MOELIS & CO, 10-K filed on 2/23/2023
Annual Report
v3.22.4
Document and Entity Information - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Feb. 08, 2023
Jun. 30, 2022
Entity Registrant Name Moelis & Co    
Entity Central Index Key 0001596967    
Document Type 10-K    
Document Period End Date Dec. 31, 2022    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Interactive Data Current Yes    
Entity Public Float     $ 2,491
Document Fiscal Year Focus 2022    
Document Fiscal Period Focus FY    
Trading Symbol MC    
Entity File Number 001-36418    
Entity Tax Identification Number 46-4500216    
Entity Address, Address Line One 399 Park Avenue    
Entity Address, Address Line Two 4th Floor    
Entity Address, City or Town New York    
Entity Address, State or Province NY    
Entity Address, Postal Zip Code 10022    
City Area Code 212    
Local Phone Number 883-3800    
Title of 12(b) Security Class A common stock    
Security Exchange Name NYSE    
Entity Incorporation, State or Country Code DE    
Document Annual Report true    
Document Transition Report false    
Documents Incorporated by Reference

Portions of the Registrant’s definitive proxy statement for its 2023 annual meeting of stockholders are incorporated by reference in Part III of this Form 10‑K.

    
Auditor Firm ID 34    
Auditor Name Deloitte & Touche LLP    
Auditor Location New York, NY    
Class A Common Stock      
Entity Common Stock, Shares Outstanding   63,989,134  
Class B Common Stock      
Entity Common Stock, Shares Outstanding   4,635,898  
v3.22.4
Consolidated Statements of Financial Condition - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Assets    
Cash and cash equivalents $ 206,794 $ 520,213
Restricted cash 745 801
Receivables:    
Accounts receivable, net of allowance for credit losses of $1,729 and $2,823 as of December 31, 2022 and December 31, 2021, respectively 47,825 41,870
Accrued and other receivables 8,514 27,698
Total receivables 56,339 69,568
Deferred compensation 15,100 11,499
Investments 265,245 263,341
Right-of-use assets 152,341 164,083
Equipment and leasehold improvements, net 57,152 59,163
Deferred tax assets 429,649 448,123
Prepaid expenses and other assets 33,504 18,890
Total assets 1,216,869 1,555,681
Liabilities and Equity    
Compensation payable 243,176 503,707
Accounts payable, accrued expenses and other liabilities 11,929 69,883
Amount due pursuant to tax receivable agreement 302,356 307,363
Deferred revenue 7,708 4,539
Lease liabilities 192,762 191,890
Total liabilities 757,931 1,077,382
Commitments and Contingencies (See Note 12)  
Treasury stock, at cost; 9,076,777 and 5,873,180 shares at December 31, 2022 and December 31, 2021, respectively (403,857) (256,320)
Additional paid-in-capital 1,412,795 1,280,498
Retained earnings (accumulated deficit) (560,690) (535,282)
Accumulated other comprehensive income (loss) (4,529) (560)
Total Moelis & Company equity 444,495 489,068
Noncontrolling interests 14,443 (10,769)
Total equity 458,938 478,299
Total liabilities and equity 1,216,869 1,555,681
Class A Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share 730 685
Class B Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share $ 46 $ 47
v3.22.4
Consolidated Statements of Financial Condition (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Accounts receivable, allowance for credit losses $ 1,729 $ 2,823
Treasury stock, shares 9,076,777 5,873,180
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 73,063,181 68,518,779
Common stock, shares outstanding 63,986,404 62,645,599
Treasury stock, shares 9,076,777 5,873,180
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 4,635,898 4,686,344
Common stock, shares outstanding 4,635,898 4,686,344
v3.22.4
Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenues $ 985,297 $ 1,540,611 $ 943,276
Expenses      
Compensation and benefits 618,195 913,909 560,803
Occupancy 24,243 26,533 30,033
Professional fees 20,971 21,826 18,378
Communication, technology and information services 39,310 35,373 32,181
Travel and related expenses 32,416 15,399 12,845
Depreciation and amortization 7,975 7,242 4,708
Other expenses 26,087 24,412 18,619
Total expenses 769,197 1,044,694 677,567
Operating income (loss) 216,100 495,917 265,709
Other income and (expenses) 220 40,396 4,404
Income (loss) before income taxes 216,320 536,313 270,113
Provision (benefit) for income taxes 47,638 113,335 51,675
Net income (loss) 168,682 422,978 218,438
Net income (loss) attributable to noncontrolling interests 18,337 57,765 39,607
Net income (loss) attributable to Moelis & Company 150,345 365,213 178,831
Class A Common Stock      
Expenses      
Net income (loss) attributable to Moelis & Company $ 150,345 $ 365,213 $ 178,831
Weighted-average shares of Class A common stock outstanding      
Basic (in shares) 65,766,439 63,125,497 56,566,645
Diluted (in shares) 70,320,182 68,435,579 60,723,365
Net income (loss) per share attributable to holders of shares of Class A common stock      
Basic (in dollars per share) $ 2.29 $ 5.79 $ 3.16
Diluted (in dollars per share) $ 2.14 $ 5.34 $ 2.95
v3.22.4
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Statement of Comprehensive Income [Abstract]      
Net income (loss) $ 168,682 $ 422,978 $ 218,438
Foreign currency translation adjustment, net of tax (4,333) (431) (2,040)
Other comprehensive income (loss) (4,333) (431) (2,040)
Comprehensive income (loss) 164,349 422,547 216,398
Less: Comprehensive income (loss) attributable to noncontrolling interests 17,973 57,693 39,200
Comprehensive income (loss) attributable to Moelis & Company $ 146,376 $ 364,854 $ 177,198
v3.22.4
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Cash flows from operating activities      
Net income (loss) $ 168,682 $ 422,978 $ 218,438
Adjustments to reconcile net income to net cash provided by (used in) operating activities:      
Bad debt expense (benefit) 2,630 2,026 2,544
Depreciation and amortization 7,975 7,242 4,708
Equity-based compensation 128,938 167,938 133,623
Deferred tax provision 26,786 22,862 38,997
Gain on equity method investment (2,903) (30,091)  
Other 12,100 (6,251) (2,488)
Changes in assets and liabilities:      
Accounts receivable (20,320) 26,941 (46,698)
Accrued and other receivables 22,026 (14,721) (983)
Prepaid expenses and other assets (14,987) (3,396) 1,236
Deferred compensation (3,762) 505 (221)
Compensation payable (255,291) 282,872 57,003
Accounts payable, accrued expenses and other liabilities (45,043) 52,874 21,461
Deferred revenue 3,227 1,845 (347)
Dividends received 2,936 3,356 1,942
Net cash provided by (used in) operating activities 32,994 936,980 429,215
Cash flows from investing activities      
Purchases of investments (334,743) (486,124) (390,586)
Proceeds from sales of investments 332,517 456,302 391,494
Note payments received from (issued to) employees (3,000) 70 (200)
Purchases of equipment and leasehold improvements (5,957) (16,426) (40,659)
Proceeds from partial sale of equity method investment   29,164  
Net cash provided by (used in) investing activities (11,183) (17,014) (39,951)
Cash flows from financing activities      
Payments for dividends and tax distributions (174,651) (479,963) (282,920)
Payments for treasury stock purchases (147,537) (104,150) (44,334)
Payments under tax receivable agreement (6,613) (18,628) (36,459)
Proceeds from exercise of stock options     11,923
Other proceeds 1,900 200  
Net cash provided by (used in) financing activities (326,901) (602,541) (351,790)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash (8,385) 305 (2,762)
Net increase (decrease) in cash, cash equivalents, and restricted cash (313,475) 317,730 34,712
Cash, cash equivalents, and restricted cash, beginning of period 521,014 203,284 168,572
Cash, cash equivalents, and restricted cash, end of period 207,539 521,014 203,284
Cash paid during the period for:      
Income taxes, net 76,422 55,189 (305)
Other non-cash activity      
Class A Partnership Units or other equity converted into Class A Common Stock 7,478 26,964 14,964
Dividends in kind 20,804 63,374 41,144
Non-cash settlement of accounts receivable $ 10,802 18,550  
Cumulative effect adjustment upon adoption of ASU 2016-13     364
Settlement of partnership units not yet paid   118  
Forfeiture of fully-vested Group LP units or other equity units   $ 25 $ 96
v3.22.4
Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Total
Cumulative Effect Adjustment Upon Adoption
As Adjusted
Common Stock
Class A Common Stock
Common Stock
Class A Common Stock
As Adjusted
Common Stock
Class B Common Stock
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                                
Net income (loss) 218,438                     178,831         39,607  
Equity-based compensation 133,623     $ 40           133,544             39  
Equity-based compensation (in shares)       4,036,161                            
Other comprehensive income (loss) (2,040)                           (1,633)   (407)  
Dividends declared and tax distributions (282,920)                 41,144   (274,957)         (49,107)  
Treasury stock purchases (44,334)             $ (44,334)                    
Treasury stock purchases (in shares)               (1,201,525)                    
Exercise of stock options 11,923     $ 7           11,916                
Exercise of stock options (in shares)       727,984                            
Class A Partnership Units or other equity converted into Class A Common Stock 14,178     $ 45   $ (45)       (6,544)             20,722  
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)       4,449,165   (4,449,165)                        
Equity-based payments to non-employees 1,452                 1,452                
Other 690                 (1,981)             2,671  
Balance at end of the period at Dec. 31, 2020 444,473     $ 620   $ 59   $ (152,170)   1,052,322   (420,682)     (201)   (35,475)  
Balance at end of the period (in shares) at Dec. 31, 2020       61,986,927   5,948,750   (3,959,083)                    
Changes in Equity                                    
Net income (loss) 422,978                     365,213         57,765  
Equity-based compensation 167,938     $ 36           142,507             25,395  
Equity-based compensation (in shares)       3,714,605                            
Other comprehensive income (loss) (431)                           (359)   (72)  
Dividends declared and tax distributions (479,963)                 63,374   (479,813)         (63,524)  
Treasury stock purchases $ (104,150)             $ (104,150)                    
Treasury stock purchases (in shares) (1,914,097)             (1,914,097)                    
Class A Partnership Units or other equity converted into Class A Common Stock $ 26,964     $ 29   $ (12)       22,005             4,942  
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)       2,817,247   (1,262,406)                        
Equity-based payments to non-employees 315                 315                
Other 175                 (25)             200  
Balance at end of the period at Dec. 31, 2021 478,299     $ 685   $ 47   $ (256,320)   1,280,498   (535,282)     (560)   (10,769)  
Balance at end of the period (in shares) at Dec. 31, 2021       68,518,779   4,686,344   (5,873,180)                    
Changes in Equity                                    
Net income (loss) 168,682                     150,345         18,337  
Equity-based compensation 128,938     $ 33           103,040             25,865  
Equity-based compensation (in shares)       3,488,662                            
Other comprehensive income (loss) (4,333)                           (3,969)   (364)  
Dividends declared and tax distributions (174,651)                 20,804   (175,753)         (19,702)  
Treasury stock purchases $ (147,537)             $ (147,537)                    
Treasury stock purchases (in shares) (3,203,597)             (3,203,597)                    
Class A Partnership Units or other equity converted into Class A Common Stock $ 7,478     $ 12   $ (1)       8,291             (824)  
Class A Partnership Units or other equity converted into Class A Common Stock (in shares)       1,055,740   (50,446)                        
Equity-based payments to non-employees 162                 162                
Other 1,900                               1,900  
Balance at end of the period at Dec. 31, 2022 $ 458,938     $ 730   $ 46   $ (403,857)   $ 1,412,795   $ (560,690)     $ (4,529)   $ 14,443  
Balance at end of the period (in shares) at Dec. 31, 2022       73,063,181   4,635,898   (9,076,777)                    
v3.22.4
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Class A Common Stock      
Dividends declared per share of Class A common stock $ 2.40 $ 6.80 $ 4.1525
v3.22.4
Organization and Basis of Presentation
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Basis of Presentation
1.
ORGANIZATION AND BASIS OF PRESENTATION

