. Since its IPO, the Company has conducted several offerings of Class A common stock in order to facilitate organized liquidity and increase the public float of its Class A common stock. The aggregate increase to Class A common stock as a result of such offerings was 24,923,349 shares. The Company did not retain any proceeds from the sale of its Class A common stock.

As of June 30, 2024, there were 80,712,812 shares of Class A common stock issued, 10,350,064 shares of treasury stock, and 70,362,748 shares outstanding. As of December 31, 2023, there were 76,859,499 shares of Class A common stock issued, 10,184,460 shares of treasury stock, and 66,675,039 shares outstanding.

The changes in Class A common stock since the IPO are due primarily to the follow-on offering transactions described above, exchanges of Class A partnership units, the exercise of stock options and vesting of restricted stock units issued in connection with the Company’s annual compensation process and ongoing hiring process.

 

Class B Common Stock

In conjunction with Moelis & Company’s IPO of its Class A common stock, the Company issued 36,158,698 shares of Class B common stock. Moelis & Company Partner Holdings LP (“Partner Holdings”) holds all shares of Class B common stock, enabling it initially to exercise majority voting control over the Company. In connection with the Company’s offerings of Class A common stock described above, 24,919,744 shares of Class B common stock were purchased from Partner Holdings at a cost of $550. The economic rights of Class B common stock are based on the ratio of the Class B subscription price to the initial public offering price of shares of Class A common stock (.00055 to 1). Shares of Class B common stock are generally not transferable and, if transferred other than in the limited circumstances set forth in Moelis & Company’s Amended and Restated Certificate of Incorporation, such shares shall automatically convert into a number of shares of Class A common stock, or dollar equivalent. Each share of Class B common stock may also be converted to a number of Class A shares at the option of the holder. Holders of shares of Class B common stock are entitled to receive dividends of the same type as any dividends payable on outstanding shares of Class A common stock at a ratio of .00055 to 1.

 

As of June 30, 2024, and December 31, 2023, 4,432,288 and 4,489,778 shares of Class B common stock were issued and outstanding, respectively, due primarily to the IPO and offering transactions, and Class B conversions described above.

Treasury Stock

During the six months ended June 30, 2024 and 2023, the Company repurchased 165,604 and 1,063,410 shares, respectively, from its employees for the purpose of settling tax liabilities incurred upon the delivery of equity-based compensation awards. The result of the repurchases was an increase of $8,726 and $44,756, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of June 30, 2024 and 2023.

Share Repurchase Plan

In July 2021, the Board of Directors authorized the repurchase of up to $100,000 of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions. The dollar value of shares that may yet be purchased under the program was $62,529 as of June 30, 2024.

Noncontrolling Interests

A Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests (non-redeemable). As of June 30, 2024 and December 31, 2023, partners held 6,301,776 and 6,286,001 Group LP partnership units, respectively, representing a 8% and 9% noncontrolling interest in Moelis & Company, respectively.

 

Controlling Interests

Moelis & Company operates and controls all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Group GP, and thus the 70,362,748 shares of Class A common stock outstanding as of June 30, 2024 (66,675,039 as of December 31, 2023), represents the controlling interest.
v3.24.2
Related-Party Transactions
 6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
Related-Party Transactions
9.
RELATED‑PARTY TRANSACTIONS

Aircraft Lease — On August 30, 2014, a related party, Moelis & Company Manager LLC ("Manager"), acquired an aircraft with funds received solely from its managing member (Mr. Moelis). The aircraft is used and operated by the Company pursuant to a dry lease with Manager, the lessor, and Mr. Moelis that was entered into on July 12, 2019. The terms of the dry lease are comparable to the market rates of leasing from an independent third party. Pursuant to this dry lease arrangement, the lessee is obligated to bear its share of the costs of operating the aircraft. In addition, Mr. Moelis is the other lessee of the aircraft and shares the operating and related costs of the plane in proportion to his respective use pursuant to a cost sharing and operating agreement that became effective in tandem with the dry lease. In 2023, the dry lease and cost sharing agreements with Mr. Moelis were extended for one year and are scheduled to terminate on December 31, 2024.

During the three months ended June 30, 2024 and 2023, the Company incurred $0 and $323, respectively, in aircraft lease costs to be paid to Manager, and $0 and $647 for the six months ended June 30, 2024 and 2023, respectively.

Promissory Notes — As of June 30, 2024, there were $9,448 of unsecured promissory notes from employees held by the Company (December 31, 2023: $3,119). Any outstanding balances are reflected in accrued and other receivables on the condensed consolidated statements of financial condition. The notes bear fixed interest rates ranging from 4.00% to 5.00%. During the six months ended June 30, 2024 and 2023, the Company received no principal repayments on such notes. For the three months ended June 30, 2024 and 2023, the Company recognized interest income of $110 and $31, respectively, and, $183 and $62 for the six months ended June 30, 2024 and 2023, respectively, which is included in other income and expenses on the condensed consolidated statements of operations.

Services Agreement — In connection with the Company’s IPO, the Company entered into a services agreement with a related party, Moelis Asset Management LP, whereby the Company provides certain administrative services to Moelis Asset Management LP for a fee. This fee totaled $60 and $56 for the three months ended June 30, 2024 and 2023, respectively, and $116 and $111 for the six months ended June 30, 2024 and 2023. The amount of the fee is based upon the estimated usage and related expense of all shared services between the Company and Moelis Asset Management LP during the relevant period, and will be assessed periodically by management as per the terms of the agreement. As of June 30, 2024 and December 31, 2023, the Company had no balances due to or from Moelis Asset Management LP.

Revenues — From time to time, the Company enters into advisory transactions with affiliated entities, such as Moelis Asset Management LP and its affiliates. The Company earned revenues associated with such transactions of $9,663 and $0 for the three months ended June 30, 2024 and 2023, respectively, and $9,663 and $0 for the six months ended June 30, 2024 and 2023.
v3.24.2
Regulatory Requirements
 6 Months Ended
Jun. 30, 2024
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]  
Regulatory Requirements
10.
REGULATORY REQUIREMENTS

Under the SEC Uniform Net Capital Rule (SEC Rule 15c3-1) Alternative Standard under Section (a)(1)(ii), the minimum net capital requirement is $250. As of June 30, 2024, U.S. Broker Dealer had net capital of $90,007, which was $89,757 in excess of its required net capital. As of December 31, 2023, U.S. Broker Dealer had net capital of $25,223 which was $24,973 in excess of its required net capital.

Certain other non-U.S. subsidiaries are subject to various securities and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have consistently exceeded their local capital adequacy requirements.
v3.24.2
Commitments and Contingencies
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
11.
COMMITMENTS AND CONTINGENCIES

Bank Lines of Credit — The Company amended its revolving credit facilities during the second quarter of 2024 and maintains aggregate base credit commitments of $50,000 across the following two facilities:

Corporate Facility - The Company maintains a corporate revolving credit facility with a base credit commitment of $5,000. The Company has the option to request a temporary increase of up to $45,000 additional credit, not to exceed the capacity available under the FINRA credit line discussed below. This option may be exercised up to two times per year during the

twelve-month term of the credit line. Unless the lender issues a notice of termination prior to such maturity date, this facility will automatically extend to June 30, 2026. The Company incurs a 0.25% per annum fee on the amount of the unused commitment. Borrowings on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the borrower’s option of (i) Secured Overnight Financing Rate ("SOFR") plus 1.3% or (ii) Prime minus 1.50%.

As of June 30, 2024 and December 31, 2023, the Company had no borrowings under the credit facility. As of June 30, 2024, the Company’s available credit under this facility was $4,426 as a result of the issuance of an aggregate amount of $574 of various standby letters of credit, which were required in connection with certain office leases and other agreements.

