MOELIS & CO, 10-Q filed on 10/28/2021
Quarterly Report
v3.21.2
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2021
Oct. 14, 2021
Entity Registrant Name Moelis & Co  
Entity Central Index Key 0001596967  
Document Type 10-Q  
Document Period End Date Sep. 30, 2021  
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 2021  
Document Fiscal Period Focus Q3  
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 5th 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   60,964,311
Class B Common Stock    
Entity Common Stock, Shares Outstanding   4,845,457
v3.21.2
Condensed Consolidated Statements of Financial Condition - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Assets    
Cash and cash equivalents $ 278,701 $ 202,477
Restricted cash 1,032 807
Receivables:    
Accounts receivable, net of allowance for credit losses of $2,768 and $3,775 as of September 30, 2021 and December 31, 2020, respectively 100,783 89,297
Accrued and other receivables 32,268 11,916
Total receivables 133,051 101,213
Deferred compensation 13,840 12,004
Investments 338,628 211,826
Right-of-use assets 163,902 177,069
Equipment and leasehold improvements, net 56,836 49,977
Deferred tax assets 417,132 424,345
Prepaid expenses and other assets 16,408 16,726
Total assets 1,419,530 1,196,444
Liabilities and Equity    
Compensation payable 389,895 220,058
Accounts payable, accrued expenses and other liabilities 21,019 25,026
Amount due pursuant to tax receivable agreement 307,603 307,581
Deferred revenue 3,914 2,692
Lease liabilities 191,207 196,614
Total liabilities 913,638 751,971
Commitments and Contingencies (See Note 11)
Treasury stock, at cost; 5,807,112 and 3,959,083 shares as of September 30, 2021 and December 31, 2020, respectively (252,192) (152,170)
Additional paid-in-capital 1,184,795 1,052,322
Retained earnings (accumulated deficit) (414,851) (420,682)
Accumulated other comprehensive income (loss) (1,691) (201)
Total Moelis & Company equity 516,776 479,948
Noncontrolling interests (10,884) (35,475)
Total equity 505,892 444,473
Total liabilities and equity 1,419,530 1,196,444
Class A Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share 667 620
Total equity 667 620
Class B Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share 48 59
Total equity $ 48 $ 59
v3.21.2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Accounts receivable, allowance for credit losses $ 2,768 $ 3,775
Treasury stock, shares 5,807,112 3,959,083
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 66,771,423 61,986,927
Common stock, shares outstanding 60,964,311 58,027,844
Treasury stock, shares 5,807,112 3,959,083
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 4,845,457 5,948,750
Common stock, shares outstanding 4,845,457 5,948,750
v3.21.2
Condensed Consolidated Statements of Operations - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Revenues $ 490,821 $ 207,604 $ 1,115,594 $ 521,248
Expenses        
Compensation and benefits 307,590 127,148 678,106 371,884
Occupancy 5,842 7,660 20,226 22,564
Professional fees 4,771 4,952 16,572 14,383
Communication, technology and information services 9,139 8,162 26,014 24,117
Travel and related expenses 4,469 1,662 8,949 11,154
Depreciation and amortization 1,947 941 5,033 3,216
Other expenses 4,915 5,121 17,885 14,682
Total expenses 338,673 155,646 772,785 462,000
Operating income (loss) 152,148 51,958 342,809 59,248
Other income and (expenses) 30,435 (1,631) 36,376 (6,568)
Income (loss) before income taxes 182,583 50,327 379,185 52,680
Provision (benefit) for income taxes 42,119 8,534 69,721 (10,195)
Net income (loss) 140,464 41,793 309,464 62,875
Net income (loss) attributable to noncontrolling interests 20,169 8,842 43,299 10,526
Net income (loss) attributable to Moelis & Company 120,295 32,951 266,165 52,349
Class A Common Stock        
Expenses        
Net income (loss) attributable to Moelis & Company $ 120,295 $ 32,951 $ 266,165 $ 52,349
Weighted-average shares of Class A common stock outstanding        
Basic (in shares) 63,024,943 56,803,430 62,493,293 55,263,689
Diluted (in shares) 68,274,912 60,668,084 67,631,068 59,241,139
Net income (loss) per share attributable to holders of shares of Class A common stock        
Basic (in dollars per share) $ 1.91 $ 0.58 $ 4.26 $ 0.95
Diluted (in dollars per share) $ 1.76 $ 0.54 $ 3.94 $ 0.88
v3.21.2
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Statement Of Income And Comprehensive Income [Abstract]        
Net income (loss) $ 140,464 $ 41,793 $ 309,464 $ 62,875
Foreign currency translation adjustment, net of tax (2,983) (499) (1,685) (2,224)
Other comprehensive income (loss) (2,983) (499) (1,685) (2,224)
Comprehensive income (loss) 137,481 41,294 307,779 60,651
Less: Comprehensive income (loss) attributable to noncontrolling interests 19,831 8,752 43,104 10,093
Comprehensive income (loss) attributable to Moelis & Company $ 117,650 $ 32,542 $ 264,675 $ 50,558
v3.21.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Cash flows from operating activities    
Net income (loss) $ 309,464 $ 62,875
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Bad debt expense 1,733 2,808
Depreciation and amortization 5,033 3,216
Equity-based compensation 108,824 97,724
Deferred tax provision 28,363 (7,111)
Gain on equity method investment (22,508)  
Other (11,442) 8,509
Changes in assets and liabilities:    
Accounts receivable (28,339) (23,532)
Accrued and other receivables (19,393) (2,589)
Prepaid expenses and other assets (922) 1,190
Deferred compensation (1,836) (1,585)
Compensation payable 170,149 (45,715)
Accounts payable, accrued expenses and other liabilities 3,446 1,245
Deferred revenue 1,209 4,464
Dividends received 3,356 1,942
Net cash provided by (used in) operating activities 547,137 103,441
Cash flows from investing activities    
Purchases of investments (380,496) (259,965)
Proceeds from sales of investments 270,083 252,484
Notes issued to employees   (200)
Note payments received from employees 70  
Purchases of equipment and leasehold improvements (11,890) (31,209)
Proceeds from partial sale of equity method investment 29,164  
Net cash provided by (used in) investing activities (93,069) (38,890)
Cash flows from financing activities    
Dividends and tax distributions (259,589) (122,871)
Payments under tax receivable agreement (16,336)  
Proceeds from exercise of stock options   11,923
Treasury stock purchases (100,022) (33,354)
Net cash provided by (used in) financing activities (375,947) (144,302)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash (1,672) (2,672)
Net increase (decrease) in cash, cash equivalents, and restricted cash 76,449 (82,423)
Cash, cash equivalents, and restricted cash, beginning of period 203,284 168,572
Cash, cash equivalents, and restricted cash, end of period 279,733 86,149
Cash paid during the period for:    
Income taxes 48,532 1,914
Other non-cash activity    
Non-cash settlement of accounts receivable 15,125  
Cumulative effect adjustment upon adoption of ASU 2016-13   364
Dividend equivalents issued 33,293 17,021
Class A Partnership Units or other equity converted into Class A Common Stock 4,193 5,968
Forfeiture of fully-vested Group LP units or other equity units $ 25 $ 96
v3.21.2
Condensed Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Total
Cumulative Effect Adjustment Upon Adoption
As Adjusted
Class A Common Stock
Class A Common Stock
As Adjusted
Class B Common Stock
Class B Common Stock
As Adjusted
Treasury Stock
Treasury Stock
As Adjusted
Additional Paid-In Capital
Additional Paid-In Capital
As Adjusted
Retained Earnings (Accumulated Deficit)
Retained Earnings (Accumulated Deficit)
Cumulative Effect Adjustment Upon Adoption
Retained Earnings (Accumulated Deficit)
As Adjusted
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
As Adjusted
Noncontrolling Interests
Noncontrolling Interests
As Adjusted
Balance at beginning of the period at Dec. 31, 2019 $ 393,827 $ (364) $ 393,463 $ 528 $ 528 $ 104 $ 104 $ (107,836) $ (107,836) $ 872,791 $ 872,791 $ (324,192) $ (364) $ (324,556) $ 1,432 $ 1,432 $ (49,000) $ (49,000)
Balance at beginning of the period (in shares) at Dec. 31, 2019       52,773,617 52,773,617 10,397,915 10,397,915 (2,757,558) (2,757,558)                  
Changes in Equity                                    
Accounting Standards Update [Extensible List]   ASU 2016-13                     ASU 2016-13          
Net income (loss) 30,126                     25,130         4,996  
Equity-based compensation 38,255     $ 36           38,189             30  
Equity-based compensation (in shares)       3,581,294                            
Other comprehensive income (loss) (1,630)                           (1,304)   (326)  
Dividends declared tax distributions (88,689)                 12,125   (79,391)         (21,423)  
Treasury Stock Purchases (31,636)             $ (31,636)                    
Treasury stock purchases (in shares)               (869,779)                    
Exercise of Stock options 11,819     $ 7           11,812                
Exercise of stock options (in shares)       721,484                            
Equity-based payments to non-employees 158                 158                
Other 690                 (1,981)             2,671  
Balance at end of the period at Mar. 31, 2020 352,556     $ 571   $ 104   $ (139,472)   933,094   (378,817)     128   (63,052)  
Balance at end of the period (in shares) at Mar. 31, 2020       57,076,395   10,397,915   (3,627,337)                    
Balance at beginning of the period at Dec. 31, 2019 393,827 $ (364) $ 393,463 $ 528 $ 528 $ 104 $ 104 $ (107,836) $ (107,836) 872,791 $ 872,791 (324,192) $ (364) $ (324,556) 1,432 $ 1,432 (49,000) $ (49,000)
Balance at beginning of the period (in shares) at Dec. 31, 2019       52,773,617 52,773,617 10,397,915 10,397,915 (2,757,558) (2,757,558)                  
Changes in Equity                                    
Net income (loss) 62,875                                  
Treasury Stock Purchases $ (33,354)                                  
Treasury stock purchases (in shares) (925,857)                                  
Balance at end of the period at Sep. 30, 2020 $ 414,643     $ 591   $ 86   $ (141,190)   993,688   (384,731)     (359)   (53,442)  
Balance at end of the period (in shares) at Sep. 30, 2020       59,144,937   8,490,938   (3,683,415)                    
Balance at beginning of the period at Mar. 31, 2020 352,556     $ 571   $ 104   $ (139,472)   933,094   (378,817)     128   (63,052)  
Balance at beginning of the period (in shares) at Mar. 31, 2020       57,076,395   10,397,915   (3,627,337)                    
Changes in Equity                                    
Net income (loss) (9,044)                     (5,732)         (3,312)  
Equity-based compensation 29,379     $ 1           29,369             9  
Equity-based compensation (in shares)       72,616                            
Other comprehensive income (loss) (95)                           (78)   (17)  
Dividends declared tax distributions (17,081)                 2,496   (16,588)         (2,989)  
Treasury Stock Purchases (766)             $ (766)                    
Treasury stock purchases (in shares)               (24,619)                    
Exercise of Stock options 104                 104                
Exercise of stock options (in shares)       6,500                            
Equity-based payments to non-employees 651                 651                
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges 4,939     $ 17   $ (17)       (4,388)             9,327  
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges (in shares)       1,742,406   (1,742,406)                        
Balance at end of the period at Jun. 30, 2020 360,643     $ 589   $ 87   $ (140,238)   961,326   (401,137)     50   (60,034)  
Balance at end of the period (in shares) at Jun. 30, 2020       58,897,917   8,655,509   (3,651,956)                    
Changes in Equity                                    
Net income (loss) 41,793                     32,951         8,842  
Equity-based compensation 30,093     $ 1           30,092                
Equity-based compensation (in shares)       82,449                            
Other comprehensive income (loss) (499)                           (409)   (90)  
Dividends declared tax distributions (17,101)                 2,400   (16,545)         (2,956)  
Treasury Stock Purchases (952)             $ (952)                    
Treasury stock purchases (in shares)               (31,459)                    
Equity-based payments to non-employees 423                 423                
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges 243     $ 1   $ (1)       (553)             796  
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges (in shares)       164,571   (164,571)                        
Balance at end of the period at Sep. 30, 2020 414,643     $ 591   $ 86   $ (141,190)   993,688   (384,731)     (359)   (53,442)  
Balance at end of the period (in shares) at Sep. 30, 2020       59,144,937   8,490,938   (3,683,415)                    
Balance at beginning of the period at Dec. 31, 2020 444,473     $ 620   $ 59   $ (152,170)   1,052,322   (420,682)     (201)   (35,475)  
Balance at beginning of the period (in shares) at Dec. 31, 2020       61,986,927   5,948,750   (3,959,083)                    
Changes in Equity                                    
Net income (loss) 75,798                     66,529         9,269  
Equity-based compensation 50,963     $ 36           41,508             9,419  
Equity-based compensation (in shares)       3,612,341                            
Other comprehensive income (loss) (744)                           (655)   (89)  
Dividends declared tax distributions (39,685)                 5,131   (39,013)         (5,803)  
Treasury Stock Purchases (74,211)             $ (74,211)                    
Treasury stock purchases (in shares)               (1,363,934)                    
Equity-based payments to non-employees 108                 108                
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges 3,903     $ 10   $ (10)       2,161             1,742  
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges (in shares)       1,049,293   (1,049,293)                        
Other (25)                 (25)                
Balance at end of the period at Mar. 31, 2021 460,580     $ 666   $ 49   $ (226,381)   1,101,205   (393,166)     (856)   (20,937)  
Balance at end of the period (in shares) at Mar. 31, 2021       66,648,561   4,899,457   (5,323,017)                    
Balance at beginning of the period at Dec. 31, 2020 444,473     $ 620   $ 59   $ (152,170)   1,052,322   (420,682)     (201)   (35,475)  
Balance at beginning of the period (in shares) at Dec. 31, 2020       61,986,927   5,948,750   (3,959,083)                    
Changes in Equity                                    
Net income (loss) 309,464                                  
Treasury Stock Purchases $ (100,022)                                  
Treasury stock purchases (in shares) (1,848,029)                                  
Balance at end of the period at Sep. 30, 2021 $ 505,892     $ 667   $ 48   $ (252,192)   1,184,795   (414,851)     (1,691)   (10,884)  
Balance at end of the period (in shares) at Sep. 30, 2021       66,771,423   4,845,457   (5,807,112)                    
Balance at beginning of the period at Mar. 31, 2021 460,580     $ 666   $ 49   $ (226,381)   1,101,205   (393,166)     (856)   (20,937)  
Balance at beginning of the period (in shares) at Mar. 31, 2021       66,648,561   4,899,457   (5,323,017)                    
Changes in Equity                                    
Net income (loss) 93,202                     79,341         13,861  
Equity-based compensation 29,041                 27,699             1,342  
Equity-based compensation (in shares)       45,056                            
Other comprehensive income (loss) 2,042                           1,810   232  
Dividends declared tax distributions (178,649)                 23,078   (179,660)         (22,067)  
Treasury Stock Purchases (21,712)             $ (21,712)                    
Treasury stock purchases (in shares)               (409,370)                    
Equity-based payments to non-employees 83                 83                
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges 206     $ 1           39             166  
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges (in shares)       47,238   (47,238)                        
Balance at end of the period at Jun. 30, 2021 384,793     $ 667   $ 49   $ (248,093)   1,152,104   (493,485)     954   (27,403)  
Balance at end of the period (in shares) at Jun. 30, 2021       66,740,855   4,852,219   (5,732,387)                    
Changes in Equity                                    
Net income (loss) 140,464                     120,295         20,169  
Equity-based compensation 28,820                 27,463             1,357  
Equity-based compensation (in shares)       23,806                            
Other comprehensive income (loss) (2,983)                           (2,645)   (338)  
Dividends declared tax distributions (41,255)                 5,084   (41,661)         (4,678)  
Treasury Stock Purchases (4,099)             $ (4,099)                    
Treasury stock purchases (in shares)               (74,725)                    
Equity-based payments to non-employees 68                 68                
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges 84         $ (1)       76             9  
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges (in shares)       6,762   (6,762)                        
Balance at end of the period at Sep. 30, 2021 $ 505,892     $ 667   $ 48   $ (252,192)   $ 1,184,795   $ (414,851)     $ (1,691)   $ (10,884)  
Balance at end of the period (in shares) at Sep. 30, 2021       66,771,423   4,845,457   (5,807,112)                    
v3.21.2
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares
 3 Months Ended
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Sep. 30, 2020
Jun. 30, 2020
Mar. 31, 2020
Class A Common Stock            
Dividends declared per share of Class A common stock $ 0.60 $ 2.55 $ 0.55 $ 0.255 $ 0.255 $ 1.26
v3.21.2
Organization and Basis of Presentation
 9 Months Ended
Sep. 30, 2021
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, governments and financial sponsors, 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 (“Moelis U.S.”), 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 BV, a private limited company incorporated in Amsterdam, Netherlands. In addition to Amsterdam, Moelis Netherlands maintains operations in Paris, France through a wholly owned subsidiary, Moelis & Company Netherlands B.V. French Branch