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

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

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

•
Moelis & Company LLC (“U.S. Broker Dealer”), a Delaware limited liability company, a registered broker‑dealer with the U.S. Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
•
Moelis & Company Israel Ltd., a limited company incorporated in Israel.
•
Moelis & Company International Holdings LLC (“Moelis International”), a Delaware limited liability company, owns the following entities and investments, directly or indirectly:
•
Moelis & Company UK LLP (“Moelis UK”), a limited liability partnership registered under the laws of England and Wales. In addition to the United Kingdom, Moelis UK maintains operations through the following branches:
•
Moelis & Company Europe Limited, Frankfurt am Main Branch (German branch)
•
Moelis & Company UK LLP, DIFC Branch (Dubai branch)
•
Moelis & Company Asia Limited (“Moelis Asia”), a limited company incorporated in Hong Kong licensed under the Hong Kong Securities and Futures Ordinance to provide financial advisory services. In addition to Hong Kong, Moelis Asia maintains operations in Beijing, China through a wholly‑owned Chinese subsidiary, Moelis & Company Consulting (Beijing) Company Limited.
•
Moelis & Company Netherlands B.V., a private limited company incorporated in Amsterdam, Netherlands. In addition to Amsterdam, Moelis Netherlands maintains operations in Paris, France through a branch, Moelis & Company Netherlands B.V. French Branch.
•
Moelis & Company Europe B.V., a private limited company incorporated in Amsterdam, Netherlands.
•
Moelis & Company India Private Limited, a private limited company incorporated in Mumbai, India.
•
Moelis & Company Assessoria Financeira Ltda. (“Moelis Brazil”), a limited liability company incorporated in São Paulo, Brazil.
•
Moelis & Company Saudi Limited, a limited liability company incorporated in Riyadh, Saudi Arabia.
•
An equity method investment in MA Financial Group Limited ("MA Financial", previously known as Moelis Australia Limited), a public company listed on the Australian Securities Exchange.
v3.22.4
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting—The Company prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the combined operations, assets and liabilities of the Company. The Notes are an integral part of the Company's consolidated financial statements.

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

In preparing the 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 consolidated financial statements.

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

The Company’s cash is maintained in U.S. and non-U.S. bank accounts, of which most bank account balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance Corporation and U.K. Financial Services Compensation Scheme coverage limits). The Company’s cash equivalents are invested primarily in sovereign treasury securities and money market funds.

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future U.S. medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of December 31, 2022 and 2021, is presented below.

 

 

 

December 31,

 

 

2022

 

2021

Cash

 

$

109,646

 

$

135,217

Cash equivalents

 

 

97,148

 

 

384,996

Restricted cash

 

 

745

 

 

801

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

 

$

207,539

 

$

521,014

 

Receivables—The accompanying 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 as of December 31, 2022 and 2021 were $9,462 and $20,041, respectively, of long term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. These long term receivables generated interest income of $607, $743 and $748 for the years ended December 31, 2022, 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 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 ("ASU") 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 continues to assess its CECL estimates and recognize changes to expected credit losses during the period in earnings.

 

The following tables summarize credit loss allowance activity for the years ended December 31, 2022 and December 31, 2021:

 

 

Year Ended December 31, 2022

 

Year Ended December 31, 2021

 

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

$

2,621

 

$

202

 

$

2,823

 

$

3,577

 

$

198

 

$

3,775

Charge-offs, foreign currency translation and other adjustments

 

(3,656)

 

 

(68)

 

 

(3,724)

 

 

(2,978)

 

 

—

 

 

(2,978)

Recoveries

 

(3,855)

 

 

(103)

 

 

(3,958)

 

 

(8,637)

 

 

(65)

 

 

(8,702)

Provision for credit losses

 

6,026

 

 

562

 

 

6,588

 

 

10,659

 

 

69

 

 

10,728

Allowance for credit losses, ending balance

$

1,136

 

$

593

 

$

1,729

 

$

2,621

 

$

202

 

$

2,823

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

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

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

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

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

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

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

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 consolidated statement of operations. Investments held at cost are reported within investments on the consolidated statements of financial condition.

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 consolidated statements of financial condition reflect the Company’s share of contributions made to, distributions received from, and the equity earnings and losses of, the investment. The Company reflects its share of gains and losses of the investment in other income and expenses in the consolidated statements of operations using the most recently available earnings data at the end of the period.

Leases — The Company maintains operating leases for corporate offices and an aircraft. The Company determines if a contract contains a lease at inception. Operating leases are recorded as right-of-use (“ROU”) assets and lease liabilities on the 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.

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 consolidated statements of financial condition and any gain or loss is reflected in the consolidated statements of operations.

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

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

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

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

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

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

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

Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the consolidated statement of operations upon completion

of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated).

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

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

Equity‑based Compensation—The Company recognizes the cost of services received in exchange for equity instrument awards. The cost of such awards reflects the grant‑date fair value, which is based on quoted market prices of the Company's stock at the time of grant, amortized over the service period required by the award’s vesting terms. In certain instances, the Company may grant an equity-based award with a post-vesting restriction, which is reflected in the grant-date fair value of the award. 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 terms that qualify certain employees to terminate their services while not forfeiting certain qualifying incentive RSUs granted during employment. For qualifying awards, (i) the employee must be at least 56 years old, (ii) the employee must have provided at least 5 consecutive years of service to the Company and (iii) the total of (i) and (ii) must be equal to at least 65 years. Any such 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 consolidated statements of financial condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more‑likely‑than‑not that some or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a two‑step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the years ended December 31, 2022, 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 years ended December 31, 2022, 2021 and 2020, no such amounts were recorded.

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

Effective January 1, 2021, the Company adopted ASU 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.

Inflation Reduction Act of 2022 – The Inflation Reduction Act of 2022 (the “IRA”) was enacted on August 16, 2022. This bill contains a number of tax-related provisions that are effective after December 31, 2022, including (i) the imposition of a 15% minimum tax on book income for corporations with a 3-year average adjusted book income over $1 billion, and (ii) the creation of a 1% excise tax on the value of stock repurchases (net of the value of stock issuances) during the taxable year. Upon initial evaluation, the Company does not expect the IRA to have a material impact to the Company’s consolidated financial statements.

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 consolidated statements of operations.
v3.22.4
Recent Accounting Pronouncements
 12 Months Ended
Dec. 31, 2022
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Recent Accounting Pronouncements
3.
RECENT ACCOUNTING PRONOUNCEMENTS

In March 2020, the FASB issued ASU 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. The Company has evaluated this ASU and does not expect its adoption to have a material impact to the Company's consolidated financial statements.

In June 2022, the FASB issued ASU No. 2022-03, "Fair Value Measurement" ("ASU 2022-03"). ASU 2022-03 states that a contractual restriction on the sale of an equity security is not considered in measuring fair value. Furthermore, it requires an entity to disclose the fair value of equity securities subject to contractual sale restrictions, the nature and remaining duration of the restrictions and the circumstances that could cause a lapse in the restrictions. ASU 2022-03 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. Early application is permitted. Upon initial evaluation, the Company does not expect its adoption to have a material impact to the Company's consolidated financial statements.
v3.22.4
Fixed and Intangible Assets
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Fixed and Intangible Assets
4.
FIXED AND INTANGIBLE ASSETS

Equipment and leasehold improvements, net consists of the following:

 

 

 

December 31,

 

December 31,

 

 

2022

 

2021

Office equipment

 

$

16,157

 

$

15,883

Furniture and fixtures

 

 

14,386

 

 

14,303

Leasehold improvements

 

 

61,293

 

 

61,054

Construction in progress

 

 

1,438

 

 

—

Total

 

 

93,274

 

 

91,240

Less: Accumulated depreciation and amortization

 

 

(36,122)

 

 

(32,077)

Equipment and leasehold improvements, net

 

$

57,152

 

$

59,163

 

Depreciation and amortization expenses for fixed assets totaled $7,975, $7,242 and $4,708 for the years ended December 31, 2022, 2021 and 2020, respectively.