U.S. Broker Dealer Facility - The U.S. Broker Dealer maintains a $45,000 revolving credit facility agreement pre-approved by FINRA with a credit period ending May 24, 2025 and a maturity date of May 24, 2026. The Company incurs a 0.25% per annum fee on the amount of the unused commitment. Borrowings on the facility bear interest equal to the Prime rate, payable quarterly in arrears of the last day of March, June, September and December of each calendar year. The Company had no borrowings under this credit facility and the available balance was $45,000 as of June 30, 2024.

Leases — The Company maintains operating leases for corporate offices and an aircraft with various expiration dates, some of which extend through 2036. Some leases include options to terminate or to extend the lease terms. The Company records lease liabilities measured at the present value of anticipated lease payments over the lease term, including options to extend or terminate the lease when it is reasonably certain such options will be exercised. The implicit discount rates used to determine the present value of the Company’s leases are not readily determinable, thus the Company uses its secured borrowing rate, which was determined with reference to our available credit line. See below for additional information about the Company’s leases.

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

($ in thousands)

 

2024

 

2023

 

2024

 

2023

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

 $

6,189

 

 

 $

6,159

 

 

 $

12,373

 

 

 $

11,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating cash inflows/(outflows) for operating leases

 

 $

(6,256)

 

 

 $

(6,332)

 

 

 $

(12,180)

 

 

 $

(12,414)

 

Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period)

 

 $

1,345

 

 

 $

15,919

 

 

 $

1,563

 

 

 $

16,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases (in years)

 

11.60

 

 

 

12.26

 

 

 

11.60

 

 

 

12.26

 

Weighted-average discount rate - operating leases

 

3.99

%

 

 

3.74

 %

 

 

3.99

%

 

 

3.74

%

During the six months ended June 30, 2024 and 2023, the Company received $482 and $0 of tenant improvement allowances, respectively. These cash receipts are included within net operating cash inflows/(outflows) for operating leases in the supplemental cash flow information above.

As of June 30, 2024, the future sublease income and maturities of our operating lease liabilities are as follows:

Fiscal year ended

 

Sublease Income

 

Operating Leases

Remainder of 2024

 

$

(423)

 

$

12,167

2025

 

 

(423)

 

 

23,688

2026

 

 

—

 

 

22,139

2027

 

 

—

 

 

21,269

2028

 

 

—

 

 

21,048

Thereafter

 

 

—

 

 

163,575

Total Payments

 

$

(846)

 

$

263,886

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

(538)

Less: Present value adjustment

 

 

(54,128)

Total

 

$

209,220

 

Contractual Arrangements — In the normal course of business, the Company enters into contracts that contain a variety of representations and warranties and which provide indemnification for specified losses, including certain indemnification of certain officers, directors and employees.

Legal — In the ordinary course of business, from time to time the Company and its affiliates are involved in judicial or regulatory proceedings, arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters. In addition, government agencies and self-regulatory organizations conduct periodic examinations, investigations and initiate administrative proceedings regarding the Company’s business, including, among other matters, compliance, accounting, recordkeeping and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees. In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company often cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be. For matters where the Company can reasonably estimate the amount of a probable loss, or range of loss, the Company will accrue a loss for such matters in accordance with the U.S. GAAP for the aggregate of the estimated amount or the minimum amount of the range, if no amount within the range is a better estimate. The Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.

During 2023, West Palm Beach Firefighters’ Pension Fund, a putative Class A stockholder of the Company, filed a class action lawsuit, on behalf of itself and other similarly-situated Class A stockholders, in the Delaware Court of Chancery against the Company seeking declaratory judgment that certain provisions of the Stockholders Agreement between the Company and Partner Holdings are invalid and unenforceable as a matter of Delaware law. On March 4, 2024, the Court of Chancery issued an interlocutory order, presently in effect, that certain provisions of the Stockholders Agreement, including the provisions relating to approval rights and director vacancies, are facially invalid, void, and unenforceable under Delaware law. On July 18, 2024, the Court of Chancery issued an order awarding plaintiff’s counsel $6,000 in fees and expenses, to be paid by the Company. The time to appeal the orders issued in the case has not yet run, and the Company has the option to appeal the orders.
v3.24.2
Employee Benefit Plans
 6 Months Ended
Jun. 30, 2024
Retirement Benefits [Abstract]  
Employee Benefit Plans
12.
EMPLOYEE BENEFIT PLANS

The Company covers substantially all U.S. salaried employees with a defined contribution 401(k) plan. Each salaried employee of the Company who has attained the age of 21 is eligible to participate in the 401(k) plan on their first day of employment. Any employer contributions to the 401(k) plan are entirely at the discretion of the Company. The Company accrued expenses relating to employer matching contributions to the 401(k) plan for the three months ended June 30, 2024 and 2023, in the amounts of $1,073 and $1,011, respectively, and $2,113 and $1,797 for the six months ended June 30, 2024 and 2023, respectively.
v3.24.2
Income Taxes
 6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
13.
INCOME TAXES

The Company’s operations are generally comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities generally represent obligations of their interest holders. The Company is subject to certain foreign, state, and local entity-level taxes (for example, the New York City Unincorporated Business Tax (“UBT”)). In addition, the Company is subject to U.S. corporate federal, state, and local income tax on its allocable share of results of operations from Group LP.

The Company’s provisions for income taxes were an expense of $6,855 and a benefit of $1,969 for the three months ended June 30, 2024 and 2023, respectively. The Company's provisions for income tax were benefits of $599 and $5,177 for the six months ended June 30, 2024 and 2023. The income taxes for the aforementioned periods primarily reflects the Company’s allocable share of operating results from Group LP at the prevailing U.S. federal, state, and local corporate income tax rates and the effect of certain non-tax-deductible items, offset by the effect of the excess tax benefit recognized in connection with the delivery of equity-based compensation at an appreciated price above the grant date price for such equity. The excess tax benefits for the three months ended June 30, 2024 and 2023 were $38 and $14, respectively, and $10,674 and $3,359 for the six months ended June 30, 2024 and 2023, respectively.

There was an exchange of Class A partnership units for Class A common stock in February 2024 that resulted in an increase to our deferred tax asset related to a step-up in the tax basis in Group LP assets. Approximately $6,271 of the increase to this deferred tax asset is attributable to exchanges by certain partners of Group LP who are party to the tax receivable agreement. Pursuant to this agreement, 85% (or $5,330) of the tax benefits associated with this portion of the deferred tax asset

are payable to such exchanging partners over the next 15 years and recorded as amount due pursuant to tax receivable agreement in the condensed consolidated statements of financial condition. The remaining tax benefit is allocable to the Company and is recorded in additional paid-in-capital.

During the year ended December 31, 2023, Group LP was selected for examination by the Internal Revenue Service for the tax year ended December 31, 2020. The Company’s tax years for 2022, 2021 and 2020 are generally subject to examination by the tax authorities. Tax examinations are monitored on an ongoing basis and adjustments to tax liabilities are made as appropriate.
v3.24.2
Revenues and Business Information
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Revenues and Business Information
14.
REVENUES AND BUSINESS INFORMATION

The Company’s activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, financial sponsors, governments and sovereign wealth funds, a range of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings, capital markets and other corporate finance matters.

Since the financial markets are global in nature, the Company generally manages its business based on the operating results of the enterprise taken as whole, not by geographic region. The following table disaggregates the revenues and assets based on the location of the office that generates the revenues or holds the assets, and therefore may not be reflective of the geography in which our clients are located.