 

Moelis & Company Europe BV, 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.

 

An equity method investment in MA Financial Group Limited (previously known as Moelis Australia Limited) (“MA Financial”), a public company listed on the Australian Securities Exchange
v3.21.2
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2021
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”). 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, 2020.

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. 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 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 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. Treasury instruments and money market securities.

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 medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of September 30, 2021 and 2020, is presented below.

 

 

 

September 30,

 

 

2021

 

2020

Cash

 

$

81,608

 

$

46,026

Cash equivalents

 

 

197,093

 

 

39,487

Restricted cash

 

 

1,032

 

 

636

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

 

$

279,733

 

$

86,149

 

Additionally, as of December 31, 2020, the Company held cash of $83,472 and cash equivalents of $119,005.

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 September 30, 2021 and December 31, 2020 were $23,917 and $19,603 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. These long term receivables generated interest income of $207 and $182 for the three months ended September 30, 2021 and 2020, respectively, and $587 and $568 for the nine months ended September 30, 2021 and 2020, 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.

On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13— “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13") using the modified retrospective method. Upon adoption, a cumulative adjustment was recorded which decreased retained earnings by $459. The tax effect of this adjustment increased retained earnings by $95, resulting in a net decrease of $364 as of January 1, 2020. ASU 2016-13 replaces the incurred loss impairment methodology for financial instruments with the current expected credit loss (CECL) model which requires estimates of future credit losses based on reasonable supporting information. The Company will recognize its expected credit losses for each reporting period going forward.

The following tables summarize credit loss allowance activity for the three and nine months ended September 30, 2021 and 2020:

 

 

Three Months Ended September 30, 2021

 

 

Three Months Ended September 30, 2020

 

 

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

$

 

4,048

 

$

 

306

 

$

 

4,354

 

 

$

 

4,507

 

$

 

200

 

$

 

4,707

 

Charge-offs, foreign currency translation and other adjustments

 

 

(2,018

)

 

 

—

 

 

 

(2,018

)

 

 

 

(1,428

)

 

 

—

 

 

 

(1,428

)

Recoveries

 

 

(1,884

)

 

 

(65

)

 

 

(1,949

)

 

 

 

(1,235

)

 

 

—

 

 

 

(1,235

)

Reduction to allowance

 

 

(3,902

)

 

 

(65

)

 

 

(3,967

)

 

 

 

(2,663

)

 

 

—

 

 

 

(2,663

)

Provision for credit losses

 

 

2,381

 

 

 

—

 

 

 

2,381

 

 

 

 

2,473

 

 

 

(6

)

 

 

2,467

 

Allowance for credit losses, ending balance

$

 

2,527

 

$

 

241

 

$

 

2,768

 

 

$

 

4,317

 

$

 

194

 

$

 

4,511

 

 

 

Nine Months Ended September 30, 2021

 

 

Nine Months Ended September 30, 2020

 

 

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

$

 

3,577

 

$

 

198

 

$

 

3,775

 

 

$

 

4,088

 

$

 

—

 

$

 

4,088

 

Adjustment for adoption of ASU 2016-13

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

260

 

 

 

199

 

 

 

459

 

Allowance for Credit Losses, adjusted beginning balance

 

 

3,577

 

 

 

198

 

 

 

3,775

 

 

 

 

4,348

 

 

 

199

 

 

 

4,547

 

Charge-offs, foreign currency translation and other adjustments

 

 

(2,740

)

 

 

—

 

 

 

(2,740

)

 

 

 

(2,844

)

 

 

—

 

 

 

(2,844

)

Recoveries

 

 

(6,775

)

 

 

(65

)

 

 

(6,840

)

 

 

 

(2,471

)

 

 

(26

)

 

 

(2,497

)

Reduction to allowance

 

 

(9,515

)

 

 

(65

)

 

 

(9,580

)

 

 

 

(5,315

)

 

 

(26

)

 

 

(5,341

)

Provision for credit losses

 

 

8,465

 

 

 

108

 

 

 

8,573

 

 

 

 

5,284

 

 

 

21

 

 

 

5,305

 

Allowance for credit losses, ending balance

$

 

2,527

 

$

 

241

 

$

 

2,768

 

 

$

 

4,317

 

$

 

194

 

$

 

4,511

 

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 inputs into the determination of fair value require significant judgment or estimation by the Company’s management.

For level 3 investments in which pricing inputs are unobservable and limited market activity exists, management’s 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.

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 investments. 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.