 

As of December 31, 2022 and December 31, 2021, there were $1,639 and $2,127 of costs capitalized, net of $1,232 and $744 of accumulated amortization, respectively, within prepaid expenses and other assets on our consolidated statements of financial position related to the implementation of cloud computing arrangements. The amortization expense of the capitalized costs was $488, $488 and $256 for the years ended December 31, 2022, 2021 and 2020, respectively. The amortization expense was recorded within communication, technology and information services on the consolidated statements of operations.
v3.22.4
Investments
 12 Months Ended
Dec. 31, 2022
Investments, All Other Investments [Abstract]  
Investments
5.
INVESTMENTS

Investments Measured at Fair Value

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

The estimated fair value of money market funds, sovereign treasury securities, common stock, and warrants are based on quoted prices for recent trading activity in identical or similar instruments. The Company generally invests in sovereign treasury securities with maturities of less than twelve months and considers U.S. and U.K. treasury securities to be risk free and does not reserve for expected credit losses on these investments. Common stock and warrants held of publicly-traded companies are categorized as level 1 in the fair value hierarchy.

The fair value of the Company's financial assets as of December 31, 2022, have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign treasury securities

$

55,938

 

$

—

 

$

55,938

 

$

—

Money market funds

 

41,210

 

 

—

 

 

41,210

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign treasury securities

 

205,779

 

 

—

 

 

205,779

 

 

—

Common stock

 

12,149

 

 

12,149

 

 

—

 

 

—

Warrants

 

153

 

 

153

 

 

—

 

 

—

Total financial assets

$

315,229

 

$

12,302

 

$

302,927

 

$

—

For the year ended December 31, 2022, unrealized losses of $15,038 were recognized related to equity investments measured at fair value held at the reporting date. All losses were recognized in other income and expenses on the consolidated statement of operations. The cost basis of the financial assets recorded at fair value included in investments on the consolidated statement of financial condition was $234,546 as of December 31, 2022.

 

The fair value of the Company's financial assets as of December 31, 2021 have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign treasury securities

$

301,992

 

$

—

 

$

301,992

 

$

—

Money market funds

 

83,004

 

 

—

 

 

83,004

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign treasury securities

 

200,973

 

 

—

 

 

200,973

 

 

—

Common stock

 

15,964

 

 

15,964

 

 

—

 

 

—

Warrants

 

684

 

 

684

 

 

—

 

 

—

Total financial assets

$

602,617

 

$

16,648

 

$

585,969

 

$

—

 

For the year ended December 31, 2021, unrealized losses of $2,788 were recognized related to equity investments measured at fair value held at the reporting date. All losses were recognized in other income and expenses

on the consolidated statement of operations. The cost basis of the financial assets recorded at fair value included in investments on the consolidated statement of financial condition was $220,422 as of December 31, 2021.

 

Investments Held at Cost

 

The Company made investments in the sponsors (collectively referred to herein as "Atlas Crest Sponsors") of several Atlas Crest Entities, each a SPAC. The Company's Chief Executive Officer, Kenneth Moelis, was the managing member of the Atlas Crest Sponsors and served 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.

 

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 consolidated statements of financial condition. As of December 31, 2022 and December 31, 2021, the aggregate investment balances of the Atlas Crest Sponsors held at cost was $0 and $1,895, respectively. During 2022, the remaining Atlas Crest Entities were wound up and the remainder of the Company's investments were liquidated. The Company recognized $983 in realized losses in other income and expenses on the consolidated statement of operations related to the wind-ups.

 

Equity Method Investments

 

Equity-method investments are presented within investments on the Company’s consolidated statements of financial condition. As of December 31, 2022, and 2021, the carrying value of the Company's equity method investment in MA Financial (formerly known as Moelis Australia Limited) was $47,164 and $43,825, respectively. The Company’s share of earnings on this investment is recorded in other income and expenses on the consolidated statements of operations.

 

During the years ended December 31, 2022, 2021 and 2020, MA Financial declared dividends, of which the Company received $2,936, $3,356, and $1,942, respectively. The Company accounted for the dividends as returns on investment and reduced the carrying value of the investment in MA Financial by the amount of dividends received.

 

From time to time, MA Financial may issue shares in connection with a transaction or employee compensation which reduces the Company's ownership interest in MA Financial and can result in dilution gains or losses. Such gains or losses are recorded in other income and expenses on the consolidated statements of operations.
v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes
6.
INCOME TAXES

The following table presents the U.S. and non‑U.S. components of income (loss) before income tax expense:

 

 

 

For the Year Ended December 31,

 

 

2022

 

2021

 

2020

U.S.

 

$

164,623

 

$

468,725

 

$

264,047

Non-U.S.

 

 

51,697

 

 

67,588

 

 

6,066

Income (loss) before income taxes

 

$

216,320

 

$

536,313

 

$

270,113

 

The current and deferred components of the income tax provision for the years ended December 31, 2022, 2021 and 2020 are as follows:

 

 

 

For the Year Ended December 31,

 

 

2022

 

2021

 

2020

Current income taxes:

 

 

 

 

 

 

 

 

 

Federal

 

$

8,659

 

$

63,979

 

$

8,207

State and Local

 

 

6,290

 

 

15,875

 

 

2,955

Foreign

 

 

5,901

 

 

10,619

 

 

1,517

 

 

$

20,850

 

$

90,473

 

$

12,679

Deferred income taxes:

 

 

 

 

 

 

 

 

 

Federal

 

$

20,308

 

$

20,811

 

$

31,773

State and Local

 

 

4,788

 

 

4,295

 

 

7,122

Foreign

 

 

1,692

 

 

(2,244)

 

 

101

Total

 

$

47,638

 

$

113,335

 

$

51,675

 

 

The total provision for income taxes differs from the amount which would be computed by applying the appropriate statutory rate to income before income taxes as follows:

 

 

 

For the Year Ended December 31,

 

 

2022

 

2021

 

2020

Reconciliation of federal statutory tax rates

 

 

 

 

 

 

 

 

 

U.S. statutory tax rate

 

21.0

%

 

21.0

%

 

21.0

%

Increase (decrease) due to state and local taxes

 

2.3

%

 

3.6

%

 

3.7

%

Rate benefit as a U.S. limited partnership/flow through

 

-1.8

%

 

-2.3

%

 

-3.1

%

Excess tax benefit from equity compensation delivery

 

-2.6

%

 

-3.4

%

 

-2.6

%

Foreign taxes

 

0.8

%

 

1.3

%

 

0.0

%

Non-deductible expenses

 

1.9

%

 

2.2

%

 

1.1

%

Return to provision

 

1.1

%

 

-0.3

%

 

-0.2

%

Other

 

-0.8

%

 

-1.0

%

 

-0.8

%

Effective income tax rate

 

21.9

%

 

21.1

%

 

19.1

%

 

Deferred income taxes reflect the net effect of temporary differences between the tax basis of an asset or liability and its reported amount in the Company’s consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years.

The significant components of deferred tax assets and liabilities included on the Company’s consolidated statements of financial condition are as follows:

 

 

 

For the Year Ended December 31,

 

 

2022

 

2021

Net operating loss

 

$

8,679

 

$

9,867

Step-up in tax basis in Group LP assets

 

 

361,544

 

 

384,080

Deferred compensation

 

 

66,228

 

 

63,778

Lease liability

 

 

44,326

 

 

43,479

Other

 

 

9,467

 

 

12,631

 

 

 

490,244

 

 

513,835

Valuation allowance on NOL and other

 

 

(11,563)

 

 

(18,368)

Deferred tax asset

 

$

478,681

 

$

495,467

 

 

 

 

 

 

 

Right-of-use asset

 

$

(34,972)

 

$

(37,117)

Other

 

 

(14,060)

 

 

(10,227)

Deferred tax liability

 

$

(49,032)

 

$

(47,344)

 

 

 

 

 

 

 

Net deferred tax asset

 

$

429,649

 

$

448,123

 

The Company recorded a decrease in the net deferred tax asset of $18,474 for the year ended December 31, 2022, which was primarily attributable to current year amortization of the tax basis in Group LP assets, partially offset by an increase in the step-up in tax basis in Group LP assets in connection with the exchanges of Group LP partnership units for Class A common stock during 2022.

As of December 31, 2022, the Company had accumulated net foreign operating loss carryforwards related to its international operations of approximately $36,455 for which it has recorded a deferred tax asset of $8,679. Approximately $36,157 of the operating losses (or $8,607 of the deferred tax asset) has an indefinite life and $298 of the operating losses (or $72 of the deferred tax asset) will expire in 2028.

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

The Company’s tax years for 2021, 2020 and 2019 are generally subject to examination by the tax authorities as of December 31, 2022. The Company does not expect any material changes in its tax provision related to any outstanding current examinations as of December 31, 2022. Tax examinations are monitored on an ongoing basis and adjustments to tax liabilities are made as appropriate.

The Company has no unrecognized tax benefits for the periods ended December 31, 2022, 2021 and 2020.
v3.22.4
Net Income (Loss) Per Share Attributable to Class A Common Shareholders
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Net Income (Loss) Per Share Attributable to Class A Common Shareholders
7.
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 years ended December 31, 2022, 2021 and 2020 are presented below.