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

 

 

 

 

United States

$

199,592

 

$

143,613

 

$

355,310

 

$

301,663

Europe

 

37,958

 

 

25,537

 

 

70,233

 

 

42,156

Rest of World

 

27,036

 

 

10,721

 

 

56,528

 

 

23,872

Total

$

264,586

 

$

179,871

 

$

482,071

 

$

367,691

 

 

June 30,

 

December 31,

 

2024

 

2023

Assets:

 

 

 

 

 

United States

$

879,719

 

$

985,592

Europe

 

72,408

 

 

74,832

Rest of World

 

98,702

 

 

119,335

Total

$

1,050,829

 

$

1,179,759

 

As of June 30, 2024, and December 31, 2023, the Company had deferred revenues of $3,671 and $4,649, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the six months ended June 30, 2024 and 2023, $3,466 and $6,698 of revenues were recognized from the opening balance of deferred revenues, respectively.

Due to the factors that may delay or terminate a transaction (see Note 2), the Company does not estimate constrained transaction fees for revenue recognition. Quantitative disclosures of constrained variable consideration are not provided for remaining, wholly unsatisfied, performance obligations. The remaining performance obligations related to retainers, upfront fees and announcement fees are typically associated with contracts that have durations of one year or less.
v3.24.2
Subsequent Events
 6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events
15.
SUBSEQUENT EVENTS

The Company has evaluated subsequent events for adjustment to or disclosure in these condensed consolidated financial statements through the date of this report and has not identified any recordable or disclosable events not otherwise reported in these financial statements or the notes thereto other than the following. The Board of Directors of Moelis & Company has declared a dividend of $0.60 per share to be paid on September 26, 2024, to Class A common stockholders of record on August 5, 2024, 2024.
v3.24.2
Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Basis of Accounting

Basis of Accounting — The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the combined operations, assets and liabilities of the Company. The Notes are an integral part of the Company's condensed consolidated financial statements. As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Consolidation

Consolidation — The Company’s policy is to consolidate (i) entities in which it has a controlling financial interest, (ii) variable interest entities where the Company has a variable interest and is deemed to be the primary beneficiary and (iii) limited partnerships where the Company has ownership of the majority of voting interests. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity’s operating and financial decisions, the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. All intercompany balances and transactions with the Company’s subsidiaries have been eliminated in consolidation.
Use of Estimates

Use of Estimates — The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and could have a material impact on the condensed consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary.

In preparing the condensed consolidated financial statements, management makes estimates and assumptions regarding:

•
the adequacy of the allowance for credit losses;
•
the assessment of whether revenues from variable consideration should be constrained due to the probability of a significant revenue reversal;
•
the assessment of probable lease terms and the measurement of the present value of such obligations;
•
the assessment of long-lived assets for impairment and measurement of impairment, if applicable;

 

•
the measurement and realization of deferred taxes;

 

•
the measurement of amount due pursuant to tax receivable agreement; and

 

•
other matters that affect the reported amounts and disclosures of contingencies in the condensed consolidated financial statements.
Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash — Cash and cash equivalents include all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase.

The Company’s cash is maintained in U.S. and non-U.S. bank accounts, of which most bank account balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance

Corporation and U.K. Financial Services Compensation Scheme coverage limits). The Company’s cash equivalents are invested primarily in U.S. and U.K. sovereign debt securities and money market funds.

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future U.S. medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of June 30, 2024 and 2023, is presented below.

 

 

June 30,

 

 

2024

 

2023

Cash

 

$

47,837

 

$

34,741

Cash equivalents

 

 

102,597

 

 

125,458

Restricted cash

 

 

809

 

 

615

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

 

$

151,243

 

$

160,814

 

Additionally, as of December 31, 2023, the Company held cash of $49,054 and cash equivalents of $137,363.
Receivables

Receivables — The accompanying condensed consolidated statements of financial condition present accounts receivable balances net of allowance for credit losses based on the Company’s assessment of the collectability of customer accounts.

Included in the accounts receivable balances at June 30, 2024 and December 31, 2023 were $2,432 and $4,422, respectively, of long-term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. Long-term receivables generated interest income of $23 and $53 for the three months ended June 30, 2024 and 2023, respectively, and $55 and $123 for the six months ended June 30, 2024 and 2023, respectively.

The Company maintains an allowance for credit losses that, in management’s opinion, provides for an adequate reserve to cover losses that may be incurred. For purposes of determining appropriate allowances, the Company stratifies its population of accounts receivable into two categories, one for short-term receivables and a second for private funds advisory receivables. Each population is separately evaluated using an aging method that results in a percentage reserve based on the age of the receivable, in addition to considerations of historical charge-offs and current economic conditions.

After concluding that a reserved accounts receivable is no longer collectible, the Company will charge-off the receivable. This has the effect of reducing both the gross receivable and the allowance for credit losses. If a reserved accounts receivable is subsequently collected, such recoveries reduce the gross receivable and the allowance for credit losses and is a reduction of bad debt expense, which is recorded within other expenses on the condensed consolidated statement of operations. The combination of recoveries and the provision for credit losses of a reported period comprise the Company’s bad debt expense.

The following tables summarize credit loss allowance activity for the three and six months ended June 30, 2024 and 2023:

 

Three Months Ended June 30, 2024

 

Three Months Ended June 30, 2023

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,920

 

$

35

 

$

1,955

 

$

1,043

 

$

582

 

$

1,625

Charge-offs, foreign currency translation and other adjustments

 

(371)

 

 

—

 

 

(371)

 

 

71

 

 

—

 

 

71

Recoveries

 

(980)

 

 

(4)

 

 

(984)

 

 

(593)

 

 

(19)

 

 

(612)

Provision for credit losses

 

1,682

 

 

4

 

 

1,686

 

 

680

 

 

4

 

 

684

Allowance for credit losses, ending balance

$

2,251

 

$

35

 

$

2,286

 

$

1,201

 

$

567

 

$

1,768

 

 

 

Six Months Ended June 30, 2024

 

Six Months Ended June 30, 2023

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,221

 

$

42

 

$

1,263

 

$

1,136

 

$

593

 

$

1,729

Charge-offs, foreign currency translation and other adjustments

 

(644)

 

 

—

 

 

(644)

 

 

(3)

 

 

—

 

 

(3)

Recoveries

 

(1,544)

 

 

(12)

 

 

(1,556)

 

 

(1,322)

 

 

(30)

 

 

(1,352)

Provision for credit losses

 

3,218

 

 

5

 

 

3,223

 

 

1,390

 

 

4

 

 

1,394

Allowance for credit losses, ending balance

$

2,251

 

$

35

 

$

2,286

 

$

1,201

 

$

567

 

$

1,768
Deferred Compensation

Deferred Compensation — Deferred compensation costs represent arrangements with certain employees whereby cash payments are subject to a required period of service subsequent to payment by the Company. These amounts are charged to expenses over the period that the employee is required to provide services in order to vest in the payment.
Financial Instruments at Fair Value

Financial Instruments at Fair Value — Fair value is generally based on quoted prices, however if quoted market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations, price activity for equivalent instruments and valuation pricing models. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of instrument, the characteristics specific to the instrument and the state of the marketplace (including the existence and transparency of transactions between market participants). Financial instruments with readily-available actively quoted prices or for which fair value can be measured from actively-quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest level of observability) based on inputs:

Level 1 — Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the quoted price.

Level 2 — Pricing inputs that are significant to the overall fair value measurement are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level 1. Fair value is determined through the use of models or other valuation methodologies.