Investments Held at Cost — Investments without readily determinable fair values are measured at cost, less impairment. If the Company identifies an observable price change in an orderly transaction for an investment held at cost, it will measure the investment at fair value as of the date the observable transaction occurred. The Company shall reassess at each reporting period whether such investments should continue to be measured at cost, less impairment, or another method. Any resulting gain or loss from a change in measurement shall be recorded in other income and expenses on the condensed consolidated statement of operations. Investments held at cost are reported within investments on the condensed consolidated statements of financial condition.

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.

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, will be expensed in the period they are incurred. The amortization expense of such capitalized costs will be presented under communication, technology and information services on the condensed consolidated statement of operations.

Effective January 1, 2020, the Company adopted Accounting Standards Update No. 2018-15, “Goodwill and Other —Internal Use Software” (“ASU 2018-15”) using a prospective approach. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in cloud computing arrangements with the requirements for capitalizing costs to develop or obtain internal-use software. See Note 4—Fixed and Intangible Assets below for further details on the Company’s capitalized cloud computing arrangements.

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. 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.

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 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 from advisory engagements and, in many cases, we are not paid until the completion of an underlying transaction. The Company recognizes revenues from providing advisory services when or as our obligations are fulfilled and collection is reasonably assured. The vast majority of our advisory revenues, which include reimbursements for certain out-of-pocket expenses, are recognized over time; however, a small number of transactions may be recognized at a point in time. We provide our advisory service on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. During such engagements, our clients are continuously benefitting from our counsel and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees is constrained until substantially all services have been provided, specified conditions have been met 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. Revenues may be recognized at a point in time if the engagement represents a singular objective that does not transfer any notable value until formally completed, such as when issuing a fairness opinion. In these instances, the 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 is based on its grant-date fair value based on quoted market prices at the time of grant amortized over the service period required by the award’s vesting terms. 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 are subject to the same vesting conditions as the underlying RSUs on which they were accrued. Dividends in kind will be forfeited if the underlying award does not vest.

The Company has a retirement plan whereby a retiring employee generally will not forfeit certain qualifying incentive RSUs granted during employment if at retirement the employee meets certain requirements. 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 RSUs 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. Any unvested RSUs 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 portion 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 nine months ended September 30, 2021 and 2020, 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 nine months ended September 30, 2021 and 2020, 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.

Effective January 1, 2021, the Company adopted Accounting Standards Update No. 2019-12, “Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain rule exceptions to simplify accounting for income taxes. ASU 2019-12 has been incorporated into our provision for income taxes calculation and does not have a material impact to our overall income taxes.

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. 
v3.21.2
Recent Accounting Pronouncements
 9 Months Ended
Sep. 30, 2021
New Accounting Pronouncements And Changes In Accounting Principles [Abstract]  
Recent Accounting Pronouncements

3. RECENT ACCOUNTING PRONOUNCEMENTS

 

In March 2020, the FASB issued Accounting Standards Update No. 2020-04, “Reference Rate Reform” (“ASU 2020-04”). ASU 2020-04 provides optional guidance for entities that are impacted by interest rate reform. Specifically, ASU 2020-04 allows for contracts under the scope of Topic 310—Receivables to be accounted for prospectively with the updated interest rate, among other specifications for debt, derivative instruments, and other contracts. ASU 2020-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application is permitted. Upon initial evaluation, we do not anticipate any material changes to our condensed consolidated financial statements.
v3.21.2
Fixed and Intangible Assets
 9 Months Ended
Sep. 30, 2021
Property Plant And Equipment [Abstract]  
Fixed and Intangible Assets

4. FIXED AND INTANGIBLE ASSETS

 

Equipment and leasehold improvements, net consists of the following:

 

 

 

September 30,

 

December 31,

 

 

2021

 

2020

Office equipment

 

$

15,771

 

$

13,267

Furniture and fixtures

 

 

14,148

 

 

10,409

Leasehold improvements

 

 

56,790

 

 

36,286

Construction in progress

 

 

                        —

 

 

14,943

Total

 

 

86,709

 

 

74,905

Less accumulated depreciation and amortization

 

 

(29,873)

 

 

(24,928)

Equipment and leasehold improvements, net

 

$

56,836

 

$

49,977

 

 

Depreciation and amortization expenses for fixed assets totaled $1,947 and $941 for the three months ended September 30, 2021 and 2020, respectively, and $5,033 and $3,216 for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, there were $2,249 of costs capitalized within prepaid expenses and other assets on our condensed consolidated statement of financial position related to the implementation of cloud computing arrangements. The amortization expense of the capitalized costs was $122 and $113 for the three months ended September 30, 2021 and 2020, respectively, and $366 and $127 for the nine months ended September 30, 2021 and 2020, respectively. The amortization expense was recorded within communication, technology and information services on the condensed consolidated statement of operations.
v3.21.2
Investments
 9 Months Ended
Sep. 30, 2021
Investments All Other Investments [Abstract]  
Investments

5. INVESTMENTS

Fair value investments are contained within the balance of 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. 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 inputs into the determination of fair value require significant judgment or estimation by the Company’s management.

The estimated fair values of money market securities and U.S. Treasury instruments are based on quoted prices for recent trading activity in identical or similar instruments. The Company generally invests in U.S. Treasury instruments with maturities of less than twelve months. The Company considers these securities to be risk free and does not reserve for expected credit losses on these treasury investments. See Note 2 for further information on the Company’s fair value hierarchy.

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.

Investments without readily determinable fair values are measured at cost, less impairment. If the Company identifies an observable price change in an orderly transaction for an investment held at cost, it will measure the investment at fair value as of the date the observable transaction occurred. The Company shall reassess at each reporting period whether such investments should continue to be measured at cost or another method. Any resulting gain or loss from a change in measurement shall be recorded in other income and expenses on the condensed consolidated statement of operations. Investments held at cost are reported within investments on the condensed consolidated statements of financial condition.

The Company’s financial assets, recorded at fair value on a recurring basis, as of September 30, 2021 have been categorized based upon the fair value hierarchy, described above, as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

$

 

151,992

 

$

 

—

 

$

 

151,992

 

$

 

—

 

Money market securities

 

 

45,101

 

 

 

—

 

 

 

45,101

 

 

 

—

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

 

279,698

 

 

 

—

 

 

 

279,698

 

 

 

—

 

Common stock

 

 

13,431

 

 

 

13,431

 

 

 

—

 

 

 

—

 

Interest in sponsor of Atlas Crest I

 

 

7,533

 

 

 

—

 

 

 

7,533

 

 

 

—

 

Total financial assets

$

 

497,755

 

$

 

13,431

 

$

 

484,324

 

$

 

—

 

For the three and nine months ended September 30, 2021, unrealized gains of $4,899 were recognized in other income and expenses on the condensed consolidated statement of operations related to investments measured at fair value held at the reporting date. The cost basis of

the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $295,801 as of September 30, 2021.

The Company made investments in the sponsors (collectively referred to herein as “Atlas Crest Sponsors”) of several Atlas Crest Investment Corp. entities, each a special purpose acquisition company (“SPAC”) (each an “Atlas Crest Entity” and collectively, the “Atlas Crest Entities”). The Company’s Chief Executive Officer, Kenneth Moelis, is the managing member of the Atlas Crest Sponsors and serves as Non-Executive Chairman of the Atlas Crest Entities. The Company does not direct the activities of the Atlas Crest Sponsors or the related SPACs.

On September 16, 2021, Atlas Crest Investment Corp. ("Atlas Crest I") completed its business combination with Archer Aviation Inc. ("Archer") and the combined company is now traded on the New York Stock Exchange (NYSE:ACHR). The Company provided services to Atlas Crest I in connection with the business combination, and the Company received as payment for its services (i) cash fees plus (ii) 1,512,500 shares of Archer Class A common stock, which is categorized as level 1 in the fair value hierarchy. In addition, the Company's interest in the sponsor of Atlas Crest I was measured at a fair value of $7,533 as of September 30, 2021. The Company's interest in the sponsor of Atlas Crest I is categorized as level 2 as the significant pricing inputs of the investment are indirectly observable.

Investments in the Atlas Crest Sponsors that do not have readily determinable fair values are measured at cost less impairment, and are included in investments on the condensed consolidated statement of financial condition. As of September 30, 2021, and December 31, 2020, the aggregate investment balance of the Atlas Crest Sponsors was $3,833 and $887, respectively.

The Company's financial assets, recorded at fair value on a recurring basis, as of December 31, 2020 have been categorized based upon the fair value hierarchy described above, as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

$

 

15,599

 

$

 

—

 

$

 

15,599

 

$

 

—

 

Money market securities

 

 

103,406

 

 

 

—

 

 

 

103,406

 

 

 

—

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

 

172,671

 

 

 

—

 

 

 

172,671

 

 

 

—

 

Total financial assets

$

 

291,676

 

$

 

—

 

$

 

291,676

 

$

 

—

 

For the three and nine months ended September 30, 2020, unrealized losses of $60 and $227 were recognized in other income and expenses on the condensed consolidated statement of operations related to common stock held at the reporting date. The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $172,640 as of December 31, 2020.

Equity-method investments are contained within the balance of investments on the Company’s condensed consolidated statements of financial condition. On April 1, 2010, the Company entered into a 50-50 joint venture in Moelis Australia Holdings PTY Limited, investing a combination of cash and certain net assets in exchange for its interests. On April 10, 2017, Moelis Australia Holdings PTY Limited consummated their initial public offering and is listed on the Australian Securities Exchange as MA Financial Group Limited (ASX: MAF). As a result of the offering, the Company’s ownership interest in MA Financial was diluted and continues to be accounted for under the equity method of accounting.

On August 17, 2021 and February 17, 2021, MA Financial declared dividends, of which the Company received $1,077 and $2,279 on September 22, 2021 and March 4, 2021, respectively. On February 19, 2020, MA Financial declared a dividend and the Company received $1,942 on March 4, 2020. The Company accounted for the dividends as a return on investment and reduced the carrying value of the investment in MA Financial by the amount of the dividends received.

During the three and nine months ended September 30, 2021, the Company recognized gains of $0 and $2,334, respectively, related to share issuances by MA Financial for an employee compensation plan. The shares were issued at fair values greater than the carrying values of the ownership interests held, resulting in dilution gains, which were recorded in other income on the condensed consolidated statement of operations.

On August 25, 2021, the Company sold 6.0 million shares of MA Financial common stock. This transaction resulted in a gain of $20,174, recorded in other income and expenses on the condensed consolidated statements of operations. As a result, the Company's ownership interest in MA Financial was reduced.