 

 

 

Year Ended December 31,

(dollars in thousands, except per share amounts)

 

2022

 

 

2021

 

 

2020

Numerator:

 

 

 

 

 

 

 

 

 

 

 

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

 

$

150,345

 

 

$

365,213

 

 

$

178,831

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

(a)

 

 

 

(a)

 

 

 

(a)

 

 

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

 

$

150,345

 

 

$

365,213

 

 

$

178,831

Denominator:

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

65,766,439

 

 

 

63,125,497

 

 

 

56,566,645

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

(a)

 

 

 

(a)

 

 

 

(a)

 

 

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

(b)

 

4,553,743

 

(b)

 

5,310,082

 

(b)

 

4,156,720

Weighted average shares of Class A common stock outstanding—diluted

 

 

70,320,182

 

 

 

68,435,579

 

 

 

60,723,365

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

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.29

 

 

$

5.79

 

 

$

3.16

Diluted

 

$

2.14

 

 

$

5.34

 

 

$

2.95

 

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 76,361,466 shares for the year ended December 31, 2022, 76,040,864 shares for the year ended December 31, 2021 and 71,950,031 shares for the year ended December 31, 2020. 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 years ended December 31, 2022, 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 years ended December 31, 2022, 2021 and 2020, there were 17,686 RSUs, 289 RSUs, and 5,475 RSUs that would have been included in the treasury stock method calculation if the effect were dilutive, respectively.
v3.22.4
Equity-Based Compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Equity-Based Compensation
8.
EQUITY‑BASED COMPENSATION

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 years ended December 31, 2022, 2021 and 2020, the Company recognized expense of $128,938, $167,938 and $133,623, respectively, in relation to these awards.

The following table summarizes activity related to RSUs for the years ended December 31, 2022, 2021 and 2020.

 

 

Restricted Stock Units

 

2022

 

2021

 

2020

 

 

 

Weighted

 

 

 

Weighted

 

 

 

Weighted

 

 

 

Average

 

 

 

Average

 

 

 

Average

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

Shares

 

Fair Value

 

Shares

 

Fair Value

 

Shares

 

Fair Value

Unvested Balance at January 1,

8,068,120

 

$

46.36

 

8,742,695

 

$

41.45

 

8,414,130

 

$

42.19

Granted

3,430,910

 

 

48.97

 

3,875,588

 

 

54.84

 

4,456,157

 

 

37.58

Forfeited

(306,906)

 

 

48.78

 

(432,846)

 

 

47.31

 

(149,592)

 

 

40.73

Vested

(3,092,495)

 

 

46.10

 

(4,117,317)

 

 

42.56

 

(3,978,000)

 

 

39.01

Unvested Balance at December 31,

8,099,629

 

$

47.49

 

8,068,120

 

$

46.36

 

8,742,695

 

$

41.45

 

In addition, the Company issues partnership units that are intended to qualify as "profits interest" for U.S. federal income tax purposes ("Partnership Units") that, subject to certain terms and conditions, are exchangeable into shares of Moelis & Company Class A common stock on a one-for-one basis. These Partnership Units are recorded as noncontrolling interests in the Company's consolidated statements of financial condition. Further, these Partnership Units generally vest over a service life of five years, however in certain arrangements the Partnership Units are granted without a service requirement, but do not have exchange rights until the third anniversary of the grant-date. During the years ended December 31, 2022 and 2021, the Company granted 809,899 and 395,834 Partnership Units, respectively, with a grant-date fair value of $38,413 and $21,672, respectively.

 

As of December 31, 2022, the total compensation expense related to unvested RSUs and other stock-based awards not yet recognized was $136,890, which is expected to be recognized over a weighted‑average period of 1.4 years.
v3.22.4
Stockholders Equity
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
Stockholders Equity
9.
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 December 31, 2022, there were 73,063,181 shares of Class A common stock issued, 9,076,777 shares of treasury stock, and 63,986,404 shares outstanding. As of December 31, 2021, there were 68,518,779 shares of Class A common stock issued, 5,873,180 shares of treasury stock, and 62,645,599 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 December 31, 2022, and 2021, 4,635,898 and 4,686,344 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 years ended December 31, 2022 and 2021, the Company repurchased 3,203,597 and 1,914,097 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 $147,537 and $104,150, respectively, in the treasury stock balance on the Company’s consolidated statements of changes in equity as of December 31, 2022 and 2021.

 

Share Repurchase Plan

 

In July 2021, the Board of Directors authorized the repurchase of up to $100,000 of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions. The remaining balance of shares authorized for repurchase under the program is $62,529 as of December 31, 2022.

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 December 31, 2022 and 2021, partners held 5,888,027 and 6,090,500 Group LP partnership units, respectively, representing a 8% and 9% noncontrolling interest in Moelis & Company, respectively.

Controlling Interests

Moelis & Company operates and controls all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Group GP, and thus the 63,986,404 shares of Class A common stock outstanding as of December 31, 2022 (62,645,599 as of December 31, 2021), represents the controlling interest.
v3.22.4
Related-Party Transactions
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Related-Party Transactions
10.
RELATED‑PARTY TRANSACTIONS

Aircraft Lease—On August 30, 2014, a related party, Moelis & Company Manager LLC ("Manager"), acquired an aircraft with funds received solely from its managing member (Mr. Moelis). The aircraft is used and operated by the Company pursuant to a dry lease with Manager, the lessor, and Mr. Moelis that was entered into on July 12, 2019. The terms of the dry lease are comparable to the market rates of leasing from an independent third party. Pursuant to this dry lease arrangement, the lessee is obligated to bear its share of the costs of operating the aircraft. In addition, Mr. Moelis is

the other lessee of the aircraft and shares the operating and related costs of the plane in proportion to his respective use pursuant to a cost sharing and operating agreement that became effective in tandem with the dry lease. In 2022, the dry lease and cost sharing agreements with Mr. Moelis were extended for one year and are scheduled to terminate on December 31, 2023.

For each of the years ended December 31, 2022, 2021 and 2020, the Company incurred $1,295 in aircraft lease costs to be paid to Manager.

Promissory Notes—As of December 31, 2022, there were $3,119 of unsecured promissory notes from employees held by the Company (December 31, 2021: $219). Any outstanding balances are reflected in accrued and other receivables on the consolidated statements of financial condition. The notes held bear a fixed interest rate of 4.00%. During the years ended December 31, 2022, 2021 and 2020, the Company received $0, $70 and $0, respectively, of principal repayments and recognized interest income of $17, $11 and $12, respectively, on such notes, respectively, which is included in other income and expenses on the consolidated statements of operations. During the years ended December 31, 2022 and 2021, the Company recognized $100 of compensation and benefits expense each year related to tranches of a promissory note that will not be repaid.

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 $221, $220 and $296 for the years ended December 31, 2022, 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 December 31, 2022 and 2021, the Company had no balances due to or from Moelis Asset Management LP.

Affiliated SPACs and SPAC Sponsors—As needed, the Company provides office space, secretarial, administrative, and other corporate services to Atlas Crest Entities. These services are provided to the Atlas Crest Entities upon consummation of their IPOs, in each case for a fee of $10 per month. For the years ended December 31, 2022, 2021 and 2020, this fee totaled $110, $200 and $20, respectively. These types of arrangements generally persist with each Atlas Crest Entity until such Atlas Crest Entity consummates a business combination or is liquidated. During 2022, the remaining Atlas Crest Entities were wound up and the remainder of the Company's investments were liquidated, therefore, no additional service fees are expected. As of December 31, 2022 and December 31, 2021, the Company had no balances due to or from the Atlas Crest Entities or their sponsors.

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 $8,857, $30,346 and $0 for the years ended December 31, 2022, 2021 and 2020, respectively. In addition, the Company and its affiliate MA Financial jointly executed a transaction with a third-party client where the engagement contract was with MA Financial. The earned revenues related to this transaction were $4,212 for the year ended December 31, 2022.
v3.22.4
Regulatory Requirements
 12 Months Ended
Dec. 31, 2022
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]  
Regulatory Requirements
11.
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 December 31, 2022, U.S. Broker Dealer had net capital of $91,960, which was $91,710 in excess of its required net capital. As of December 31, 2021, U.S. Broker Dealer had net capital of $180,342 which was $180,092 in excess of its required net capital.

Certain other non-U.S. subsidiaries are subject to various securities and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have consistently exceeded their local capital adequacy requirements.
v3.22.4
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
12.
COMMITMENTS AND CONTINGENCIES

Bank Lines of Credit— The Company maintains a $65,000 revolving credit facility which has a maturity date of June 30, 2023. Unless the lender issues a notice of termination at least 60 days prior to such maturity date, this facility will automatically extend to June 28, 2024. Borrowings on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the borrower’s option of (i) Secured Overnight Financing Rate ("SOFR") plus 1.1% or (ii) Prime minus 1.50%. As of December 31, 2022 and 2021, the Company had no borrowings under the credit facility.

As of December 31, 2022, the Company’s available credit under this facility was $64,236 as a result of the issuance of an aggregate amount of $764 of various standby letters of credit, which were required in connection with certain office leases and other agreements. The Company incurs a 1% per annum fee on the outstanding balance of issued letters of credit.

U.S. Broker Dealer maintains a $30,000 revolving credit facility agreement pre-approved by FINRA which has a credit period ending May 24, 2023 and a maturity date of May 24, 2024. Borrowings on the facility bear interest equal to the Prime rate, payable quarterly in arrears of the last day of March, June, September, and December of each calendar year. The Company had no borrowings under this credit facility and the available balance was $30,000 as of December 31, 2022.

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.

 

 

Year Ended

 

 

December 31,

($ in thousands)

 

2022

 

2021

 

2020

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

 $

22,215

 

 

 $

24,550

 

 

$

26,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Net operating cash inflows/(outflows) for operating leases

 

 $

(9,800)

 

 

 $

(16,278)

 

 

$

(17,957)

 

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

 

 $

4,806

 

 

 $

4,731

 

 

$

7,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases

 

 

12.70

 years

 

 

13.28

 years

 

 

13.72

 years

Weighted-average discount rate - operating leases

 

 

3.51

%

 

 

3.52

%

 

 

3.52

%

During the years ended December 31, 2022, 2021 and 2020, the Company received $14,495, $4,163 and $5,688, respectively, of tenant improvement allowances primarily related to the Company's lease at 399 Park Avenue in New York, New York. These cash receipts are included within net operating cash inflows/(outflows) for operating leases in the supplemental cash flow information above.