Level 3 — Pricing inputs that are significant to the overall fair value measurement are unobservable for the instruments and include situations where there is little, if any, market activity for the investments. The determination of fair value is based on the best information available, may incorporate management's own assumptions, and involves a significant degree of judgment.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument. The Company's methodology for reclassifications impacting the fair value hierarchy is that transfers in/out of the respective category are reported at fair value as of the beginning of the period in which the reclassification occurred.
Equity Method Investments

Equity Method Investments — The Company accounts for its equity method investments under the equity method of accounting as the Company does not control these entities but has the ability to exercise significant influence. The amounts recorded in investments on the condensed consolidated statements of financial condition reflect the Company’s share of contributions made to, distributions received from, and the equity earnings and losses of, the investment. The Company reflects its share of gains and losses of the investment in other income and expenses in the condensed consolidated statements of operations using the most recently available earnings data at the end of the period.
Leases

Leases — The Company maintains operating leases for corporate offices and an aircraft. The Company determines if a contract contains a lease at inception. Operating leases are recorded as right-of-use (“ROU”) assets and lease liabilities on the condensed consolidated statements of financial condition. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at the lease commencement date and are measured at the present value of anticipated lease payments over the lease term. The operating lease ROU assets are equal to the lease liabilities, adjusted for certain lease incentives, accrued rents, and prepaid rents. Typically, our borrowing rate is used to determine the present value of lease payments because the implicit rate is not readily determinable. Our lease terms may include options to extend or terminate the lease. These options are factored into our present value calculations when it is reasonably certain that such options will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term. ROU assets are evaluated for impairment when an event or change in circumstances indicates the carrying value of the assets may not be recoverable. If this occurs, the Company recognizes an impairment charge for the difference between the carrying amount and the estimated fair value of the assets.
Equipment and Leasehold Improvements

Equipment and Leasehold Improvements — Office equipment and furniture and fixtures are stated at cost less accumulated depreciation, which is determined using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years, respectively. Leasehold improvements are stated at cost less accumulated amortization, which is determined using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset.

Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Assets that are in development and have not yet been placed in service are generally classified as “Construction in Progress” and are reclassified to the appropriate category when the associated assets are placed in service. Equipment and leasehold improvements are evaluated for impairment when an event or change in circumstances indicates the carrying value of the assets may not be recoverable. If this occurs, the Company recognizes an impairment charge for the difference between the carrying amount and the estimated fair value of the assets. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations.
Software

Software — Costs related to implementation of cloud computing arrangements that qualify for capitalization are stated at cost less accumulated amortization within prepaid and other assets on the Company’s condensed consolidated statement of financial condition. Such capitalized costs are amortized using the straight-line method over the term of the cloud computing service contract or another rational basis, beginning when the cloud computing arrangement is substantially complete and ready for its intended use. All costs not directly related to the implementation of cloud computing arrangements, including overhead costs and costs of service agreements, are expensed in the period they are incurred. The amortization expense of such capitalized costs are presented under communication, technology and information services on the condensed consolidated statement of operations.
Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement

Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement — In conjunction with the IPO, the Company was treated for U.S. federal income tax purposes as having directly purchased Class A partnership units in Group LP from the existing unitholders. Additional Group LP Class A partnership units may be issued and exchanged for shares of Class A common stock in the Company. The initial purchase and future exchanges are expected to result in an increase in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP. These increases in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP would not have been available but for the initial purchase and future exchanges. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax the Company would otherwise be required to pay in the future. As a result, the Company records a deferred tax asset for such increase in tax basis.

The Company has entered into a tax receivable agreement with its eligible Managing Directors that will provide for the payment by the Company to its eligible Managing Directors of 85% of the amount of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that the Company actually realizes as a result of (a) the increases in tax basis attributable to exchanges by its eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of this tax receivable agreement. The Company expects to benefit from the remaining 15% of cash savings, if any, in income tax that it realizes and record any such estimated tax benefits as an increase to additional paid-in-capital. For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing the Company’s actual income tax liability to the amount of such taxes that it would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Group LP as a result of the exchanges and had it not entered into the tax receivable agreement. The term of the tax receivable agreement commenced upon consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. The Company has recorded the estimated tax benefits related to the increase in tax basis and imputed interest as a result of the initial purchase and subsequent exchanges described above as a deferred tax asset in the condensed consolidated statements of financial condition. The amount due to its

eligible Managing Directors related to the tax receivable agreement as a result of the initial purchase and subsequent exchanges described above is recorded as amount due pursuant to tax receivable agreement in the condensed consolidated statements of financial condition. The amounts recorded for the deferred tax asset and the liability for our obligations under the tax receivable agreement are estimates. Any adjustments to our estimates subsequent to their initial establishment will be included in net income (loss). Future exchanges of Class A partnership units in Group LP for Class A common shares in the Company will be accounted for in a similar manner.
Revenue and Expense Recognition

Revenue and Expense Recognition — We earn substantially all of our revenues by providing advisory services on mergers and acquisitions, recapitalizations and restructurings, capital markets transactions, private fund raisings and secondary transactions, and other corporate finance matters. The Company also acts as an underwriter of certain securities offerings. We provide our advisory services on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. In many cases, we are not paid until the completion of an underlying transaction.

The Company recognizes the vast majority of its advisory services revenues over time, including reimbursements for certain out-of-pocket expenses, when or as our performance obligations are fulfilled and collection is reasonably assured. The determination of whether revenues are recognized over time or at a point in time depends upon the type of service being provided and the related performance obligations. We identify the performance obligations in our engagement letters and determine which services are distinct (i.e. separately identifiable and the client could benefit from such service on its own). We allocate the transaction price to the respective performance obligations by estimating the amount of consideration we expect in exchange for providing each service. Both the identification of performance obligations and the allocation of transaction price to the respective performance obligations requires significant judgment.

During such advisory engagements, our clients are continuously benefitting from our advice and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees, which are variable in nature, is constrained until substantially all services have been provided, specified conditions have been met (e.g. transaction closing) and it is probable that a significant reversal of revenue will not occur in a future period. Upfront fees and retainers specified in our engagement letters that meet the over time criteria will be recognized on a systematic basis over the estimated period where the related services are performed.

With respect to fairness opinions, fees are fixed and delivering the opinion is a separate performance obligation from other advisory services that may be promised under the same engagement letter; as such these revenues are recognized at a point in time when the engagement is formally completed and the client can obtain substantially all of the benefits from the service. Similarly, underwriting engagements are typically a single performance obligation and fees are generally recognized as revenue when the offering has been deemed to be completed by the lead manager of the underwriting group. In these instances, point in time recognition appropriately matches the transfer and consumption of our services.

Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the condensed consolidated statement of operations upon completion of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated).

Complications that may terminate or delay a transaction include failure to agree upon final terms with the counterparty, failure to obtain required regulatory consents, failure to obtain board or stockholder approvals, failure to secure financing, adverse market conditions or unexpected operating or financial problems related to either party to the transaction. In these circumstances, we often do not receive advisory fees that would have been received if the transaction had been completed, despite the fact that we may have devoted considerable time and resources to the transaction. Barriers to the completion of a restructuring transaction may include a lack of anticipated bidders for the assets of our client, the inability of our client to restructure its operations, or indebtedness due to a failure to reach agreement with its creditors. In these circumstances, our fees are generally limited to monthly retainer fees and reimbursement of certain out-of-pocket expenses.

We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments.
Equity-based Compensation

Equity-based Compensation — The Company recognizes the cost of services received in exchange for equity instrument awards. The cost of such awards reflects the grant-date fair value, which is typically based on quoted market prices of the Company's stock at the time of grant, amortized over the service period required by the award’s vesting terms. The Company also grants equity-based awards with post-vesting restrictions or market conditions. For these types of awards the grant-date fair value reflects the post-vesting restrictions or the probability of achieving the market conditions. The Company also recognizes the cost of services received from a nonemployee in exchange for an equity instrument based on the award’s grant-date fair value. The Company records as treasury stock shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the vesting of restricted stock units (“RSUs”). The Company records dividends in kind, net of forfeitures, on outstanding RSUs as a reduction of retained earnings with a corresponding increase in additional paid-in capital, resulting in no net change to equity. Dividends in kind on RSUs and other stock-based awards are subject to the same vesting conditions as the underlying awards on which they were accrued. Dividends in kind will be forfeited if the underlying award does not vest.