The balances of the Company’s equity method investment as of September 30, 2021 and December 31, 2020 were $34,133 and $38,143, respectively, and are included within investments on the condensed consolidated statements of financial condition. The Company’s share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operations.
v3.21.2
Net Income (Loss) Per Share Attributable to Class A Common Shareholders
 9 Months Ended
Sep. 30, 2021
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 nine months ended September 30, 2021 and 2020 are presented below.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(dollars in thousands, except per share amounts)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

120,295

 

 

$

32,951

 

 

$

266,165

 

 

$

52,349

 

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

 

$

120,295

 

 

$

32,951

 

 

$

266,165

 

 

$

52,349

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

63,024,943

 

 

 

56,803,430

 

 

 

62,493,293

 

 

 

55,263,689

 

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

 

 

5,249,969

(b)

 

 

3,864,654

(b)

 

 

5,137,775

(b)

 

 

3,977,450

(b)

Weighted average shares of Class A common stock outstanding—diluted

 

 

68,274,912

 

 

 

60,668,084

 

 

 

67,631,068

 

 

 

59,241,139

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.91

 

 

$

0.58

 

 

$

4.26

 

 

$

0.95

 

Diluted

 

$

1.76

 

 

$

0.54

 

 

$

3.94

 

 

$

0.88

 

 

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 76,077,927 and 71,774,582 for the three months ended September 30, 2021 and 2020, respectively, and 75,560,854 and 71,151,424 for the nine months ended September 30, 2021 and 2020, 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 nine months ended September 30, 2021 and 2020, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

 

(b) Certain shares of Moelis & Company’s Class A common stock assumed to be issued pursuant to certain RSUs as calculated using the treasury stock method were antidilutive and therefore have been excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. During the three months ended September 30, 2021 and 2020, there were 500 and 1,847 RSUs, respectively, that would have been included in the treasury stock method calculation if the effect were dilutive and 437 and 227,126 RSUs for the nine months ended September 30, 2021 and 2020, respectively.  
v3.21.2
Equity-Based Compensation
 9 Months Ended
Sep. 30, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Equity-Based Compensation

7. EQUITY-BASED COMPENSATION

Pre-IPO Partnership Units

Prior to the Company’s IPO, the business operated as a partnership and its ownership structure was comprised of common partners (principally outside investors) holding units and Managing Directors and employees holding units. In connection with the IPO, Group LP issued Class A partnership units to Moelis & Company and to certain existing unit holders. Following the reorganization, 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.

The Company recognized compensation expenses of $0 for the three months ended September 30, 2021 and 2020, and $0 and $39 for the nine months ended September 30, 2021 and 2020, respectively, in relation to these pre-IPO partnership units.

2014 Omnibus Incentive Plan

In connection with the IPO, the Company adopted the Moelis & Company 2014 Omnibus Incentive Plan (the “Plan”) to provide additional incentives to selected officers, employees, Managing Directors, non-employee directors, independent contractors, partners, senior advisors and consultants. The Plan provides for the issuance 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 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 September 30, 2021 and 2020, the Company recognized expense of $28,820 and $30,090, respectively, and $108,824 and $97,685 for the nine months ended September 30, 2021 and 2020, respectively, in relation to these awards.

The following table summarizes activity related to RSUs and other stock-based awards for the nine months ended September 30, 2021 and 2020.

 

 

 

RSUs and Other Stock-based Awards

 

 

2021

 

2020

 

 

 

 

Weighted

 

 

 

Weighted

 

 

 

 

Average

 

 

 

Average

 

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

 

Shares

 

Fair Value

 

Shares

 

Fair Value

Unvested Balance at January 1,

 

8,742,695

 

$

41.45

 

8,414,130

 

$

42.19

Granted

 

3,807,900

 

 

54.80

 

3,913,960

 

 

37.58

Forfeited

 

(340,419)

 

 

46.74

 

(117,850)

 

 

40.00

Vested

 

(4,007,144)

 

 

43.09

 

(3,201,045)

 

 

38.76

Unvested Balance at September 30,

 

8,203,032

 

$

46.62

 

9,009,195

 

$

41.35

 

As of September 30, 2021, the total compensation expense related to unvested RSUs and other stock-based awards not yet recognized was $159,856. The weighted-average period over which this compensation expense is expected to be recognized at September 30, 2021 is 1.7 years.

Stock Options

Pursuant to the Plan, the Company issued 3,501,881 stock options in 2014 which vest over a five-year period. The Company estimated the fair value of stock option awards at grant using the Black-Scholes valuation model with the following assumptions:

 

 

 

Assumptions

Expected life (in years)

 

 

6

Weighted-average risk free interest rate

 

 

1.91%

Expected volatility

 

 

35%

Dividend yield

 

 

2.72%

Weighted-average fair value at grant date

 

$

6.70

 

During the six year life of the options, the Company paid special dividends of $9.05, in aggregate. As required under Section 5 of the Company’s 2014 Omnibus Incentive Plan, the Compensation Committee of the Company’s Board of Directors equitably reduced the exercise price of the Company’s outstanding options to purchase common stock by $9.05 from $25.00 per share to $15.95 per share.

The following table summarizes activity related to stock options for the nine months ended September 30, 2020:

 

 

 

Stock Options Outstanding

 

 

2020

 

 

 

 

Weighted

 

 

 

 

Average

 

 

Number

 

Exercise Price

 

 

Outstanding

 

Per Share

Outstanding at January 1,

 

728,534

 

$

15.95

Exercises

 

(728,534)

 

 

15.95

Outstanding at September 30,

 

                        —

 

$

                        —

 

For the three and nine months ended September 30, 2021 and 2020, the Company recognized no expense in relation to these stock options. As of April 2020, no stock options remain outstanding.

Share Repurchase Plan

In February 2019, 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. In July 2021, the Board of Directors authorized the repurchase of an additional $100,000 of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. The remaining balance of shares authorized for repurchase under the program was $149,132 as of September 30, 2021.
v3.21.2
Stockholders Equity
 9 Months Ended
Sep. 30, 2021
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 September 30, 2021, there were 66,771,423 shares of Class A common stock issued, 5,807,112 shares of treasury stock, and 60,964,311 shares outstanding, and, as of December 31, 2020, there were 61,986,927 shares of Class A common stock issued, 3,959,083 shares of treasury stock, and 58,027,844 shares outstanding. The changes in Class A common stock are due primarily to the IPO and offering transactions described above, exchanges of Class A partnership units, the exercise of stock options and vesting of restricted stock units 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 transferrable 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 September 30, 2021, and December 31, 2020, 4,845,457 and 5,948,750 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 nine months September 30, 2021 and 2020, the Company repurchased 1,848,029 and 925,857 shares, respectively, pursuant to the Company’s share repurchase program and shares repurchased 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 $100,022 and $33,354, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of September 30, 2021 and 2020.

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 September 30, 2021 and December 31, 2020, partners held 7,801,398 and 8,508,857 Group LP partnership units, respectively, representing an 11% and 13% 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 60,964,311 shares of Class A common stock outstanding at September 30, 2021 (58,027,844 as of December 31, 2020), represents the controlling interest.
v3.21.2
Related-Party Transactions
 9 Months Ended
Sep. 30, 2021
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 was used and operated by the Company pursuant to a dry lease with Manager. The terms of the dry lease were 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 was the other lessee of the aircraft and shared the operating and related costs of the plane in proportion to his respective use pursuant to a cost sharing and operating agreement. On July 12, 2019, the Company terminated its aircraft dry lease with Manager, the lessor, and Mr. Moelis, the other lessee (the “Old Lease”) and the related cost sharing agreement with Mr. Moelis, which were set to expire by their terms on December 31, 2019, and entered into a new dry lease with Manager, the lessor, and Mr. Moelis, the other lessee (the “New Lease”) and cost sharing agreement with Mr. Moelis, which terminate on December 31, 2022. The terms of the New Lease and new cost sharing agreement are substantially similar to the Old Lease and related cost sharing agreement.

For the three months ended September 30, 2021 and 2020, the Company incurred $324 and $324 in aircraft lease costs to be paid to Manager, respectively, and $972 and $972 for the nine months ended September 30, 2021 and 2020, respectively.

Promissory Notes —As of September 30, 2021, there were $319 of unsecured promissory notes from employees held by the Company (December 31, 2020: $389). 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 3.00% to 4.00%. During each of the nine months ended September 30, 2021 and 2020, the Company received $70 and $0 of principal repayments and recognized interest income of $11 and $9, on such notes, 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 $55 and $65 for the three months ended September 30, 2021 and 2020, respectively, and $166 and $239 for the nine months ended September 30, 2021 and 2020, respectively. 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 September 30, 2021 and December 31, 2020, the Company had no balances due to or from Moelis Asset Management LP.

Affiliated SPACs and SPAC Sponsors—The Company provides office space, secretarial, administrative and other corporate services to certain Atlas Crest Entities. These services are provided to the Atlas Crest Entities upon consummation of their initial public offerings, in each case for a fee of $10 per month. For the three and nine months ended September 30, 2021, these fees totaled $60 and $170, respectively. This arrangement shall continue with each Atlas Crest Entity until such Atlas Crest Entity consummates a business combination or is liquidated. As of September 30, 2021, and December 31, 2020, the Company had no balance due from the Atlas Crest Entities or their sponsors.

In addition to the Company’s investments in the Atlas Crest Sponsors (described further in Note 5), the Company’s Executive Officers have a material, non-majority investment in the Atlas Crest Sponsors.

MA Financial —As of September 30, 2021 and December 31, 2020, the Company had a balance of $0 and $5, respectively, due to MA Financial which is reflected in accrued and other receivables on the condensed consolidated statements of financial condition. These balances consist of amounts due to or from MA Financial for advisory services performed as well as billable expenses incurred by the Company on behalf of MA Financial during the period. The relationship between the Company and MA Financial is governed by a services agreement.

Revenues —From time to time, the Company enters into advisory transactions with affiliated entities, such as an Atlas Crest Entity or Moelis Asset Management LP and its affiliates. The Company earned revenues associated with such transactions of $30,346 for each of the three and nine months ended September 30, 2021, and $0 for each of the three months and nine months ended September 30, 2020.
v3.21.2
Regulatory Requirements
 9 Months Ended
Sep. 30, 2021
Regulatory Capital Requirements [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 September 30, 2021, Moelis U.S. had net capital of $402,160, which was $401,910 in excess of its required net capital. At December 31, 2020, Moelis U.S. had net capital of $96,800 which was $96,550 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 exceeded their local capital adequacy requirements as of September 30, 2021.
v3.21.2
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2021
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

11. COMMITMENTS AND CONTINGENCIES

Bank Lines of Credit — The Company renewed its $65,000 revolving credit facility which extended the maturity date to June 30, 2022. Unless the lender issues a notice of termination at least 60 days prior to such maturity date, this facility will automatically extend to June 30, 2023. 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) LIBOR plus 1% or (ii) Prime minus 1.50%. As of September 30, 2021 and December 31, 2020, the Company had no borrowings under the credit facility. As of September 30, 2021, the Company’s available credit under this facility was $64,151 as a result of the issuance of an aggregate amount of $849 of various standby letters of credit, which were required in connection with certain office lease and other agreements. The Company incurs a 1% per annum fee on the outstanding balance of issued letters of credit.