As of December 31, 2022, the future sublease income and maturities of our operating lease liabilities are as follows:

Fiscal year ended

 

Sublease Income

 

Operating Leases

2023

 

$

(809)

 

$

22,460

2024

 

 

(809)

 

 

20,736

2025

 

 

(405)

 

 

18,120

2026

 

 

—

 

 

17,052

2027

 

 

—

 

 

16,236

Thereafter

 

 

—

 

 

146,790

Total Payments

 

$

(2,023)

 

$

241,394

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

                                 (24)

Less: Present value adjustment

 

 

(48,608)

Total

 

$

192,762

 

During the fourth quarter of 2022, the Company entered into a lease agreement for a new office space in Los Angeles to replace its existing space, which expires during 2023. The new lease has an initial term that expires in 2034. Commencement of the lease is anticipated to occur during the first half of 2023.

 

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

Legal—In the ordinary course of business, from time to time the Company and its affiliates are involved in judicial or regulatory proceedings, arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters. In addition, government agencies and self-regulatory organizations conduct periodic examinations, investigations and initiate administrative proceedings regarding the Company’s business, including, among other matters, compliance, accounting, recordkeeping and operational matters, that can result in censure, fine, the issuance of cease and desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees. In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company 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.
v3.22.4
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Employee Benefit Plans
13.
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 years ended December 31, 2022, 2021 and 2020, in the amounts of $3,619, $3,989 and $3,111, respectively.

v3.22.4
Revenues and Business Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Revenues and Business Information
14.
REVENUES AND BUSINESS INFORMATION

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

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

not be reflective of the geography in which our clients are located. No client accounted for more than 10% of revenues for the years ended December 31, 2022, 2021 and 2020.

 

 

 

Year Ended December 31,

 

 

2022

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

 

 

United States

 

$

773,869

 

$

1,312,792

 

$

794,337

Europe

 

 

131,016

 

 

157,158

 

 

92,660

Rest of World

 

 

80,412

 

 

70,661

 

 

56,279

Total

 

$

985,297

 

$

1,540,611

 

$

943,276

 

 

 

December 31,

 

December 31,

 

 

2022

 

2021

Assets:

 

 

 

 

 

 

United States

 

$

994,339

 

$

1,356,193

Europe

 

 

92,340

 

 

92,605

Rest of World

 

 

130,190

 

 

106,883

Total

 

$

1,216,869

 

$

1,555,681

 

As of December 31, 2022, and December 31, 2021, the Company had deferred revenues of $7,708 and $4,539, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the years ended December 31, 2022 and 2021, $4,533 and $2,558 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.
v3.22.4
Subsequent Events
 12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
Subsequent Events
15.
SUBSEQUENT EVENTS

The Company has evaluated subsequent events for adjustment to or disclosure in these consolidated financial statements through the date of this report and has not identified any recordable or disclosable events not otherwise reported in these financial statements or the notes thereto other than the following. The Board of Directors of Moelis & Company has declared a dividend of $0.60 per share to be paid on March 28, 2023, to Class A common stockholders of record on February 21, 2023.
v3.22.4
Schedule II-Valuation and Qualifying Accounts
 12 Months Ended
Dec. 31, 2022
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
Schedule II-Valuation and Qualifying Accounts

SUPPLEMENTAL FINANCIAL INFORMATION

 

Schedule II—Valuation and Qualifying Accounts

For the Year Ended December 31, 2022

(dollars in thousands)

 

 

Allowance for Credit

 

 

Losses(1)

 

 

2022

 

2021

 

2020

Balance at beginning of period

 

$

2,823

 

$

3,775

 

$

4,088

Additions:

 

 

 

 

 

 

 

 

 

Bad debt expense

 

 

2,630

 

 

2,026

 

 

2,544

Deductions:

 

 

 

 

 

 

 

 

 

Charge-offs, foreign currency translation and other adjustments

 

 

(3,724)

 

 

(2,978)

 

 

(2,857)

Balance at end of period

 

$

1,729

 

$

2,823

 

$

3,775
(1)
Includes the allowance for credit losses for both accounts receivable and other receivables.
v3.22.4
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Basis of Accounting

Basis of Accounting—The Company prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the combined operations, assets and liabilities of the Company. The Notes are an integral part of the Company's consolidated financial statements.
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 consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and could have a material impact on the consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary.

In preparing the 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 consolidated financial statements.
Cash, Cash Equivalents and Restricted Cash

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

The Company’s cash is maintained in U.S. and non-U.S. bank accounts, of which most bank account balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance Corporation and U.K. Financial Services Compensation Scheme coverage limits). The Company’s cash equivalents are invested primarily in sovereign treasury securities and money market funds.

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future U.S. medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of December 31, 2022 and 2021, is presented below.

 

 

 

December 31,

 

 

2022

 

2021

Cash

 

$

109,646

 

$

135,217

Cash equivalents

 

 

97,148

 

 

384,996

Restricted cash

 

 

745

 

 

801

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

 

$

207,539

 

$

521,014
Receivables

Receivables—The accompanying 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 as of December 31, 2022 and 2021 were $9,462 and $20,041, respectively, of long term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. These long term receivables generated interest income of $607, $743 and $748 for the years ended December 31, 2022, 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 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 ("ASU") 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 continues to assess its CECL estimates and recognize changes to expected credit losses during the period in earnings.

 

The following tables summarize credit loss allowance activity for the years ended December 31, 2022 and December 31, 2021:

 

 

Year Ended December 31, 2022

 

Year Ended December 31, 2021

 

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

$

2,621

 

$

202

 

$

2,823

 

$

3,577

 

$

198

 

$

3,775

Charge-offs, foreign currency translation and other adjustments

 

(3,656)

 

 

(68)

 

 

(3,724)

 

 

(2,978)

 

 

—

 

 

(2,978)

Recoveries

 

(3,855)

 

 

(103)

 

 

(3,958)

 

 

(8,637)

 

 

(65)

 

 

(8,702)

Provision for credit losses

 

6,026

 

 

562

 

 

6,588

 

 

10,659

 

 

69

 

 

10,728

Allowance for credit losses, ending balance

$

1,136

 

$

593

 

$

1,729

 

$

2,621

 

$

202

 

$

2,823

Deferred Compensation

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

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

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

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

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

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

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument. The Company’s methodology for reclassifications impacting the fair value hierarchy is that transfers in/out of the respective category are reported at fair value as of the beginning of the period in which the reclassification occurred.
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 consolidated statement of operations. Investments held at cost are reported within investments on the consolidated statements of financial condition.
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 consolidated statements of financial condition reflect the Company’s share of contributions made to, distributions received from, and the equity earnings and losses of, the investment. The Company reflects its share of gains and losses of the investment in other income and expenses in the consolidated statements of operations using the most recently available earnings data at the end of the period.
Leases

Leases — The Company maintains operating leases for corporate offices and an aircraft. The Company determines if a contract contains a lease at inception. Operating leases are recorded as right-of-use (“ROU”) assets and lease liabilities on the 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.
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 consolidated statements of financial condition and any gain or loss is reflected in the consolidated statements of operations.
Software

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

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

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

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

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

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

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

Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the consolidated statement of operations upon completion

of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated).

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

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

Equity‑based Compensation—The Company recognizes the cost of services received in exchange for equity instrument awards. The cost of such awards reflects the grant‑date fair value, which is based on quoted market prices of the Company's stock at the time of grant, amortized over the service period required by the award’s vesting terms. In certain instances, the Company may grant an equity-based award with a post-vesting restriction, which is reflected in the grant-date fair value of the award. 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 terms that qualify certain employees to terminate their services while not forfeiting certain qualifying incentive RSUs granted during employment. For qualifying awards, (i) the employee must be at least 56 years old, (ii) the employee must have provided at least 5 consecutive years of service to the Company and (iii) the total of (i) and (ii) must be equal to at least 65 years. Any such 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 consolidated statements of financial condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more‑likely‑than‑not that some or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a two‑step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the years ended December 31, 2022, 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 years ended December 31, 2022, 2021 and 2020, no such amounts were recorded.

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

Effective January 1, 2021, the Company adopted ASU 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.
Inflation Reduction Act of 2022

Inflation Reduction Act of 2022 – The Inflation Reduction Act of 2022 (the “IRA”) was enacted on August 16, 2022. This bill contains a number of tax-related provisions that are effective after December 31, 2022, including (i) the imposition of a 15% minimum tax on book income for corporations with a 3-year average adjusted book income over $1 billion, and (ii) the creation of a 1% excise tax on the value of stock repurchases (net of the value of stock issuances) during the taxable year. Upon initial evaluation, the Company does not expect the IRA to have a material impact to the Company’s consolidated financial statements.
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 consolidated statements of operations.
v3.22.4
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2022
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 December 31, 2022 and 2021, is presented below.