The Company has terms that qualify certain employees to terminate their services while not forfeiting certain qualifying incentive awards granted during employment. For qualifying awards, (i) the employee must be at least 56 years old, (ii) the employee must have provided at least 5 consecutive years of service to the Company and (iii) the total of (i) and (ii) must be equal to at least 65 years. Any such awards will continue to vest on their applicable vesting schedule, subject to noncompetition and other terms. Over time a greater number of employees may become retirement eligible and the related requisite service period over which we will expense these awards will be shorter than the stated vesting period. Unvested RSUs and certain stock-based awards are eligible to receive dividends in kind; however, the right to dividends in kind will be forfeited if the underlying award does not vest.
Income Taxes

Income Taxes — The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s condensed consolidated statements of financial condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three and six months ended June 30, 2024 and 2023, no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three and six months ended June 30, 2024 and 2023, no such amounts were recorded.

The Company recognizes excess tax benefits and deficiencies as income tax benefits or expenses in the condensed consolidated statement of operations. These are reflected in accounts payable, accrued expenses and other liabilities within the condensed consolidated statement of cash flows.
Foreign Currency Translation

Foreign Currency Translation — Assets and liabilities held in non-U.S. dollar denominated currencies are translated into U.S. dollars at exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.
v3.24.2
Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Summary of Cash, Cash Equivalents and Restricted Cash A reconciliation of the Company’s cash, cash equivalents and restricted cash as of June 30, 2024 and 2023, is presented below.

 

 

June 30,

 

 

2024

 

2023

Cash

 

$

47,837

 

$

34,741

Cash equivalents

 

 

102,597

 

 

125,458

Restricted cash

 

 

809

 

 

615

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

 

$

151,243

 

$

160,814
Summary of Credit Loss Allowance Activity

The following tables summarize credit loss allowance activity for the three and six months ended June 30, 2024 and 2023:

 

Three Months Ended June 30, 2024

 

Three Months Ended June 30, 2023

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,920

 

$

35

 

$

1,955

 

$

1,043

 

$

582

 

$

1,625

Charge-offs, foreign currency translation and other adjustments

 

(371)

 

 

—

 

 

(371)

 

 

71

 

 

—

 

 

71

Recoveries

 

(980)

 

 

(4)

 

 

(984)

 

 

(593)

 

 

(19)

 

 

(612)

Provision for credit losses

 

1,682

 

 

4

 

 

1,686

 

 

680

 

 

4

 

 

684

Allowance for credit losses, ending balance

$

2,251

 

$

35

 

$

2,286

 

$

1,201

 

$

567

 

$

1,768

 

 

 

Six Months Ended June 30, 2024

 

Six Months Ended June 30, 2023

 

Accounts Receivable

 

Accounts Receivable

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

 

Short-term Receivables

 

Private Funds Advisory Receivables

 

Total

Allowance for Credit Losses, beginning balance

$

1,221

 

$

42

 

$

1,263

 

$

1,136

 

$

593

 

$

1,729

Charge-offs, foreign currency translation and other adjustments

 

(644)

 

 

—

 

 

(644)

 

 

(3)

 

 

—

 

 

(3)

Recoveries

 

(1,544)

 

 

(12)

 

 

(1,556)

 

 

(1,322)

 

 

(30)

 

 

(1,352)

Provision for credit losses

 

3,218

 

 

5

 

 

3,223

 

 

1,390

 

 

4

 

 

1,394

Allowance for credit losses, ending balance

$

2,251

 

$

35

 

$

2,286

 

$

1,201

 

$

567

 

$

1,768
v3.24.2
Fixed and Intangible Assets (Tables)
 6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Equipment and Leasehold Improvements, Net

Equipment and leasehold improvements, net consists of the following:

 

 

 

June 30,

 

December 31,

 

 

2024

 

2023

Office equipment

 

$

18,967

 

$

18,931

Furniture and fixtures

 

 

16,488

 

 

16,143

Leasehold improvements

 

 

73,223

 

 

69,910

Construction in progress

 

 

3,921

 

 

1,714

Total

 

 

112,599

 

 

106,698

Less: Accumulated depreciation and amortization

 

 

(45,903)

 

 

(42,895)

Equipment and leasehold improvements, net

 

$

66,696

 

$

63,803
v3.24.2
Investments (Tables)
 6 Months Ended
Jun. 30, 2024
Investments, All Other Investments [Abstract]  
Summary of Fair value of Company's Financial Assets

Fair Value of Financial Assets

The fair value of the Company's financial assets as of June 30, 2024, have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

$

42,124

 

$

—

 

$

42,124

 

$

—

Money market funds

 

42,132

 

 

—

 

 

42,132

 

 

—

Certificates of Deposit

 

18,341

 

 

—

 

 

18,341

 

 

—

Total financial assets included in cash and cash equivalents

 

102,597

 

 

—

 

 

102,597

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

 

40,889

 

 

—

 

 

40,889

 

 

—

Total financial assets included in investments

 

40,889

 

 

—

 

 

40,889

 

 

—

Total financial assets

$

143,486

 

$

—

 

$

143,486

 

$

—

The fair value of the Company's financial assets as of December 31, 2023 have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

$

84,343

 

$

—

 

$

84,343

 

$

—

Money market funds

 

46,818

 

 

—

 

 

46,818

 

 

—

Certificates of Deposit

 

6,202

 

 

 

 

 

6,202

 

 

 

Total financial assets included in cash and cash equivalents

 

137,363

 

 

—

 

 

137,363

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign debt securities

 

162,899

 

 

—

 

 

162,899

 

 

—

Total financial assets included in investments

 

162,899

 

 

—

 

 

162,899

 

 

—

Total financial assets

$

300,262

 

$

—

 

$

300,262

 

$

—
v3.24.2
Net Income (Loss) Per Share Attributable to Class A Common Shareholders (Tables)
 6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share

The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three and six months ended June 30, 2024 and 2023 are presented below.

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

(dollars in thousands, except per share amounts)

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to holders of shares of Class A common stock—basic

 

 

$

13,161

 

 

$

(11,974)

 

 

$

29,727

 

 

$

(8,308)

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

Net income (loss) attributable to holders of shares of Class A common stock—diluted

 

 

$

13,161

 

 

$

(11,974)

 

 

$

29,727

 

 

$

(8,308)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

 

72,148,948

 

 

 

68,504,772

 

 

 

71,239,595

 

 

 

67,852,077

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

 

(a)

 

 

Weighted average number of incremental shares issuable from unvested RSUs and stock options, as calculated using the treasury stock method

 

(b)

 

3,639,577

 

(b)(c)

 

—

 

(b)

 

4,354,270

 

(b)(c)

 

—

Weighted average shares of Class A common stock outstanding—diluted

 

 

 

75,788,525

 

 

 

68,504,772

 

 

 

75,593,865

 

 

 

67,852,077

Net income (loss) per share attributable to holders of shares of Class A common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

0.18

 

 

$

(0.17)

 

 

$

0.42

 

 

$

(0.12)

Diluted

 

 

$

0.17

 

 

$

(0.17)

 

 

$

0.39

 

 

$

(0.12)

 

We have not included the impact of Class B common stock because these shares are entitled to an insignificant amount of economic participation.