On May 24, 2021, Moelis U.S. entered into a $30,000 revolving credit facility agreement pre-approved by FINRA to provide additional regulatory capital as necessary. Under this facility, the Company may borrow capital until May 24, 2022, the end of the credit period, and must repay aggregate principal balances by the maturity date of May 24, 2023. Borrowings on the facility bear interest equal to the Prime rate, payable quarterly in arrears on the last day of each March, June, September and December of each calendar year. The Company had no borrowing under the credit facility and the available credit under this facility was $30,000 as of September 30, 2021.

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

 

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

 

September 30,

 

 

($ in thousands)

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

 

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

5,379

 

 

$

6,697

 

 

 

$

18,870

 

 

$

19,713

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating cash outflows for operating leases

 

$

3,364

 

 

$

5,996

 

 

 

$

11,624

 

 

$

13,840

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

375

 

 

$

1,589

 

 

 

$

753

 

 

$

4,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases

 

 

13.54

 

 years

 

13.72

 

  years

 

 

13.54

 

 years

 

13.72

 

  years

Weighted-average discount rate - operating leases

 

 

3.52

%

 

 

3.53

%

 

 

 

3.52

%

 

 

3.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The future sublease income and maturities of our operating lease liabilities as of September 30, 2021, are as follows:

 

Fiscal year ended

 

Sublease Income

 

Operating Leases

Remainder of 2021

 

$

(225)

 

$

3,775

2022

 

 

(899)

 

 

24,191

2023

 

 

(899)

 

 

20,949

2024

 

 

(899)

 

 

19,058

2025

 

 

(449)

 

 

16,340

Thereafter

 

 

                                  —

 

 

177,935

Total Payments

 

$

(3,371)

 

$

262,248

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

(14,303)

Less: Present value adjustment

 

 

(56,738)

Total

 

$

191,207

 

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 and initiate administrative proceedings regarding the Company’s business, including, among other matters, compliance, accounting 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 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. Subject to the foregoing, 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.
v3.21.2
Employee Benefit Plans
 9 Months Ended
Sep. 30, 2021
Compensation And Retirement Disclosure [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 September 30, 2021 and 2020, in the amounts of $820 and $713, respectively, and $2,356 and $2,119 for the nine months ended September 30, 2021 and 2020, respectively.
v3.21.2
Income Taxes
 9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

13. INCOME TAXES

The Company’s operations are 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 represent obligations of their interest holders, except for certain other foreign, state, and local 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 provision for income tax and effective tax rate were $42,119 and 23% and $8,534 and 17% for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, the Company’s provision for income taxes was an expense of $69,721 and a benefit of $10,195, compared with pre-tax operating income of $379,185 and $52,680, respectively. The income tax provision for the aforementioned periods primarily reflects the Company’s allocable share of earnings from Group LP at the prevailing U.S. federal, state, and local corporate income tax rates 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 benefit for the nine months ended September 30, 2021 and 2020 was $17,882 and $7,353, respectively.
v3.21.2
Revenues and Business Information
 9 Months Ended
Sep. 30, 2021
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, governments, sovereign wealth funds, and financial sponsors, 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 September 30,

 

 

Nine Months Ended September 30,

 

2021

 

2020

 

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

United States

$

437,174

 

$

177,774

 

 

$

951,697

 

$

445,341

Europe

 

31,129

 

 

22,513

 

 

 

104,111

 

 

53,893

Rest of World

 

22,518

 

 

7,317

 

 

 

59,786

 

 

22,014

Total

$

490,821

 

$

207,604

 

 

$

1,115,594

 

$

521,248

 

 

 

September 30,

 

December 31,

 

 

2021

 

2020

Assets:

 

 

 

 

 

 

United States

 

$

1,252,019

 

$

1,012,831

Europe

 

 

68,344

 

 

78,470

Rest of World

 

 

99,167

 

 

105,143

Total

 

$

1,419,530

 

$

1,196,444

 

As of September 30, 2021, and December 31, 2020, the Company had deferred revenues of $3,914 and $2,692, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the nine months ended September 30, 2021 and 2020, $2,423 and $2,354 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.
v3.21.2
Subsequent Events
 9 Months Ended
Sep. 30, 2021
Subsequent Events [Abstract]  
Subsequent Events

15. SUBSEQUENT EVENTS

The Board of Directors of Moelis & Company declared a special dividend of $2.50 per share in addition to a regular quarterly dividend of $0.60 per share. The $3.10 per share will be paid on November 19, 2021 to shareholders of record as of November 8, 2021.
v3.21.2
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2021
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”). 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, 2020.
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. 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 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 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. Treasury instruments and money market securities.

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 medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of September 30, 2021 and 2020, is presented below.

 

 

 

September 30,

 

 

2021

 

2020

Cash

 

$

81,608

 

$

46,026

Cash equivalents

 

 

197,093

 

 

39,487

Restricted cash

 

 

1,032

 

 

636

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

 

$

279,733

 

$

86,149

 

Additionally, as of December 31, 2020, the Company held cash of $83,472 and cash equivalents of $119,005.
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 September 30, 2021 and December 31, 2020 were $23,917 and $19,603 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. These long term receivables generated interest income of $207 and $182 for the three months ended September 30, 2021 and 2020, respectively, and $587 and $568 for the nine months ended September 30, 2021 and 2020, 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.

On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13— “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13") using the modified retrospective method. Upon adoption, a cumulative adjustment was recorded which decreased retained earnings by $459. The tax effect of this adjustment increased retained earnings by $95, resulting in a net decrease of $364 as of January 1, 2020. ASU 2016-13 replaces the incurred loss impairment methodology for financial instruments with the current expected credit loss (CECL) model which requires estimates of future credit losses based on reasonable supporting information. The Company will recognize its expected credit losses for each reporting period going forward.

The following tables summarize credit loss allowance activity for the three and nine months ended September 30, 2021 and 2020:

 

 

Three Months Ended September 30, 2021

 

 

Three Months Ended September 30, 2020

 

 

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

$

 

4,048

 

$

 

306

 

$

 

4,354

 

 

$

 

4,507

 

$

 

200

 

$

 

4,707

 

Charge-offs, foreign currency translation and other adjustments

 

 

(2,018

)

 

 

—

 

 

 

(2,018

)

 

 

 

(1,428

)

 

 

—

 

 

 

(1,428

)

Recoveries

 

 

(1,884

)

 

 

(65

)

 

 

(1,949

)

 

 

 

(1,235

)

 

 

—

 

 

 

(1,235

)

Reduction to allowance

 

 

(3,902

)

 

 

(65

)

 

 

(3,967

)

 

 

 

(2,663

)

 

 

—

 

 

 

(2,663

)

Provision for credit losses

 

 

2,381

 

 

 

—

 

 

 

2,381

 

 

 

 

2,473

 

 

 

(6

)

 

 

2,467

 

Allowance for credit losses, ending balance

$

 

2,527

 

$

 

241

 

$

 

2,768

 

 

$

 

4,317

 

$

 

194

 

$

 

4,511

 

 

 

Nine Months Ended September 30, 2021

 

 

Nine Months Ended September 30, 2020

 

 

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

$

 

3,577

 

$

 

198

 

$

 

3,775

 

 

$

 

4,088

 

$

 

—

 

$

 

4,088

 

Adjustment for adoption of ASU 2016-13

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

260

 

 

 

199

 

 

 

459

 

Allowance for Credit Losses, adjusted beginning balance

 

 

3,577

 

 

 

198

 

 

 

3,775

 

 

 

 

4,348

 

 

 

199

 

 

 

4,547

 

Charge-offs, foreign currency translation and other adjustments

 

 

(2,740

)

 

 

—

 

 

 

(2,740

)

 

 

 

(2,844

)

 

 

—

 

 

 

(2,844

)

Recoveries

 

 

(6,775

)

 

 

(65

)

 

 

(6,840

)

 

 

 

(2,471

)

 

 

(26

)

 

 

(2,497

)

Reduction to allowance

 

 

(9,515

)

 

 

(65

)

 

 

(9,580

)

 

 

 

(5,315

)

 

 

(26

)

 

 

(5,341

)

Provision for credit losses

 

 

8,465

 

 

 

108

 

 

 

8,573

 

 

 

 

5,284

 

 

 

21

 

 

 

5,305

 

Allowance for credit losses, ending balance

$

 

2,527

 

$

 

241

 

$

 

2,768

 

 

$

 

4,317

 

$

 

194

 

$

 

4,511

 
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 inputs into the determination of fair value require significant judgment or estimation by the Company’s management.

For level 3 investments in which pricing inputs are unobservable and limited market activity exists, management’s 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.
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 investments. 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.
Investments Held at Cost

Investments Held at Cost — Investments without readily determinable fair values are measured at cost, less impairment. If the Company identifies an observable price change in an orderly transaction for an investment held at cost, it will measure the investment at fair value as of the date the observable transaction occurred. The Company shall reassess at each reporting period whether such investments should continue to be measured at cost, less impairment, or another method. Any resulting gain or loss from a change in measurement shall be recorded in other income and expenses on the condensed consolidated statement of operations. Investments held at cost are reported within investments on the condensed consolidated statements of financial condition.
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.
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, will be expensed in the period they are incurred. The amortization expense of such capitalized costs will be presented under communication, technology and information services on the condensed consolidated statement of operations.

Effective January 1, 2020, the Company adopted Accounting Standards Update No. 2018-15, “Goodwill and Other —Internal Use Software” (“ASU 2018-15”) using a prospective approach. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in cloud computing arrangements with the requirements for capitalizing costs to develop or obtain internal-use software. See Note 4—Fixed and Intangible Assets below for further details on the Company’s capitalized cloud computing arrangements.
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. 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.
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 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 from advisory engagements and, in many cases, we are not paid until the completion of an underlying transaction. The Company recognizes revenues from providing advisory services when or as our obligations are fulfilled and collection is reasonably assured. The vast majority of our advisory revenues, which include reimbursements for certain out-of-pocket expenses, are recognized over time; however, a small number of transactions may be recognized at a point in time. We provide our advisory service on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. During such engagements, our clients are continuously benefitting from our counsel and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees is constrained until substantially all services have been provided, specified conditions have been met 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. Revenues may be recognized at a point in time if the engagement represents a singular objective that does not transfer any notable value until formally completed, such as when issuing a fairness opinion. In these instances, the 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 is based on its grant-date fair value based on quoted market prices at the time of grant amortized over the service period required by the award’s vesting terms. 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 are subject to the same vesting conditions as the underlying RSUs on which they were accrued. Dividends in kind will be forfeited if the underlying award does not vest.