 

 

 

December 31,

 

 

2022

 

2021

Cash

 

$

109,646

 

$

135,217

Cash equivalents

 

 

97,148

 

 

384,996

Restricted cash

 

 

745

 

 

801

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

 

$

207,539

 

$

521,014
Summary of Credit Loss Allowance Activity

The following tables summarize credit loss allowance activity for the years ended December 31, 2022 and December 31, 2021:

 

 

Year Ended December 31, 2022

 

Year Ended December 31, 2021

 

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

$

2,621

 

$

202

 

$

2,823

 

$

3,577

 

$

198

 

$

3,775

Charge-offs, foreign currency translation and other adjustments

 

(3,656)

 

 

(68)

 

 

(3,724)

 

 

(2,978)

 

 

—

 

 

(2,978)

Recoveries

 

(3,855)

 

 

(103)

 

 

(3,958)

 

 

(8,637)

 

 

(65)

 

 

(8,702)

Provision for credit losses

 

6,026

 

 

562

 

 

6,588

 

 

10,659

 

 

69

 

 

10,728

Allowance for credit losses, ending balance

$

1,136

 

$

593

 

$

1,729

 

$

2,621

 

$

202

 

$

2,823

v3.22.4
Fixed and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Schedule of Equipment and Leasehold Improvements, Net

Equipment and leasehold improvements, net consists of the following:

 

 

 

December 31,

 

December 31,

 

 

2022

 

2021

Office equipment

 

$

16,157

 

$

15,883

Furniture and fixtures

 

 

14,386

 

 

14,303

Leasehold improvements

 

 

61,293

 

 

61,054

Construction in progress

 

 

1,438

 

 

—

Total

 

 

93,274

 

 

91,240

Less: Accumulated depreciation and amortization

 

 

(36,122)

 

 

(32,077)

Equipment and leasehold improvements, net

 

$

57,152

 

$

59,163
v3.22.4
Investments (Tables)
 12 Months Ended
Dec. 31, 2022
Investments, All Other Investments [Abstract]  
Summary of Fair value of Company's Financial Assets

The fair value of the Company's financial assets as of December 31, 2022, have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign treasury securities

$

55,938

 

$

—

 

$

55,938

 

$

—

Money market funds

 

41,210

 

 

—

 

 

41,210

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign treasury securities

 

205,779

 

 

—

 

 

205,779

 

 

—

Common stock

 

12,149

 

 

12,149

 

 

—

 

 

—

Warrants

 

153

 

 

153

 

 

—

 

 

—

Total financial assets

$

315,229

 

$

12,302

 

$

302,927

 

$

—

The fair value of the Company's financial assets as of December 31, 2021 have been categorized based upon the fair value hierarchy as follows:

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Sovereign treasury securities

$

301,992

 

$

—

 

$

301,992

 

$

—

Money market funds

 

83,004

 

 

—

 

 

83,004

 

 

—

Investments

 

 

 

 

 

 

 

 

 

 

 

Sovereign treasury securities

 

200,973

 

 

—

 

 

200,973

 

 

—

Common stock

 

15,964

 

 

15,964

 

 

—

 

 

—

Warrants

 

684

 

 

684

 

 

—

 

 

—

Total financial assets

$

602,617

 

$

16,648

 

$

585,969

 

$

—
v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of U.S. and Non-U.S. Components of Income (Loss) before Income Tax Expense

The following table presents the U.S. and non‑U.S. components of income (loss) before income tax expense:

 

 

 

For the Year Ended December 31,

 

 

2022

 

2021

 

2020

U.S.

 

$

164,623

 

$

468,725

 

$

264,047

Non-U.S.

 

 

51,697

 

 

67,588

 

 

6,066

Income (loss) before income taxes

 

$

216,320

 

$

536,313

 

$

270,113
Schedule of Current and Deferred Components of Income Tax Provision

The current and deferred components of the income tax provision for the years ended December 31, 2022, 2021 and 2020 are as follows:

 

 

 

For the Year Ended December 31,

 

 

2022

 

2021

 

2020

Current income taxes:

 

 

 

 

 

 

 

 

 

Federal

 

$

8,659

 

$

63,979

 

$

8,207

State and Local

 

 

6,290

 

 

15,875

 

 

2,955

Foreign

 

 

5,901

 

 

10,619

 

 

1,517

 

 

$

20,850

 

$

90,473

 

$

12,679

Deferred income taxes:

 

 

 

 

 

 

 

 

 

Federal

 

$

20,308

 

$

20,811

 

$

31,773

State and Local

 

 

4,788

 

 

4,295

 

 

7,122

Foreign

 

 

1,692

 

 

(2,244)

 

 

101

Total

 

$

47,638

 

$

113,335

 

$

51,675

 
Reconciliation from Appropriate Statutory Rate to Income Before Income Taxes

The total provision for income taxes differs from the amount which would be computed by applying the appropriate statutory rate to income before income taxes as follows:

 

 

 

For the Year Ended December 31,

 

 

2022

 

2021

 

2020

Reconciliation of federal statutory tax rates

 

 

 

 

 

 

 

 

 

U.S. statutory tax rate

 

21.0

%

 

21.0

%

 

21.0

%

Increase (decrease) due to state and local taxes

 

2.3

%

 

3.6

%

 

3.7

%

Rate benefit as a U.S. limited partnership/flow through

 

-1.8

%

 

-2.3

%

 

-3.1

%

Excess tax benefit from equity compensation delivery

 

-2.6

%

 

-3.4

%

 

-2.6

%

Foreign taxes

 

0.8

%

 

1.3

%

 

0.0

%

Non-deductible expenses

 

1.9

%

 

2.2

%

 

1.1

%

Return to provision

 

1.1

%

 

-0.3

%

 

-0.2

%

Other

 

-0.8

%

 

-1.0

%

 

-0.8

%

Effective income tax rate

 

21.9

%

 

21.1

%

 

19.1

%
Schedule of Components of Deferred Tax Assets and Liabilities

The significant components of deferred tax assets and liabilities included on the Company’s consolidated statements of financial condition are as follows:

 

 

 

For the Year Ended December 31,

 

 

2022

 

2021

Net operating loss

 

$

8,679

 

$

9,867

Step-up in tax basis in Group LP assets

 

 

361,544

 

 

384,080

Deferred compensation

 

 

66,228

 

 

63,778

Lease liability

 

 

44,326

 

 

43,479

Other

 

 

9,467

 

 

12,631

 

 

 

490,244

 

 

513,835

Valuation allowance on NOL and other

 

 

(11,563)

 

 

(18,368)

Deferred tax asset

 

$

478,681

 

$

495,467

 

 

 

 

 

 

 

Right-of-use asset

 

$

(34,972)

 

$

(37,117)

Other

 

 

(14,060)

 

 

(10,227)

Deferred tax liability

 

$

(49,032)

 

$

(47,344)

 

 

 

 

 

 

 

Net deferred tax asset

 

$

429,649

 

$

448,123

v3.22.4
Net Income (Loss) Per Share Attributable to Class A Common Shareholders (Tables)
 12 Months Ended
Dec. 31, 2022
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 years ended December 31, 2022, 2021 and 2020 are presented below.

 

 

 

Year Ended December 31,

(dollars in thousands, except per share amounts)

 

2022

 

 

2021

 

 

2020

Numerator:

 

 

 

 

 

 

 

 

 

 

 

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

 

$

150,345

 

 

$

365,213

 

 

$

178,831

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

(a)

 

 

 

(a)

 

 

 

(a)

 

 

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

 

$

150,345

 

 

$

365,213

 

 

$

178,831

Denominator:

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

65,766,439

 

 

 

63,125,497

 

 

 

56,566,645

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

(a)

 

 

 

(a)

 

 

 

(a)

 

 

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

(b)

 

4,553,743

 

(b)

 

5,310,082

 

(b)

 

4,156,720

Weighted average shares of Class A common stock outstanding—diluted

 

 

70,320,182

 

 

 

68,435,579

 

 

 

60,723,365

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

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.29

 

 

$

5.79

 

 

$

3.16

Diluted

 

$

2.14

 

 

$

5.34

 

 

$

2.95

 

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 76,361,466 shares for the year ended December 31, 2022, 76,040,864 shares for the year ended December 31, 2021 and 71,950,031 shares for the year ended December 31, 2020. 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 years ended December 31, 2022, 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 years ended December 31, 2022, 2021 and 2020, there were 17,686 RSUs, 289 RSUs, and 5,475 RSUs that would have been included in the treasury stock method calculation if the effect were dilutive, respectively.
v3.22.4
Equity-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Summary of Activity Related to RSUs

The following table summarizes activity related to RSUs for the years ended December 31, 2022, 2021 and 2020.

 

 

Restricted Stock Units

 

2022

 

2021

 

2020

 

 

 

Weighted

 

 

 

Weighted

 

 

 

Weighted

 

 

 

Average

 

 

 

Average

 

 

 

Average

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

Number of

 

Grant Date

 

Shares

 

Fair Value

 

Shares

 

Fair Value

 

Shares

 

Fair Value

Unvested Balance at January 1,

8,068,120

 

$

46.36

 

8,742,695

 

$

41.45

 

8,414,130

 

$

42.19

Granted

3,430,910

 

 

48.97

 

3,875,588

 

 

54.84

 

4,456,157

 

 

37.58

Forfeited

(306,906)

 

 

48.78

 

(432,846)

 

 

47.31

 

(149,592)

 

 

40.73

Vested

(3,092,495)

 

 

46.10

 

(4,117,317)

 

 

42.56

 

(3,978,000)

 

 

39.01

Unvested Balance at December 31,

8,099,629

 

$

47.49

 

8,068,120

 

$

46.36

 

8,742,695

 

$

41.45
v3.22.4
Commitments and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Additional Leases Information See below for additional information about the Company’s leases.

 

 

Year Ended

 

 

December 31,

($ in thousands)

 

2022

 

2021

 

2020

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

 $

22,215

 

 

 $

24,550

 

 

$

26,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Net operating cash inflows/(outflows) for operating leases

 

 $

(9,800)

 

 

 $

(16,278)

 

 

$

(17,957)

 

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

 

 $

4,806

 

 

 $

4,731

 

 

$

7,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases

 

 

12.70

 years

 

 

13.28

 years

 

 

13.72

 years

Weighted-average discount rate - operating leases

 

 

3.51

%

 

 

3.52

%

 

 

3.52

%

During the years ended December 31, 2022, 2021 and 2020, the Company received $14,495, $4,163 and $5,688, respectively, of tenant improvement allowances primarily related to the Company's lease at 399 Park Avenue in New York, New York. These cash receipts are included within net operating cash inflows/(outflows) for operating leases in the supplemental cash flow information above.
Schedule of Future Sublease Income and Maturities of Our Operating Lease Liabilities

As of December 31, 2022, the future sublease income and maturities of our operating lease liabilities are as follows:

Fiscal year ended

 

Sublease Income

 

Operating Leases

2023

 

$

(809)

 

$

22,460

2024

 

 

(809)

 

 

20,736

2025

 

 

(405)

 

 

18,120

2026

 

 

—

 

 

17,052

2027

 

 

—

 

 

16,236

Thereafter

 

 

—

 

 

146,790

Total Payments

 

$

(2,023)

 

$

241,394

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

                                 (24)

Less: Present value adjustment

 

 

(48,608)

Total

 

$

192,762
v3.22.4
Revenues and Business Information (Tables)
 12 Months Ended
Dec. 31, 2022
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.