(a) Class A partnership units may be exchanged for Moelis & Company Class A common stock on a one-for-one basis, subject to applicable exchange restrictions. If all Class A partnership units were to be exchanged for Class A common stock, fully diluted Class A common stock outstanding would be 82,088,700 shares and 74,789,460 shares for the three months ended June 30, 2024 and 2023, respectively, and 81,907,500 and 74,042,471 shares for the six months ended June 30, 2024 and 2023, respectively. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) available to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests in consolidated entities associated with the Group LP Class A partnership units (including any tax impact). For the three and six months ended June 30, 2024 and 2023, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

 

(b) Certain RSUs assumed to be issued as Class A common stock pursuant to the treasury stock method were antidilutive and therefore excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. During the three months ended June 30, 2024 and 2023, there were 0 RSUs and 73,447 RSUs that would have been included in the treasury stock method calculation if the effect were dilutive, respectively, and 1,979 and 59,733 RSUs for the six months ended June 30, 2024 and 2023, respectively.

 

(c) The Company incurred a loss for the three and six months ended June 30, 2023, and as a result the assumed issuance of any Class A common stock pursuant to the treasury stock method is antidilutive. There were 2,967,363 and 3,883,800 shares pursuant to the treasury stock method related to unvested RSUs that were excluded from diluted share count for the three and six months ended June 30, 2023, respectively. If such shares were included, diluted Class A common stock outstanding would be 71,472,135 and 71,735,877 shares for the three and six months ended June 30, 2023, respectively.
v3.24.2
Equity-Based Compensation (Tables)
 6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Summary of Activity Related to RSUs

The following table summarizes activity related to RSUs for the six months ended June 30, 2024 and 2023.

 

Restricted Stock Units

 

2024

 

2023

 

 

 

Weighted

 

 

 

Weighted

 

 

 

Average

 

 

 

Average

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

Shares

 

Fair Value

 

Shares

 

Fair Value

Unvested Balance at January 1,

7,850,573

 

$

46.82

 

8,099,629

 

$

47.49

Granted

3,630,864

 

 

54.84

 

3,626,424

 

 

44.28

Forfeited

(761,568)

 

 

51.03

 

(119,074)

 

 

42.39

Vested

(3,021,231)

 

 

46.46

 

(3,454,469)

 

 

45.83

Unvested Balance at June 30,

7,698,638

 

$

50.44

 

8,152,510

 

$

46.72
v3.24.2
Commitments and Contingencies (Tables)
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Additional Leases Information See below for additional information about the Company’s leases.

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

($ in thousands)

 

2024

 

2023

 

2024

 

2023

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

 $

6,189

 

 

 $

6,159

 

 

 $

12,373

 

 

 $

11,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating cash inflows/(outflows) for operating leases

 

 $

(6,256)

 

 

 $

(6,332)

 

 

 $

(12,180)

 

 

 $

(12,414)

 

Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period)

 

 $

1,345

 

 

 $

15,919

 

 

 $

1,563

 

 

 $

16,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases (in years)

 

11.60

 

 

 

12.26

 

 

 

11.60

 

 

 

12.26

 

Weighted-average discount rate - operating leases

 

3.99

%

 

 

3.74

 %

 

 

3.99

%

 

 

3.74

%
Schedule of Future Sublease Income and Maturities of Our Operating Lease Liabilities

As of June 30, 2024, the future sublease income and maturities of our operating lease liabilities are as follows:

Fiscal year ended

 

Sublease Income

 

Operating Leases

Remainder of 2024

 

$

(423)

 

$

12,167

2025

 

 

(423)

 

 

23,688

2026

 

 

—

 

 

22,139

2027

 

 

—

 

 

21,269

2028

 

 

—

 

 

21,048

Thereafter

 

 

—

 

 

163,575

Total Payments

 

$

(846)

 

$

263,886

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

(538)

Less: Present value adjustment

 

 

(54,128)

Total

 

$

209,220

 
v3.24.2
Revenues and Business Information (Tables)
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Schedule of Geographical Distribution of Revenues and Assets The following table disaggregates the revenues and assets based on the location of the office that generates the revenues or holds the assets, and therefore may not be reflective of the geography in which our clients are located.

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

 

 

 

 

United States

$

199,592

 

$

143,613

 

$

355,310

 

$

301,663

Europe

 

37,958

 

 

25,537

 

 

70,233

 

 

42,156

Rest of World

 

27,036

 

 

10,721

 

 

56,528

 

 

23,872

Total

$

264,586

 

$

179,871

 

$

482,071

 

$

367,691

 

 

June 30,

 

December 31,

 

2024

 

2023

Assets:

 

 

 

 

 

United States

$

879,719

 

$

985,592

Europe

 

72,408

 

 

74,832

Rest of World

 

98,702

 

 

119,335

Total

$

1,050,829

 