The Company has a retirement plan whereby a retiring employee generally will not forfeit certain qualifying incentive RSUs granted during employment if at retirement the employee meets certain requirements. 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 RSUs 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. Any unvested RSUs 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 portion 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 nine months ended September 30, 2021 and 2020, 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 nine months ended September 30, 2021 and 2020, 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.

Effective January 1, 2021, the Company adopted Accounting Standards Update No. 2019-12, “Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain rule exceptions to simplify accounting for income taxes. ASU 2019-12 has been incorporated into our provision for income taxes calculation and does not have a material impact to our overall income taxes.
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. 
v3.21.2
Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2021
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 September 30, 2021 and 2020, is presented below.

 

 

 

September 30,

 

 

2021

 

2020

Cash

 

$

81,608

 

$

46,026

Cash equivalents

 

 

197,093

 

 

39,487

Restricted cash

 

 

1,032

 

 

636

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

 

$

279,733

 

$

86,149
Summary of Credit Loss Allowance Activity

The following tables summarize credit loss allowance activity for the three and nine months ended September 30, 2021 and 2020:

 

 

Three Months Ended September 30, 2021

 

 

Three Months Ended September 30, 2020

 

 

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

$

 

4,048

 

$

 

306

 

$

 

4,354

 

 

$

 

4,507

 

$

 

200

 

$

 

4,707

 

Charge-offs, foreign currency translation and other adjustments

 

 

(2,018

)

 

 

—

 

 

 

(2,018

)

 

 

 

(1,428

)

 

 

—

 

 

 

(1,428

)

Recoveries

 

 

(1,884

)

 

 

(65

)

 

 

(1,949

)

 

 

 

(1,235

)

 

 

—

 

 

 

(1,235

)

Reduction to allowance

 

 

(3,902

)

 

 

(65

)

 

 

(3,967

)

 

 

 

(2,663

)

 

 

—

 

 

 

(2,663

)

Provision for credit losses

 

 

2,381

 

 

 

—

 

 

 

2,381

 

 

 

 

2,473

 

 

 

(6

)

 

 

2,467

 

Allowance for credit losses, ending balance

$

 

2,527

 

$

 

241

 

$

 

2,768

 

 

$

 

4,317

 

$

 

194

 

$

 

4,511

 

 

 

Nine Months Ended September 30, 2021

 

 

Nine Months Ended September 30, 2020

 

 

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

$

 

3,577

 

$

 

198

 

$

 

3,775

 

 

$

 

4,088

 

$

 

—

 

$

 

4,088

 

Adjustment for adoption of ASU 2016-13

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

260

 

 

 

199

 

 

 

459

 

Allowance for Credit Losses, adjusted beginning balance

 

 

3,577

 

 

 

198

 

 

 

3,775

 

 

 

 

4,348

 

 

 

199

 

 

 

4,547

 

Charge-offs, foreign currency translation and other adjustments

 

 

(2,740

)

 

 

—

 

 

 

(2,740

)

 

 

 

(2,844

)

 

 

—

 

 

 

(2,844

)

Recoveries

 

 

(6,775

)

 

 

(65

)

 

 

(6,840

)

 

 

 

(2,471

)

 

 

(26

)

 

 

(2,497

)

Reduction to allowance

 

 

(9,515

)

 

 

(65

)

 

 

(9,580

)

 

 

 

(5,315

)

 

 

(26

)

 

 

(5,341

)

Provision for credit losses

 

 

8,465

 

 

 

108

 

 

 

8,573

 

 

 

 

5,284

 

 

 

21

 

 

 

5,305

 

Allowance for credit losses, ending balance

$

 

2,527

 

$

 

241

 

$

 

2,768

 

 

$

 

4,317

 

$

 

194

 

$

 

4,511

 
v3.21.2
Fixed and Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2021
Property Plant And Equipment [Abstract]  
Schedule of Equipment and Leasehold Improvements, Net

Equipment and leasehold improvements, net consists of the following:

 

 

 

September 30,

 

December 31,

 

 

2021

 

2020

Office equipment

 

$

15,771

 

$

13,267

Furniture and fixtures

 

 

14,148

 

 

10,409

Leasehold improvements

 

 

56,790

 

 

36,286

Construction in progress

 

 

                        —

 

 

14,943

Total

 

 

86,709

 

 

74,905

Less accumulated depreciation and amortization

 

 

(29,873)

 

 

(24,928)

Equipment and leasehold improvements, net

 

$

56,836

 

$

49,977

 

 
v3.21.2
Investments (Tables)
 9 Months Ended
Sep. 30, 2021
Investments All Other Investments [Abstract]  
Summary of Financial Assets Recorded at Fair Value On Recurring Basis

The Company’s financial assets, recorded at fair value on a recurring basis, as of September 30, 2021 have been categorized based upon the fair value hierarchy, described above, as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

$

 

151,992

 

$

 

—

 

$

 

151,992

 

$

 

—

 

Money market securities

 

 

45,101

 

 

 

—

 

 

 

45,101

 

 

 

—

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

 

279,698

 

 

 

—

 

 

 

279,698

 

 

 

—

 

Common stock

 

 

13,431

 

 

 

13,431

 

 

 

—

 

 

 

—

 

Interest in sponsor of Atlas Crest I

 

 

7,533

 

 

 

—

 

 

 

7,533

 

 

 

—

 

Total financial assets

$

 

497,755

 

$

 

13,431

 

$

 

484,324

 

$

 

—

 

The Company's financial assets, recorded at fair value on a recurring basis, as of December 31, 2020 have been categorized based upon the fair value hierarchy described above, as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

$

 

15,599

 

$

 

—

 

$

 

15,599

 

$

 

—

 

Money market securities

 

 

103,406

 

 

 

—

 

 

 

103,406

 

 

 

—

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

 

172,671

 

 

 

—

 

 

 

172,671

 

 

 

—

 

Total financial assets

$

 

291,676

 

$

 

—

 

$

 

291,676

 

$

 

—

 
v3.21.2
Net Income (Loss) Per Share Attributable to Class A Common Shareholders (Tables)
 9 Months Ended
Sep. 30, 2021
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 nine months ended September 30, 2021 and 2020 are presented below.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(dollars in thousands, except per share amounts)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

120,295

 

 

$

32,951

 

 

$

266,165

 

 

$

52,349

 

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

 

$

120,295

 

 

$

32,951

 

 

$

266,165

 

 

$

52,349

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

63,024,943

 

 

 

56,803,430

 

 

 

62,493,293

 

 

 

55,263,689

 

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

 

 

5,249,969

(b)

 

 

3,864,654

(b)

 

 

5,137,775

(b)

 

 

3,977,450

(b)

Weighted average shares of Class A common stock outstanding—diluted

 

 

68,274,912

 

 

 

60,668,084

 

 

 

67,631,068

 

 

 

59,241,139

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.91

 

 

$

0.58

 

 

$

4.26

 

 

$

0.95

 

Diluted

 

$

1.76

 

 

$

0.54

 

 

$

3.94

 

 

$

0.88

 

 

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 76,077,927 and 71,774,582 for the three months ended September 30, 2021 and 2020, respectively, and 75,560,854 and 71,151,424 for the nine months ended September 30, 2021 and 2020, 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 nine months ended September 30, 2021 and 2020, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

 

(b) Certain shares of Moelis & Company’s Class A common stock assumed to be issued pursuant to certain RSUs as calculated using the treasury stock method were antidilutive and therefore have been excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. During the three months ended September 30, 2021 and 2020, there were 500 and 1,847 RSUs, respectively, that would have been included in the treasury stock method calculation if the effect were dilutive and 437 and 227,126 RSUs for the nine months ended September 30, 2021 and 2020, respectively.  
v3.21.2
Equity-Based Compensation (Tables)
 9 Months Ended
Sep. 30, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Summary of Activity Related to RSUs and Other Stock-based Awards

The following table summarizes activity related to RSUs and other stock-based awards for the nine months ended September 30, 2021 and 2020.

 

 

 

RSUs and Other Stock-based Awards

 

 

2021

 

2020

 

 

 

 

Weighted

 

 

 

Weighted

 

 

 

 

Average

 

 

 

Average

 

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

 

Shares

 

Fair Value

 

Shares

 

Fair Value

Unvested Balance at January 1,

 

8,742,695

 

$

41.45

 

8,414,130

 

$

42.19

Granted

 

3,807,900

 

 

54.80

 

3,913,960

 

 

37.58

Forfeited

 

(340,419)

 

 

46.74

 

(117,850)

 

 

40.00

Vested

 

(4,007,144)

 

 

43.09

 

(3,201,045)

 

 

38.76

Unvested Balance at September 30,

 

8,203,032

 

$

46.62

 

9,009,195

 

$

41.35
Schedule of Assumptions Used to Estimate the Fair Value of Stock Option Using the Black-Scholes Valuation model The Company estimated the fair value of stock option awards at grant using the Black-Scholes valuation model with the following assumptions:

 

 

 

Assumptions

Expected life (in years)

 

 

6

Weighted-average risk free interest rate

 

 

1.91%

Expected volatility

 

 

35%

Dividend yield

 

 

2.72%

Weighted-average fair value at grant date

 

$

6.70
Summary of Activity Related to Stock Options

The following table summarizes activity related to stock options for the nine months ended September 30, 2020:

 

 

 

Stock Options Outstanding

 

 

2020

 

 

 

 

Weighted

 

 

 

 

Average

 

 

Number

 

Exercise Price

 

 

Outstanding

 

Per Share

Outstanding at January 1,

 

728,534

 

$

15.95

Exercises

 

(728,534)

 

 

15.95

Outstanding at September 30,

 

                        —

 

$

                        —

v3.21.2
Commitments and Contingencies (Tables)
 9 Months Ended
Sep. 30, 2021
Commitments And Contingencies Disclosure [Abstract]  
Schedule of Additional Leases Information See below for additional information about the Company’s leases.