 

 

Year Ended December 31,

 

 

2022

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

 

 

United States

 

$

773,869

 

$

1,312,792

 

$

794,337

Europe

 

 

131,016

 

 

157,158

 

 

92,660

Rest of World

 

 

80,412

 

 

70,661

 

 

56,279

Total

 

$

985,297

 

$

1,540,611

 

$

943,276

 

 

 

December 31,

 

December 31,

 

 

2022

 

2021

Assets:

 

 

 

 

 

 

United States

 

$

994,339

 

$

1,356,193

Europe

 

 

92,340

 

 

92,605

Rest of World

 

 

130,190

 

 

106,883

Total

 

$

1,216,869

 

$

1,555,681
v3.22.4
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Cash and Cash Equivalents        
Cash $ 109,646 $ 135,217    
Cash equivalents 97,148 384,996    
Restricted cash 745 801    
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 207,539 $ 521,014 $ 203,284 $ 168,572
v3.22.4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Aug. 16, 2022
Jan. 01, 2020
Dec. 31, 2019
Accounting Policies [Line Items]            
Long-term receivables $ 9,462 $ 20,041        
Interest income from long-term receivables 607 743 $ 748      
Cumulative effect on retained earnings $ 458,938 478,299 444,473     $ 393,827
Percentage of minimum tax on book income       15.00%    
Minimum book income for corporation       $ 1,000,000    
Percentage of excise tax on the value of stock repurchases       1.00%    
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      
Income tax related interest and penalties 0 0 0      
Retained Earnings            
Accounting Policies [Line Items]            
Cumulative effect on retained earnings $ (560,690) $ (535,282) $ (420,682)     (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          
v3.22.4
Summary of Significant Accounting Policies - Summary of Credit Loss Allowance Activity (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance $ 2,823 $ 3,775
Charge-offs, foreign currency translation and other adjustments (3,724) (2,978)
Recoveries (3,958) (8,702)
Provision for credit losses 6,588 10,728
Allowance for credit losses, ending balance 1,729 2,823
Short-term Receivables    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance 2,621 3,577
Charge-offs, foreign currency translation and other adjustments (3,656) (2,978)
Recoveries (3,855) (8,637)
Provision for credit losses 6,026 10,659
Allowance for credit losses, ending balance 1,136 2,621
Private Funds Advisory Receivables    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance 202 198
Charge-offs, foreign currency translation and other adjustments (68)  
Recoveries (103) (65)
Provision for credit losses 562 69
Allowance for credit losses, ending balance $ 593 $ 202
v3.22.4
Fixed and Intangible Assets - Schedule of Equipment and Leasehold Improvements, Net (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Equipment and Leasehold Improvements, Net    
Total $ 93,274 $ 91,240
Less: Accumulated depreciation and amortization (36,122) (32,077)
Equipment and leasehold improvements, net 57,152 59,163
Office Equipment    
Equipment and Leasehold Improvements, Net    
Total 16,157 15,883
Furniture and Fixtures    
Equipment and Leasehold Improvements, Net    
Total 14,386 14,303
Leasehold Improvements    
Equipment and Leasehold Improvements, Net    
Total 61,293 $ 61,054
Construction in progress    
Equipment and Leasehold Improvements, Net    
Total $ 1,438  
v3.22.4
Fixed and Intangible Assets - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Equipment and Leasehold Improvements, Net      
Depreciation and amortization expenses $ 7,975 $ 7,242 $ 4,708
Prepaid Expenses and Other Assets      
Equipment and Leasehold Improvements, Net      
Costs capitalized, net of accumulated amortization 1,639 2,127  
Accumulated amortization, net 1,232 744  
Communication, Technology and Information Services      
Equipment and Leasehold Improvements, Net      
Amortization expense of capitalized costs $ 488 $ 488 $ 256
v3.22.4
Investments - Summary of Fair value of Company's Financial Assets (Details) - Fair Value, Recurring - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Fair value measurements    
Total financial assets $ 315,229 $ 602,617
Sovereign Treasury Securities    
Fair value measurements    
Cash and cash equivalents 55,938 301,992
Investments in securities 205,779 200,973
Warrants    
Fair value measurements    
Investments in securities 153 684
Money Market Funds    
Fair value measurements    
Cash and cash equivalents 41,210 83,004
Common Stock    
Fair value measurements    
Investments in securities 12,149 15,964
Level 1    
Fair value measurements    
Total financial assets 12,302 16,648
Level 1 | Warrants    
Fair value measurements    
Investments in securities 153 684
Level 1 | Common Stock    
Fair value measurements    
Investments in securities 12,149 15,964
Level 2    
Fair value measurements    
Total financial assets 302,927 585,969
Level 2 | Sovereign Treasury Securities    
Fair value measurements    
Cash and cash equivalents 55,938 301,992
Investments in securities 205,779 200,973
Level 2 | Money Market Funds    
Fair value measurements    
Cash and cash equivalents $ 41,210 $ 83,004
v3.22.4
Investments - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Schedule of Investments      
Investments at fair value, cost basis $ 234,546 $ 220,422  
Dividends received 2,936 3,356 $ 1,942
Corporate Joint Venture      
Schedule of Investments      
Dividends received 2,936 3,356 $ 1,942
Equity method investments 47,164 43,825  
Common Stock      
Schedule of Investments      
Unrealized gains (losses) on equity securities 15,038 2,788  
Atlas Crest Sponsors      
Schedule of Investments      
Investments at fair value, cost basis 0 $ 1,895  
Realized losses $ (983)    
v3.22.4
Income Taxes - Schedule of U.S. and Non-U.S. Components of Income (Loss) Before Income Tax Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
U.S. and non-U.S. components of income (loss) before income tax expense:      
U.S. $ 164,623 $ 468,725 $ 264,047
Non-U.S. 51,697 67,588 6,066
Income (loss) before income taxes $ 216,320 $ 536,313 $ 270,113
v3.22.4
Income Taxes - Schedule of Current and Deferred Components of Income Tax Provision (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Current income taxes:      
Federal $ 8,659 $ 63,979 $ 8,207
State and Local 6,290 15,875 2,955
Foreign 5,901 10,619 1,517
Total 20,850 90,473 12,679
Deferred income taxes:      
Federal 20,308 20,811 31,773
State and Local 4,788 4,295 7,122
Foreign 1,692 (2,244) 101
Income Tax Expense (Benefit), Total $ 47,638 $ 113,335 $ 51,675
v3.22.4
Income Taxes - Schedule of Appropriate Statutory Rate to Income Before Income Taxes (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Reconciliation of federal statutory tax rates      
U.S. statutory tax rate 21.00% 21.00% 21.00%
Increase (decrease) due to state and local taxes 2.30% 3.60% 3.70%
Rate benefit as a U.S. limited partnership/flow through (1.80%) (2.30%) (3.10%)
Excess tax benefit from equity compensation delivery (2.60%) (3.40%) (2.60%)
Foreign taxes 0.80% 1.30% 0.00%
Non-deductible expenses 1.90% 2.20% 1.10%
Return to provision 1.10% (0.30%) (0.20%)
Other (0.80%) (1.00%) (0.80%)
Effective income tax rate 21.90% 21.10% 19.10%
v3.22.4
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Significant components of deferred tax assets and liabilities:    
Net operating loss $ 8,679 $ 9,867
Step-up in tax basis in Group LP assets 361,544 384,080
Deferred compensation 66,228 63,778
Lease liability 44,326 43,479
Other 9,467 12,631
Gross 490,244 513,835
Valuation allowance on NOL and other (11,563) (18,368)
Deferred tax asset 478,681 495,467
Right-of-use asset (34,972) (37,117)
Other (14,060) (10,227)
Deferred tax liability (49,032) (47,344)
Net deferred tax asset $ 429,649 $ 448,123
v3.22.4
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Taxes [Line Items]      
Decrease in the net deferred tax asset $ (18,474)    
Unrecognized tax benefits 0 $ 0 $ 0
Foreign      
Income Taxes [Line Items]      
Operating loss carryforwards 36,455    
Deferred tax assets for foreign operating loss carryforwards 8,679    
Operating loss carryforwards with indefinite life 36,157    
Deferred tax assets for operating loss carryforwards for indefinite life 8,607    
Operating loss carryforwards which expire in 2028 298    
Deferred tax assets for operating loss carryforwards which expire in 2028 $ 72    
v3.22.4
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
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Numerator:      
Net income (loss) attributable to holders of shares of Class A common stock—basic $ 150,345 $ 365,213 $ 178,831
Class A Common Stock      
Numerator:      
Net income (loss) attributable to holders of shares of Class A common stock—basic 150,345 365,213 178,831
Add (deduct) dilutive effect of:      
Net income (loss) attributable to holders of shares of Class A common stock—diluted $ 150,345 $ 365,213 $ 178,831
Denominator:      
Weighted average shares of Class A common stock outstanding—basic 65,766,439 63,125,497 56,566,645
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 4,553,743 5,310,082 4,156,720
Weighted average shares of Class A common stock outstanding—diluted 70,320,182 68,435,579 60,723,365
Net income (loss) per share attributable to holders of shares of Class A common stock, basic      
Basic $ 2.29 $ 5.79 $ 3.16
Net income (loss) per share attributable to holders of shares of Class A common stock, diluted      
Diluted $ 2.14 $ 5.34 $ 2.95
v3.22.4
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Parenthetical) (Details) - shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Class A Common Stock      
Earnings Per Share Basic [Line Items]      
Number of shares of common stock to be issued upon exchange of a partnership unit 1    
Fully diluted shares of common stock outstanding if all Class A partnership units were to be exchanged for common stock immediately following the reorganization 76,361,466 76,040,864 71,950,031
Restricted Stock and RSUs      
Earnings Per Share Basic [Line Items]      
Number of antidilutive securities excluded from calculation of diluted income (loss) per share 17,686 289 5,475
v3.22.4