$

1,179,759
v3.24.2
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Jun. 30, 2023
Dec. 31, 2022
Cash and Cash Equivalents        
Cash $ 47,837 $ 49,054 $ 34,741  
Cash equivalents 102,597 137,363 125,458  
Restricted cash 809 798 615  
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 151,243 $ 187,215 $ 160,814 $ 207,539
v3.24.2
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Accounting Policies [Line Items]          
Cash $ 47,837,000 $ 34,741,000 $ 47,837,000 $ 34,741,000 $ 49,054,000
Cash equivalents 102,597,000 125,458,000 102,597,000 125,458,000 137,363,000
Long-term receivables 2,432,000   2,432,000   $ 4,422,000
Interest income from long-term receivables 23,000 53,000 $ 55,000 123,000  
Assets and Liabilities, Lessee          
Percentage of tax benefits payable to partners under tax receivable agreement     85.00%    
Remaining percentage of cash savings realized by the Company (as a percent)     15.00%    
Revenue and Expense Recognition and Equity-Based Compensation          
Minimum age of retiring employees required so that certain qualifying awards granted during employment will not be forfeited     56 years    
Consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited     5 years    
Minimum total age and consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited     65 years    
Income Taxes          
Unrecognized tax benefits 0 0 $ 0 0  
Income tax related interest and penalties $ 0 $ 0 $ 0 $ 0  
Minimum          
Accounting Policies [Line Items]          
Installment Period     3 years    
Minimum | Office Equipment and Furniture and Fixtures          
Assets and Liabilities, Lessee          
Useful lives 3 years   3 years    
Maximum          
Accounting Policies [Line Items]          
Installment Period     4 years    
Maximum | Office Equipment and Furniture and Fixtures          
Assets and Liabilities, Lessee          
Useful lives 7 years   7 years    
v3.24.2
Summary of Significant Accounting Policies - Summary of Credit Loss Allowance Activity (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance $ 1,955 $ 1,625 $ 1,263 $ 1,729
Charge-offs, foreign currency translation and other adjustments (371) 71 (644) (3)
Recoveries (984) (612) (1,556) (1,352)
Provision for credit losses 1,686 684 3,223 1,394
Allowance for credit losses, ending balance 2,286 1,768 2,286 1,768
Short-term Receivables        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance 1,920 1,043 1,221 1,136
Charge-offs, foreign currency translation and other adjustments (371) 71 (644) (3)
Recoveries (980) (593) (1,544) (1,322)
Provision for credit losses 1,682 680 3,218 1,390
Allowance for credit losses, ending balance 2,251 1,201 2,251 1,201
Private Funds Advisory Receivables        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance 35 582 42 593
Recoveries (4) (19) (12) (30)
Provision for credit losses 4 4 5 4
Allowance for credit losses, ending balance $ 35 $ 567 $ 35 $ 567
v3.24.2
Fixed and Intangible Assets - Schedule of Equipment and Leasehold Improvements, Net (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Equipment and Leasehold Improvements, Net    
Total $ 112,599 $ 106,698
Less: Accumulated depreciation and amortization (45,903) (42,895)
Equipment and leasehold improvements, net 66,696 63,803
Office Equipment    
Equipment and Leasehold Improvements, Net    
Total 18,967 18,931
Furniture and Fixtures    
Equipment and Leasehold Improvements, Net    
Total 16,488 16,143
Leasehold Improvements    
Equipment and Leasehold Improvements, Net    
Total 73,223 69,910
Construction in progress    
Equipment and Leasehold Improvements, Net    
Total $ 3,921 $ 1,714
v3.24.2
Fixed and Intangible Assets - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Equipment and Leasehold Improvements, Net          
Depreciation and amortization expenses $ 2,434 $ 1,936 $ 4,809 $ 4,009  
Prepaid Expenses and Other Assets          
Equipment and Leasehold Improvements, Net          
Costs capitalized, net of accumulated amortization 1,047   1,047   $ 1,151
Accumulated amortization, net 1,824   1,824   $ 1,720
Communication, Technology and Information Services          
Equipment and Leasehold Improvements, Net          
Amortization expense of capitalized costs $ 46 $ 122 $ 104 $ 244  
v3.24.2
Investments - Summary of Financial Assets Recorded at Fair Value On Recurring Basis (Details) - Fair Value, Recurring - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Fair value measurements    
Total financial assets included in cash and cash equivalents $ 102,597 $ 137,363
Total financial assets included in investments 40,889 162,899
Total financial assets 143,486 300,262
Sovereign Debt Securities    
Fair value measurements    
Total financial assets included in cash and cash equivalents 42,124 84,343
Total financial assets included in investments 40,889 162,899
Certificates of Deposit    
Fair value measurements    
Total financial assets included in cash and cash equivalents 18,341  
Total financial assets included in investments   6,202
Money Market Funds    
Fair value measurements    
Total financial assets included in cash and cash equivalents 42,132 46,818
Level 2    
Fair value measurements    
Total financial assets included in cash and cash equivalents 102,597 137,363
Total financial assets included in investments 40,889 162,899
Total financial assets 143,486 300,262
Level 2 | Sovereign Debt Securities    
Fair value measurements    
Total financial assets included in cash and cash equivalents 42,124 84,343
Total financial assets included in investments 40,889 162,899
Level 2 | Certificates of Deposit    
Fair value measurements    
Total financial assets included in cash and cash equivalents 18,341 6,202
Level 2 | Money Market Funds    
Fair value measurements    
Total financial assets included in cash and cash equivalents $ 42,132 $ 46,818
v3.24.2
Investments - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Schedule of Investments          
Investments at fair value, cost basis $ 40,629   $ 40,629   $ 160,125
Dividends received     2,155 $ 2,189  
Corporate Joint Venture          
Schedule of Investments          
Dividends received     2,155 2,189  
Equity method investments 46,264   46,264   $ 47,458
Common Stock          
Schedule of Investments          
Unrealized gains (losses) on equity securities 0 $ 595 0 (1,829)  
Sovereign Debt Securities          
Schedule of Investments          
Unrealized gains (losses) on debt Securities trading $ 308 $ (28) $ 260 $ (28)  
v3.24.2
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Numerator:        
Net income (loss) attributable to holders of shares of Class A common stock—basic $ 13,161 $ (11,974) $ 29,727 $ (8,308)
Class A Common Stock        
Numerator:        
Net income (loss) attributable to holders of shares of Class A common stock—basic 13,161 (11,974) 29,727 (8,308)
Add (deduct) dilutive effect of:        
Net income (loss) attributable to holders of shares of Class A common stock—diluted $ 13,161 $ (11,974) $ 29,727 $ (8,308)
Denominator:        
Weighted average shares of Class A common stock outstanding—basic 72,148,948 68,504,772 71,239,595 67,852,077
Add (deduct) dilutive effect of:        
Weighted average number of incremental shares issuable from unvested RSUs and stock options, as calculated using the treasury stock method 3,639,577   4,354,270  
Weighted average shares of Class A common stock outstanding—diluted 75,788,525 68,504,772 75,593,865 67,852,077
Net income (loss) per share attributable to holders of shares of Class A common stock, basic        
Basic $ 0.18 $ (0.17) $ 0.42 $ (0.12)
Net income (loss) per share attributable to holders of shares of Class A common stock, diluted        
Diluted $ 0.17 $ (0.17) $ 0.39 $ (0.12)
v3.24.2
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Parenthetical) (Details) - shares
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Class A Common Stock        
Earnings Per Share Basic [Line Items]        
Number of shares of common stock to be issued upon exchange of a partnership unit 1   1  
Fully diluted shares of common stock outstanding if all Class A partnership units were to be exchanged for common stock immediately following the reorganization 82,088,700 74,789,460 81,907,500 74,042,471
Number of shares of common stock outstanding if excluded treasury stock method shares were included   71,472,135   71,735,877
Restricted Stock and RSUs        
Earnings Per Share Basic [Line Items]        
Number of antidilutive securities excluded from calculation of diluted income (loss) per share 0 73,447 1,979 59,733
Unvested Restricted Stock Units [Member]        
Earnings Per Share Basic [Line Items]        
Number of antidilutive securities excluded from calculation of diluted income (loss) per share   2,967,363   3,883,800
v3.24.2
Equity-Based Compensation - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 06, 2024
Mar. 31, 2024
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Compensation expenses $ 25,957 $ 33,581 $ 85,935 $ 93,219    
Partnership Units, granted     415,753 482,941    
Partnership Units, grant date fair value     $ 20,914 $ 20,037    
2024 Omnibus Incentive Plan | Maximum            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Shares authorized for issuance         15,000,000  
RSUs and Other Stock-based Awards            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Total compensation expense not yet recognized $ 226,749   $ 226,749      
Weighted average period to recognize compensation expense     1 year 10 months 24 days      
RSUs and Other Stock-based Awards | Minimum            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Vesting period     4 years      
Partnership units vesting period     2 years      
RSUs and Other Stock-based Awards | Maximum            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Vesting period     5 years      
Partnership units vesting period     5 years      
Performance Units            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Restricted Stock Units, granted     91,498      
Restricted Stock Units, grant date fair value     $ 5,133      
Partnership Units, granted       100,722    
Partnership Units, grant date fair value       $ 4,594    