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

 

September 30,

 

 

($ in thousands)

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

 

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

5,379

 

 

$

6,697

 

 

 

$

18,870

 

 

$

19,713

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating cash outflows for operating leases

 

$

3,364

 

 

$

5,996

 

 

 

$

11,624

 

 

$

13,840

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

375

 

 

$

1,589

 

 

 

$

753

 

 

$

4,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases

 

 

13.54

 

 years

 

13.72

 

  years

 

 

13.54

 

 years

 

13.72

 

  years

Weighted-average discount rate - operating leases

 

 

3.52

%

 

 

3.53

%

 

 

 

3.52

%

 

 

3.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

The future sublease income and maturities of our operating lease liabilities as of September 30, 2021, are as follows:

 

Fiscal year ended

 

Sublease Income

 

Operating Leases

Remainder of 2021

 

$

(225)

 

$

3,775

2022

 

 

(899)

 

 

24,191

2023

 

 

(899)

 

 

20,949

2024

 

 

(899)

 

 

19,058

2025

 

 

(449)

 

 

16,340

Thereafter

 

 

                                  —

 

 

177,935

Total Payments

 

$

(3,371)

 

$

262,248

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

(14,303)

Less: Present value adjustment

 

 

(56,738)

Total

 

$

191,207
v3.21.2
Revenues and Business Information (Tables)
 9 Months Ended
Sep. 30, 2021
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 September 30,

 

 

Nine Months Ended September 30,

 

2021

 

2020

 

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

United States

$

437,174

 

$

177,774

 

 

$

951,697

 

$

445,341

Europe

 

31,129

 

 

22,513

 

 

 

104,111

 

 

53,893

Rest of World

 

22,518

 

 

7,317

 

 

 

59,786

 

 

22,014

Total

$

490,821

 

$

207,604

 

 

$

1,115,594

 

$

521,248

 

 

 

September 30,

 

December 31,

 

 

2021

 

2020

Assets:

 

 

 

 

 

 

United States

 

$

1,252,019

 

$

1,012,831

Europe

 

 

68,344

 

 

78,470

Rest of World

 

 

99,167

 

 

105,143

Total

 

$

1,419,530

 