Equity-Based Compensation - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Compensation expenses $ 128,938 $ 167,938 $ 133,623
Partnership Units, granted 809,899 395,834  
Partnership Units, grant-date fair value $ 38,413 $ 21,672  
RSUs and Other Stock-based Awards      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Vesting period 5 years    
Total compensation expense not yet recognized $ 136,890    
Weighted average period to recognize compensation expense 1 year 4 months 24 days    
RSUs and Other Stock-based Awards | Minimum      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Vesting period 4 years    
RSUs and Other Stock-based Awards | Maximum      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Vesting period 5 years    
Class A Common Stock      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Number of shares of common stock to be issued upon exchange of a partnership unit 1    
Class A Common Stock | RSUs and Other Stock-based Awards      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Number of shares of common stock to be issued upon exchange of a partnership unit 1    
v3.22.4
Equity-Based Compensation - Summary of Activity Related to RSUs (Details) - Restricted Stock Units - $ / shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Number of Shares      
Unvested Balance at the beginning of the year 8,068,120 8,742,695 8,414,130
Granted 3,430,910 3,875,588 4,456,157
Forfeited (306,906) (432,846) (149,592)
Vested (3,092,495) (4,117,317) (3,978,000)
Unvested Balance at the end of the year 8,099,629 8,068,120 8,742,695
Weighted Average Grant Date Fair Value      
Unvested Balance at the beginning of the period $ 46.36 $ 41.45 $ 42.19
Granted 48.97 54.84 37.58
Forfeited 48.78 47.31 40.73
Vested 46.10 42.56 39.01
Unvested Balance at the end of the period $ 47.49 $ 46.36 $ 41.45
v3.22.4
Stockholders Equity - Additional Information (Details)
$ in Thousands
 1 Months Ended 12 Months Ended
Nov. 30, 2014
Apr. 30, 2014
USD ($)
shares
Dec. 31, 2022
USD ($)
shares
Dec. 31, 2021
USD ($)
shares
Dec. 31, 2020
USD ($)
Jul. 31, 2021
USD ($)
Class Of Stock [Line Items]            
Treasury stock, shares     9,076,777 5,873,180    
Treasury stock shares acquired (in shares)     3,203,597 1,914,097    
Treasury stock shares acquired | $     $ 147,537 $ 104,150 $ 44,334  
Number of units held by noncontrolling interest holders     5,888,027 6,090,500    
Group LP            
Class Of Stock [Line Items]            
Noncontrolling interests (as a percent)     8.00% 9.00%    
Class A Common Stock            
Class Of Stock [Line Items]            
Aggregate stock issuance (in shares)   15,263,653        
Increase in shares outstanding   24,923,349        
Common stock, shares issued     73,063,181 68,518,779    
Treasury stock, shares     9,076,777 5,873,180    
Common stock, shares outstanding     63,986,404 62,645,599    
Number of shares of common stock to be issued upon exchange of a partnership unit     1      
Class A Common Stock | Share Repurchase Plan            
Class Of Stock [Line Items]            
Share value authorized for repurchase | $           $ 100,000
Value of remaining shares authorized for repurchase | $     $ 62,529      
Class B Common Stock            
Class Of Stock [Line Items]            
Increase in shares outstanding   36,158,698        
Common stock, shares issued     4,635,898 4,686,344    
Common stock, shares outstanding     4,635,898 4,686,344    
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        
v3.22.4
Related-Party Transactions - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Related-party transactions      
Revenue from related parties $ 8,857 $ 30,346 $ 0
Compensation and benefits expense related to tranche of promissory note 618,195 913,909 560,803
Unsecured Promissory Notes      
Related-party transactions      
Compensation and benefits expense related to tranche of promissory note 100 100  
Manager | Aircraft Lease Entered into During August 2014      
Related-party transactions      
Expenses 1,295 1,295 1,295
Employees      
Related-party transactions      
Unsecured promissory notes from employees $ 3,119 219  
Employees | Unsecured Promissory Notes      
Related-party transactions      
Interest rates (as a percent) 4.00%    
Principal repayments $ 0 70 0
Interest income recognized 17 11 12
Moelis Asset Management LP      
Related-party transactions      
Fee for services 221 220 296
Due from related party 0 0  
Due to related party 0 0  
Atlas Crest Entities      
Related-party transactions      
Fee for services 110 200 $ 20
Due from related party 0 0  
Fee for services peer month 10    
Due to related party 0 $ 0  
MA Financial      
Related-party transactions      
Revenue from related parties $ 4,212    
v3.22.4
Regulatory Requirements - Additional Information (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Regulatory Requirements    
Minimum net capital requirement $ 250  
U.S. Broker Dealer    
Regulatory Requirements    
Net capital 91,960 $ 180,342
Net capital in excess of required net capital $ 91,710 $ 180,092
v3.22.4
Commitments and Contingencies - Additional Information (Details) - USD ($)
 3 Months Ended 12 Months Ended
Dec. 31, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Bank line of credit        
Proceeds from tenant improvement allowances   $ 14,495,000 $ 4,163,000 $ 5,688,000
Lease expiration year 2023      
Available credit under the facility $ 64,236,000 64,236,000    
Revolving Credit Facility Due at May 24, 2024        
Bank line of credit        
Commitment amount 30,000,000 $ 30,000,000    
Maturity date   May 24, 2024    
Reference rate (as a percent)   Prime rate    
Borrowings under the credit facility 0 $ 0    
Line of credit facility credit period to borrow capital   May 24, 2023    
Line of credit facility, frequency of payments   quarterly    
Available credit under the facility $ 30,000,000 $ 30,000,000    
Revolving Credit Facility        
Bank line of credit        
Fixed rate of interest (as a percent) 3.50% 3.50%    
Borrowings under the credit facility $ 0 $ 0 $ 0  
Standby Letters of Credit        
Bank line of credit        
Letters of credit outstanding $ 764,000 $ 764,000    
Fee on the outstanding balances (as a percent)   1.00%    
Prime | Revolving Credit Facility        
Bank line of credit        
Interest rate margin (as a percent)   (1.50%)    
Reference rate (as a percent)   Prime    
SOFR | Revolving Credit Facility        
Bank line of credit        
Interest rate margin (as a percent)   1.10%    
New Lease        
Bank line of credit        
Lease expiration year 2034      
Secured Bank Line of Credit        
Bank line of credit        
Commitment amount $ 65,000,000 $ 65,000,000    
Minimum days to issue termination notice   60 days    
Maturity date   Jun. 28, 2024    
v3.22.4
Commitments and Contingencies - Schedule of Additional Leases Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Supplemental Income Statement Information:      
Operating lease cost $ 22,215 $ 24,550 $ 26,669
Cash paid for amounts included in the measurement of lease liabilities:      
Net operating cash inflows/(outflows) for operating leases (9,800) (16,278) (17,957)
Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period) $ 4,806 $ 4,731 $ 7,062
Other Information      
Weighted-average remaining lease term - operating leases 12 years 8 months 12 days 13 years 3 months 10 days 13 years 8 months 19 days
Weighted-average discount rate - operating leases 3.51% 3.52% 3.52%
v3.22.4
Commitments and Contingencies - Schedule of Future Minimum Rental Payments Required Under Operating Leases in Place (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Sublease Income    
2023 $ (809)  
2024 (809)  
2025 (405)  
Total payments (2,023)  
Operating Lease Payments    
2023 22,460  
2024 20,736  
2025 18,120  
2026 17,052  
2027 16,236  
Thereafter 146,790  
Total payments 241,394  
Less: Tenant improvement allowances (24)  
Less: Present value adjustment (48,608)  
Operating Lease, Liability $ 192,762 $ 191,890
v3.22.4
Employee Benefit Plans - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Retirement Benefits [Abstract]      
Minimum age required to be eligible to participate in the 401(k) plan   21 years  
Expenses accrued relating to employer matching contributions $ 3,619 $ 3,989 $ 3,111
v3.22.4
Revenues and Business Information - Additional Information (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
Item
Dec. 31, 2021
USD ($)
Item
Dec. 31, 2020
Item
Revenues From External Customers And Long Lived Assets [Line Items]      
Deferred revenue $ 7,708 $ 4,539  
Revenues recognized from opening balance of deferred revenues $ 4,533 $ 2,558  
Client | Revenue      
Revenues From External Customers And Long Lived Assets [Line Items]      
Number of clients | Item 0 0 0
v3.22.4
Revenues and Business Information - Schedule of Geographical Distribution of Revenues and Assets (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenues From External Customers And Long Lived Assets [Line Items]      
Revenues $ 985,297 $ 1,540,611 $ 943,276
Total assets 1,216,869 1,555,681  
United States      
Revenues From External Customers And Long Lived Assets [Line Items]      
Revenues 773,869 1,312,792 794,337
Total assets 994,339 1,356,193  
Europe      
Revenues From External Customers And Long Lived Assets [Line Items]      
Revenues 131,016 157,158 92,660
Total assets 92,340 92,605  
Rest of World      
Revenues From External Customers And Long Lived Assets [Line Items]      
Revenues 80,412 70,661 $ 56,279
Total assets $ 130,190 $ 106,883  
v3.22.4
Subsequent Events - Additional Information (Details) - Subsequent Event
Feb. 08, 2023
$ / shares
Subsequent Event [Line Items]  
Dividends declared per share $ 0.60
Dividend payable date Mar. 28, 2023
Dividend payable record date Feb. 21, 2023
v3.22.4
Schedule II-Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Changes in valuation and qualifying accounts      
Balance at beginning of period $ 2,823 $ 3,775 $ 4,088
Additions:      
Bad debt expense 2,630 2,026 2,544
Deductions:      
Charge-offs foreign currency translation and other adjustments (3,724) (2,978) (2,857)
Balance at end of period $ 1,729 $ 2,823 $ 3,775