Percentage of maximum vesting of target units if pre-specified market conditions are achieved and service requirement are met     150.00%      
Performance Units | Minimum            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Partnership units vesting period     3 years      
Performance Units | Maximum            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Partnership units vesting period     5 years      
Class A Common Stock            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Number of shares of common stock to be issued upon exchange of a partnership unit 1   1      
Class A Common Stock | RSUs and Other Stock-based Awards            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Number of shares of common stock to be issued upon exchange of a partnership unit           1
v3.24.2
Equity-Based Compensation - Summary of Activity Related to RSUs (Details) - Restricted Stock Units - $ / shares
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Number of Shares    
Unvested Balance at the beginning of the period 7,850,573 8,099,629
Granted 3,630,864 3,626,424
Forfeited (761,568) (119,074)
Vested (3,021,231) (3,454,469)
Unvested Balance at the end of the period 7,698,638 8,152,510
Weighted Average Grant Date Fair Value    
Unvested Balance at the beginning of the period $ 46.82 $ 47.49
Granted 54.84 44.28
Forfeited 51.03 42.39
Vested 46.46 45.83
Unvested Balance at the end of the period $ 50.44 $ 46.72
v3.24.2
Stockholders Equity - Additional Information (Details)
$ in Thousands
 1 Months Ended 3 Months Ended 6 Months Ended
Nov. 30, 2014
Apr. 30, 2014
USD ($)
shares
Jun. 30, 2024
USD ($)
shares
Mar. 31, 2024
USD ($)
Jun. 30, 2023
USD ($)
Mar. 31, 2023
USD ($)
Jun. 30, 2024
USD ($)
shares
Jun. 30, 2023
USD ($)
shares
Dec. 31, 2023
shares
Jul. 31, 2021
USD ($)
Class Of Stock [Line Items]                    
Treasury stock, shares     10,350,064       10,350,064   10,184,460  
Treasury stock shares acquired (in shares)             165,604 1,063,410    
Treasury stock shares acquired | $     $ 332 $ 8,394 $ 230 $ 44,526 $ 8,726 $ 44,756    
Number of units held by noncontrolling interest holders     6,301,776       6,301,776   6,286,001  
Group LP                    
Class Of Stock [Line Items]                    
Noncontrolling interests (as a percent)     8.00%       8.00%   9.00%  
Class A Common Stock                    
Class Of Stock [Line Items]                    
Aggregate stock issuance (in shares)   15,263,653                
Increase in shares outstanding   24,923,349                
Common stock, shares issued     80,712,812       80,712,812   76,859,499  
Treasury stock, shares     10,350,064       10,350,064   10,184,460  
Common stock, shares outstanding     70,362,748       70,362,748   66,675,039  
Number of shares of common stock to be issued upon exchange of a partnership unit     1       1      
Class A Common Stock | Share Repurchase Plan                    
Class Of Stock [Line Items]                    
Share value authorized for repurchase | $                   $ 100,000
Value of remaining shares authorized for repurchase | $     $ 62,529       $ 62,529      
Class B Common Stock                    
Class Of Stock [Line Items]                    
Increase in shares outstanding   36,158,698                
Common stock, shares issued     4,432,288       4,432,288   4,489,778  
Common stock, shares outstanding     4,432,288       4,432,288   4,489,778  
Ratio of subscription price to the initial public offering price of shares of common stock 0.00055                  
Dividends payable ratio to outstanding shares of publicly traded common stock 0.00055                  
Stock purchased   24,919,744                
Purchase cost | $   $ 550                
v3.24.2
Related-Party Transactions - Additional Information (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Related Party          
Related-party transactions          
Revenue from related parties $ 9,663,000 $ 0 $ 9,663,000 $ 0  
Manager | Aircraft Lease Entered into During August 2014          
Related-party transactions          
Expenses 0 323,000 0 647,000  
Employees          
Related-party transactions          
Unsecured promissory notes from employees 9,448,000   9,448,000   $ 3,119,000
Employees | Unsecured Promissory Notes          
Related-party transactions          
Principal repayments     0 0  
Interest income recognized 110,000 31,000 $ 183,000 62,000  
Employees | Minimum | Unsecured Promissory Notes          
Related-party transactions          
Interest rates (as a percent)     4.00%    
Employees | Maximum | Unsecured Promissory Notes          
Related-party transactions          
Interest rates (as a percent)     5.00%    
Moelis Asset Management LP          
Related-party transactions          
Fee for services 60,000 $ 56,000 $ 116,000 $ 111,000  
Due from related party $ 0   $ 0   $ 0
v3.24.2
Regulatory Requirements - Additional Information (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Regulatory Requirements    
Minimum net capital requirement $ 250  
U.S. Broker Dealer    
Regulatory Requirements    
Net capital 90,007 $ 25,223
Net capital in excess of required net capital $ 89,757 $ 24,973
v3.24.2
Commitments and Contingencies - Additional Information (Details) - USD ($)
 6 Months Ended
Jul. 18, 2024
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Bank line of credit        
Available credit under the facility   $ 4,426,000    
Proceeds from tenant improvement allowances   (482,000) $ 0  
Legal fees and expenses $ 6,000,000      
Revolving Credit Facility Due at May 24, 2025        
Bank line of credit        
Commitment amount   $ 45,000,000    
Maturity date   May 24, 2026    
Reference rate (as a percent)   Prime rate    
Unused commitment fee percentage   0.25%    
Borrowings under credit facility   $ 0    
Available credit under the facility   $ 45,000,000    
Line of credit facility credit period to borrow capital   May 24, 2025    
Line of credit facility, frequency of payments   quarterly    
Revolving Credit Facility        
Bank line of credit        
Base credit commitments   $ 50,000,000    
Fixed rate of interest (as a percent)   3.50%    
Borrowings under the credit facility   $ 0   $ 0
Unused commitment fee percentage   0.25%    
Standby Letters of Credit        
Bank line of credit        
Letters of credit outstanding   $ 574,000    
Corporate Revolving Credit Facility        
Bank line of credit        
Base credit commitments   5,000,000    
Corporate Revolving Credit Facility | Maximum        
Bank line of credit        
Increase in base credit commitment amount   $ 45,000,000    
SOFR | Revolving Credit Facility        
Bank line of credit        
Interest rate margin (as a percent)   1.30%    
Prime | Revolving Credit Facility        
Bank line of credit        
Interest rate margin (as a percent)   (1.50%)    
Reference rate (as a percent)   Prime    
Secured Bank Line of Credit        
Bank line of credit        
Maturity date   Jun. 30, 2026    
v3.24.2
Commitments and Contingencies - Schedule of Additional Leases Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Supplemental Income Statement Information:        
Operating lease cost $ 6,189 $ 6,159 $ 12,373 $ 11,739
Cash paid for amounts included in the measurement of lease liabilities:        
Net operating cash inflows/(outflows) for operating leases (6,256) (6,332) (12,180) (12,414)
Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period) $ 1,345 $ 15,919 $ 1,563 $ 16,968
Other Information        
Weighted-average remaining lease term - operating leases 11 years 7 months 6 days 12 years 3 months 3 days 11 years 7 months 6 days 12 years 3 months 3 days
Weighted-average discount rate - operating leases 3.99% 3.74% 3.99% 3.74%
v3.24.2
Commitments and Contingencies - Schedule of Future Minimum Rental Payments Required Under Operating Leases in Place (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Sublease Income    
Remainder of 2024 $ (423)  
2025 (423)  
Total Payments (846)  
Operating Leases    
Remainder of 2024 12,167  
2025 23,688  
2026 22,139  
2027 21,269  
2028 21,048  
Thereafter 163,575  
Total Payments 263,886  
Less: Tenant improvement allowances (538)  
Less: Present value adjustment (54,128)  
Operating Lease, Liability $ 209,220 $ 215,684
v3.24.2
Employee Benefit Plans - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Retirement Benefits [Abstract]        
Minimum age required to be eligible to participate in the 401(k) plan     21 years  
Expenses accrued relating to employer matching contributions $ 1,073 $ 1,011 $ 2,113 $ 1,797
v3.24.2
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Tax Disclosure [Abstract]        
Provisions (benefit) for income taxes $ 6,855 $ (1,969) $ (599) $ (5,177)
Excess tax benefit $ 38 $ 14 10,674 $ 3,359
Increase (Decrease) in Deferred Income Taxes     $ 6,271  
Percentage of portion of deferred tax asset payable     85.00%  
Portion of deferred tax asset payable     $ 5,330  
Portion of deferred tax asset payable, period     15 years  
v3.24.2
Revenues and Business Information - Schedule of Geographical Distribution of Revenues and Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues $ 264,586 $ 179,871 $ 482,071 $ 367,691  
Total assets 1,050,829   1,050,829   $ 1,179,759
United States          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 199,592 143,613 355,310 301,663  
Total assets 879,719   879,719   985,592
Europe          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 37,958 25,537 70,233 42,156  
Total assets 72,408   72,408   74,832
Rest of World          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 27,036 $ 10,721 56,528 $ 23,872  
Total assets $ 98,702   $ 98,702   $ 119,335
v3.24.2
Revenues and Business Information - Additional Information (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Segment Reporting [Abstract]      
Deferred revenue $ 3,671   $ 4,649
Revenues recognized from opening balance of deferred revenues $ 3,466 $ 6,698  
v3.24.2
Subsequent Events - Additional Information (Details) - Subsequent Event
Jul. 24, 2024
$ / shares
Subsequent Event [Line Items]  
Dividends declared per share $ 0.6
Dividend payable date Sep. 26, 2024
Dividend payable record date Aug. 05, 2024