$

1,196,444
v3.21.2
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Sep. 30, 2020
Dec. 31, 2019
Cash and Cash Equivalents        
Cash $ 81,608 $ 83,472 $ 46,026  
Cash equivalents 197,093 119,005 39,487  
Restricted cash 1,032 807 636  
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 279,733 $ 203,284 $ 86,149 $ 168,572
v3.21.2
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Jun. 30, 2020
Mar. 31, 2020
Jan. 01, 2020
Dec. 31, 2019
Accounting Policies [Line Items]                      
Cash $ 81,608 $ 46,026 $ 81,608 $ 46,026     $ 83,472        
Cash equivalents 197,093 39,487 197,093 39,487     119,005        
Long-term receivables 23,917   23,917       19,603        
Interest income from long-term receivables 207 182 587 568              
Cumulative effect on retained earnings 505,892 414,643 $ 505,892 414,643 $ 384,793 $ 460,580 444,473 $ 360,643 $ 352,556   $ 393,827
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              
Retained Earnings                      
Accounting Policies [Line Items]                      
Cumulative effect on retained earnings $ (414,851) $ (384,731) $ (414,851) $ (384,731) $ (493,485) $ (393,166) $ (420,682) $ (401,137) $ (378,817)   (324,192)
Cumulative Effect Adjustment Upon Adoption                      
Accounting Policies [Line Items]                      
Cumulative effect on retained earnings                     (364)
Cumulative Effect Adjustment Upon Adoption | Retained Earnings                      
Accounting Policies [Line Items]                      
Cumulative effect on retained earnings                     $ (364)
ASU 2016-13 | Cumulative Effect Adjustment Upon Adoption, Before Tax | Retained Earnings                      
Accounting Policies [Line Items]                      
Cumulative effect on retained earnings                   $ (459)  
ASU 2016-13 | Cumulative Effect Adjustment Upon Adoption, Tax | Retained Earnings                      
Accounting Policies [Line Items]                      
Cumulative effect on retained earnings                   95  
ASU 2016-13 | Cumulative Effect Adjustment Upon Adoption | Retained Earnings                      
Accounting Policies [Line Items]                      
Cumulative effect on retained earnings                   $ (364)  
Minimum                      
Accounting Policies [Line Items]                      
Installment Period     3 years                
Minimum | Office Equipment and Furniture and Fixtures                      
Assets and Liabilities, Lessee                      
Useful lives     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                
v3.21.2
Summary of Significant Accounting Policies - Summary of Credit Loss Allowance Activity (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance $ 4,354 $ 4,707 $ 3,775  
Allowance for Credit Losses, adjusted beginning balance     3,775 $ 4,547
Charge-offs, foreign currency translation and other adjustments (2,018) (1,428) (2,740) (2,844)
Recoveries (1,949) (1,235) (6,840) (2,497)
Reductions to allowance (3,967) (2,663) (9,580) (5,341)
Provision for credit losses 2,381 2,467 8,573 5,305
Allowance for credit losses, ending balance 2,768 4,511 2,768 4,511
Previously Reported        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance     3,775 4,088
ASU 2016-13        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance       459
Short-term Receivables        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance 4,048 4,507    
Allowance for Credit Losses, adjusted beginning balance     3,577 4,348
Charge-offs, foreign currency translation and other adjustments (2,018) (1,428) (2,740) (2,844)
Recoveries (1,884) (1,235) (6,775) (2,471)
Reductions to allowance (3,902) (2,663) (9,515) (5,315)
Provision for credit losses 2,381 2,473 8,465 5,284
Allowance for credit losses, ending balance 2,527 4,317 2,527 4,317
Short-term Receivables | Previously Reported        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance     3,577 4,088
Short-term Receivables | ASU 2016-13        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance       260
Private Funds Advisory Receivables        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance 306 200    
Allowance for Credit Losses, adjusted beginning balance     198 199
Recoveries (65)   (65) (26)
Reductions to allowance (65)   (65) (26)
Provision for credit losses   (6) 108 21
Allowance for credit losses, ending balance $ 241 $ 194 241 194
Private Funds Advisory Receivables | Previously Reported        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance     $ 198  
Private Funds Advisory Receivables | ASU 2016-13        
Financing Receivable Allowance For Credit Losses [Line Items]        
Allowance for Credit Losses, beginning balance       $ 199
v3.21.2
Fixed and Intangible Assets - Schedule of Equipment and Leasehold Improvements, Net (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Equipment and Leasehold Improvements, Net    
Total $ 86,709 $ 74,905
Less accumulated depreciation and amortization (29,873) (24,928)
Equipment and leasehold improvements, net 56,836 49,977
Office Equipment    
Equipment and Leasehold Improvements, Net    
Total 15,771 13,267
Furniture and Fixtures    
Equipment and Leasehold Improvements, Net    
Total 14,148 10,409
Leasehold Improvements    
Equipment and Leasehold Improvements, Net    
Total $ 56,790 36,286
Construction in progress    
Equipment and Leasehold Improvements, Net    
Total   $ 14,943
v3.21.2
Fixed and Intangible Assets - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Equipment and Leasehold Improvements, Net        
Depreciation and amortization expenses $ 1,947 $ 941 $ 5,033 $ 3,216
Prepaid Expenses and Other Assets        
Equipment and Leasehold Improvements, Net        
Costs capitalized 2,249   2,249  
Communication, Technology and Information Services        
Equipment and Leasehold Improvements, Net        
Amortization expense of capitalized costs $ 122 $ 113 $ 366 $ 127
v3.21.2
Investments - Summary of Financial Assets Recorded at Fair Value On Recurring Basis (Details) - Fair Value, Recurring - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Fair value measurements    
Total financial assets $ 497,755 $ 291,676
U.S. Treasury Instruments    
Fair value measurements    
Cash and cash equivalents 151,992 15,599
Investments in securities 279,698 172,671
Money Market Securities    
Fair value measurements    
Cash and cash equivalents 45,101 103,406
Common Stock    
Fair value measurements    
Investments in securities 13,431  
Interest in Sponsor of Atlas Crest I    
Fair value measurements    
Investments in securities 7,533  
Level 1    
Fair value measurements    
Total financial assets 13,431  
Level 1 | Common Stock    
Fair value measurements    
Investments in securities 13,431  
Level 2    
Fair value measurements    
Total financial assets 484,324 291,676
Level 2 | U.S. Treasury Instruments    
Fair value measurements    
Cash and cash equivalents 151,992 15,599
Investments in securities 279,698 172,671
Level 2 | Money Market Securities    
Fair value measurements    
Cash and cash equivalents 45,101 $ 103,406
Level 2 | Interest in Sponsor of Atlas Crest I    
Fair value measurements    
Investments in securities $ 7,533  
v3.21.2
Investments - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 22, 2021
Sep. 16, 2021
Aug. 25, 2021
Aug. 17, 2021
Mar. 04, 2021
Feb. 17, 2021
Mar. 04, 2020
Feb. 19, 2020
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Apr. 01, 2010
Schedule of Investments                            
Investments at fair value, cost basis                 $ 295,801   $ 295,801   $ 172,640  
Dividends received                     3,356 $ 1,942    
Equity method investments                 34,133   34,133   38,143  
Investment gains on share issuances                 0   2,334      
Corporate Joint Venture                            
Schedule of Investments                            
Ownership percentage                           50.00%
Dividends received $ 1,077     $ 1,077 $ 2,279 $ 2,279 $ 1,942 $ 1,942            
Common Stock                            
Schedule of Investments                            
Unrealized gains (losses) on equity securities                 4,899 $ (60) 4,899 $ (227)    
Common Stock shares sold     6,000,000.0                      
Gain from sale of equity method investment     $ 20,174                      
Atlas Crest Sponsors                            
Schedule of Investments                            
Investments at fair value, cost basis                 3,833   3,833   $ 887  
Atlas Crest I                            
Schedule of Investments                            
Investment, fair value                 $ 7,533   $ 7,533      
Atlas Crest I | Archer                            
Schedule of Investments                            
Compensation received in shares   1,512,500                        
v3.21.2
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 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Numerator:        
Net income (loss) attributable to holders of shares of Class A common stock—basic $ 120,295 $ 32,951 $ 266,165 $ 52,349
Class A Common Stock        
Numerator:        
Net income (loss) attributable to holders of shares of Class A common stock—basic 120,295 32,951 266,165 52,349
Add (deduct) dilutive effect of:        
Net income (loss) attributable to holders of shares of Class A common stock—diluted $ 120,295 $ 32,951 $ 266,165 $ 52,349
Denominator:        
Weighted average shares of Class A common stock outstanding—basic 63,024,943 56,803,430 62,493,293 55,263,689
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 5,249,969 3,864,654 5,137,775 3,977,450
Weighted average shares of Class A common stock outstanding—diluted 68,274,912 60,668,084 67,631,068 59,241,139
Net income (loss) per share attributable to holders of shares of Class A common stock        
Basic (in dollars per share) $ 1.91 $ 0.58 $ 4.26 $ 0.95
Diluted (in dollars per share) $ 1.76 $ 0.54 $ 3.94 $ 0.88
v3.21.2
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) - Class A Common Stock - shares
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
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 76,077,927 71,774,582 75,560,854 71,151,424
Restricted Stock and RSUs        
Earnings Per Share Basic [Line Items]        
Number of antidilutive securities excluded from calculation of diluted income (loss) per share 500 1,847 437 227,126
v3.21.2
Equity-Based Compensation - Additional Information (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 90 Months Ended
Oct. 28, 2021
Apr. 30, 2014
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2014
Sep. 30, 2021
Jul. 28, 2021
Apr. 30, 2020
Dec. 31, 2019
Feb. 28, 2019
Nov. 09, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                          
Compensation expenses     $ 28,820,000 $ 30,090,000 $ 108,824,000 $ 97,685,000              
Subsequent Event                          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                          
Special dividends paid (in dollars per share) $ 2.50                        
Pre IPO Partnership Units                          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                          
Compensation expenses     0 0 0 39,000              
RSUs and Other Stock-based Awards                          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                          
Total compensation expense not yet recognized     159,856,000   $ 159,856,000     $ 159,856,000          
Weighted average period to recognize compensation expense         1 year 8 months 12 days                
RSUs and Other Stock-based Awards | Minimum                          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                          
Vesting period         4 years                
RSUs and Other Stock-based Awards | Maximum                          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                          
Vesting period         5 years                
Stock Options                          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                          
Compensation expenses     $ 0 $ 0 $ 0 $ 0              
Vesting period             5 years            
Grants (in shares)   3,501,881                      
Special dividends paid (in dollars per share)               $ 9.05          
Reduction to exercise price of options outstanding due to special dividend paid (in dollars per share)               9.05          
Exercise price (in dollars per share)     $ 15.95   $ 15.95     $ 15.95     $ 15.95   $ 25.00
Stock options outstanding                   0 728,534    
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     1          
Class A Common Stock | Share Repurchase Plan                          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                          
Share value authorized for repurchase                 $ 100,000,000     $ 100,000,000  
Value of remaining shares authorized for repurchase     $ 149,132,000   $ 149,132,000     $ 149,132,000          
v3.21.2
Equity-Based Compensation - Summary of Activity Related to RSUs and Other Stock-based Awards (Details) - RSUs and Other Stock-based Awards - $ / shares
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Number of Shares    
Unvested Balance at the beginning of the period 8,742,695 8,414,130
Granted 3,807,900 3,913,960
Forfeited (340,419) (117,850)
Vested (4,007,144) (3,201,045)
Unvested Balance at the end of the period 8,203,032 9,009,195
Weighted Average Grant Date Fair Value    
Unvested Balance at the beginning of the period $ 41.45 $ 42.19
Granted 54.80 37.58
Forfeited 46.74 40.00
Vested 43.09 38.76
Unvested Balance at the end of the period $ 46.62 $ 41.35
v3.21.2
Equity-Based Compensation - Schedule of Assumptions Used to Estimate the Fair Value of Stock Option Using Black-Scholes Valuation Model (Details)
 9 Months Ended
Sep. 30, 2021
$ / shares
Assumptions Used to Estimate Fair Value  
Expected life (in years) 6 years
Weighted-average risk free interest rate 1.91%
Expected volatility 35.00%
Dividend yield 2.72%
Weighted-average fair value at grant date $ 6.70
v3.21.2
Equity-Based Compensation - Summary of Activity Related to Stock Options (Details) - Stock Options
 9 Months Ended
Sep. 30, 2020
$ / shares
shares
Number Outstanding  
Outstanding at January 1, | shares 728,534
Exercises | shares (728,534)
Weighted-Average Exercise Price Per Share  
Outstanding at January 1, | $ / shares $ 15.95
Exercises | $ / shares $ 15.95
v3.21.2
Stockholders Equity - Additional Information (Details)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended
Nov. 30, 2014
Apr. 30, 2014
shares
Sep. 30, 2021
USD ($)
shares
Jun. 30, 2021
USD ($)
Mar. 31, 2021
USD ($)
Sep. 30, 2020
USD ($)
Jun. 30, 2020
USD ($)
Mar. 31, 2020
USD ($)
Sep. 30, 2021
USD ($)
shares
Sep. 30, 2020
USD ($)
shares
Dec. 31, 2020
shares
Class Of Stock [Line Items]                      
Treasury stock, shares     5,807,112           5,807,112   3,959,083
Treasury stock shares acquired (in shares)                 1,848,029 925,857  
Treasury stock shares acquired | $     $ 4,099 $ 21,712 $ 74,211 $ 952 $ 766 $ 31,636 $ 100,022 $ 33,354  
Number of units held by noncontrolling interest holders     7,801,398           7,801,398   8,508,857
Group LP                      
Class Of Stock [Line Items]                      
Noncontrolling interests (as a percent)     11.00%           11.00%   13.00%
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     66,771,423           66,771,423   61,986,927
Treasury stock, shares     5,807,112           5,807,112   3,959,083
Common stock, shares outstanding     60,964,311           60,964,311   58,027,844
Number of shares of common stock to be issued upon exchange of a partnership unit     1           1    
Class A Common Stock | Group LP                      
Class Of Stock [Line Items]                      
Common stock, shares outstanding     60,964,311           60,964,311   58,027,844
Class B Common Stock                      
Class Of Stock [Line Items]                      
Increase in shares outstanding   36,158,698                  
Common stock, shares issued     4,845,457           4,845,457   5,948,750
Common stock, shares outstanding     4,845,457           4,845,457   5,948,750
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    
v3.21.2
Related-Party Transactions - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Manager | Aircraft Lease Entered into During August 2014          
Related-party transactions          
Expenses $ 324,000 $ 324,000 $ 972,000 $ 972,000  
Employees          
Related-party transactions          
Unsecured promissory notes from employees 319,000   319,000   $ 389,000
Employees | Unsecured Promissory Notes          
Related-party transactions          
Principal repayments     70,000 0  
Interest income recognized     $ 11,000 9,000  
Employees | Minimum | Unsecured Promissory Notes          
Related-party transactions          
Interest rates (as a percent)     3.00%    
Employees | Maximum | Unsecured Promissory Notes          
Related-party transactions          
Interest rates (as a percent)     4.00%    
Moelis Asset Management LP          
Related-party transactions          
Fee for services 55,000 65,000 $ 166,000 239,000  
Due from related party 0   0   0
Revenue from related parties   $ 0   $ 0  
Atlas Crest Entities          
Related-party transactions          
Fee for services 60,000   170,000    
Fee for services peer month     10,000    
Due from related party 0   0   0
Revenue from related parties 30,346,000   30,346,000    
Corporate Joint Venture          
Related-party transactions          
Due to related party $ 0   $ 0   $ 5,000
v3.21.2
Regulatory Requirements - Additional Information (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Regulatory Requirements    
Minimum net capital requirement $ 250  
Moelis US    
Regulatory Requirements    
Net capital 402,160 $ 96,800
Net capital in excess of required net capital $ 401,910 $ 96,550
v3.21.2
Commitments and Contingencies - Additional Information (Details) - USD ($)
 9 Months Ended
May 24, 2021
Sep. 30, 2021
Dec. 31, 2020
Bank line of credit      
Available credit under the facility   $ 64,151,000  
Revolving Credit Facility Due at May 24, 2023      
Bank line of credit      
Commitment amount $ 30,000,000    
Maturity date May 24, 2023    
Reference rate (as a percent)   Prime rate  
Borrowings under the credit facility   $ 0  
Available credit under the facility   $ 30,000,000  
Line of credit facility credit period to borrow capital May 24, 2022    
Line of credit facility, frequency of payments   quarterly  
Revolving Credit Facility      
Bank line of credit      
Fixed rate of interest (as a percent)   3.50%  
Borrowings under the credit facility   $ 0 $ 0
Standby Letters of Credit      
Bank line of credit      
Letters of credit outstanding   $ 849,000  
Fee on the outstanding balances (as a percent)   1.00%  
LIBOR | Revolving Credit Facility      
Bank line of credit      
Interest rate margin (as a percent)   1.00%  
Reference rate (as a percent)   LIBOR  
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      
Commitment amount   $ 65,000,000  
Minimum days to issue termination notice   60 days  
Maturity date   Jun. 30, 2023  
v3.21.2
Commitments and Contingencies - Schedule of Additional Leases Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Supplemental Income Statement Information:        
Operating lease cost $ 5,379 $ 6,697 $ 18,870 $ 19,713
Cash paid for amounts included in the measurement of lease liabilities:        
Net operating cash outflows for operating leases 3,364 5,996 11,624 13,840
Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period): $ 375 $ 1,589 $ 753 $ 4,643
Other Information        
Weighted-average remaining lease term - operating leases 13 years 6 months 14 days 13 years 8 months 19 days 13 years 6 months 14 days 13 years 8 months 19 days
Weighted-average discount rate - operating leases 3.52% 3.53% 3.52% 3.53%
v3.21.2
Commitments and Contingencies - Schedule of Future Minimum Rental Payments Required Under Operating Leases in Place (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Sublease Income    
Remainder of 2021 $ (225)  
2022 (899)  
2023 (899)  
2024 (899)  
2025 (449)  
Total Payments (3,371)  
Operating Leases    
Remainder of 2021 3,775  
2022 24,191  
2023 20,949  
2024 19,058  
2025 16,340  
Thereafter 177,935  
Total Payments 262,248  
Less: Tenant improvement allowances (14,303)  
Less: Present value adjustment (56,738)  
Operating Lease, Liability $ 191,207 $ 196,614
v3.21.2
Employee Benefit Plans - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Compensation And Retirement Disclosure [Abstract]        
Minimum age required to be eligible to participate in the 401(k) plan     21 years  
Expenses accrued relating to employer matching contributions $ 820 $ 713 $ 2,356 $ 2,119
v3.21.2
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Income Tax Disclosure [Abstract]        
Provision (benefit) for income taxes $ 42,119 $ 8,534 $ 69,721 $ (10,195)
Effective tax rate (as a percent) 23.00% 17.00%    
Pre-tax operating income $ 182,583 $ 50,327 379,185 52,680
Excess tax benefit     $ 17,882 $ 7,353
v3.21.2
Revenues and Business Information - Schedule of Geographical Distribution of Revenues and Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues $ 490,821 $ 207,604 $ 1,115,594 $ 521,248  
Total assets 1,419,530   1,419,530   $ 1,196,444
United States          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 437,174 177,774 951,697 445,341  
Total assets 1,252,019   1,252,019   1,012,831
Europe          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 31,129 22,513 104,111 53,893  
Total assets 68,344   68,344   78,470
Rest of World          
Revenues From External Customers And Long Lived Assets [Line Items]          
Revenues 22,518 $ 7,317 59,786 $ 22,014  
Total assets $ 99,167   $ 99,167   $ 105,143
v3.21.2
Revenues and Business Information - Additional Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Segment Reporting [Abstract]      
Deferred revenue $ 3,914   $ 2,692
Revenues recognized from opening balance of deferred revenues $ 2,423 $ 2,354  
v3.21.2
Subsequent Events - Additional Information (Details) - Subsequent Event
Oct. 28, 2021
$ / shares
Subsequent Event [Line Items]  
Special dividends paid (in dollars per share) $ 2.50
Regular quarterly dividend declared 0.60
Dividends declared per share $ 3.10
Dividend payable date Nov. 19, 2021
Dividend payable record date Nov. 08, 2021